<PAGE> 1
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
Date of Report (Date of earliest event reported) February 18, 1999
Del Webb Corporation
(Exact name of registrant as specified in charter)
<TABLE>
<CAPTION>
Delaware 1-4785 86-0077724
<S> <C> <C>
(State or other jurisdiction of (Commission file number) (IRS employer identification no.)
incorporation)
6001 North 24th Street, Phoenix, Arizona 85016
(Address of principal executive offices) (Zip code)
</TABLE>
Registrant's telephone number, including area code (602) 808-8088
Not applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
(a) Exhibit 1.1 hereto is the Underwriting Agreement dated February 12,
1999 between Del Webb Corporation, on the one hand, and Warburg Dillon Read LLC,
Goldman, Sachs & Co., Salomon Smith Barney Inc. and NationsBanc Montgomery
Securities LLC, on the other hand.
(b) Exhibit 1.2 hereto is the Indenture dated as of February 18, 1999
between Del Webb Corporation and Bank of Montreal Trust Company.
ITEM 7. EXHIBITS.
(c) Exhibits:
1.1 Underwriting Agreement dated February 12, 1999
between Del Webb Corporation, on the one hand, and
Warburg Dillon Read LLC, Goldman, Sachs & Co.,
Salomon Smith Barney Inc. and NationsBanc Montgomery
Securities LLC, on the other hand.
1.2 Indenture dated as of February 18, 1999 between Del
Webb Corporation and Bank of Montreal Trust Company.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: February 18, 1999
DEL WEBB CORPORATION
By:/s/ Robertson C. Jones
-------------------------------------------
Robertson C. Jones
Senior Vice President and General Counsel
3
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EXHIBIT INDEX
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<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
<S> <C> <C>
1.1 Underwriting Agreement dated February 12, 1999 between Del Webb Corporation, _
on the one hand, and Warburg Dillon Read LLC, Goldman, Sachs & Co., Salomon
Smith Barney Inc. and NationsBanc Montgomery Securities LLC, on the other
hand.
1.2 Indenture dated as of February 18, 1999 between Del Webb Corporation and _
Bank of Montreal Trust Company.
</TABLE>
4
<PAGE> 1
Exhibit 1.1
- --------------------------------------------------------------------------------
DEL WEBB CORPORATION
10-1/4% SENIOR SUBORDINATED DEBENTURES DUE 2010
UNDERWRITING AGREEMENT
DATED FEBRUARY 12, 1999
- --------------------------------------------------------------------------------
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UNDERWRITING AGREEMENT
February 12, 1999
Warburg Dillon Read LLC
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
c/o Warburg Dillon Read LLC
299 Park Avenue
New York, New York 10171
Dear Sirs:
Del Webb Corporation (the "Company") proposes to issue and sell to
Warburg Dillon Read LLC, Goldman, Sachs & Co., Salomon Smith Barney Inc. and
NationsBanc Montgomery Securities LLC (the "Underwriters") $150,000,000
aggregate principal amount of its 10-1/4% Senior Subordinated Debentures due
2010, (the "Debentures"). The Debentures are described in the Prospectus which
is referred to below.
The Debentures are to be issued pursuant to an Indenture (the
"Indenture") to be dated as of February 18, 1999, between the Company and Bank
of Montreal Trust Company, as trustee.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a shelf registration statement on Form S-3, including a
prospectus, relating to $250,000,000 of securities, including the Debentures,
which incorporates by reference documents that the Company has filed or will
file in accordance with the provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder (collectively, the
"Exchange Act"). As used in this Agreement, "Base Prospectus" shall mean the
prospectus included in the Registration Statement when it became effective under
the Act on October 22, 1998, as it may have been amended subsequent to that date
and prior to the date hereof. The Company has furnished to you, for use by you
and by dealers, copies of a preliminary prospectus supplement, including the
Base Prospectus contained therein and all documents incorporated by reference
therein (collectively, the "Preliminary Prospectus") relating to the Debentures.
Except where the context otherwise requires, the shelf registration
<PAGE> 3
statement, as in effect at the time of execution of this Agreement, including
all documents filed as part thereof or incorporated by reference therein, and
including the Base Prospectus, is herein called the "Registration Statement,"
and the final prospectus supplement relating to the Debentures, including (i)
the Base Prospectus and (ii) all documents incorporated therein or in the Base
Prospectus by reference, in the form first filed by the Company with the
Commission pursuant to Rule 424(b)(5) under the Act, is herein called the
"Prospectus."
The Company and the Underwriters agree as follows:
1. Sale and Purchase: Upon the basis of the warranties and
representations and the other terms and conditions herein set forth, the Company
agrees to sell to the Underwriters and the Underwriters, severally and not
jointly, agree to purchase from the Company, the aggregate principal amount of
Debentures set forth opposite the name of such Underwriter in Schedule I
attached hereto, in each case at a purchase price of 98.390% of the principal
amount thereof, plus accrued interest from the Time of Purchase (as hereinafter
defined). You shall release the Debentures for public sale promptly after this
Agreement becomes effective. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
2. Payment and Delivery: Payment of the purchase price for the
Debentures shall be made to the Company in immediately available funds at the
office of Warburg Dillon Read LLC in New York City, against delivery of the
Debentures to you for the respective accounts of the Underwriters. Such payment
and delivery shall be made at 10:00 A.M., New York City time, on February 18,
1999 (unless another time shall be agreed to by you and the Company or unless
postponed in accordance with the provisions of Section 8 hereof). The time at
which such payment and delivery are actually made is hereinafter sometimes
called the "Time of Purchase." The Debentures shall be delivered to you in
definitive or global form in such names and in such denominations as you shall
specify on the second business day(1) preceding the Time of Purchase. For the
purpose of expediting the checking of the Debentures by you, the Company agrees
to make such Debentures available to you for such purpose at least one full
business day preceding the Time of Purchase.
3. Representations and Warranties of the Company: The Company
represents and warrants to the Underwriters that:
- --------
(1) As used herein, "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
<PAGE> 4
(a) each Preliminary Prospectus filed pursuant to Rule 424
under the Act complied in all material respects with the Act; when the
Registration Statement became effective and at all times subsequent
thereto up to the Time of Purchase, the Registration Statement and the
Prospectus, and any supplements or amendments thereto, complied and
will comply in all material respects with the provisions of the Act and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the Registration Statement at all such times did not and
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus at all
such times did not and will not contain an untrue statement of a
material fact or omit to state 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 makes no warranty or representation with
respect to any statement contained in the Prospectus in reliance upon
and in conformity with information concerning the Underwriters and
furnished in writing by or on behalf of you to the Company expressly
for use in the Prospectus and set forth in the section of the
Prospectus entitled "Underwriting;" the documents incorporated by
reference in the Prospectus, at the time they were filed (or, if an
amendment with respect to any such document was filed, when such
amendment was filed) with the Commission, complied in all material
respects with the requirements of the Exchange Act, and, except to the
extent, if any, they are modified or superseded by the Registration
Statement or the Prospectus, do not contain an untrue statement of a
material fact or omit to state 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; and the
Company has complied and, until completion of the offering of the
Debentures will continue in the future to comply, with its obligations
under the Exchange Act;
(b) the conditions for use of a registration statement on Form
S-3 set forth in the General Instructions to Form S-3 have been
satisfied with respect to the Company and the transactions contemplated
by this Agreement, the Registration Statement and Prospectus;
(c) the consolidated capitalization of the Company as of
December 31, 1998 is as set forth under the column entitled "December
31, 1998 - Actual" in the section of the Prospectus entitled
"Capitalization" and, as of the Time of Purchase, assuming the Time of
Purchase had been
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December 31, 1998, the consolidated capitalization of the Company shall
be as set forth under the column entitled "December 31, 1998 - As
Adjusted" in the section of the Prospectus entitled "Capitalization;"
all of the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and nonassessable; the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware, with full power and authority (i) to own its
properties and conduct its business as described in the Registration
Statement and Prospectus, and (ii) to execute, deliver and perform its
obligations under this Agreement and the Indenture and to issue, sell
and deliver the Debentures as herein contemplated;
(d) the Company and each of its subsidiaries listed on
Schedule II attached hereto (the "Operating Subsidiaries") are duly
qualified or licensed by and are in good standing in each jurisdiction
in which they conduct their respective business and in which the
failure to be so licensed or qualified could have a material adverse
effect on the condition (financial or other), business, prospects or
results of operations of the Company and the subsidiaries taken as a
whole; the Company and each of the Operating Subsidiaries are in
compliance with the laws, orders, rules, regulations and directives
issued or administered by each such jurisdiction, except where the
failure to be in compliance will not have a material adverse effect on
the condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole; all of
the outstanding capital stock or other securities evidencing equity
ownership of each of the Operating Subsidiaries have been duly and
validly authorized and issued and are fully paid and non-assessable,
and are directly or indirectly owned by the Company; each Operating
Subsidiary has been duly organized and is validly existing under the
laws of the jurisdiction pursuant to which such Operating Subsidiary is
incorporated or organized, and each Operating Subsidiary has full power
and authority to own its properties and conduct its business as
described in the Registration Statement and Prospectus; no subsidiary
of the Company other than an Operating Subsidiary, accounted for more
than one percent of the Company's consolidated assets, revenues or net
earnings at and for the fiscal year ended June 30, 1998 or at and for
the six months ended December 31, 1998 or is expected to account for
more than one percent of the Company's consolidated assets, revenues or
net earnings at and for the fiscal year ending June 30, 1999; and the
Company and the Operating Subsidiaries accounted for more than 99% of
the Company's consolidated assets, revenues and net earnings at and for
the fiscal year ended June 30, 1998 and at and for the six months ended
December 31, 1998 and are expected to account for more than 99% of the
Company's consolidated assets, revenues and net earnings at and for the
fiscal year ending June 30, 1999;
<PAGE> 6
(e) neither the Company nor any of its subsidiaries is in
breach of, or in default under (nor has any event occurred which with
notice, lapse of time or both would constitute a breach of, or default
under), its respective charter or bylaws or in the performance or
observance of any license, obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, bank loan or
credit agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which any of them is bound,
which breach or default could have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole; and
the execution, delivery and performance of this Agreement and the
issuance of the Debentures and consummation of the transactions
contemplated hereby will not conflict with, or result in any breach of,
or constitute a default under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of, or default
under), any provision of the charter, bylaws or operating agreement of
the Company or any of the Operating Subsidiaries or under any provision
of any license, indenture, mortgage, deed of trust, bank loan or credit
agreement or other agreement or instrument to which the Company or any
of the Operating Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of its Operating
Subsidiaries;
(f) the Indenture has been duly authorized by the Company and
when executed and delivered by the Company will be a legal, valid and
binding agreement of the Company enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of equity;
(g) the Debentures have been duly authorized by the Company
and when executed and delivered by the Company will constitute legal,
valid and binding obligations of the Company entitled to the benefits
of the Indenture and enforceable in accordance with their terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and general principles of equity;
(h) this Agreement has been duly authorized, executed and
<PAGE> 7
delivered by the Company and is a legal, valid and binding agreement of
the Company enforceable in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by federal or
state securities laws or announced public policy;
(i) the Debentures and the Indenture conform in all material
respects to the descriptions thereof contained in the Prospectus;
(j) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Debentures as contemplated hereby
other than registration of the Debentures under the Act, any necessary
qualification or exemption under the securities or blue sky laws of the
various jurisdictions in which the Debentures are being offered by the
Underwriters and the filing of this Agreement and the Indenture with
the Commission as exhibits to a Form 8-K, which filing of this
Agreement the Company agrees to make in a timely manner and in any
event prior to the Time of Purchase and which filing of the Indenture
the Company agrees to make in a timely manner, and in any event within
5 days of the Time of Purchase;
(k) no person has the right, contractual or otherwise, to
cause the Company to issue to it, or register pursuant to the Act, any
securities of the Company as a consequence of the issue and sale of the
Debentures to the Underwriters hereunder nor does any person have
preemptive rights, rights of first refusal or other rights to purchase
any of the Debentures;
(l) KPMG LLP, whose reports on the consolidated financial
statements of the Company and its subsidiaries are included or
incorporated by reference in the Registration Statement and Prospectus,
are independent public accountants with respect to the Company as
required by the Act;
(m) each of the Company and the Operating Subsidiaries has all
necessary licenses, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all authorizations,
consents and approvals necessary to date from other persons, in order
to conduct its respective business, in each case where the absence of
which would have a material adverse effect on the condition (financial
or other), business, prospects or results of operations of the Company
and its subsidiaries taken as a whole; neither the Company nor any of
the Operating Subsidiaries is in violation of, or in default under, any
such license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any of the Operating Subsidiaries
<PAGE> 8
the effect of which would have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole;
(n) all legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(o) there is no action, suit, or proceeding pending or, to the
best knowledge of the Company, threatened against the Company or any of
its subsidiaries or any of their respective properties, at law or in
equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency
that could result in a judgment, decree or order having a material
adverse effect on the condition (financial or other), business,
prospects or results of operations of the Company and its subsidiaries
taken as a whole;
(p) the audited financial statements included in the
Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries as
of the dates indicated and the consolidated results of operations and
cash flows of the Company and its subsidiaries for the periods
specified and comply with the requirements applicable to registration
statements on Form S-3 under the Act; such financial statements have
been prepared in conformity with generally accepted accounting
principles, applied on a consistent basis during the periods involved;
the other financial and statistical information and data included in
the Registration Statement and the Prospectus, historical and as
adjusted, are accurately presented in all material respects and
prepared on a basis consistent with the financial statements and the
books and records of the Company and its subsidiaries.
(q) subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as
may be otherwise stated in or contemplated by the Registration
Statement or Prospectus, there has not been (A) any material adverse
change in the business, prospects or results of operations of the
Company and its subsidiaries taken as a whole, (B) any transaction that
is material to the Company and its subsidiaries taken as a whole,
proposed or entered into by the Company or any of its subsidiaries or
(C) any obligation, contingent or
<PAGE> 9
otherwise, directly or indirectly, incurred by the Company or any of
its subsidiaries that is material to the Company and its subsidiaries
taken as a whole;
(r) there is no claim pending or threatened or to the best
knowledge of the Company, contemplated under any Environmental Law (as
defined below) against the Company or any subsidiary which, if
adversely determined, would have a material adverse effect on the
condition (financial or other), business, prospects or results of
operations of the Company and its subsidiaries taken as a whole; there
are no past or present actions or conditions including, without
limitation, the release of any hazardous substance or waste regulated
under any Environmental Law that are likely to form the basis of any
such claim under existing law against the Company or any of its
subsidiaries, which, if adversely determined, would have a material
adverse effect on the condition (financial or other), business,
prospects or results of operations of the Company and its subsidiaries
taken as a whole. The term "Environmental Law" means any federal,
state, local or foreign law, rule or regulation now in effect governing
pollution or protection of the environment;
(s) the Company or the applicable subsidiary has good and
market able title to all properties and assets reflected as owned in
the financial statements hereinabove described (or elsewhere in the
Prospectus), and no such property or asset is subject to any lien,
mortgage, pledge, charge or encumbrance of any kind except (i) those
reflected in such financial statements (or elsewhere in the
Prospectus), (ii) those existing in the ordinary course in connection
with the business of the Company and its subsidiaries and which do not
adversely affect the use made and proposed to be made of such property
by the Company and its subsidiaries taken as a whole or (iii) those
which are not material in amount and do not adversely affect the use
made and proposed to be made of such property by the Company and its
subsidiaries taken as a whole. The Company or the applicable subsidiary
holds its material leased properties, if any, under valid and binding
leases, with such exceptions as are not materially significant in
relation to the business of the Company and its subsidiaries taken as a
whole;
(t) neither the Company nor any of the Operating Subsidiaries,
nor any employee of the Company or any of the Operating Subsidiaries,
has made any payment of funds of the Company or any of the Operating
Subsidiaries prohibited by law, and no funds of the Company or any of
the Operating Subsidiaries have been set aside to be used for any
payment prohibited by law;
(u) the Company and its subsidiaries have filed all federal or
state
<PAGE> 10
income or franchise tax returns required to be filed and have paid all
taxes shown thereon as due, and there is no material tax deficiency
which has been or could be properly asserted against the Company or any
of its subsidiaries; all material tax liabilities are adequately
provided for on the books of the Company and its subsidiaries;
(v) the Company has not incurred any liability for any
finder's fees or similar payments in connection with the transactions
herein contemplated; and
(w) neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, or is subject to regulation thereunder.
4. Certain Covenants of the Company: The Company hereby covenants
and agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Debentures for offering and
sale under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect as long as
required for the distribution of the Debentures, provided that the
Company shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of any such state
(except service of process with respect to the offering and sale of the
Debentures); to promptly advise you of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Debentures for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best
efforts to obtain the withdrawal of any order of suspension at the
earliest practicable moment;
(b) from time to time to furnish to you as many copies of the
Prospectus (as amended or supplemented) as you may reasonably request;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when any amendment to the
Registration Statement has been filed or becomes effective and (ii)
when the Prospectus is filed with the Commission pursuant to Rule
424(b)(5) under the Act (which the Company agrees to file in a timely
manner under such Rule);
<PAGE> 11
(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for,
or the entry of a stop order suspending the effectiveness of, the
Registration Statement and, if the Commission should enter a stop
order suspending the effectiveness of the Registration Statement, to
make every reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise you promptly of any proposal to
amend or supplement the Registration Statement or Prospectus, including
by filing any documents that would be incorporated therein by reference
and to file no such amendment or supplement to which you shall
reasonably object in writing;
(e) to furnish to you for a period of eight years from the
date of this Agreement, but only so long as the Company is subject to
the periodic reporting requirements of the Exchange Act (or, if
shorter, the period of time the Debentures are outstanding) (i) copies
of any reports or other communications that the Company shall send to
its stockholders generally or shall from time to time publish or
publicly disseminate, (ii) copies of all annual, quarterly and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar form as may be designated by the Commission, and (iii)
such other non-confidential information as you may reasonably request
regarding the Company and which is produced by the Company in the
ordinary course of business;
(f) to advise you promptly of the happening of any event known
to the Company within the time during which a Prospectus relating to
the Debentures is required to be delivered under the Act which, in the
judgment of the Company, would require the making of any change in the
Prospectus then being used or in the information incorporated therein
by reference, so that the Prospectus, as then supplemented, would not
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, and, during
such time, to prepare and furnish, at the Company's expense, to you
promptly such amendments or supplements to such Prospectus as may be
necessary to reflect any such change in such quantities as reasonably
requested by you and to furnish to you a copy of such proposed
amendment or supplement before filing any such amendment or supplement
with the Commission;
(g) to make generally available to its securityholders and to
deliver to you (if not otherwise delivered pursuant to Section 4(e)
hereof), an earnings statement of the Company (which need not be
audited and will satisfy the provisions of Section 11(a) of the Act
including, at the option of
<PAGE> 12
the Company, Rule 158) covering a period of twelve months beginning
after the date of the Prospectus as soon as is reasonably practicable
after the termination of such twelve-month period but not later than
fifteen months after the date of the Prospectus.
(h) to furnish to you two conformed copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents
incorporated by reference therein) and such additional conformed copies
thereof as you shall reasonably request;
(i) to furnish to you as early as practicable prior to the
Time of Purchase, but no later than two business days prior thereto, a
copy of the latest available unaudited interim consolidated financial
statements, if any, of the Company and its subsidiaries that have been
read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(d) of this
Agreement;
(j) to apply the net proceeds from the sale of the Debentures
in the manner set forth under the caption "Use of Proceeds" in the
Registration Statement and Prospectus;
(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement otherwise becomes effective
or is terminated, to pay all expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the
Underwriters except as set forth under Section 5 hereof and (iv) below)
in connection with (i) the preparation and filing of each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto
or to the Registration Statement, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including
the incorporated documents and costs of mailing and shipment), (ii) the
preparation, issuance, execution, authentication, sale and delivery of
the Debentures, (iii) the reproduction and furnishing of copies of this
Agreement, any dealer agreements and the Indenture to the Underwriters
and to dealers (including costs of mailing and shipment), (iv) the
qualification or registration of the Debentures for offering and sale
under state laws and the determination of their eligibility for
investment under state law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel in connection with such
state law matters) and the preparation and furnishing of copies of any
blue sky surveys or legal investment surveys to the
<PAGE> 13
Underwriters and to dealers, (v) the listing of the Debentures on the
New York Stock Exchange and any other stock exchange on which the
Debentures may be listed, (vi) any filing fee for review of the public
offering of the Debentures by the National Association of Securities
Dealers, Inc. and (vii) the performance of the Company's other
obligations hereunder;
(l) to furnish to you, before filing with the Commission
subsequent to the effective date of the Registration Statement and
during the period referred to in paragraph (f) above, a copy of any
document proposed to be filed pursuant to Sections 13, 14 or 15(d) of
the Exchange Act;
(m) to refrain from investing the proceeds from the sale of
the Debentures in a manner to cause the Company or any of its
subsidiaries to become an "investment company" within the meaning of
the Investment Company Act of 1940, as amended; and
(n) to use its best efforts to cause the Debentures to be
listed on the New York Stock Exchange.
5. Reimbursement of Underwriters' Expenses: If the Debentures are
not delivered for any reason other than the default by the Underwriters in their
obligations hereunder, the Company shall reimburse the Underwriters for all of
their reasonable out-of-pocket expenses in connection with the matters
contemplated hereunder, including the reasonable fees and disbursements of their
counsel; provided, however, that if the Underwriters determine to terminate this
Agreement pursuant to Section 7 hereof and such determination is not reasonable,
then the Underwriters shall not be entitled to reimbursement of their
out-of-pocket expenses under this Section 5.
6. Conditions of the Underwriters' Obligations: The obligations
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the Time of
Purchase, the performance by the Company of its obligations hereunder and to the
following conditions:
(a) The Company shall furnish to you at the Time of Purchase
an opinion of Gibson, Dunn & Crutcher LLP, special counsel for the
Company, addressed to you and dated the Time of Purchase in the form
set forth in Annex A hereto.
(b) The Company shall furnish to you at the Time of Purchase
an opinion of Robertson C. Jones, Esq., Vice President and General
Counsel of the Company, addressed to you and dated the Time of Purchase
in the form set forth in Annex B hereto.
<PAGE> 14
(c) [Intentionally left blank]
(d) You shall have received from KPMG LLP letters dated as of
the date of this Agreement and the Time of Purchase, as the case may
be, and addressed to you, each in form and substance heretofore
approved by you.
(e) You shall have received at the Time of Purchase an opinion
from Skadden, Arps, Slate, Meagher & Flom LLP in form and substance
reasonably satisfactory to you.
(f) No amendment or supplement to the Registration Statement
or Prospectus, including documents deemed to be incorporated by
reference therein, shall be filed to which you reasonably have objected
in writing prior to such filing.
(g) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act;
(h) Prior to the Time of Purchase (i) no stop order with
respect to the effectiveness of the Registration Statement shall have
been issued under the Act or proceedings initiated under Section 8(d)
or 8(e) of the Act; (ii) the Registration Statement and all amendments
thereto, or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall not contain an untrue
statement of material fact or omit to state 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.
(i) Between the time of execution of this Agreement and the
Time of Purchase there has not been (i) any material and adverse
change, present or prospective, in the condition (financial or other),
business, prospects or results of operations of the Company and its
subsidiaries taken as a whole, (ii) any transaction that is material to
the Company and its subsidiaries taken as a whole entered into by the
Company or any of its subsidiaries or (iii) any obligation, contingent
or otherwise, directly or indirectly, incurred by the Company or any of
its subsidiaries that is material to the Company and its
<PAGE> 15
subsidiaries taken as a whole.
(j) The Company at the Time of Purchase will deliver to you a
certificate executed by two of its executive officers to the effect
that the representations and warranties of the Company set forth in
this Agreement and the conditions set forth in paragraph (h) and
paragraph (i) have been met and are true and correct as of such date.
(k) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the
Time of Purchase as you may reasonably request.
(l) The Company shall perform such of its obligations under
this Agreement as are to be performed by the terms hereof at or before
the Time of Purchase.
(m) The Debentures shall have been approved for listing on the
New York Stock Exchange.
(n) Between the time of execution of this Agreement and the
Time of Purchase (i) there shall not have occurred any downgrading in
the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization," as that term is defined in
Rule 436(g)(2) under the Act and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities.
7. Effective Date of Agreement; Termination: This Agreement shall
become effective when the parties hereto have executed and delivered this
Agreement.
The obligations of each of the Underwriters hereunder shall be subject
to termination in the absolute discretion of either of you if, at any time prior
to the Time of Purchase, trading in securities generally on the New York Stock
Exchange or American Stock Exchange shall have been suspended or minimum prices
shall have been established on such exchange, or if a banking moratorium shall
have been declared either by the United States or New York State authorities, or
if the United States shall have declared war in accordance with its
constitutional processes or there shall have occurred any material outbreak or
escalation of hostilities or other national or international calamity or crisis
of such magnitude in its effect on the financial markets of the United States
as, in your judgment make it impracticable to market the Debentures.
<PAGE> 16
If you elect to terminate this Agreement as provided in this Section 7,
the Company and the other Underwriters shall be notified promptly by letter sent
by facsimile transmission and registered mail, or by telegram.
If the sale to the Underwriters of the Debentures, as contemplated by
this Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company
shall be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Sections 4(k), 5 and 9 hereof), and the Underwriters
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 9 hereof).
8. Increase in Underwriters' Commitments: If any Underwriter
shall default in its obligation to take up and pay for the Debentures to be
purchased by it hereunder and:
(a) if the aggregate principal amount of the Debentures which
all Underwriters so defaulting shall have agreed but failed to take up
and pay for does not exceed 10% of the total aggregate principal amount
of the Debentures, the non-defaulting Underwriter or Underwriters shall
take up and pay for (in addition to the aggregate principal amount of
the Debentures it is obliged to purchase pursuant to Section 1 hereof)
the aggregate principal amount of the Debentures agreed to be purchased
by such defaulting Underwriter, as hereinafter provided. Such aggregate
principal amount of the Debentures shall be taken up and paid for by
such non-defaulting Underwriter or Underwriters in such amounts as you
may designate with the consent of each Underwriter so designated or, in
the event no such designation is made, such aggregate principal amount
of the Debentures shall be taken up and paid for by all nondefaulting
Underwriters pro rata in proportion to the aggregate principal amount
of the Debentures set forth opposite the names of such non-defaulting
Underwriters in Schedule I hereto; or
(b) if the aggregate principal amount of the Debentures which
all Underwriters so defaulting shall have agreed but failed to take up
and pay for exceeds 10% of the total aggregate principal amount of the
Debentures, the non-defaulting Underwriter or Underwriters may, but
shall not be required to, elect to take up and pay for the aggregate
principal amount of the Debentures agreed to be purchased by such
defaulting Underwriter or Underwriters in such amounts as you may
designate with the consent of each Underwriter so
<PAGE> 17
designated. If the non-defaulting Underwriters do not so elect, this
Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriter or
Underwriters that it will not sell any Debentures hereunder unless all of the
Debentures are purchased by the Underwriters (or by substituted Underwriters
selected by you with the approval of the Company (which will not be unreasonably
withheld) or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
non-defaulting Underwriter or Underwriters or by the Company for a defaulting
Underwriter or Underwriters in accordance with the foregoing provisions, the
Company or you shall have the right to postpone the Time of Purchase for a
period not exceeding five (5) business days in order that any necessary changes
in the Registration Statement and Prospectus and other documents may be
effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule I.
9. Indemnity by the Company and the Underwriters:
(a) The Company agrees to indemnify and hold harmless each of
the Underwriters, each person that controls any of the Underwriters
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the agents, employees, officers and directors of each
of the Underwriters and of each such controlling person (collectively,
the "Underwriter indemnified parties") from and against any and all
losses, claims, damages, judgments, liabilities and expenses
(including, but not limited to, the reasonable fees and expenses of
counsel and other expenses in connection with investigating, preparing,
defending or settling any such action or claim, whether commenced or
threatened) which, jointly or severally, any Underwriter indemnified
party may incur as they are incurred (and regardless of whether the
Underwriter indemnified party is a party to the litigation, if any)
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
the Prospectus or the Preliminary Prospectus (as the same may have been
or may be amended or supplemented), or arising out of or based upon any
omission or alleged
<PAGE> 18
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, judgments, liabilities or
expenses arise out of, or are based upon, any such untrue statement or
omission or alleged untrue statement or omission based upon and in
conformity with information with respect to the Underwriters furnished
in writing by you to the Company expressly for use therein with
reference to the Underwriters; provided, however, that the indemnity
agreement contained in this Section 9(a) with respect to the
Preliminary Prospectus or amended or supplemented Preliminary
Prospectus shall not inure to the benefit of any of the Underwriters
(or to the benefit of any person controlling any of the Underwriters)
from whom the person asserting any such loss, expense, liability or
claim purchased the Debentures which is the subject thereof if the
Prospectus corrected any such alleged untrue statement or omission and
if such Underwriter failed to send or give a copy of the Prospectus to
such person at or prior to the written confirmation of the sale of such
Debentures to such person.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted
against any Underwriter indemnified party, with respect to which
indemnity may be sought against the Company pursuant to this Section 9,
such Underwriter indemnified party shall promptly notify the Company in
writing, and the Company shall assume the defense thereof, including
the employment of counsel satisfactory to the Underwriter indemnified
party in its reasonable judgment and payment of all fees and expenses;
provided that the omission so to notify the Company shall not relieve
the Company from any liability that it may have to any Underwriter
indemnified party unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the
Company. An Underwriter indemnified party shall have the right to
employ separate counsel in any such action or proceeding and to assume
in the defense thereof, but the fees and expenses of such counsel shall
be at the expense of such Underwriter indemnified party unless (i) the
employment of such counsel has been specifically authorized in writing
by the Company, (ii) the Company has failed promptly to assume the
defense and employ counsel satisfactory to the Underwriter indemnified
party in its reasonable judgment, or (iii) the named parties to any
such action or proceeding (including any impleaded parties) include
both the Underwriter indemnified party and the Company and such
Underwriter indemnified party shall have concluded in its reasonable
judgment that there may be one or more legal defenses available to it
that are different from or additional to those available to the Company
(in which case the Company shall not have the right to assume the
defense of such action on behalf of such Underwriter indemnified
party), in any of which events such fees and expenses shall be borne by
the Company and paid as
<PAGE> 19
incurred. It is understood, however, that the Company shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriter indemnified parties, which firm shall be designated in
writing by Warburg Dillon Read LLC, and that all such fees and expenses
shall be reimbursed as they are incurred. The Company shall not be
liable for any settlement of any such action effected without the
written consent of the Company (which consent shall not be unreasonably
withheld or delayed), but if settled with the written consent of the
Company, or if there is a final judgment with respect thereto, the
Company agrees to indemnify and hold harmless each Underwriter
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(c) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, its directors, its officers
who signed the Registration Statement, and any person that controls the
Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act (collectively, the "Company indemnified parties") to
the same extent as the foregoing indemnity from the Company to the
Underwriter indemnified parties, but only with respect to information
covering such Underwriter furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use with respect
to such Underwriter in the Registration Statement, the Prospectus or
the Preliminary Prospectus (as the same may have been amended or
supplemented). In case any action shall be brought against any Company
indemnified party based on the Registration Statement, the Prospectus
or the Preliminary Prospectus (as the same may have been amended or
supplemented) and in respect of which indemnity may be sought against
the Underwriters pursuant to this Section 9(c), the Underwriters shall
have the rights and duties given to the Company by Section 9(b) hereof
(except that if the Company shall have assumed the defense thereof the
Underwriters shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, provided that
the fees and expenses of such counsel shall be at the Underwriters'
expense), and the Company indemnified parties shall have the rights and
duties given to the Underwriter indemnified parties by Section 9(b)
hereof.
(d) If the indemnification provided for in this Section 9 is
<PAGE> 20
unavailable to, or insufficient to hold harmless, any Underwriter
indemnified party or any Company indemnified party, then the party
required to indemnify such indemnified party under this Section 9
shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages, judgments, liabilities and expenses (i)
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 Debentures, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above 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, liabilities or expenses, 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 proportions as the total proceeds from the
offering (net of underwriting discounts and commission but 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. The relative fault of the Company on the one hand and the
Underwriters on the other 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 or by the Under
writers, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses incurred by such
party in its reasonable judgment in connection with investigating or
defending any claim or action.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. Notwithstanding the provisions
of this subsection (d), no Under writer shall be required to contribute
any amount in excess of the underwriting discount applicable to the
Debentures underwritten by such Underwriter and distributed to the
public. No person guilty of fraudulent
<PAGE> 21
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 sixth paragraph under the caption "Underwriting" on page
[S-42] of the Prospectus Supplement concerning stabilization by the
Underwriters and the third paragraph under the caption "Underwriting"
on page [S-42] of the Prospectus Supplement concerning the terms of the
offering by the Underwriters constitute the only information furnished
to the Company in writing by the Underwriters expressly for use in the
Registration Statement, the Prospectus or the Preliminary Prospectus
(as the same may have been amended or supplemented prior to the date
of the Prospectus).
(e) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and representations of the
Company contained in this Agreement shall remain in full force and
effect, regardless of any investigation made by or on behalf of the
Underwriter indemnified party or by or on behalf of any Company
indemnified party, and shall survive any termination of this Agreement
or the issuance and delivery of the Debentures. The Company and the
Underwriters agree promptly to notify the other of the commencement of
any litigation or proceeding against it and, in the case of the
Company, against any of the Company's officers and directors, in
connection with the issuance and sale of the Debentures or in
connection with the Registration Statement, the Prospectus or the
Preliminary Prospectus (as the same may have been amended or
supplemented prior to the date of the Prospectus).
10. Other Agreements: Each of the Company and the Underwriters
represents and agrees that (a) it has not offered or sold, and for a period of
six months after the date of issue of the Debentures will not offer or sell, any
Debentures to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which do not constitute an offer to the public in the
United Kingdom for the purposes of the Public Offers of Securities Regulations
1995, (b) it has complied and will comply with all applicable provisions of the
Public Offers of Securities Regulations 1995 and the Financial Services Act 1986
with respect to anything done by it in relation to the Debentures in, from or
otherwise involving the United Kingdom and (c) it has only issued or passed on
and will only issue or pass on in the United Kingdom any document received by it
in connection with the issue or sale of Debentures to a person who is of a kind
described in Article 11(3) of the Financial Services Act of 1986 (Investment
Advertisements) (Exemptions) Order 1996 (as amended) or is a person to whom the
document may otherwise lawfully be issued or passed on.
<PAGE> 22
11. Notices: Except as otherwise provided herein, all statements,
requests, notices and agreements shall be in writing and, if to the
Underwriters, shall be sufficient in all respects if timely delivered or sent to
Warburg Dillon Read LLC, 299 Park Avenue, New York, NY 10171, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if timely delivered to the Company at the offices of the Company at 6001 N. 24th
Street, Phoenix, Arizona 85016, Attention: Robertson C. Jones, Esq. Any party
may change the address at which it is to receive statements, requests, notices
and agreements by written notice to the other parties.
12. GOVERNING LAW; CONSTRUCTION: THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT
HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF
THIS AGREEMENT.
13. Parties in Interest: The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company, the Underwriter
indemnified parties and the Company indemnified parties, and their respective
successors, assigns, executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from the
Underwriters) shall acquire or have any right under or by virtue of this
Agreement
14. Counterparts: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement between
the parties.
[REMAINDER INTENTIONALLY LEFT BLANK]
<PAGE> 23
Very truly yours,
DEL WEBB CORPORATION
By: _______________________________
Name:
Title:
Agreed to and accepted as of the date
first above written:
Warburg Dillon Read LLC
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
By: Warburg Dillon Read LLC
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
<PAGE> 24
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount
Underwriter of Debentures
----------- ----------------
<S> <C>
Warburg Dillon Read LLC .................................. $ 82,500,000
Salomon Smith Barney Inc. ................................ $ 25,500,000
Goldman, Sachs & Co. ..................................... $ 30,000,000
NationsBanc Montgomery Securities LLC .................... $ 12,000,000
Total ............................................... $150,000,000
============
</TABLE>
SCHEDULE II
Anthem Arizona, LLC, an Arizona limited liability company
Bellasera Corp., an Arizona corporation
Del Webb Communities, Inc., an Arizona corporation
Del E. Webb Development Co., L.P., a Delaware limited partnership
Del Webb California Corp., an Arizona corporation
Del Webb's Coventry Homes, Inc., an Arizona corporation
Del Webb's Coventry Homes Construction Co., an Arizona corporation
Del Webb Home Construction, Inc., an Arizona corporation
Del Webb's Spruce Creek Communities, Inc., an Arizona corporation
Del Webb's Sunflower of Tucson, Inc., an Arizona corporation
Terravita Home Construction Co., an Arizona corporation
Terravita Corp., an Arizona corporation
Del Webb's Coventry Homes of Tucson, Inc., an Arizona corporation
Del Webb's Coventry Homes Construction of Tucson, Co. an Arizona Corporation
Del Webb's Coventry Homes of Nevada, Inc., an Arizona corporation
Del Webb Conservation Holding Corp., an Arizona corporation
Trovas Company, an Arizona corporation
Trovas Construction Company, an Arizona corporation
Del Webb Texas Limited Partnership, an Arizona limited partnership
Fairmount Mortgage, Inc., an Arizona corporation
Del Webb Limited Holding Co., an Arizona corporation
Del Webb Southwest Co., an Arizona corporation
DW Aviation Co., Inc., an Arizona corporation
Mountain View Two LLC, an Arizona limited liability company
Spruce Creek South Utilities, Inc., a Florida corporation
<PAGE> 25
ANNEX A
February [ ], 1999
Warburg Dillon Read LLC
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
c/o Warburg Dillon Read LLC
299 Park Avenue
New York, New York 10171
Re: Del Webb Corporation
Public Offering of $200 Million of
[ ]% Senior Subordinated Debentures due 2010
Ladies and Gentlemen:
We have acted as special counsel to Del Webb Corporation, a
Delaware corporation (the "Company"), in connection with its sale to you of $200
million of [ ]% Senior Subordinated Debentures Due 2010 (the "Debentures")
pursuant to the Underwriting Agreement, dated February [ ], 1999, between each
of you and the Company (the "Underwriting Agreement"). This opinion is rendered
to you pursuant to Section 6(a) of the Underwriting Agreement.
In connection with our examination of documents as described
below, we have assumed the genuineness of all signatures on, and the
authenticity of, all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as copies. With respect
to agreements and instruments executed by natural persons, we have assumed the
legal competency of such persons.
For the purpose of rendering this opinion, we have made such
factual and legal inquiries as we deemed necessary under the circumstances and
in that connection we have examined, among other things, originals or copies of
the following:
(1) The registration statement on Form S-3 (file number
333-63671) filed by the Company with the Securities
and
<PAGE> 26
Warburg Dillon Read LLC.
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
February [ ], 1999
Page 26
Exchange Commission (the "Commission") on September
18, 1998 for the purpose of registering the sale of
various securities, including Senior Subordinated
Debt Securities, under the Securities Act of 1933, as
amended (the "Securities Act"), the related Form T-1
filed with the Commission for the purpose of
qualifying the Indenture (defined below) under the
Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the prospectus included as part
of the Registration Statement (defined below). The
registration statement in the form in which it became
effective on October 22, 1998, including the
documents incorporated by reference therein to the
extent not modified or superseded thereby, is
referred to below as the "Registration Statement",
the prospectus of the Company dated October 22, 1998,
including the documents incorporated by reference
therein to the extent not modified or superseded
thereby, is referred to below as the "Prospectus" and
the Prospectus, as supplemented by the Prospectus
Supplement to Prospectus dated February [ ], 1999, in
the form filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations adopted by the
Commission under the Securities Act, including the
documents incorporated by reference therein to the
extent not modified or superseded thereby, is
referred to below as the "Prospectus/Prospectus
Supplement";
(2) The order of the Commission dated October 22, 1998,
declaring the Registration Statement effective under
the Securities Act;
(3) The Certificate of Incorporation of the Company, as
amended to date;
(4) The Bylaws of the Company, as amended to date;
(5) Minutes of meetings of the Company's Board of
Directors at which actions were taken with respect to
the transactions covered by this opinion and minutes
or records of other
<PAGE> 27
Warburg Dillon Read LLC.
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
February [ ], 1999
Page 27
corporate proceedings;
(6) The action of the Chief Executive Officer of the
Company, dated as of February [ ], 1999, with respect
to the terms of the Debentures and the Indenture;
(7) The letters of KPMG LLP, dated February [ ], 1999 and
the date hereof, delivered pursuant to Section 6(d)
of the Underwriting Agreement;
(8) The certificates, dated as of the date hereof,
delivered pursuant to Section 6(k) of the
Underwriting Agreement;
(9) The Directors and Officers Questionnaires of the
directors and executive officers of the Company;
(10) The Indenture, dated as of February [ ], 1999,
between the Company and Bank of Montreal Trust
Company, as Trustee (the "Trustee"), pursuant to
which the Debentures are to be issued (the
"Indenture");
(11) The Certificate of the Trustee, dated as of the date
hereof, as to the due authentication of the
Debentures;
(12) The Underwriting Agreement;
(13) Specimen certificate(s) representing the Debentures;
(14) The opinion of Robertson C. Jones, Esq., Vice
President and General Counsel of the Company, to you,
dated February [ ], 1999;
(15) The documents referred to in subparagraphs (x)(B),
(C), (D), (E) and (F) below and the indentures with
respect to the Company's 9-3/4% Senior Subordinated
Debentures due 2003, 9% Senior Subordinated
Debentures due 2006, 9 3/4% Senior Subordinated
Debentures due 2008 and 9 3/8% Senior
<PAGE> 28
Warburg Dillon Read LLC.
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
February [ ], 1999
Page 28
Subordinated Debentures due 2009;
(16) Such other certificates and assurances from public
officials and officers and representatives of the
Company that we considered necessary or appropriate
for the purpose of rendering this opinion, copies of
which have been delivered to you; and
(17) The opinions rendered by us in connection with our
representation of the Company in the issuance of its
common stock and certain related documents.
Based on the foregoing and in reliance thereon (with respect to
the opinion of Robertson C. Jones, to the extent set forth below), and subject
to the assumptions, qualifications and limitations set forth herein, we are of
the opinion that:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware and has the corporate power to (A)
own its properties and conduct its business, in each
case as described in the Prospectus/Prospectus
Supplement, and (B) execute and deliver the
Underwriting Agreement and the Indenture and to
issue, sell and deliver the Debentures as
contemplated by the Underwriting Agreement;
(ii) Each of the entities listed on Schedule II to the
Underwriting Agreement (the "Material Subsidiaries")
is a corporation, limited partnership or limited
liability company, as the case may be, duly
organized, validly existing and, as to the Material
Subsidiaries that are corporations and Del E. Webb
Development Co., L.P., a Delaware limited partnership
("DEVCO"), in good standing under the laws of its
respective jurisdiction of incorporation or
organization. Each Material Subsidiary has the
corporate, partnership or limited liability company
power to own its properties and conduct its business,
in each case as described in the
Prospectus/Prospectus Supplement;
<PAGE> 29
Warburg Dillon Read LLC.
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
February [ ], 1999
Page 29
(iii) The Company is qualified to do business and in good
standing in Arizona, California, Nevada, Illinois,
Texas and South Carolina; Bellasera Corp., an Arizona
corporation, is qualified to do business and in good
standing in Illinois; Del Webb Communities, Inc., an
Arizona corporation, is qualified to do business and
in good standing in Nevada and South Carolina; Del
Webb Conservation Holding Corp., an Arizona
corporation, is qualified to do business and in good
standing in Nevada; Del Webb California Corp., an
Arizona corporation, is qualified to do business and
in good standing in California; Del Webb's Coventry
of Nevada, Inc., Homes Construction Co., an Arizona
corporation, is qualified to do business and in good
standing in Nevada; DEVCO is qualified to do business
in Arizona and Nevada; Del Webb Southwest Co., an
Arizona corporation, is qualified to do business and
in good standing in Texas; and Del Webb Texas Limited
Partnership, an Arizona limited partnership, is
qualified to do business in Arizona and Texas.
(iv) The Company has the authorized capital stock set
forth in the Prospectus/Prospectus Supplement;
(v) The 2,500,000 shares and 375,000 shares of the
Company's Common Stock issued on June 25 and July 25,
1991, respectively, in a registered public offering,
the approximately 1.1 million shares of the Company's
common stock publicly issued in August and September
1987 in an exchange offer for then outstanding notes,
the 333,333 shares of common stock of the Company
issued on September 25, 1983, upon exercise of
warrants, in a registered public offering and the
approximately 3.2 million shares of common stock of
the Company issued in connection with the
underwritten call in May and June 1992 of the
Company's 10-3/8% Convertible Subordinated Debentures
(none of which, we are informed, are now outstanding)
were all duly and validly authorized, fully paid,
non-assessable and not issued in violation of any
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preemptive rights provided by Arizona law or the
Articles of Incorporation or Bylaws of the Company as
then in effect (the Company was incorporated in
Arizona at the time of each of these issuances of
common stock). The 2,474,900 shares of the Company's
common stock issued on August 16, 1995 in a
registered public offering were all duly and validly
authorized, fully paid, non-assessable and not issued
in violation of any preemptive rights provided by
Delaware law or the Certificate of Incorporation or
Bylaws of the Company as then in effect;
(vi) To our knowledge, there are no actions, suits or
proceedings pending or threatened in writing against
the Company or any of the Material Subsidiaries or
any of their respective properties, at law or in
equity or before or by any commission, board, body,
authority or agency, that are required to be
described in the Prospectus/Prospectus Supplement but
are not so described;
(vii) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(viii) The Debentures have been duly authorized by the
Company and, when executed, issued and authenticated
in accordance with the terms of the Indenture and
delivered and paid for in accordance with the terms
of the Underwriting Agreement, will be entitled to
the benefits of the Indenture and will be legal,
valid and binding obligations of the Company,
enforceable against the Company in accordance with
their terms, and the Debentures and the Indenture
conform to the descriptions thereof in the Prospec-
tus/Prospectus Supplement;
(ix) The Indenture has been duly authorized, executed and
delivered by the Company and is a legal, valid and
binding agreement of the Company, enforceable against
the Company in accordance with its terms, and the
Indenture has been qualified under the Trust
Indenture Act;
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(x) The execution, delivery and performance of the
Underwriting Agreement and the Indenture, the
issuance and sale of the Debentures by the Company
and the consummation of the other transactions
contemplated by the Underwriting Agreement and the
Indenture will not result in any breach of or
constitute a default under (or constitute an event
which with notice, lapse of time or both would
constitute a breach of or default under): (A) the
Certificate of Incorporation or Bylaws of the
Company; (B) any indenture, mortgage, deed of trust,
bank loan or credit agreement or other similar
written agreement or instrument that was filed, or
incorporated by reference, as an exhibit to the
Company's Annual Report on Form 10-K for its fiscal
year ended June 30, 1998 filed with the Commission or
that is referred to in the Prospectus/Prospectus
Supplement; (C) the Company's 9-3/4% Senior
Subordinated Debentures due 2003; (D) the Company's
9% Senior Subordinated Debentures due 2006; (E) the
Company's 9-3/4% Senior Subordinated Debentures due
2008; (F) the Company's 9-3/8% Senior Subordinated
Debentures due 2009; (G) any federal or Arizona
state statute, regulation or rule applicable to the
Company (with respect to the execution, delivery and
performance of the Indenture and the issuance and
sale of the Debentures only, provided that no opinion
is expressed as to state securities or Blue Sky laws
or the rules and regulations under any of them or as
to any misstatements or omissions in the
Registration Statement, Prospectus or
Prospectus/Prospectus Supplement); (H) the Delaware
General Corporation Law (with respect to the
execution, delivery and performance of the Indenture
and the issuance and sale of the Debentures only,
provided that no opinion is expressed as to state
securities or Blue Sky laws or the rules and
regulations under any of them or as to any
misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement); or (I) any license, decree, judgment or
order applicable to the Company and known to us (with
respect to the execution, delivery and performance of
the Indenture and the issuance and sale of the
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Debentures only, provided that no opinion is
expressed as to state securities or Blue Sky laws or
the rules and regulations under any of them or as to
any misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement);
(xi) No consent, approval, authorization, order or
qualification of or registration with any federal or
Arizona, Delaware (to the extent required by the
Delaware General Corporation Law) or New York state
governmental or regulatory commission, board, body,
authority or agency is required for the issuance or
sale of the Debentures by the Company as contemplated
by the Underwriting Agreement and the Indenture,
other than as has been accomplished under the
Securities Act and the Trust Indenture Act and for
filing of the Indenture under the Securities Act
(which, we understand, is anticipated to be timely
done by the Company by the filing of a Current Report
on Form 8-K to which such document will be an
exhibit), provided that we express no opinion as to
any necessary qualification or registration, or
exemption therefrom, under any state securities or
Blue Sky laws;
(xii) The Registration Statement has become effective under
the Securities Act and, to our knowledge, no stop
order proceedings with respect thereto are pending or
threatened under the Securities Act;
(xiii) To our knowledge, neither the Company nor any of the
Material Subsidiaries is in breach of or in default
under (nor has any event occurred that with notice,
lapse of time or both would constitute a breach of or
default under): (a) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other written
agreement or instrument identified or described in
subparagraph (x)(B), (C), (D), (E) and (F) above; or
(b) any federal or Arizona, California, Delaware,
Nevada, South Carolina, Texas, Illinois or Florida
state or local license, decree, judgment or order
applicable to the
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Company or any of the Material Subsidiaries and known
to us; in each case in clauses (a) and (b) where such
breach or default could have a material adverse
affect on the consolidated financial position,
prospects, shareholders' equity or results of
operations of the Company and its subsidiaries taken
as a whole;
(xiv) To our knowledge, there are no contracts, licenses,
agreements, leases or documents of a character that
are required to be filed as exhibits to the
Registration Statement or to be summarized or
described in the Prospectus/Prospectus Supplement
that have not been so filed, summarized or described;
and
(xv) The Registration Statement and the Prospectus/
Prospectus Supplement (except as to the financial
statements, financial statement notes and financial
statement schedules and other financial and
statistical data contained or incorporated by
reference therein and in the Exhibits thereto
(including the T-1), as to which we express no
opinion or make no other statement) comply as to form
in all material respects with the applicable
requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations under
both; the documents incorporated by reference in
the Registration Statement and the Prospec-
tus/Prospectus Supplement when they were filed or, if
an amendment with respect to any such document was
filed, when such amendment was filed (except as to
financial statements, financial statement notes and
financial statement schedules and other financial and
statistical data contained therein, as to which we
express no opinion or make no other statement),
complied as to form in all material respects with the
then applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
(xvi) The Statements in the Prospectus/Prospectus
Supplement under the caption "Certain Federal Tax
Matters," to the extent
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they constitute statements of United States federal
tax laws, are correct in all material respects.
(xvii) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is
subject to regulation thereunder.
During the course of the preparation of the
Prospectus/Prospectus Supplement, we participated in conferences with
representatives of the Company, its independent accountants, you and your
counsel, at which conferences the contents of the Registration Statement,
Prospectus and Prospectus/Prospectus Supplement and related matters were
discussed. We have not independently verified the accuracy, completeness or
fairness of the statements contained in the Registration Statement, Prospectus
or Prospectus/Prospectus Supplement and the nature of our participation is such
that we are unable to assume, and do not assume, any responsibility for the
accuracy, completeness or fairness of such statements. However, based upon our
participation as described in this paragraph, we have no reason to believe and
do not believe that the Registration Statement, Prospectus or the
Prospectus/Prospectus Supplement or any documents incorporated by reference
therein (provided that we express no opinion and make no other statement as to
the financial statements, financial statement notes and financial statement
schedules and other financial and statistical data contained therein or with
respect to the T-1), as of their respective effective or issue dates and as of
the date hereof, contained or contains any untrue statement of a material fact
or omitted or omits to state a 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.
Our opinion set forth in paragraphs (viii) and (ix) above is
subject to (a) the effect of applicable bankruptcy, reorganization, insolvency,
moratorium and other similar laws and court decisions of general application,
including without limitation, statutory or other laws regarding fraudulent or
preferential transfers relating to, limiting or affecting the enforcement of
creditors' rights generally and (b) general principles of equity which may limit
the enforceability of any of the remedies, covenants or other provisions of the
Debentures and the Indenture, as well as the availability of injunctive relief
or other equitable remedies, and the application of principles of equity
(regardless of whether enforcement is considered in
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proceedings at law or in equity) as such principles relate to, limit or affect
the enforcement of creditors' rights generally. In addition, we express no
opinion as to: (a) any provisions of the Debentures or the Indenture regarding
the remedies available to any person (1) to take discretionary action that is
arbitrary, unreasonable or capricious or is not taken in good faith or in a
commercially reasonable manner, whether or not such action is permitted under
the Debentures or the Indenture, or (2) for violations or breaches that are
determined by a court to be non-material; (b) with respect to subparagraphs
(x)(B), (C), (D), (E) and (F), whether compliance by the Company with Sections
4.14 or 4.15 of the Indenture, by making a "Change of Control Offer" or a "Net
Worth Offer" (as defined therein), the creation of a lien on property of the
Company under the fourth paragraph of Section 7.07 of the Indenture or the
existence of a "Default" or "Event of Default" under Article 6 of the Indenture
will constitute a default, event of default or cross-default under any of the
indentures, mortgages, deeds of trust, bank loans or credit agreements or other
similar written agreements or instruments referred to in subparagraphs (x)(B),
(C), (D), (E) and (F); (c) with respect to whether acceleration of the
Debentures may affect the collectibility of that portion of the stated principal
amount thereof that might be determined to constitute unearned interest thereon;
(d) the enforceability of the waivers of rights or defenses provided for in
Section 4.12 of the Indenture; or (e) the enforceability under certain
circumstances under law or court decisions of provisions providing for the
indemnification of or contribution to a party with respect to a liability where
such indemnification or contribution is contrary to public policy. Our opinion
in paragraphs (viii) and (ix) is subject to the assumption that the Indenture
has been duly authorized, executed and delivered by the Trustee and the Agent
and constitutes a valid and binding agreement of the Trustee and the Agent,
enforceable against the Trustee and the Agent in accordance with its terms,
subject to exceptions of the type contained above in this paragraph.
This letter is limited to the facts and the law as they exist
on the date hereof. In addition, with respect to statements in this letter based
on our knowledge, (i) we have advised you only as to knowledge obtained by us in
connection with matters to which we have given substantive attention as counsel
to the Company in the form of legal consultation and (ii) such knowledge refers
only to the knowledge of the lawyers in our firm participating in the
preparation of the Registration Statement and the Prospectus/Prospectus
Supplement (being Steven Meiers, Stephen Tolles, Larry Furst and ______________)
and not to the knowledge of every lawyer in our firm. The individuals mentioned
above are those whom, we believe, are the
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appropriate persons of whom to inquire in rendering the opinions given as to our
knowledge herein. Please be advised that (a) our firm has not represented the
Company or any of its subsidiaries in any real property-related matters or given
substantive attention as counsel for the Company in the form of legal
consultation as to any license, decree, judgment or order as may exist with
respect to the business of Company and its subsidiaries (other than judgments or
orders favorable to the Company that are either not relevant to, or are
consistent with, the opinions expressed in this letter), (b) we are not
representing the Company in connection with any actual or threatened actions,
suits or proceedings and (c) except for a review of one of the certificates
referred to in paragraph (16), with your permission, we have not made any other
inquiries with respect thereto.
The Company is a Delaware corporation and, until it
reincorporated in Delaware in 1994, was an Arizona corporation. The Material
Subsidiaries are Arizona corporations, an Arizona limited liability company, an
Arizona limited partnership and a Delaware limited partnership. We are not
admitted to practice in Arizona or Delaware. However, we are generally familiar
with Title 10 of the Arizona Revised Statutes, Chapters 1-23 (Corporations and
Associations) and its predecessor statutes, the Delaware General Corporation Law
and the Delaware Revised Uniform Limited Partnership Act and, except as set
forth in the following sentence, have made such review thereof as we consider
necessary for the purpose of rendering the opinion contained in paragraphs (i),
(ii) (as to DEVCO), (iv), (v), (vii), (viii), (ix), (x)(A) and (xi) of this
opinion. Insofar as this opinion covers Arizona law (except with respect to
paragraph (iii) hereof), or Arizona, California, Delaware, Nevada, South
Carolina, Texas, Illinois or Florida state or local licenses, decrees, judgments
or orders and as to paragraphs (v), (xiii) (b) and (xiv), we have relied, with
your permission, on the opinion of Robertson C. Jones, Esq., Vice President and
General Counsel of the Company, to you, a copy of which is attached hereto, and
(a) as to paragraphs (ii) (second sentence) (with respect to the Material
Subsidiaries other than DEVCO), (x)(G) (except as to federal law), (xi) (except
as to federal law and the Delaware General Corporation Law), and (xiii) such
reliance is, with your permission, exclusive and without any independent
verification and (b) our opinion is subject to the same qualifications,
assumptions and limitations as are set forth in that opinion. We believe you and
we are justified in relying on that opinion. Subject to the foregoing, this
opinion is limited to federal, Arizona, Delaware and New York law, to the extent
set forth above. With respect to the opinion in paragraphs (i) and (ii) as to
valid existence and good standing and with respect to the opinion in
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paragraph (iii), we have relied exclusively on certificates from the relevant
state authorities, except with respect to the qualification of DEVCO in Arizona,
in which case we have relied exclusively on oral advice from a representative of
the relevant state authority.
This letter is furnished to you in connection with the
Underwriting Agreement and the transactions contemplated thereby, is solely for
your benefit, may not be quoted in part by you or in whole or in part by any
other person and may not be relied upon by any other person or by you in any
other context.
Very truly yours,
GIBSON, DUNN & CRUTCHER LLP
<PAGE> 38
ANNEX B
February [ ], 1999
Warburg Dillon Read LLC
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
c/o Warburg Dillon Read LLC
299 Park Avenue
New York, New York 10171
Re: Del Webb Corporation
Public Offering of $200,000,000 of
[ ]% Senior Subordinated Debentures due 2010
Ladies and Gentlemen:
I am the General Counsel of Del Webb Corporation, a Delaware
corporation (the "Company"), and render this opinion to you pursuant to Section
6(b) of the Underwriting Agreement, dated February [ ], 1999, between each of
you and the Company (the "Underwriting Agreement") in connection with the sale
by the Company to you of $200 million of [ ]% Senior Subordinated Debentures due
2010 (the "Debentures").
In connection with my examination of documents as described
below, I have assumed the genuineness of all signatures on, and the authenticity
of, all documents submitted to me as originals and the conformity to original
documents of all documents submitted to me as copies. With respect to agreements
and instruments executed by natural persons, I have assumed the legal competency
of such persons.
For the purpose of rendering this opinion, I have made such
factual and legal inquiries as I deemed necessary under the circumstances and in
that connection I have examined, among other things, originals or copies of the
following:
(1) The registration statement on Form S-3 (Securities
Act file number 333-63671) filed by the Company with
the Securities and Exchange Commission (the
"Commission") on September 18, 1998 for the purpose
of registering the sale of various securities,
including Senior Subordinated Debt Securities, under
the Securities Act of 1933, as amended (the
"Securities Act"), the related Form T-1 filed with
the Commission for the
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purpose of qualifying the Indenture (defined below)
under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act") and the prospectus
included as part of the Registration Statement
(defined below). The registration statement in the
form in which it became effective on October 22,
1998, including the documents incorporated by
reference therein to the extent not modified or
superseded thereby, is referred to below as the
"Registration Statement", the prospectus of the
Company dated October 22, 1998, including the
documents incorporated by reference therein to the
extent not modified or superseded thereby, is
referred to below as the "Prospectus" and the
Prospectus, as supplemented by the Prospectus
Supplement to Prospectus dated February [ ], 1999 in
the form filed by the Company with the Commission
pursuant to Rule 424(b) of the Rules and Regulations
adopted by the Commission under the Securities Act
(the "Rules"), including the documents incorporated
by reference therein to the extent not modified or
superseded thereby, is referred to below as the
"Prospectus/Prospectus Supplement";
(2) The Certificate of Incorporation of the Company
The Articles of Incorporation of Del Webb
Communities, Inc.,
Anthem Arizona, LLC
Bellasera Corp
Del Webb's Coventry Homes, Inc.
Del Webb's Coventry Homes Construction Co.
Del Webb Home Construction, Inc.
Del Webb's Spruce Creek Communities, Inc.
Del Webb's Sunflower of Tucson, Inc.
Terravita Home Construction Co.
Terravita Corp.
Del Webb's Coventry Homes of Tucson, Inc.
Del Webb's Coventry Homes Construction of Tucson Co.
Del Webb's Coventry Homes of Nevada, Inc.
Del Webb Homes, Inc.
Del Webb Conservation Holding Corp.
Trovas Company
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Trovas Construction Company
Fairmount Mortgage, Inc.
Del Webb Limited Holding Co.
Del Webb Southwest Co. (each of which is an Arizona
corporation)
Certificate and Agreement of Limited Partnership of
Del Webb Texas Limited Partnership, an Arizona
limited partnership ("DW Texas L.P.") (together, the
"Material Subsidiaries");
(3) The Bylaws of the Company and of the Material
Subsidiaries that are corporations, as amended to
date;
(4) Minutes of meetings of the Boards of Directors of the
Company at which actions were taken with respect to
the transactions covered by this opinion and minutes
or records of other corporate proceedings;
(5) The action of the Chief Executive Officer of the
Company, dated as of February [ ], 1999, with respect
to the terms of the Debentures and the Indenture;
(6) The letters of KPMG LLP, dated February [ ], 1999,
and the date hereof, delivered pursuant to Section
6(d) of the Underwriting Agreement;
(7) The certificate, dated as of the date hereof,
delivered pursuant to Section 6(j) of the
Underwriting Agreement;
(8) The Indenture, dated as of February [ ], 1999,
between the Company and Bank of Montreal Trust
Company, as Trustee (the "Trustee"), pursuant to
which the Debentures are to be issued (the
"Indenture");
(9) The Certificate of the Trustee, dated as of the date
hereof, as to the due authentication of the
Debentures;
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(10) The Underwriting Agreement;
(11) Specimen certificate(s) representing the Debentures;
(12) The documents referred to in subparagraph (v)(A)-(F)
below and the indentures with respect to the
Company's 9-3/4% Senior Subordinated Debentures due
2003, 9% Senior Subordinated Debentures due 2006,
9-3/4% Senior Subordinated Debentures due 2008 and
9-3/8% Senior Subordinated Debentures due 2009;
(13) My opinions rendered in connection with the public
offerings by the Company of its 9-3/4% Senior
Subordinated Debentures due 2003, 9% Senior
Subordinated Debentures due 2006, 9-3/4% Senior
Subordinated Debentures due 2008 and 9-3/8% Senior
Subordinated Debentures due 2009 and 2,474,900 shares
of the Common Stock in August 1995; and
(14) Such other certificates and assurances from public
officials and officers and representatives of the
Company that I considered necessary or appropriate
for the purpose of rendering this opinion, copies of
which have been delivered to you.
Based on the foregoing and in reliance thereon, and subject to
the assumptions, qualifications and limitations set forth herein, I am of the
opinion that:
(i) Each of the Material Subsidiaries (except DW Texas
L.P.) is a corporation organized, validly existing
and in good standing under the laws of Arizona, and
DW Texas L.P. is a limited partnership organized and
validly existing under the laws of Arizona. Each
Material Subsidiary has the corporate or partner ship
(as to DW Texas L.P.) power to own its properties and
conduct its business, in each case as described in
the Prospectus/Prospectus Supplement;
(ii) The 2,500,000 shares and 375,000 shares of the
Company's
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common stock issued on June 25 and July 25, 1991,
respectively, in a registered public offering, the
approximately 1.1 million shares of the Company's
common stock publicly issued in August and September
1987 in an exchange offer for then outstanding notes,
the 333,333 shares of common stock of the Company
issued on September 25, 1983, upon exercise of
warrants, in a registered public offering and the
approximately 3.2 million shares of common stock of
the Company issued in connection with the
underwritten call in May and June 1992 of the Com-
pany's 10-3/8% Convertible Subordinated Debentures
(none of which, I am informed, are now outstanding)
were all duly and validly authorized, fully paid,
non-assessable and not issued in violation of any
preemptive rights provided by Arizona law or the
Articles of Incorporation or Bylaws of the Company as
then in effect (the Company was incorporated in
Arizona at the time of each of these issuances of
common stock);
(iii) To my knowledge and except for a 1989 lawsuit
challenging the issuance of the Company's 10-3/8%
Convertible Subordinated Debentures and the shares
issuable upon conversion thereof, which lawsuit was
dismissed without any payment by the Company to the
plaintiffs or their counsel, no shares of common
stock of the Company issued and outstanding as of the
date hereof have been or are the subject of any claim
or threatened claim that they were not duly
authorized, validly issued and non-assessable. Though
it is unclear precisely which statute of limitations
in Arizona law would govern any such claim, for
issuances when the Company was an Arizona
corporation, the limitation period by which any such
claim must be made is the later of six years from the
date of any issuance of shares or three years from
the date any claimant knew or should have known that
the applicable shares were not authorized, validly
issued and non-assessable;
(iv) The Underwriting Agreement and the Indenture have
been
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duly authorized, executed and delivered by the
Company;
(v) To my knowledge, none of the Company, any of the
Material Subsidiaries or Del E. Webb Development Co.,
L.P., a Delaware limited partnership ("DEVCO"), is in
breach of or in default under (nor has any event
occurred which with notice, lapse of time or both
would constitute a breach of or default under): (A)
any indenture, mortgage, deed of trust, bank loan or
credit agreement or other written agreement or
instrument which was filed, or incorporated by
reference, as an exhibit to the Company's Annual
Report on Form 10-K for its fiscal year ended June
30, 1998 filed with the Commission or which is
referred to in the Prospectus/Prospectus Supplement;
(B) the Company's 9-3/4% Senior Subordinated
Debentures due 2003; (C) the Company's 9% Senior
Subordinated Debentures due 2006; (D) the Company's
9-3/4% Senior Subordinated Debentures due 2008; (E)
the Company's 9-3/8% Senior Subordinated Debentures
due 2009; (F) the Company's Option Agreements with
respect to real property located in Lincoln,
California, near Hilton Head Island, South Carolina,
and in Georgetown, Texas, in each case which are
referred to in the Prospectus/Prospectus Supplement;
or (G) any federal or Arizona, California, Delaware,
Nevada, South Carolina, Texas, Illinois or Florida
state or local license, decree, judgment or order
applicable to the Company, any of the Material
Subsidiaries or DEVCO and known to me; in each case
in subparagraphs (A)-(G) above, where such breach or
default could have a material adverse effect on the
consolidated financial position, prospects,
shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole;
(vi) To my knowledge, there are no contracts, licenses,
agreements, leases or documents of a character which
are required to be filed as exhibits to the
Registration Statement or to be summarized or
described in the Prospectus/Prospectus Supplement
which have not been so filed, summarized or
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described;
(vii) The Debentures have been duly authorized, executed
and delivered by the Company;
(viii) No consent, approval, authorization, order or
qualification of or registration with any Arizona
state governmental or regulatory commission, board,
body, authority or agency is required for the
issuance or sale of the Debentures by the Company as
contemplated by the Underwriting Agreement, provided
that I express no opinion as to any necessary
qualification or registration, or exemption
therefrom, under Arizona state securities or Blue Sky
laws;
(ix) The execution, delivery and performance of the
Underwriting Agreement and the Indenture and the
issuance and sale of the Debentures by the Company
and the consummation of the transactions contemplated
by the Underwriting Agreement and the Indenture by
the Company will not result in any breach of or
constitute a default under (or constitute an event
which with notice, lapse of time or both would
constitute a breach of or default under): (A) any
indenture, mortgage, deed of trust, bank loan or
credit agreement or other written agreement or
instrument referred to in paragraphs (v)(A)-(F)
above, provided that no opinion is rendered as to
whether the making of a Charge of Control Offer or a
Net Worth Offer, as defined in and pursuant to
Sections 4.14 or 4.15 of the Indenture, respectively,
or creating a lien pursuant to the fourth paragraph
of Section 7.07 of the Indenture would result in such
a breach or default (or event which with notice,
lapse of time or both would constitute such a breach
of default); (B) any Arizona, California, Delaware,
Nevada, South Carolina, Texas, Illinois or Florida
state statute, regulation or rule applicable to the
Company, any of the Material Subsidiaries or DEVCO
(with respect to the execution, delivery and
performance of the Indenture and the sale of the
Debentures only, provided that no opinion is
expressed as to state securities or Blue Sky laws or
<PAGE> 45
Warburg Dillon Read LLC.
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
February [ ], 1999
Page 45
the rules and regulations under any of them or as
to any misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement); or (C) any license, decree, judgment or
order applicable to the Company, any of the Material
Subsidiaries or DEVCO and known to me (with respect
to the execution, delivery and performance of the
Indenture and the sale of the Debentures only,
provided that no opinion is expressed as to state
securities or Blue Sky laws or the rules and
regulations under any of them or as to any
misstatements or omissions in the Registration
Statement, Prospectus or Prospectus/Prospectus
Supplement);
(x) To my knowledge, there are no actions, suits or
proceedings pending or threatened in writing against
the Company, any of the Material Subsidiaries or
DEVCO, or any of their respective properties, at law
or in equity or before or by any commission, board,
body, authority or agency, which are required to be
described in the Prospectus/Prospectus Supplement,
but are not so described; and
(xi) The Company owns, directly or indirectly, all of the
"Common Equity" (as defined in the Indenture) of each
of the Material Subsidiaries and DEVCO.
During the course of the preparation of the
Prospectus/Prospectus Supplement, I participated in conferences with
representatives of the Company, its independent accountants, you and your
counsel, at which conferences the contents of the Registration Statement,
Prospectus and Prospectus/Prospectus Supplement and related matters were
discussed. I have not independently verified the accuracy, completeness or
fairness of the statements contained in the Registration Statement, Prospectus
or Prospectus/Prospectus Supplement and the nature of my participation is such
that I am unable to assume, and do not assume, any responsibility for the
accuracy, completeness or fairness of such statements. However, based upon my
participation as described in this paragraph, I have no reason to believe and do
not believe that the Registration Statement, the Prospectus or the
Prospectus/Prospectus Supplement (provided that I express no opinion and make no
other statement as to the financial statements, financial statement notes and
financial statement schedules
<PAGE> 46
Warburg Dillon Read LLC.
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
NationsBanc Montgomery Securities LLC
February [ ], 1999
Page 46
and other financial and statistical data contained or incorporated by reference
therein or with respect to the T-1), as of their respective effective or issue
date and as of the date hereof, contained or contains any untrue statement of a
material fact or omitted or omits to state a 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.
This letter is limited to the facts and the law as they exist
on the date hereof. In addition, with respect to statements in this letter based
on my knowledge, I have advised you only as to knowledge obtained by me in
connection with matters to which I have given substantive attention as General
Counsel of the Company in the form of legal consultation and knowledge obtained
by me from consultation with attorneys in the legal department of the Company
concerning the opinions set forth above with respect to their knowledge in
connection with matters to which they have given substantive attention as
attorneys for the Company in the form of legal consultation.
This opinion is limited to Arizona law. The statements herein
as to California, Delaware, Nevada, South Carolina, Texas, Illinois and Florida
state or local statutes, regulations, rules, licenses, decrees, judgments or
orders are as to my knowledge and not an opinion with respect thereto. This
letter is furnished to you in connection with the Underwriting Agreement and the
transactions contemplated thereby, is solely for your benefit, may not be quoted
in part by you or in whole or in part by any NationsBanc Montgomery Securities
LLC February [ ], 1999 Page 10 other person and may not be relied upon by any
other person or by you in any other context, provided that this letter may be
relied upon by Gibson, Dunn & Crutcher LLP in connection with its opinion
pursuant to Section 6(a) of the Underwriting Agreement and in any opinion to the
Trustee and may be attached to those opinions.
Very truly yours,
ROBERTSON C. JONES
<PAGE> 1
Exhibit 1.2
DEL WEBB CORPORATION
AND
BANK OF MONTREAL TRUST COMPANY,
TRUSTEE
$200,000,000
10 1/4% Senior Subordinated Debentures due 2010
INDENTURE
Dated as of February 18, 1999
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION INDENTURE
- ------- ---------
<S> <C>
310(a)(1)7.10.......................................................... 7.10
(a)(2).............................................................. 7.10
(a)(3).............................................................. N.A.
(a)(4).............................................................. N.A.
(b)................................................................. 7.08; 7.10; 10.02
(c)................................................................. N.A.
311(a)................................................................. 7.11
(b)................................................................. 7.11
(c)................................................................. N.A.
312(a)................................................................. 2.05
(b)................................................................. 10.03
(c)................................................................. 10.03
313(a)................................................................. 7.06
(b)(1).............................................................. N.A.
(b)(2).............................................................. 7.06
(c)................................................................. 7.06; 10.02
(d)................................................................. 7.06
314(a)................................................................. 4.02; 10.02
(b)................................................................. N.A.
(c)(1).............................................................. 10.04
(c)(2).............................................................. 10.04
(c)(3).............................................................. N.A.
(d)................................................................. N.A.
(e)................................................................. 10.05
(f)................................................................. N.A.
315(a)................................................................. 7.01(b)
(b)................................................................. 7.05; 10.02
(c)................................................................. 7.01(a)
(d)................................................................. 7.01(c)
(e)................................................................. 6.11
316(a)(last sentence).................................................. 2.09
(a)(1)(A)........................................................... 6.05
(a)(1)(B)........................................................... 6.04
</TABLE>
* This Cross-Reference Table is not part of the Indenture.
i
<PAGE> 3
<TABLE>
<S> <C>
(a)(2).............................................................. N.A.
(b)................................................................. 6.07
317(a)(1).............................................................. 6.08
(a)(2).............................................................. 6.09
(b)................................................................. 2.04
318(a)................................................................. 10.01
</TABLE>
N.A. means not applicable.
ii
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE 1
DEFINITIONS
SECTION 1.01 DEFINITIONS....................................................................... 1
"9% Debentures"............................................................................ 1
"9 3/4% Debentures due 2003"............................................................... 1
"9 3/4% Debentures due 2008"............................................................... 1
"9 3/8% Debentures"........................................................................ 1
"Acquired Indebtedness".................................................................... 1
"Affiliate"................................................................................ 2
"Agent".................................................................................... 2
"Asset Sale"............................................................................... 2
"Board of Directors"....................................................................... 2
"Capital Stock"............................................................................ 2
"Capitalized Lease Obligations"............................................................ 2
"Change of Control"........................................................................ 3
"Common Equity"............................................................................ 3
"Company".................................................................................. 3
"Consolidated Cash Flow Available for Fixed Charges"....................................... 3
"Consolidated Fixed Charge Coverage Ratio"................................................. 4
"Consolidated Income Tax Expense".......................................................... 4
"Consolidated Interest Expense"............................................................ 4
"Consolidated Net Earnings"................................................................ 4
"Consolidated Tangible Net Worth".......................................................... 6
"Default".................................................................................. 6
"Depository"............................................................................... 6
"Discontinued Operations".................................................................. 6
"Disqualified Stock"....................................................................... 6
"DTC"...................................................................................... 7
"Excess Asset Lien"........................................................................ 7
"Exchange Act"............................................................................. 7
"Excluded Debt"............................................................................ 7
"Foothills"................................................................................ 7
"GAAP"..................................................................................... 7
"Global Security........................................................................... 7
"Guarantee"................................................................................ 7
</TABLE>
iii
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
"Holder" or "Securityholder"............................................................... 8
"Indebtedness"............................................................................. 8
"Indenture"................................................................................ 9
"Intangible Assets"........................................................................ 9
"Investments".............................................................................. 9
"Lien"..................................................................................... 9
"Material Subsidiary"...................................................................... 9
"Non-Recourse Indebtedness"................................................................ 10
"Officers' Certificate".................................................................... 11
"Opinion of Counsel"....................................................................... 11
"Person"................................................................................... 11
"principal"................................................................................ 11
"redemption date".......................................................................... 11
"redemption price"......................................................................... 11
"Refinancing Indebtedness"................................................................. 11
"Released Asset Value"..................................................................... 12
"repurchaseable"........................................................................... 12
"Restricted Payment"....................................................................... 12
"Restricted Subsidiaries".................................................................. 13
"SEC"...................................................................................... 13
"Securities"............................................................................... 13
"subsidiary"............................................................................... 13
"Sun City Las Vegas"....................................................................... 13
"Sun City Palm Desert"..................................................................... 13
"Sun City Tucson".......................................................................... 14
"Sun City West"............................................................................ 14
"TIA"...................................................................................... 14
"Trustee".................................................................................. 14
"Trust Officer"............................................................................ 14
"Unrestricted Subsidiaries"................................................................ 14
"Weighted Average Life to Maturity"........................................................ 15
"Wholly Owned Restricted Subsidiary"....................................................... 15
"Wholly Owned Subsidiary".................................................................. 15
SECTION 1.02 OTHER DEFINITIONS................................................................. 16
</TABLE>
iv
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT............................................................ 16
SECTION 1.04 RULES OF CONSTRUCTION............................................................. 17
ARTICLE 2
THE SECURITIES
SECTION 2.01 FORM AND DATING................................................................... 17
SECTION 2.02 EXECUTION AND AUTHENTICATION...................................................... 18
SECTION 2.03 REGISTRAR AND PAYING AGENT........................................................ 19
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST............................................... 20
SECTION 2.05 SECURITYHOLDER LISTS.............................................................. 20
SECTION 2.06 TRANSFER AND EXCHANGE............................................................. 21
SECTION 2.07 REPLACEMENT SECURITIES............................................................ 23
SECTION 2.08 OUTSTANDING SECURITIES............................................................ 23
SECTION 2.09 WHEN TREASURY SECURITIES DISREGARDED.............................................. 24
SECTION 2.10 TEMPORARY SECURITIES.............................................................. 24
SECTION 2.11 CANCELLATION...................................................................... 24
SECTION 2.12 DEFAULTED INTEREST................................................................ 25
SECTION 2.13 CUSIP NUMBER...................................................................... 25
ARTICLE 3
REDEMPTION
SECTION 3.01 NOTICES TO TRUSTEE................................................................ 25
SECTION 3.02 SELECTION OF SECURITIES TO BE REDEEMED............................................ 26
SECTION 3.03 NOTICE OF REDEMPTION.............................................................. 26
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.................................................... 27
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE....................................................... 27
SECTION 3.06 SECURITIES REDEEMED IN PART....................................................... 27
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF SECURITIES............................................................. 28
</TABLE>
v
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SECTION 4.02 SEC REPORTS....................................................................... 28
SECTION 4.03 COMPLIANCE CERTIFICATE............................................................ 29
SECTION 4.04 MAINTENANCE OF OFFICE OR AGENCY................................................... 30
SECTION 4.05 RESTRICTIONS ON ADDITIONAL INDEBTEDNESS........................................... 30
SECTION 4.06 RESTRICTIONS ON DIVIDENDS AND OTHER PAYMENTS...................................... 31
SECTION 4.07 LIMITATIONS ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES......... 33
SECTION 4.08 LIMITATIONS ON TRANSACTIONS WITH AFFILIATES....................................... 34
SECTION 4.09 CONTINUED EXISTENCE............................................................... 35
SECTION 4.10 TAXES............................................................................. 35
SECTION 4.11 LIMITATION ON RANKING OF FUTURE INDEBTEDNESS...................................... 35
SECTION 4.12 STAY, EXTENSION AND USURY LAWS.................................................... 36
SECTION 4.13 INVESTMENT COMPANY ACT............................................................ 36
SECTION 4.14 CHANGE OF CONTROL................................................................. 36
SECTION 4.15 MAINTENANCE OF CONSOLIDATED TANGIBLE NET WORTH.................................... 38
ARTICLE 5
SUCCESSORS
SECTION 5.01 WHEN THE COMPANY MAY MERGE, ETC................................................... 41
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED................................................. 42
SECTION 5.03 PURCHASE OPTION ON CHANGE OF CONTROL.............................................. 43
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT................................................................. 43
SECTION 6.02 ACCELERATION...................................................................... 45
SECTION 6.03 OTHER REMEDIES.................................................................... 46
SECTION 6.04 WAIVER OF PAST DEFAULTS........................................................... 46
SECTION 6.05 CONTROL BY MAJORITY............................................................... 46
</TABLE>
vi
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SECTION 6.06 LIMITATION ON SUITS............................................................... 47
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.............................................. 47
SECTION 6.08 COLLECTION SUIT BY TRUSTEE........................................................ 47
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.................................................. 48
SECTION 6.10 PRIORITIES........................................................................ 48
SECTION 6.11 UNDERTAKING FOR COSTS............................................................. 48
ARTICLE 7
THE TRUSTEE
SECTION 7.01 DUTIES OF THE TRUSTEE............................................................. 49
SECTION 7.02 RIGHTS OF THE TRUSTEE............................................................. 50
SECTION 7.03 INDIVIDUAL RIGHTS OF THE TRUSTEE.................................................. 51
SECTION 7.04 TRUSTEE'S DISCLAIMER.............................................................. 51
SECTION 7.05 NOTICE OF DEFAULTS................................................................ 51
SECTION 7.06 REPORTS BY THE TRUSTEE TO HOLDERS................................................. 51
SECTION 7.07 COMPENSATION AND INDEMNITY........................................................ 52
SECTION 7.08 REPLACEMENT OF THE TRUSTEE........................................................ 53
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.................................................. 54
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION..................................................... 54
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY................................. 54
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01 TERMINATION OF COMPANY'S OBLIGATIONS.............................................. 55
SECTION 8.02 APPLICATION OF TRUST MONEY........................................................ 58
SECTION 8.03 REPAYMENT TO COMPANY.............................................................. 59
SECTION 8.04 REINSTATEMENT..................................................................... 59
ARTICLE 9
AMENDMENTS
SECTION 9.01 WITHOUT THE CONSENT OF HOLDERS.................................................... 59
</TABLE>
vii
<PAGE> 9
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 9.02 WITH THE CONSENT OF HOLDERS....................................................... 60
SECTION 9.03 COMPLIANCE WITH THE TRUST INDENTURE ACT........................................... 61
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS................................................. 61
SECTION 9.05 NOTATION ON OR EXCHANGE OF SECURITIES............................................. 62
SECTION 9.06 THE TRUSTEE PROTECTED............................................................. 62
ARTICLE 10
GENERAL PROVISIONS
SECTION 10.01 TRUST INDENTURE ACT CONTROLS...................................................... 62
SECTION 10.02 NOTICES........................................................................... 63
SECTION 10.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS....................................... 63
SECTION 10.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT................................ 63
SECTION 10.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..................................... 64
SECTION 10.06 RULES BY TRUSTEE AND AGENTS....................................................... 64
SECTION 10.07 LEGAL HOLIDAYS.................................................................... 64
SECTION 10.08 NO RECOURSE AGAINST OTHERS........................................................ 65
SECTION 10.09 COUNTERPARTS...................................................................... 65
SECTION 10.10 OTHER PROVISIONS.................................................................. 65
SECTION 10.11 GOVERNING LAW..................................................................... 66
SECTION 10.12 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..................................... 66
SECTION 10.13 SUCCESSORS........................................................................ 66
SECTION 10.14 SEVERABILITY...................................................................... 67
SECTION 10.15 TABLE OF CONTENTS, HEADINGS, ETC.................................................. 67
ARTICLE 11
SUBORDINATION
SECTION 11.01 AGREEMENT TO SUBORDINATE.......................................................... 67
SECTION 11.02 CERTAIN DEFINITIONS............................................................... 67
SECTION 11.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY.............................................. 68
</TABLE>
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
SECTION 11.04 DEFAULT ON DESIGNATED SENIOR DEBT................................................. 69
SECTION 11.05 ACCELERATION OF SECURITIES........................................................ 70
SECTION 11.06 WHEN DISTRIBUTIONS MUST BE PAID OVER.............................................. 70
SECTION 11.07 NOTICE BY THE COMPANY............................................................. 71
SECTION 11.08 SUBROGATION....................................................................... 71
SECTION 11.09 RELATIVE RIGHTS................................................................... 71
SECTION 11.10 SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY.................................. 72
SECTION 11.11 DISTRIBUTION OR NOTICE TO THE REPRESENTATIVE...................................... 72
SECTION 11.12 RIGHTS OF THE TRUSTEE AND PAYING AGENT............................................ 72
SECTION 11.13 NO FIDUCIARY DUTY TO HOLDERS OF SENIOR DEBT....................................... 73
</TABLE>
ix
<PAGE> 11
This Indenture, dated as of February 18, 1999, is between Del Webb
Corporation, a Delaware corporation (hereinafter the "Company" as more fully
set forth in Section 1.01), and Bank of Montreal Trust Company, a New York
banking corporation (hereinafter the "Trustee" as more fully set forth in
Section 1.01).
The Company has duly authorized an aggregate of $200,000,000 principal
amount of its 10 1/4% Senior Subordinated Debentures due 2010 (the "Securities")
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture. Each party agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the
Securities.
ARTICLE 1
DEFINITIONS
SECTION 1.01 DEFINITIONS.
"9% Debentures" means the Company's 9% Senior Subordinated Debentures
due 2006.
"9 3/4% Debentures due 2003" means the Company's 9 3/4% Senior
Subordinated Debentures due 2003.
"9 3/4% Debentures due 2008" means the Company's 9 3/4% Senior
Subordinated Debentures due 2008.
"9 3/8% Debentures" means the Company's 9 3/8% Senior Subordinated
Debentures due 2009.
"Acquired Indebtedness" means (i) with respect to any Person that
becomes a subsidiary of the Company after the date hereof, Indebtedness of such
Person and its subsidiaries existing at the time such Person becomes a
subsidiary of the Company that was not incurred in connection with, or in
contemplation of, such Person becoming a subsidiary of the Company and (ii) with
respect to the Company or any of its subsidiaries, any Indebtedness assumed by
the Company or any of its subsidiaries in connection with the acquisition of an
asset from another Person that was not incurred by such other Person in
connection with, or in contemplation of, such acquisition.
1
<PAGE> 12
"Affiliate" of any Person means any Person directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
the referent Person. For purposes of this definition, control of a Person shall
mean the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise. Notwithstanding the foregoing, the term "Affiliate" shall not
include, with respect to the Company or any Wholly Owned Subsidiary of the
Company, any Wholly Owned Subsidiary of the Company.
"Agent" means any Registrar, Paying Agent, co-registrar or co-paying
agent; when reference is made to the Registrar herein, such reference shall
include each co-registrar; and when reference is made to the Paying Agent
herein, such reference shall include each co-paying agent.
"Asset Sale" for any Person means the sale, lease, conveyance or other
disposition (including, without limitation, by merger, consolidation, operation
of law or otherwise) of any assets of the Company or its Restricted Subsidiaries
in any transaction, or series of related transactions, outside of the Company's
then ordinary course of business, where the proceeds from any such sale, lease,
conveyance or other disposition, whether in a transaction or series of related
transactions, exceeds $1,000,000.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Capital Stock" of any Person means any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participations or other equivalents of or interests in (however designated) the
equity (which includes, but is not limited to, common stock, preferred stock and
partnership and joint venture interests) of such Person (excluding any debt
securities that are convertible into, or exchangeable for, such equity).
"Capitalized Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
2
<PAGE> 13
"Change of Control" means any of the following: (i) the sale, lease,
conveyance or other disposition of all or substantially all of the Company's
assets as an entirety or substantially as an entirety to any Person or "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) in one or a series
of transactions, provided that a transaction where the holders of all classes of
Common Equity of the Company immediately prior to such transaction own, directly
or indirectly, 50 percent or more of all classes of Common Equity of such Person
or group immediately after such transactions shall not be a change of control;
(ii) the acquisition by the Company and/or any of its subsidiaries of 50 percent
or more of the aggregate voting power of all classes of Common Equity of the
Company in one transaction or a series of related transactions; (iii) the
liquidation or dissolution of the Company, provided that a liquidation or
dissolution of the Company which is part of a transaction or series of related
transactions that does not constitute a change of control under the "provided"
clause of clause (i) above shall not constitute a change of control under this
clause (iii); or (iv) any transaction or series of transactions (as a result of
a tender offer, merger, consolidation or otherwise) that results in, or that is
in connection with, (a) any Person, including a "group" (within the meaning of
Section 13(d)(3) of the Exchange Act) that includes such Person, acquiring
"beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 50 percent or more of the aggregate voting power of
all classes of Common Equity of the Company or any Person that possesses
"beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 50 percent or more of the aggregate voting power of
all classes of Common Equity of the Company, or (b) less than 50 percent
(measured by the aggregate voting power of all classes) of the Company's Common
Equity being registered under Section 12(b) or 12(g) of the Exchange Act.
"Common Equity" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.
"Company" means the party named as such above until a successor
replaces it in accordance with Article 5 and thereafter means the successor.
"Consolidated Cash Flow Available for Fixed Charges" of the Company
means for any period the amounts for such period of (i) Consolidated Net
Earnings, plus (ii) Consolidated Income Tax Expense, plus (iii) amortization of
capitalized interest included in cost of sales, plus (iv) allocation of noncash
costs to cost of sales, excluding interest, plus (v) to the extent not otherwise
included, other noncash
3
<PAGE> 14
charges to earnings, net, reduced by (vi) noncash earnings included in
Consolidated Net Earnings; all as determined on a consolidated basis for the
Company and its Restricted Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" of the Company means, with
respect to any determination date, the ratio of (i) Consolidated Cash Flow
Available for Fixed Charges of the Company for the prior four full fiscal
quarters for which financial results have been reported immediately preceding
the determination date to (ii) the aggregate Consolidated Interest Expense of
the Company for the prior four full fiscal quarters for which financial results
have been reported immediately preceding the determination date.
"Consolidated Income Tax Expense" of the Company for any period means
the provision for taxes based on earnings and profits of the Company and its
Restricted Subsidiaries (but only to the extent such income or profits were
included in computing the Consolidated Net Earnings of the Company for such
period), deter mined on a consolidated basis consistent with the Company's past
practices under Statement of Financial Accounting Standards No. 96.
"Consolidated Interest Expense" of the Company for any period means the
aggregate amount of interest which, in conformity with GAAP, would be set
opposite the caption "interest expense" or any like caption on the consolidated
statement of earnings of the Company and its Restricted Subsidiaries (including,
but not limited to, imputed interest included on Capitalized Lease Obligations,
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, the net costs associated
with hedging obligations, amortization of other financing fees and expenses, the
interest portion of any deferred payment obligation, amortization of discount or
premium, if any, and all other noncash interest expense other than interest
amortized to cost of sales) and includes, without duplication (including
duplication of the foregoing items), all capitalized interest and all interest
incurred in connection with Investments in Discontinued Operations for such
period and interest actually paid by the Company or a Restricted Subsidiary
under any Guarantee of Indebtedness (including a Guarantee of principal,
interest or any combination thereof) of any other Person, all determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Earnings" of the Company for any period means the net
income (or loss) of the Company and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP (except that income
taxes shall be determined on a basis consistent with the Company's past
practices
4
<PAGE> 15
under Statement of Financial Accounting Standards No. 96); provided that there
shall be excluded from such net income (to the extent otherwise included
therein), without duplication: (i) the net income (or loss) of any Person (other
than a Restricted Subsidiary of the Company) in which any Person other than the
Company has an ownership interest, except to the extent that any such income has
actually been received by the Company or any of its Wholly Owned Restricted
Subsidiaries in the form of dividends or similar distributions during such
period; (ii) except to the extent includable in the consolidated net income of
the Company pursuant to the foregoing clause (i), the net income (or loss) of
any Person that accrued prior to the date that (a) such Person becomes a
Restricted Subsidiary of the Company or is merged into or consolidated with the
Company or any of its Restricted Subsidiaries or (b) the assets of such Person
are acquired by the Company or any of its Restricted Subsidiaries; (iii) the net
earnings of any Restricted Subsidiary of the Company (other than a Wholly Owned
Restricted Subsidiary) to the extent that (but only so long as) the declaration
or payment of dividends or similar distributions by such Restricted Subsidiary
of those earnings is not permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to the Restricted Subsidiary during such
period (and when and to the extent such dividend or other distribution is
permitted, such income not previously recognized shall then be recognized, in
the period when such dividend or other distribution was permitted and to the
extent of such permission); (iv) any gain (but not loss), together with any
related provisions for taxes on any such gain, realized during such period by
the Company or any of its Restricted Subsidiaries upon (a) the acquisition of
any securities, or the extinguishment of any Indebtedness, of the Company or any
of its Restricted Subsidiaries, or (b) any Asset Sale by the Company or any of
its Restricted Subsidiaries; (v) any extraordinary gain (but not extraordinary
loss), together with any related provision for taxes on any such extraordinary
gain, realized by the Company or any of its Restricted Subsidiaries during such
period; and (vi) in the case of a successor to the Company by consolidation,
merger or transfer of its assets, any earnings of the successor prior to such
merger, consolidation or transfer of assets; provided, further, that there shall
be included in such Consolidated Net Earnings (to the extent not otherwise
included therein) the net earnings of any Unrestricted Subsidiary of the Company
to the extent such net earnings are received by the Company or a Wholly Owned
Restricted Subsidiary in the form of cash dividends or other cash distributions
from such Unrestricted Subsidiary; provided, further, that, in calculating
Consolidated Net Earnings, the Company shall be entitled to take into
consideration the tax benefits associated with any loss, but only when and to
the extent such tax benefits are recognized by the Company; provided, further,
that solely for purposes of calculating the Consolidated Fixed Charge Coverage
Ratio under Section 4.05, Consolidated Net Earnings shall exclude (x) any
noncash losses on
5
<PAGE> 16
valuation reserves relating to Discontinued Operations, Foothills, the
5,661-acre tract of land referred to under "Business and Properties -- Other
Real Estate Activities --Other" in the Annual Report of the Company on Form 10-K
for the year ended June 30, 1993 or the 77-acre tract of land in Fort Collins,
Colorado, each of which is owned by subsidiaries of the Company on the date
hereof, except to the extent the Company has made Investments in the particular
Discontinued Operation, Foothills or such other tracts of land in question since
February 11, 1994, and (y) any noncash losses, whether or not extraordinary,
incurred in connection with the issuance of Capital Stock of the Company (other
than Disqualified Stock) in exchange for Indebtedness of the Company or its
Wholly Owned Restricted Subsidiaries since February 11, 1994.
"Consolidated Tangible Net Worth" of the Company as of any date means
the stockholders' equity (including any preferred stock that is classified as
equity under GAAP, other than Disqualified Stock) of the Company and its
Restricted Subsidiaries on a consolidated basis at such date, as determined in
accordance with GAAP, less (i) all write-ups subsequent to December 31, 1992 in
the book value of any asset owned by the Company or any of its Restricted
Subsidiaries and (ii) Intangible Assets reflected on the consolidated balance
sheet of the Company and its Restricted Subsidiaries as of such date.
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, an Event of Default.
"Depository" means, with respect to Securities issuable in whole or in
part in the form of one or more Global Securities, a clearing agency registered
under the Exchange Act that is designated to act as Depository for such
Securities as contemplated by this Indenture.
"Discontinued Operations" means with respect to the Company those
operations of the Company and its subsidiaries which were classified as
"discontinued operations" in the consolidated financial statements of the
Company and its subsidiaries as of December 31, 1992.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final maturity date of the Securities.
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<PAGE> 17
"DTC" has the meaning set forth in Section 2.02 hereof.
"Excess Asset Lien" means a Lien on assets or property securing
Non-Recourse Indebtedness incurred pursuant to clause (iv) of Section 4.05 to
the extent the aggregate undepreciated and unamortized cost basis of such assets
or property exceeds the outstanding principal amount of such Non-Recourse
Indebted ness. The amount of a Restricted Payment based upon the grant of an
Excess Asset Lien is the amount by which the undepreciated and unamortized cost
basis of such assets or property at the date of grant of the Lien exceeds the
outstanding principal amount of such Non-Recourse Indebtedness.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
"Excluded Debt" means any Indebtedness of the Company which is (i)
subordinated (subject to the rights of holders of Senior Debt) in right of
payment to the Securities (upon liquidation or otherwise) at least to the extent
that the Securities are subordinated to Senior Debt and (ii) matures after, and
is not redeemable mandatorily or at the option of the holder thereof prior to,
the final maturity date of the Securities.
"Foothills" means Del E. Webb Foothills Corporation, the successor to
an Arizona general partnership organized on January 31, 1986 for the purpose of
acquiring and developing certain real property in Phoenix, Arizona (and its
successors).
"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, in each case as in effect on the date
hereof.
"Global Security" means a Security that evidences all or part of the
Securities and is authenticated and delivered to, and registered in the name of,
the Depository for such Securities or a nominee thereof.
"Guarantee" with respect to any obligation means: (i) any direct or
indirect guarantee; (ii) any direct or indirect agreement or arrangement,
contingent or other wise, to purchase, repurchase or otherwise acquire any part
or all of such obligation; or (iii) any other direct or indirect agreement or
arrangement the practical effect of
7
<PAGE> 18
which is to assure the payment or performance (or payment of damages in the
event of nonperformance) of all or any part of such obligation.
"Holder" or "Securityholder" means a person in whose name a Security is
registered in the Registrar's books (if there is more than one Registrar and the
Trustee is a Registrar, as registered in the books kept by the Trustee in its
capacity as Registrar).
"Indebtedness" of any Person at any date means, without duplication,
(i) all indebtedness of such Person for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto), other than standby letters of
credit incurred by such Person in the ordinary course of business; (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses incurred in the
ordinary course of business, (v) all Capitalized Lease Obligations of such
Person, (vi) all Indebtedness of others secured by a Lien (other than assessment
district and similar Liens arising in connection with municipal financings) on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person and (vii) all Indebted ness of others Guaranteed by such Person to the
extent of such Guarantee. The amount of Indebtedness of any Person at any date
shall be (a) the outstanding balance at such date of all unconditional
obligations described above, (b) the maximum liability of such Person for any
contingent obligations under clause (iii) above and (c) in the case of clause
(vi), the lesser of (A) the fair market value of any asset subject to a Lien
securing the Indebtedness of others on the date that the Lien attaches and (B)
the amount of the Indebtedness secured. To the extent such Person Guarantees the
obligation of another Person to pay interest on indebtedness owed by such other
Person, then a designated percentage of the interest Guaranteed or the principal
amount of the underlying Indebtedness, as the case may be, shall be deemed
Indebted ness of the referent Person. For purposes of this definition, the
amount of such deemed Indebtedness of the referent Person shall be equal to the
lesser of: (a) the aggregate principal amount of the underlying Indebtedness
relating to such interest Guarantee or (b) the aggregate amount of interest due
and payable over the term of such Indebtedness (or the term of the Securities,
if shorter) determined based upon the rate of interest in effect as of the date
of such determination, together with the maximum prepayment premium or penalty
which could become due or payable with respect to such Indebtedness if such
Indebtedness was prepaid prior to the maturity of the Securities.
Notwithstanding the foregoing, Indebtedness shall not include (v)
8
<PAGE> 19
Indebtedness which has been defeased or discharged, (w) Indebtedness in respect
of interest rate swap or similar agreements intended to protect against
fluctuations in interest rates, or foreign currency hedge, exchange or similar
agreements intended to protect against fluctuations in currency exchange rates,
(x) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business, provided that such Indebtedness is
extinguished within five Business Days of its incurrence, (y) letters of credit
provided in the ordinary course of business securing performance (and not
financial) obligations and (z) performance, completion, surety and similar bonds
and similar purpose undertakings provided in the ordinary course of business.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Intangible Assets" of the Company means all unamortized debt discount
and expense, unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, write-ups of assets over their carrying
value at December 31, 1992 or the date of acquisition, if acquired subsequent
thereto, and all other items which would be treated as intangibles on the
consolidated balance sheet of the Company and its Restricted Subsidiaries
prepared in accordance with GAAP.
"Investments" of any Person means (i) all investments (assets net of
liabilities) by such Person in any other Person in the form of loans, advances
or capital contributions, (ii) all Guarantees of Indebtedness or other
obligations of any other Person by such Person, (iii) all purchases (or other
acquisitions for consideration) by such Person of Indebtedness, Capital Stock or
other securities of any other Person and (iv) all other items that would be
classified as investments (including, without limitation, purchases of assets
outside the ordinary course of business) on a balance sheet of such Person
prepared in accordance with GAAP.
"Lien" means, with respect to any asset, any mortgage, deed of trust,
pledge, lien, charge, security interest, adverse claim affecting title or
resulting in a charge against such asset, or encumbrance of any kind in respect
of such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell).
"Material Subsidiary" means (i) any subsidiary of the Company that
holds, directly or indirectly, a material amount of the assets of Sun City West,
Sun City Las
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<PAGE> 20
Vegas, Sun City Palm Desert or Sun City Tucson or (ii) any other subsidiary of
the Company which accounted for (a) 5% or more of the revenues of the Company on
a consolidated basis for the four full fiscal quarters for which financial
results have been reported immediately prior to the Default or Event of Default
and (b) 5% or more of the total assets of the Company on a consolidated basis as
of the four full fiscal quarters for which financial results have been reported
immediately prior to the Default or Event of Default. Subsidiaries of the
Company that hold assets of a specific real estate project will be a "Material
Subsidiary Group" if such subsidiaries, when considered as one subsidiary, would
be a Material Subsidiary under clause (ii) of the preceding sentence.
"Non-Recourse Indebtedness" means Indebtedness secured by a Lien on
property to the extent the liability for such Indebtedness (and any interest
thereon) is limited to the security of the borrower's rights in such property
and its income and rents, without liability on the part of the Company or any of
its subsidiaries for any deficiency, including liability by reason of any
agreement by the Company or any of its subsidiaries to provide additional
capital or maintain the financial condition of or otherwise support the credit
of the Person incurring such indebtedness; provided, however, that with respect
to the Company and its Restricted Subsidiaries, Non-Recourse Indebtedness shall
also include Indebtedness of Coventry of California, Inc., Del Webb's Coventry
Homes, Inc., Del Webb's Coventry Homes of Tucson, Inc., Del Webb's Coventry
Homes Construction of Tucson Co., Del Webb's Coventry Homes of Nevada, Inc., Del
Webb Homes, Inc., Trovas Company and Trovas Construction Co. (collectively
"Coventry"), but only to the extent that, and so long as, (a) such Indebtedness
shall have no recourse whatsoever (including but not limited to, no recourse
with respect to the collection of principal or interest on such Indebtedness)
to the Company or any Restricted Subsidiary of the Company (other than Coventry)
or any assets of the Company or any Restricted Subsidiary of the Company (other
than Coventry), (b) neither the Company nor any of its Restricted Subsidiaries
(other than Coventry) shall have provided to any holder of Indebtedness of
Coventry any covenant or agreement to maintain a minimum net worth at Coventry
or other wise directly or indirectly provided any other similar form of credit
or capital support to Coventry, (c) the proceeds of such Indebtedness are used
exclusively by Coventry in connection with its business and (d) the aggregate of
all direct and indirect Investments by the Company and its Restricted
Subsidiaries in Coventry shall not exceed $15 million. Indebtedness which is
otherwise Non-Recourse Indebtedness will not lose its character as Non-Recourse
Indebtedness because there is recourse to the borrower, any guarantor or any
other Person for (1) environmental warranties or indemnities, (2) indemnities
for fraud, misrepresentation or non-payment of rents or profits from secured
assets to be paid to the lender or (3) any other matters which are
10
<PAGE> 21
at the relevant time customary in instruments evidencing or securing
non-recourse Indebtedness.
"Officers' Certificate" means a certificate signed by two Officers, one
of whom must be the principal executive officer, principal financial officer or
principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Outstanding Debentures" means the 9% Debentures, the 9 3/4% Debentures
due 2003, the 9 3/4% Debentures due 2008 and the 9 3/8% Debentures, in each
case, to the extent outstanding at the time in question.
"Person" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"principal" of a debt security, including the Securities, means the
principal of the security plus the premium, if any, on the security.
"redemption date" when used with respect to any of the Securities to be
redeemed, means the date fixed by the Company for such redemption pursuant to
this Indenture and the Securities.
"redemption price" when used with respect to any of the Securities to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture and the Securities.
"Refinancing Indebtedness" means renewals, extensions, refinancings or
refundings of Indebtedness outstanding on the date of, or permitted to be
incurred by, the Indenture (including Refinancing Indebtedness, but excluding
any Indebtedness incurred pursuant to clauses (i), (vi) and (vii) of Section
4.05), provided that, (A) in the case of any refinancing or refunding of
Indebtedness equal in right of payment to the Securities, such Refinancing
Indebtedness is made equal in right of payment or subordinate to the Securities
and, in the case of any refinancing or refunding of Indebtedness subordinated to
the Securities, such Refinancing Indebtedness is made subordinate to the
Securities to substantially the same extent as such refinanced or
11
<PAGE> 22
refunded Indebtedness is subordinated to the Securities, (B) in either such
case, such Refinancing Indebtedness does not require the payment of all or a
portion of the principal thereof (whether pursuant to purchase, redemption,
defeasance, retirement, sinking fund payment, payment at stated maturity or
otherwise, but excluding any retirement required by virtue of acceleration of
such Indebtedness upon an event of default thereunder) prior to the final
scheduled maturity of the Indebtedness being refinanced or refunded, (C) the
portion, if any, of such Refinancing Indebtedness that is scheduled to mature on
or prior to the maturity date of the Securities has a Weighted Average Life to
Maturity at the time such Refinancing Indebtedness is incurred that is equal to
or greater than the Weighted Average Life to Maturity of the portion of the
Indebtedness being refunded, refinanced or extended that is scheduled to mature
on or prior to the maturity date of the Securities, (D) such Refinancing
Indebtedness will be Refinancing Indebtedness to the extent it is in an
aggregate principal amount that is equal to or less than the aggregate principal
amount then outstanding under the Indebtedness being refinanced or refunded and
(E) if such Indebtedness being renewed, extended, refinanced or refunded is
Non-Recourse Indebtedness incurred pursuant to clause (iv) of Section 4.05, only
to the extent such Refinancing Indebtedness is Non-Recourse Indebtedness and is
secured with only the assets as the Indebtedness being renewed, extended,
refinanced or refunded.
"Released Asset Value" means the undepreciated and unamortized cost
basis of assets or property, or portion thereof, of the Company or a Restricted
Subsidiary which is released from an Excess Asset Lien (to the extent of the
release). The amount of the Released Asset Value is equal to the undepreciated
and unamortized cost basis of such assets or property (or relevant portion
thereof), at the time of the granting of the Excess Asset Lien, so released (to
the extent of the release).
"repurchaseable" does not include redeemable.
"Restricted Payment" means with respect to any Person, (i) the
declaration of any dividend or the making of any other payment or distribution
of cash, securities or other property or assets in respect of such Person's
Capital Stock (except that a dividend payable solely in Capital Stock (other
than Disqualified Stock) of such Person shall not constitute a Restricted
Payment), (ii) any payment on account of the purchase, redemption, retirement or
other acquisition for value of such Person's Capital Stock or any other payment
or distribution made in respect thereof, either directly or indirectly, (iii)
any Investment in (a) an Unrestricted Subsidiary necessary to fund operating
expenses, or (b) any other Investment in an Unrestricted Subsidiary, (iv) any
principal payment, redemption, repurchase, defeasance or other acquisition or
retirement of (a) Excluded Debt or (b) Indebtedness of the Company or its
subsidiaries
12
<PAGE> 23
which is subordinated in right of payment to the Securities prior to the
scheduled principal payment or scheduled maturity of such Indebtedness or (v)
the grant of an Excess Asset Lien; provided, however, that with respect to the
Company and its subsidiaries, Restricted Payments shall not include (a) any
payment described in clause (i) or (ii) above made to the Company or any of its
Wholly Owned Restricted Subsidiaries by any of the Company's subsidiaries, (b)
any underwritten call of Indebtedness of the Company which is convertible into
Capital Stock (other than Disqualified Stock) but only to the extent the Company
is not required to make any redemption or principal payments in respect of
Indebtedness subject to such under written call (other than redemption and
principal payments which are covered by the net proceeds received by the Company
from a concurrent sale of Capital Stock (other than Disqualified Stock) to the
underwriters or standby purchasers participating in such underwritten call) or
(c) the exchange by the Company of Capital Stock (other than Disqualified Stock)
for Indebtedness of the Company or a Restricted Subsidiary in an exchange offer,
but only to the extent the exchange is solely for such Capital Stock.
"Restricted Subsidiaries" means each of the subsidiaries of the Company
which is not, as of the determination date, an Unrestricted Subsidiary of the
Company.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued under this
Indenture.
"subsidiary" of any Person means (i) any corporation of which at least
a majority of the aggregate voting power of all classes of the Common Equity is
owned by such Person directly or through one or more other subsidiaries of such
Person and (ii) any entity other than a corporation in which such Person,
directly or indirectly, owns at least a majority of the Common Equity of such
entity.
"Sun City Las Vegas" means the Company's age-restricted active adult
community development located in Las Vegas, Nevada, as its geographic boundaries
existed at February 11, 1994.
"Sun City Palm Desert" means the Company's age-restricted active adult
community development located in the Coachella Valley in Southern California
(formerly known as Sun City Palm Springs), as its geographic boundaries existed
at February 11, 1994.
13
<PAGE> 24
"Sun City Tucson" means the Company's age-restricted active adult
community development located in Pima County, Arizona, as its geographic
boundaries existed at February 11, 1994.
"Sun City West" means the Company's age-restricted active adult
community development located in Maricopa County, Arizona, as its geographic
boundaries existed at February 11, 1994.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77-bbbb) as in effect on the date of execution of this Indenture, except
as provided in Section 9.03.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"Unrestricted Subsidiaries" means each of the subsidiaries of the
Company so designated by a resolution adopted by the Company's Board of
Directors and whose creditors have no direct or indirect recourse (including,
but not limited to, recourse with respect to the payment of principal or
interest on Indebtedness of such subsidiary) to the Company or a Restricted
Subsidiary (except to the extent the Investment made by the Company in the
Unrestricted Subsidiary is (a) permitted under Section 4.06 and (b) is a
Guarantee); provided, however, that the Board of Directors of the Company will
be prohibited from designating any subsidiary which holds, directly or
indirectly, any of the assets of Sun City West, Sun City Tucson, Sun City Las
Vegas or Sun City Palm Desert as an Unrestricted Subsidiary. The Board of
Directors of the Company may designate an Unrestricted Subsidiary to be a
Restricted Subsidiary, provided that (i) any such redesignation shall be deemed
to be an incurrence by the Company and its Restricted Subsidiaries of the
Indebtedness (if any) of such redesignated subsidiary for purposes of Section
4.05 as of the date of such redesignation and (ii) immediately after giving
effect to such redesignation and the incurrence of any such additional
Indebtedness, the Company and its Restricted Subsidiaries could incur $1 of
additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio
in Section 4.05. Subject to the foregoing, the Board of Directors of the Company
also may designate any Restricted Subsidiary to be an Unrestricted Subsidiary,
provided that (i) all previous Investments by the Company and its Restricted
Subsidiaries shall be deemed to be Restricted Payments at the time
14
<PAGE> 25
of such designation and shall reduce the amount available for Restricted
Payments under Section 4.06 and (ii) immediately after giving effect to such
designation and reduction of amounts available for Restricted Payments under
Section 4.06, the Company and its Restricted Subsidiaries could incur $1 of
additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio
in Section 4.05. Any such designation or redesignation by the Board of Directors
shall be evidenced to the Trustee by the filing with the Trustee of a certified
copy of the Resolution of the Company's Board of Directors giving effect to such
designation or redesignation and an officer's certificate certifying that such
designation or redesignation complied with the foregoing conditions and setting
forth the underlying calculations of such certificate.
"Weighted Average Life to Maturity" means, when applied to any Indebted
ness or portion thereof (if applicable), at any date, the number of years
obtained by dividing (i) the then outstanding principal amount of such
Indebtedness or portion thereof (if applicable) into (ii) the sum of the
products obtained by multiplying (a) the amount of each remaining installment,
sinking fund, serial maturity or other required payment of principal, including
payment at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment.
"Wholly Owned Restricted Subsidiary" of the Company means a Restricted
Subsidiary of the Company of which 100% of the Common Equity (except for
directors' qualifying shares or certain minority interests owned by other
Persons solely due to local law requirements that there be more than one
stockholder, but which interest is not in excess of what is required for such
purpose) is owned directly by the Company or through one or more other Wholly
Owned Restricted Subsidiaries of the Company.
"Wholly Owned Subsidiary" of any Person means (i) a subsidiary of which
100% of the Common Equity (except for directors' qualifying shares or certain
minority interests owned by other Persons solely due to local law requirements
that there be more than one stockholder, but which interest is not in excess of
what is required for such purpose) is owned directly by such Person or through
one or more other Wholly Owned Subsidiaries of such Person or (ii) any entity
other than a corporation in which such Person, directly or indirectly, owns all
of the Common Equity.
15
<PAGE> 26
SECTION 1.02 OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Term Defined in Section
- ---- ------------------
<S> <C>
"Affiliate Transaction".............................................. 4.08
"Bankruptcy Law"..................................................... 6.01
"business day"....................................................... 10.07
"Custodian".......................................................... 6.01
"Debt"............................................................... 11.02
"Designated Senior Debt"............................................. 11.02
"Event of Default"................................................... 6.01
"Legal Holiday"...................................................... 10.07
"Officer"............................................................ 10.10
"Paying Agent"....................................................... 2.03
"Registrar".......................................................... 2.03
"Representative"..................................................... 11.02
"Senior Debt"........................................................ 11.02
"United States Government Obligations"............................... 8.01
</TABLE>
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder or Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
16
<PAGE> 27
"obligor" on the Securities means the Company or any other obligor on
the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) the male, female and neuter genders include one another.
ARTICLE 2
THE SECURITIES
SECTION 2.01 FORM AND DATING.
The Securities and the Trustee's certificate of authentication relating
thereto shall be substantially in the form set forth in Exhibit A, which is part
of this Indenture, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage. The Company shall approve the forms of the Securities
and any notation, legend or endorsement on them. Each Security shall be dated
the date of its authentication.
17
<PAGE> 28
The terms and provisions contained in the Securities shall constitute,
and are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
SECTION 2.02 EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
Upon a written order of the Company signed by an Officer of the
Company, the Trustee shall authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of the Securities (being
$200,000,000). The aggregate principal amount of Securities outstanding at any
time may not exceed that amount except as provided in Section 2.07.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 or any integral multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same right as an Agent to deal with the Company or
an Affiliate.
Every Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY
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OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND
NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE
BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES. EVERY SECURITY DELIVERED UPON
REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS GLOBAL
SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN LIMITED
CIRCUMSTANCES. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS TO BE MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Owners of beneficial interests in a Global Security, as such, are not
Holders under the Indenture and will not be entitled to the rights of Holders
under the Indenture.
SECTION 2.03 REGISTRAR AND PAYING AGENT.
The Company shall maintain or cause to be maintained in the Borough of
Manhattan, City of New York (the "New York Office"), State of New York, and in
such other locations as it shall determine, an office or agency: (i) where
securities may be presented for registration of transfer or for exchange
("Registrar"); (ii) where Securities may be presented for payment ("Paying
Agent"); and (iii) where notices and demand to or upon the Company in respect of
Securities and this Indenture may be served by the Holders. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional Paying
Agents. The term "Paying Agent" includes any additional Paying Agent. The
Company may change any Paying Agent, Registrar or co-registrar without prior
notice. The Company shall notify the Trustee of the name and address of any
Agent not a party to this Indenture and shall enter into an appropriate
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agency agreement with any Registrar, Paying Agent or co-registrar not a party to
this Indenture. The agreement shall implement the provisions of this Indenture
that relate to such Agent. The Company or any of its subsidiaries may act as
Paying Agent, Registrar or co-registrar, except that for purposes of Articles 3
and 8 and Sections 4.14 and 4.15, neither the Company nor any of its
subsidiaries shall act as Paying Agent. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such, the Trustee shall initially act as Registrar and Paying Agent and the New
York Office shall initially be the office of the Trustee in the Borough of
Manhattan, City of New York, State of New York. The Company initially appoints
DTC to act as Depository with respect to the Securities. The Trustee shall act
as custodian for the Depository with respect to the Global Securities.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent (other than the Trustee,
who hereby so agrees), to agree in writing that the Paying Agent will hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal or interest on the Securities, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
subsidiary) shall have no further liability for the money. If the Company or a
subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Securityholders all money held by it as Paying
Agent.
SECTION 2.05 SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee on or before each interest payment date and at such other times
as the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
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SECTION 2.06 TRANSFER AND EXCHANGE.
Where Securities are presented to the Registrar or a co-registrar with
a request to register a transfer or to exchange them for an equal principal
amount of Securities of other denominations, the Registrar shall register the
transfer or make the exchange if its requirements for such transactions are met.
To permit registrations of transfers and exchanges, the Company shall issue and
the Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06 or
9.05).
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities during a period beginning at the opening of business
15 days before the day of any selection of Securities for redemption under
Section 3.02 and ending at the close of business on the day of selection, or
(ii) to register the transfer or exchange of any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
The Company will execute and the Trustee will, in accordance with this
Section 2.06 for so long as the Securities are to be issued in whole or in part
in the form of one or more Global Securities, authenticate and deliver one or
more Global Securities that will (i) represent and will be denominated in an
amount equal to the aggregate outstanding principal amount of the Securities to
be represented by such Global Security or Securities, (ii) be registered in the
name of the Depository for such Global Security or Securities or the nominee of
such Depository, (iii) be delivered by the Trustee to such Depository or
pursuant to such Depository's instructions and (iv) bear the legends set forth
in Section 2.02 hereof.
Each Depository appointed in accordance herewith for a Global Security
must, at the time of its appointment and at all times while it serves as
Depository, be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation.
Notwithstanding any other provision of this Section 2.06, unless and
until it is exchanged in whole for Securities in definitive form, a Global
Security representing all or a portion of the Securities may not be transferred
except as a whole by the Depository to a nominee of such Depository or by a
nominee of such Depository to such
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Depository or another nominee of such Depository or by such Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository.
If (i) the Company notifies the Trustee in writing that at any time the
Depository is unwilling or unable to continue as Depository or if at any time
the Depository will no longer be eligible to act as such under this Section
2.06, and a successor Depository is not appointed by the Company within 90 days
after the Company receives notice from the Depository or otherwise becomes aware
of such unwilling ness, inability or ineligibility, (ii) the Company at any time
and in its sole discretion determines that the Securities issued in the form of
one or more Global Securities will no longer be represented by such Global
Security or Securities, or (iii) an Event of Default has occurred and is
continuing, the Company will execute and deliver to the Trustee as promptly as
practicable Securities in definitive form, together with an Officers'
Certificate relating to the authentication and delivery of such Securities, and
the Trustee, as promptly as practicable after the receipt of such Securities and
Officers' Certificate, will authenticate and deliver Securities in definitive
form in an aggregate principal amount equal to the principal amount of, and
containing terms and provisions identical to, the Global Security or Securities
in exchange for such Global Security or Securities.
Upon the exchange of a Global Security in whole or in part for
Securities in definitive form, such Global Security shall be cancelled by the
Trustee. Securities in definitive form issued in exchange for a Global Security
pursuant to this Section 2.06 will be registered in such names and in such
authorized denominations as the Depository, pursuant to instructions from its
direct or indirect participants or otherwise, will instruct the Trustee in
writing. The Trustee will deliver such Securities in definitive form to the
Persons in whose names such Securities are so registered or as it may otherwise
be directed by the Depository. Upon the exchange of less than the entire
principal amount of a Global Security for Securities in definitive form, the
Company will also execute, and the Trustee, upon receipt of an Officers'
Certificate will also authenticate and deliver, a new Global Security in
aggregate principal amount equal to the difference between the principal amount
of the surrendered Global Security and the aggregate principal amount of
Securities in definitive form issuable upon such exchange.
In any exchange provided for in any of the preceding paragraphs in this
Section, the Company will execute and the Trustee will authenticate and deliver
Securities in definitive form in authorized denominations.
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If a Security in definitive form is issued in exchange for any portion
of a Global Security after the close of business at the office or agency where
such exchange occurs on or after any regular record date for an interest
payment date and before the opening of business at such office or agency on the
next interest payment date, interest will not be payable on such interest
payment date or proposed date for payment, as the case may be, in respect of
such Security in definitive form, but will be payable on such interest payment
date only to the Person to whom interest in respect of such portion of such
Global Security is payable in accordance with the provisions of this Indenture.
None of the Company, the Trustee, any agent of the Trustee, any Paying
Agent or the Registrar will have any responsibility or liability for any aspect
of the Depository's records relating to or payments made on account of
beneficial ownership interests in a Global Security or for maintaining,
supervising or reviewing any of the Depository's records relating to such
beneficial ownership interests.
SECTION 2.07 REPLACEMENT SECURITIES.
If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's and the Company's
requirements are met. If required by the Trustee or the Company as a condition
of receiving a replacement Security, the Holder must provide an indemnity bond
sufficient, in the judgment of both the Company and the Trustee, to fully
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss which any of them may suffer if the Security is replaced. The Company
may charge for its expenses in replacing any Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08 OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities properly
authenticated by the Trustee except for those cancelled by the Trustee, those
delivered to it for cancellation, and those described in this Section as not
outstanding.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
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If Securities are considered paid under Section 4.01, they cease to be
outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
SECTION 2.09 WHEN TREASURY SECURITIES DISREGARDED.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities 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 Securities which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
If temporary Securities (other than a Global Security) are issued, the Company
will cause definitive Securities to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities shall
be exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
2.03 without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Securities surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall dispose of cancelled Securities as the Company directs; provided, however,
that the Trustee shall not be
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required to destroy such cancelled Securities. The Company may not issue new
Securities to replace Securities that it has paid or that have been delivered to
the Trustee for cancellation.
SECTION 2.12 DEFAULTED INTEREST.
If the Company fails to make a payment of interest on the Securities,
it shall pay such defaulted interest plus any interest payable on the defaulted
interest in any lawful manner. It may pay such defaulted interest, plus any such
interest payable on it, to the persons who are Securityholders on a subsequent
special record date. The Company shall fix any such record date and payment
date. At least 15 days before any such record date, the Company shall mail to
Securityholders a notice that states the record date, payment date and amount of
such interest to be paid.
SECTION 2.13 CUSIP NUMBER.
The Company in issuing the Securities may use a "CUSIP" number, and if
so, such CUSIP number shall be included in notices of redemption or exchange as
a convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company will
promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION
SECTION 3.01 NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of paragraph 5 of the Securities, it shall notify the
Trustee of the redemption date and the principal amount of Securities to be
redeemed. The redemption price shall be the amount determined pursuant to
paragraph 5 of the Securities.
The Company shall give each notice provided for in this Section at
least 50 days before the redemption date (unless a shorter notice period shall
be satisfactory to the Trustee).
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SECTION 3.02 SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed pro rata, by lot or by another means that
is in compliance with the requirements of the principal securities exchange, if
any, on which the Securities are listed. The Trustee shall make the selection
not more than 75 days and not less than 50 days before the redemption date from
Securities outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them it selects
shall be in amounts of $1,000 or integral multiples of $1,000. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly of the Securities or portions of Securities to be called for
redemption.
SECTION 3.03 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder whose Securities
are to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after
the redemption date, upon surrender of such Security, a new Security
or Securities in principal amount equal to the unredeemed portion will
be issued;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases
to accrue on and after the redemption date (unless the Company defaults
in the payment of the redemption price);
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(6) the paragraph of the Securities pursuant to which the
Securities are being redeemed;
(7) the aggregate principal amount of Securities that are
being redeemed;
(8) the CUSIP number of the Securities (provided that the disclaimer
permitted by Section 2.13 may be made); and
(9) the name and address of the Paying Agent.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at its expense.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date at the price set forth in the
Security.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money in immediately available funds sufficient
to pay the redemption price of and accrued interest on all Securities to be
redeemed on that date. The Trustee or the Paying Agent shall return to the
Company any money not required for that purpose.
SECTION 3.06 SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Security equal in principal amount to the unredeemed portion
of the Security surrendered.
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ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities. Principal and
interest shall be considered paid on the date due if the Trustee or Paying Agent
(other than the Company or a subsidiary) holds on that date money designated for
and sufficient to pay all principal and interest then due; provided, however,
that money held by the Paying Agent for the benefit of holders of Senior Debt
pursuant to the provisions of Article 11 hereof shall not be considered paid
within the meaning of this Section 4.01.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal, at the rate borne by the Securities, compounded semiannually
and (ii) overdue installments of interest (without regard to any applicable
grace period) at the same rate, com pounded semiannually.
SECTION 4.02 SEC REPORTS.
The Company shall deliver to the Trustee, within 15 days after it files
them with the SEC, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA Section 314(a). The
Company shall timely comply with its reporting and filing obligations under the
applicable federal securities law.
If the Company is at any time not required to file annual or quarterly
reports pursuant to Section 13 or 15(d) of the Exchange Act, the Company will
file with the Trustee, within 15 days after the last date on which it would have
been required to make such a filing with the SEC, and will upon request of a
Holder mail to that Holder (as soon as practical after receipt of such request)
at his or her address as it appears on the register of Securities kept by the
Registrar, audited annual financial statements prepared in accordance with
generally accepted accounting principles and unaudited quarterly financial
statements. Such financial statements shall be accompanied by a Management's
Discussion and Analysis of Financial Condition and Results
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of Operations of the Company for the period reported upon in substantially the
form required under the rules and regulations of the SEC, or any successor form
of similar disclosure then required under the rules and regulations of the SEC.
SECTION 4.03 COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 60 days after the end
of the first three fiscal quarters and within 120 days after the end of each
fiscal year of the Company, an Officers' Certificate stating that a review of
the activities of the Company and its subsidiaries during the preceding fiscal
period has been made under the supervision of the signing Officers with a view
to determining whether the Company has fully performed its obligations under
this Indenture and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms and conditions hereof (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest on the Securities are prohibited.
The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon becoming aware of (i) any Default, Event
of Default or default in the performance of any term or condition in this
Indenture or (ii) any event of default under any other mortgage, indenture or
instrument as that term is used in Section 6.01(4), an Officers' Certificate
specifying such Default, Event of Default or default.
So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, at the time the Officers'
Certificate described in the second preceding paragraph is filed with respect
to any fiscal year end of the Company, the Company also will file with the
Trustee a letter or statement of the independent accountants who shall have
certified the financial statements of the Company for its preceding fiscal year
in connection with the annual report of the Company to its stockholders for such
year to that effect that, in making the examination necessary for certification
of such financial statements, nothing came to their attention that would lead
them to believe that the Company has violated any of the terms or conditions
contained in this Indenture, which Default remains uncured at the date of such
letter or statement or, if they shall have obtained knowledge of any such
uncured Default, specifying in such letter or statement such Default or Defaults
and
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the nature thereof, it being understood that such accountants shall not be
liable directly or indirectly for failure to obtain knowledge of any such
Default or Defaults and that their examination was not directed primarily toward
obtaining knowledge of such noncompliance.
SECTION 4.04 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain or cause to be maintained the office or
agency required under Section 2.03. The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of such office
and agency not maintained by the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designation;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain or cause to be maintained an
office or agency in the City of New York for such purpose.
SECTION 4.05 RESTRICTIONS ON ADDITIONAL INDEBTEDNESS.
After the date hereof, the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, extend the maturity of or otherwise become liable with respect to
(collectively, "incur"), any Indebtedness (other than Indebtedness between the
Company and any of its Wholly Owned Restricted Subsidiaries or among its Wholly
Owned Restricted Subsidiaries) or issue any Disqualified Stock unless, after
giving effect thereto, the Company's Consolidated Fixed Charge Coverage Ratio on
the date thereof would be at least 3.0 to 1.0.
Notwithstanding the foregoing, the Company or any Restricted Subsidiary
may incur the following Indebtedness (plus interest and premium, if any,
thereon) without regard to the foregoing limitation (although any Indebtedness
so incurred will be included in the determination of the Consolidated Fixed
Charge Coverage Ratio thereafter): (i) Indebtedness under credit agreements in
an aggregate principal amount at any one time outstanding of not more than $150
million; (ii) Indebtedness evidenced by the Securities; (iii) Indebtedness under
Guarantees of Indebtedness incurred in the ordinary course of business of
suppliers or customers, which Guarantees are also in the ordinary course of
business of the Company or its subsidiaries; (iv) Non-Recourse Indebtedness
incurred for the acquisition and/or improvement of real
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property and secured by Liens on such real property and/or improvements; (v)
Refinancing Indebtedness; (vi) Excluded Debt; and (vii) Indebtedness not
otherwise permitted to be incurred pursuant to clauses (i) through (vi) above
which, together with any other then outstanding Indebtedness incurred pursuant
to this clause (vii) (and refinancings thereof), has an aggregate principal
amount at the time of incurrence of not in excess of 20 percent of Consolidated
Tangible Net Worth of the Company (as of the last fiscal quarter for which
financial results have then been reported).
Nothing in this Section 4.05 will restrict any Unrestricted Subsidiary
from incurring Indebtedness, and Indebtedness of any Unrestricted Subsidiary
will not be included in the Consolidated Fixed Charge Coverage Ratio, as long as
the Unrestricted Subsidiary incurring such Indebtedness remains an Unrestricted
Subsidiary. As of the date hereof, all of the Company's operating subsidiaries
are Restricted Subsidiaries under this Indenture.
SECTION 4.06 RESTRICTIONS ON DIVIDENDS AND OTHER PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly make any Restricted Payment after the
date hereof, except as provided below in this Section 4.06, if at the time of
such Restricted Payment:
(i) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(ii) the amount of such Restricted Payment, when added to the
aggregate amount of all Restricted Payments made after February 11,
1994 other than pursuant to clause (a) below, exceeds the sum of: (1)
50 percent of the Company's Consolidated Net Earnings (excluding
Consolidated Net Earnings attributable to dividends or distributions
from Unrestricted Subsidiaries) accrued during the period (taken as one
accounting period) since December 31, 1993 (or, if such aggregate
Consolidated Net Earnings shall be a deficit, minus 100% of such
aggregate deficit), plus (2) the sum of (x) 100% of the book value of
property and assets (other than cash), determined at the time such
property or assets were contributed as an Investment to an Unrestricted
Subsidiary, received by the Company or its Wholly Owned Restricted
Subsidiaries from any of their Unrestricted Subsidiaries, up to the
amount of the Company's and its Restricted Subsidiaries' aggregate net
Investment in Unrestricted Subsidiaries, provided that such property so
received is substantially
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similar to the property contributed to the Unrestricted Subsidiaries,
(y) 100% of the cash distributions or cash dividends received by the
Company or its Wholly Owned Restricted Subsidiaries from any
Unrestricted Subsidiaries, to the extent the amount of such cash and
such book value of property and assets referred to in clause (x) above
do not exceed the amount of the Company's and its Restricted
Subsidiaries' aggregate net Investment in Unrestricted Subsidiaries and
(z) 50% of any other cash distributions or cash dividends received by
the Company and its Wholly Owned Restricted Subsidiaries from
Unrestricted Subsidiaries, plus (3) the aggregate net proceeds,
including the fair market value of property other than cash (such fair
market value to be determined by a majority of the disinterested
members of the full Board of Directors of the Company, whose good faith
determination shall be conclusive and evidenced by a resolution
certified by an Officers' Certificate and filed with the Trustee),
received by the Company from the issuance of Capital Stock of the
Company (other than to a subsidiary of the Company) that is not
Disqualified Stock since December 31, 1993, plus (4) 100% of the
principal amount of any Indebtedness of the Company or a Wholly Owned
Restricted Subsidiary that is converted into or exchanged for Capital
Stock of the Company that is not Disqualified Stock since December 31,
1993, plus (5) 100% of the Released Asset Value since February 11,
1994, plus (6) 100% of the reductions since February 11, 1994 in
Guarantees of the Company which are Investments in Unrestricted
Subsidiaries to the extent such Guarantees were classified as
Restricted Payments; or
(iii) the Company would be unable to incur an additional $1 of
Indebtedness under the Consolidated Fixed Charge Coverage Ratio in
Section 4.05.
Notwithstanding the foregoing, the provisions of this Section 4.06 will not
prevent:
(a) Restricted Payments since February 11, 1994 up to, but not
exceeding, $50 million not otherwise permitted above, provided that any
Restricted Payments made pursuant to this clause (a) shall be evidenced
by filing with the Trustee of an Officers' Certificate certifying that
such Restricted Payment has been made under this exception and,
provided further, that no Restricted Payment (other than a Restricted
Payment pursuant to clause (iii)(a) of the definition of Restricted
Payment) shall be made pursuant to this clause (a) if at the time of
such Restricted Payment a Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence thereof;
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(b) the purchase since February 11, 1994 at a price of not
more than $.05 per right of any rights issued or issuable pursuant to
any future rights plan of the Company, provided that such purchases
shall not exceed $1 million in the aggregate;
(c) the payment of any dividend within 60 days after the date
of declaration thereof if the payment thereof would have complied with
the limitations of this Indenture on the date of declaration; or
(d) the retirement of shares of the Company's Capital Stock in
exchange for or out of the proceeds of a substantially concurrent sale
(other than a sale to a subsidiary of the Company) of other shares of
its Capital Stock (other than Disqualified Stock).
SECTION 4.07 LIMITATIONS ON RESTRICTIONS ON DISTRIBUTIONS
FROM RESTRICTED SUBSIDIARIES.
The Company shall not, and will not permit any of its Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction (other than encumbrances or
restrictions imposed by law, by judicial or regulatory action or by provisions
in leases or other agreements that restrict the assignability thereof) on the
ability of any Restricted Subsidiary to (i) pay dividends or make any other
distributions on its Capital Stock which is owned by the Company or any of its
other Restricted Subsidiaries, or pay interest on or principal of any
Indebtedness owed to the Company or any of its other Restricted Subsidiaries,
(ii) make loans or advances to the Company or any of its other Restricted
Subsidiaries or (iii) transfer any of its properties or assets to the Company or
any of its other Restricted Subsidiaries, except in each case for encumbrances
or restrictions existing under or by reason of (a) applicable statute, law,
rule, regulation or governmental order, (b) covenants or restrictions contained
in Indebtedness existing as of the date hereof, (c) any restrictions under any
note, indenture, agreement or other document evidencing any Acquired
Indebtedness that was permitted to be incurred pursuant to the provisions of
this Indenture, provided that such restrictions and encumbrances only apply to
assets that were subject to such restrictions and encumbrances prior to the
acquisition of such assets by the Company or its subsidiaries or assets acquired
with the proceeds of such assets, (d) restrictions or encumbrances replacing
those permitted by clause (b) or (c) which are not, in the judgment of the Board
of Directors, determined in good faith, more restrictive, (e) any restrictions
or encumbrances arising in connection with the replacement, renewal or extension
of any credit
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agreement, credit facility or similar arrangement existing as of the date
hereof, provided that any such restrictions and encumbrances are not, in the
judgment of the Board of Directors, determined in good faith, more restrictive
than those in the credit agreement, credit facility or similar arrangement being
replaced, extended or renewed, as the case may be, (f) any restrictions or
encumbrances arising in connection with the refunding or refinancing of any
Indebtedness existing as of the date hereof, provided that any restrictions and
encumbrances of the type described in this clause that arise in connection with
such refunding or refinancing are not, in the judgment of the Board of
Directors, determined in good faith, more restrictive than those under the
agreement creating or evidencing the Indebtedness being refunded or refinanced,
(g) any agreement restricting the sale or other disposition of property securing
Indebtedness permitted by this Indenture if such agreement does not expressly
restrict the ability of a subsidiary of the Company to pay dividends or make
loans or advances and (h) reasonable and customary borrowing base covenants set
forth in credit agreements pursuant to which Indebtedness otherwise permitted by
this Indenture is outstanding (including but not limited to borrowing base
covenants substantially similar to those contained in the Revolving Loan
Agreement between Del Webb Communities, Inc. and First Interstate Bank of
Nevada, as agent for the lenders, as in effect on February 11, 1994), which
covenants restrict or limit the distribution of revenues or sale proceeds from
real estate or a real estate project based upon the amount of Indebted ness
outstanding on such real estate or real estate project and the value of some or
all of the remaining real estate or the project's remaining assets.
SECTION 4.08 LIMITATIONS ON TRANSACTIONS WITH AFFILIATES.
The Company and each of its Restricted Subsidiaries will not, after the
date hereof, make any loan, advance, Guarantee or capital contribution to, or
for the benefit of, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of, (i) any Affiliate of the Company or
any of its subsidiaries or (ii) any Person (or any Affiliate of such Person)
holding 10% or more of the Common Equity of the Company or any of its
subsidiaries (each an "Affiliate Transaction"), except on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary, as the case may
be, than those that could have been obtained in a comparable transaction on an
arms length basis from a Person that is not an Affiliate.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into an Affiliate Transaction involving or having a value
of more than $10 million unless (i) such Affiliate Transaction has been approved
by a majority of the
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disinterested members of a Committee of the Board of Directors of the Company or
(ii) the Company has delivered an officer's certificate to the Trustee stating
that (a) the signatory officer was not a party to or otherwise interested in
such Affiliate Transaction and (b) the terms of such Affiliate Transaction are
not less favorable to the Company or the relevant Restricted Subsidiary, as the
case may be, than those that could have been obtained in a comparable
transaction on an arms length basis from a Person that is not an Affiliate.
Delivery of a certificate as required by this Indenture and described above
will, absent manifest fraud, constitute conclusive evidence that the terms of
the Affiliate Transaction in question are not less favorable to the Company or
the relevant Restricted Subsidiary, as the case may be, than those that could
have been obtained in a comparable transaction on an arms length basis from a
Person that is not an Affiliate.
Notwithstanding the foregoing, the term "Affiliate Transaction" shall
not include any contract, agreement or understanding with or for the benefit of,
or plan for the benefit of, any or all employees of the Company or its
subsidiaries (in their capacity as such) that has been approved by the Company's
Board of Directors, a disinterested committee thereof or the Chief Executive
Officer of the Company (or his or her designee) or stock issuances to directors
pursuant to plans approved by shareholders.
SECTION 4.09 CONTINUED EXISTENCE.
Subject to Article 5, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.
SECTION 4.10 TAXES.
The Company shall pay, prior to delinquency, all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings or where the failure to do so (together with all other such
failures) would not have a material adverse effect on the financial condition or
results of operations of the Company and its subsidiaries, taken as a whole.
SECTION 4.11 LIMITATION ON RANKING OF FUTURE INDEBTEDNESS.
The Company shall not, directly or indirectly, incur, create, assume,
guarantee or otherwise become liable for any Indebtedness which is subordinated
in right of
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payment to any Senior Debt of the Company and senior in right of payment to the
Securities.
SECTION 4.12 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the Company's
obligation to pay the Securities; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law insofar as such law applies to the Securities, and covenants that it will
not, by resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law has been enacted.
SECTION 4.13 INVESTMENT COMPANY ACT.
The Company shall not become an investment company subject to
registration under the Investment Company Act of 1940, as amended.
SECTION 4.14 CHANGE OF CONTROL.
Following the occurrence of any Change of Control, the Company shall
offer (a "Change of Control Offer") to purchase all outstanding Securities at a
purchase price equal to 101% of the aggregate principal amount of the
Securities, plus accrued and unpaid interest to the date of purchase. The Change
of Control Offer shall be deemed to have commenced upon mailing of the notice
described in the next succeeding paragraph and shall terminate 20 business days
after its commencement, unless a longer offering period is required by law.
Promptly after the termination of the Change of Control Offer (the "Change of
Control Payment Date"), the Company shall purchase and mail or deliver payment
for all Securities tendered in response to the Change of Control Offer. If the
Change of Control Payment Date is on or after an interest payment record date
and on or before the related interest payment date, any accrued interest will be
paid to the person in whose name a Security is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Securities pursuant to the Change of Control Offer.
Within 30 days after any Change of Control, the Company (with notice to
the Trustee), or the Trustee at the Company's request (and at the expense of the
Company),
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will mail or cause to be mailed to all Holders on the date of the Change of
Control a notice of the occurrence of such Change of Control and of the Holders'
rights arising as a result thereof. Such notice will contain all instructions
and materials necessary to enable Holders to tender their Securities to the
Company. Such notice, which shall govern the terms of the Change of Control
Offer, shall state:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.14, the length of time the Change of Control Offer will
remain open and that all Securities validly tendered will be accepted
for payment;
(2) the purchase price and the Change of Control Payment Date;
(3) that any Security not tendered will continue to accrue
interest;
(4) that any Security accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest on the Change of
Control Payment Date unless the Company defaults in the payment of the
purchase price;
(5) that Holders electing to have a Security purchased
pursuant to any Change of Control Offer will be required to surrender
the Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice prior to termination of the Change of
Control Offer;
(6) that Holders will be entitled to withdraw their election
if the Company, depositary or Paying Agent, as the case may be,
receives, not later than the expiration of the Change of Control Offer,
or such longer period as may be required by law, a facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Security the Holder delivered for purchase and
a statement that such Holder is withdrawing his or her election to have
the Security purchased; and
(7) that Holders whose Securities are purchased only in part
will be issued Securities equal in principal amount to the unpurchased
portion of the Securities surrendered.
On or before a Change of Control Payment Date, the Company shall, to
the extent lawful, (i) if the Company appoints a depositary or Paying Agent,
deposit with
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such depositary or Paying Agent money sufficient to pay the purchase price of
all Securities tendered, (ii) deliver or cause the depositary or Paying Agent to
deliver to the Trustee Securities so tendered and (iii) deliver an Officers'
Certificate identifying the Securities accepted for payment by the Company in
accordance with the terms of this Section 4.14. The depositary or the Paying
Agent, as the case may be, shall promptly mail or deliver to each tendering
Holder an amount equal to the purchase price of the Securities tendered by such
Holder and accepted by the Company for purchase. The Company will publicly
announce the results of the Change of Control Offer on the Change of Control
Payment Date. Any Change of Control Offer will be conducted in compliance with
applicable tender offer rules, including Section 14(e) of the Exchange Act and
Rule 14e-1 thereunder. For purposes of this Section 4.14, neither the Company
nor any of its subsidiaries shall act as Paying Agent or depositary.
SECTION 4.15 MAINTENANCE OF CONSOLIDATED TANGIBLE NET WORTH.
(a) If the Company's Consolidated Tangible Net Worth at the end of each
of any two consecutive fiscal quarters (the last day of the second such fiscal
quarter being referred to as a "Deficiency Date") is less than $125 million (the
"Minimum Consolidated Tangible Net Worth"), then the Company shall, no later
than 60 days after a Deficiency Date (or 120 days if a Deficiency Date is also
the end of the Company's fiscal year), offer to purchase (a "Net Worth Offer")
10% of the principal amount of Securities originally issued hereunder (or such
lesser amount as may be outstanding at the time the Net Worth Offer is made)
(the "Offer Amount") at a purchase price equal to 100% of the aggregate
principal amount thereof, plus accrued and unpaid interest to the purchase date;
provided, however, that no such Net Worth Offer shall be required if, after the
Deficiency Date but prior to the timely delivery of the Officers' Certificate
required by this Section 4.15, capital is contributed or otherwise paid to the
Company or its subsidiaries sufficient to increase the Company's Consolidated
Tangible Net Worth to $125 million or more. The Net Worth Offer shall remain
open for a period of 20 business days following its commencement and no longer,
unless a longer period is required by law (the "Offer Period"). Promptly after
the termination of the Offer Period (the "Payment Date"), the Company shall
purchase and mail or deliver payment for the Offer Amount of Securities tendered
or, if less than the Offer Amount has been tendered, all Securities tendered in
response to the Net Worth Offer. If less than all of the Securities tendered in
response to the Net Worth Offer are to be purchased, the Company shall select
the Securities to be purchased on a pro rata basis. In no event shall the
Company's failure to meet the Minimum Consolidated Tangible Net Worth at the end
of any fiscal quarter be
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counted towards the making of more than one Net Worth Offer. Any Net Worth Offer
shall be conducted in compliance with applicable regulations under the federal
securities law, including Exchange Act Rule 14e-1.
(b) If the Payment Date is on or after an interest payment record date
and on or before the related interest payment date, any accrued interest will be
paid to the Person in whose name a Security is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Securities pursuant to the Net Worth Offer. The Company may
reduce the principal amount of Securities to be purchased pursuant to the Net
Worth Offer by subtracting 100% of the principal amount (excluding premium) of
Securities acquired by the Company subsequent to the Deficiency Date and
surrendered for cancellation through purchase (otherwise than pursuant to this
Section 4.15 or Section 4.14 hereof), redemption or exchange, and which were not
previously used as a credit against any obligation to repurchase Securities
pursuant to this Section.
(c) The Company shall provide the Trustee with notice of the Net Worth
Offer at least 10 days before the notice of any Net Worth Offer is mailed to
Holders. Such notice shall state whether the Company elects to credit any
Securities against its obligations to repurchase Securities as provided above
and shall set forth the amount of such credit and the basis therefor (including
identification of any previously cancelled Securities not theretofore credited).
Such notice shall be accompanied by any Securities required to be delivered to
the Trustee for cancellation, as provided above, in order to be credited against
the Company's obligation to purchase Securities hereunder.
(d) A Net Worth Offer shall be deemed to have commenced upon the
mailing by the Company (with notice to the Trustee) or by the Trustee at the
Company's request (and at the expense of the Company), by first class mail, of a
notice to each of the Holders. Such notice shall be mailed no later than 60 days
after the corresponding Deficiency Date (or 120 days if such Deficiency Date is
also the end of the Company's fiscal year). The notice shall, to the extent
permitted by applicable law, be accompanied by a copy of the information
regarding the Company which is (or would be, if the Company were subject to the
reporting requirements of the Exchange Act) required to be contained in a
Quarterly Report on Form 10-Q for the fiscal quarter ending on the Deficiency
Date if such fiscal quarter is one of the Company's first three fiscal quarters.
If such fiscal quarter is the Company's last fiscal quarter, a copy of the
information which is (or would be, if the Company were subject to the reporting
requirements of the Exchange Act) required to be contained in an Annual Report
on Form 10-K (including any financial statements or other information
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required to be included or incorporated by reference therein) for the fiscal
year ending with such fiscal quarter shall either accompany the notice or be
delivered to Holders not less than 15 days before the Payment Date. The notice
shall contain all instructions and materials necessary to enable such Holders
to tender Securities pursuant to the Net Worth Offer. The notice, which shall
govern the terms of the Net Worth Offer, shall state:
(1) that the Net Worth Offer is being made pursuant to this
Section 4.15 and the length of time the Net Worth Offer will remain
open;
(2) the Offer Amount, the purchase price and the Payment Date;
(3) that any Security not tendered or accepted for payment
will continue to accrue interest;
(4) that any Security accepted for payment pursuant to the Net
Worth Offer shall cease to accrue interest on the Payment Date unless
the Company defaults in payment of the purchase price;
(5) that Holders electing to have a Security purchased
pursuant to any Net Worth Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Company, a depositary,
if appointed by the Company, or a Paying Agent at the address specified
in the notice prior to termination of the Net Worth Offer;
(6) that Holders will be entitled to withdraw their election
if the Company, depositary or Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, or such
longer period as may be required by law, a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
the Security the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have the Security purchased;
(7) that, if the aggregate principal amount of Securities
surrendered by Holders exceeds the Offer Amount, the Company shall
select the Securities to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof,
shall be purchased); and
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(8) that Holders whose Securities are purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(e) On or before any Payment Date, the Company shall, to the extent
lawful, (i) accept for payment, on such a pro rata basis, Securities or portions
thereof validly tendered pursuant to the Net Worth Offer, (ii) if the Company
appoints a depositary or Paying Agent, deposit with such depositary or Paying
Agent money sufficient to pay the purchase price of all Securities or portions
thereof so accepted; (iii) deliver or cause such depositary or Paying Agent to
deliver to the Trustee Securities so accepted and (iv) deliver an Officers'
Certificate identifying the Securities or portions thereof accepted for payment
by the Company in accordance with the terms of this Section 4.15. The
depositary, the Paying Agent or the Company, as the case may be, shall promptly
mail or deliver to each tendering Holder an amount equal to the purchase price
of the Securities tendered by such Holder and accepted by the Company for
purchase, and the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Security equal in principal amount to any unpurchased portion
of the Security surrendered. Any Securities not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company will
publicly announce the results of the Net Worth Offer on the Payment Date. For
purposes of this Section 4.15, neither the Company nor any of its subsidiaries
shall act as Paying Agent or depositary.
ARTICLE 5
SUCCESSORS
SECTION 5.01 WHEN THE COMPANY MAY MERGE, ETC.
The Company shall not consolidate or merge with or into, or sell,
lease, convey or otherwise dispose of all or substantially all of its assets
(including by way of liquidation or dissolution) to any Person, unless:
(1) the Person formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale, lease,
conveyance or other disposition shall have been made (collectively, the
"Successor"), is a corporation or other legal entity organized and
existing under the laws of the United States, any state thereof or the
District of Columbia;
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(2) the Successor assumes by supplemental indenture in a form
reasonably satisfactory to the Trustee all the obligations of the
Company under the Securities and this Indenture;
(3) immediately after giving effect to such transaction no
Default or Event of Default shall have occurred and be continuing;
(4) immediately after giving effect to such transaction and
the use of any net proceeds therefrom, on a pro forma basis the
Consolidated Tangible Net Worth of the Company or the Successor, as the
case may be, would be at least equal to the Consolidated Tangible Net
Worth of the Company immediately prior to such transaction; and
(5) the Consolidated Fixed Charge Coverage Ratio of the
Company or the Successor, as the case may be, immediately after giving
effect to such transaction, would be such that the Company or the
Successor, as the case may be, would be entitled to incur at least $1
of additional indebtedness under the Consolidated Fixed Charge Coverage
Ratio test in Section 4.05.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
For purposes of this Section 5.01, a sale, lease, conveyance or other
disposition by the Company and/or its subsidiaries of all or substantially all
of the assets of the Company and its subsidiaries, taken as a whole, shall be
deemed a sale, lease, conveyance or other disposition of all or substantially
all of the assets of the Company.
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01, the Successor shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if the Successor had been named as the Company herein.
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SECTION 5.03 PURCHASE OPTION ON CHANGE OF CONTROL.
This Article 5 does not affect the obligations of the Company
(including without limitation any successor to the Company) under Section 4.14.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
An "Event of Default" with respect to any Securities occurs if:
(1) the Company defaults in the payment of interest on any
Security when the same becomes due and payable (whether or not
prohibited by Article 11 hereof) and the Default continues for a period
of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable whether at maturity,
upon redemption at the option of the Company, by declaration of
acceleration, or otherwise (whether or not prohibited by Article 11
hereof);
(3) the Company fails to comply with any of its other
agreements or covenants in, or provisions of, the Securities or this
Indenture and such failure continues for the period and after the
notice specified below;
(4) an event of default occurs under any mortgage, indenture
or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company
or any of its Restricted Subsidiaries (or the payment of which is
Guaranteed by the Company or any of its Restricted Subsidiaries), other
than Non-Recourse Indebtedness if (a) either (i) such event of default
results from the failure to pay any such Indebtedness when due (whether
at maturity or otherwise) or (ii) as a result of such event of default
the maturity of such Indebtedness has been accelerated prior to its
expressed maturity and (b) the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal when due or the maturity of which
has been so accelerated, equals or exceeds $10 million or more in the
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aggregate, without such Indebtedness having been discharged or such
acceleration rescinded within 30 days after notice to the Company from
the Trustee or the Holders of 25% in principal amount of the Securities
then outstanding; provided, however, that if such event of default
shall be remedied, cured or waived, then the Event of Default
hereunder, by reason of such event of default, shall be deemed likewise
to have been remedied, cured or waived without further action by the
Trustee or any of the Securityholders;
(5) a final judgment or final judgments, except to the extent
the judgment or judgments are in respect of Non-Recourse Indebtedness,
that exceed $10 million in the aggregate, for the payment of money, are
entered by a court or courts of competent jurisdiction, and remain
undischarged for a period (during which execution shall not be
effectively stayed) of 60 days, against (i) the Company, (ii) any of
its Material Subsidiaries which is at the time a Restricted Subsidiary
or (iii) any subsidiary which is at the time a Restricted Subsidiary
and which is (a) a member of a Material Subsidiary Group and (b)
material to or holds material assets of (in each case as deter mined in
good faith by the Board of Directors) the specific real estate project
in respect of which it is a member of the Material Subsidiary Group;
(6) the Company, any Material Subsidiary which is at the time
a Restricted Subsidiary or any subsidiary which is at the time a
Restricted Subsidiary and which meets both of the tests for inclusion
contained in subclauses (a) and (b) of Section 6.01(5)(iii), pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(7) a court of competent jurisdiction enters a judgment, order
or decree under any Bankruptcy Law that:
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(A) is for relief against the Company, any Material
Subsidiary which is at the time a Restricted Subsidiary or
any subsidiary which is at the time a Restricted Subsidiary
and which meets both of the tests for inclusion contained in
subclauses (a) and (b) of Section 6.01(5)(iii) in an
involuntary case,
(B) appoints a Custodian of the Company, any Material
Subsidiary which is at the time a Restricted Subsidiary or any
subsidiary which is at the time a Restricted Subsidiary and
which meets both of the tests for inclusion contained in
subclauses (a) and (b) of Section 6.01(5)(iii) for all or
substantially all of its property, or
(C) orders the liquidation of the Company, any
Material Subsidiary which is at the time a Restricted
Subsidiary or any subsidiary which is at the time a
Restricted Subsidiary and which meets both of the tests for
inclusion contained in subclauses (a) and (b) of Section
6.01(5)(iii), and the order or decree remains unstayed and in
effect for 60 days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
A Default under clause (3) (other than Defaults under Section 4.06
(except for a Default in connection with a Restricted Payment pursuant to
clauses (iii) and (v) of the definition of Restricted Payment), 4.09, or 5.01,
which Defaults shall be Events of Default with the notice but without the
passage of time specified in this paragraph) is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities notify the Company of the Default and the Company does
not cure the Default within 60 days (10 days with respect to a Default under
Section 4.14) after receipt of the notice. The notice must specify the Default,
demand that it be remedied and state that the notice is a "Notice of Default."
SECTION 6.02 ACCELERATION.
If an Event of Default (other than an Event of Default with respect to
the Company specified in clauses (6) and (7) of Section 6.01) occurs and is
continuing, the Trustee by written notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the then outstanding Securities by
written notice to the Company and the Trustee, may declare the unpaid principal
of and accrued interest on
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all the Securities to be due and payable. Upon such declaration of acceleration,
the aggregate principal amount of and all accrued and unpaid interest on the
outstanding Securities shall be due and payable immediately. If an Event of
Default with respect to the Company specified in clause (6) or (7) of Section
6.01 occurs, such an amount shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of a majority in principal amount of the then outstanding
Securities by notice to the Trustee may rescind an acceleration and its
consequences (except when there exists a Default consisting of nonpayment of
principal or interest on the Securities except principal or interest due solely
by reason of such acceleration) if the rescission would not conflict with any
judgment or decree.
SECTION 6.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04 WAIVER OF PAST DEFAULTS.
Subject to Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the then outstanding Securities by notice to the Trustee may
waive an existing Default or Event of Default and its consequences except a
continuing Default or Event of Default in the payment of the principal of or
interest on any Security. When a Default is waived, it is cured and stops
continuing. No waiver shall extend to any subsequent or other Default or impair
any right consequent thereon.
SECTION 6.05 CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it.
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However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, is unduly prejudicial to the rights of other Securityholders
or would involve the Trustee in personal liability.
SECTION 6.06 LIMITATION ON SUITS.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee notice of a continuing
Event of Default;
(2) the Holders of at least 25% in principal amount of the
then outstanding Securities make a request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Securities do not give the
Trustee a direction inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an
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express trust against the Company for the whole amount of principal and interest
remaining unpaid on the Securities and interest on overdue principal and
interest and such further amount as shall be sufficient to cover the costs and,
to the extent lawful, expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09 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 and
the Securityholders allowed in any judicial proceedings relative to the Company,
its creditors or its property. Nothing contained herein shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Debt to the extent required by Article
11;
Third: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
Fourth: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a
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court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in principal amount of the then outstanding
Securities.
ARTICLE 7
THE TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
SECTION 7.01 DUTIES OF THE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such opinions or
certificates which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
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(1) This paragraph does not limit the effect of paragraph (b)
of this Section;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02 RIGHTS OF THE TRUSTEE.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in such a document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate, an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
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(e) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
SECTION 7.03 INDIVIDUAL RIGHTS OF THE TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11.
SECTION 7.04 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities and it shall not be responsible for any
statement in the Indenture or any statement in the Securities other than its
authentication.
SECTION 7.05 NOTICE OF DEFAULTS.
If a Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Securityholder a notice of the Default
within 90 days after it occurs. Except in the case of a Default in payment on
any Security, the Trustee may withhold the notice if and so long as a committee
of its Trust Officers in good faith determines that withholding the notice is in
the interests of Securityholders.
SECTION 7.06 REPORTS BY THE TRUSTEE TO HOLDERS.
Within 60 days after the reporting date stated in Section 10.10, the
Trustee shall mail to Securityholders a brief report dated as of such reporting
date that complies with TIA Section 313(a) (but if no event described in TIA
Section 313(a) has occurred within twelve months preceding the reporting date,
no report need be
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transmitted). The Trustee also shall comply with TIA Section 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA Section
313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall promptly notify the Trustee when the Securities are
listed on any stock exchange.
SECTION 7.07 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Company and the Trustee
for its services hereunder. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses may include the reasonable compensation and
out-of-pocket expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor
Trustee against any and all loss, damage, claim, liability or expense, including
taxes (other than taxes based on the income, revenues or assets of the Trustee),
incurred by it in connection with the acceptance or administration of the trust
or trusts hereunder except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity. The
Company shall defend the claim with counsel designated by the Company, who may
be outside counsel to the Company but shall in all events be reasonably
satisfactory to the Trustee, and the Trustee shall cooperate in the defense. In
addition, if the Company does not so defend the Trustee or if at any time the
counsel so selected is ethically prohibited from representing the Trustee
(whether because of a conflict of interest or the provisions of the TIA) or is
not reasonably satisfactory to the Trustee, then the Trustee may retain one
separate counsel and, if deemed advisable by such counsel, local counsel, and
the Company shall pay the reasonable fees and expenses of such separate counsel
and local counsel. The indemnification herein extends to any settlement,
provided that the Company will not be liable for any settlement made without its
consent, provided further that such consent will not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
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To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 7.07 shall survive the termination of
this Indenture.
SECTION 7.08 REPLACEMENT OF THE TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the removed Trustee and the Company and may appoint a
successor Trustee with the Company's consent. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
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If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Securities
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The removed or retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject to
the lien provided for in Section 7.07. Notwithstanding the replacement of the
Trustee pursuant to this Section 7.08, the Company's obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee with respect
to expenses and liabilities incurred by it prior to such replacement.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall always have a combined
capital and surplus as stated in Section 10.10. The Trustee is subject to TIA
Section 310(b) regarding the disqualification of a trustee upon acquiring a
conflicting interest.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship set forth in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
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ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01 TERMINATION OF COMPANY'S OBLIGATIONS.
(a) This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.07 and the Trustee's and Paying Agent's
obligations under Section 8.03 shall survive) when all outstanding Securities
thereto fore authenticated and issued have been delivered (other than destroyed,
lost or stolen Securities that have been replaced or paid) to the Trustee for
cancellation and the Company has paid all sums payable hereunder. In addition,
the Company may terminate its obligations under this Indenture (except the
Company's obligations under Sections 7.07 and the Trustee's and Paying Agent's
obligations under Section 8.03) if, under terms satisfactory to the Trustee:
(1) the Securities have either become due and payable or are
by their terms due and payable within one year (or scheduled for
redemption within one year); and
(2) the Company irrevocably deposits in trust with the Trustee
money or United States Government Obligations (defined below in this
Section 8.01), or a combination thereof, sufficient, without
consideration of the reinvestment of interest, in the opinion of the
chief financial officer of the Company expressed in a written
certificate delivered to the Trustee, to pay principal and interest on
the Securities to maturity or upon redemption, as the case may be. The
Company may make the deposit only during the one-year period and only
if Article 11 permits it.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
4.01, 7.07, 7.08, and 8.04 and the Trustee's and Paying Agent's obligations
under Section 8.03 shall survive until the Securities are no longer outstanding.
Thereafter, only the Company's obligations in Sections 7.07 and the Trustee's
and Paying Agent's obligations under Section 8.03 shall survive.
After a deposit made pursuant to this Section 8.01, the Trustee, upon
request, shall acknowledge in writing the discharge of the Company's obligations
under this Indenture except for those surviving obligations specified above.
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In addition, the Company may elect to have either paragraph (b) or
paragraph (c) below be applied to the outstanding Securities upon compliance
with the conditions set forth in paragraph (d).
(b) Upon the Company's exercise under the last sentence of paragraph
(a) of the option applicable to this paragraph (b), the Company shall be deemed
to have been released and discharged from its obligations with respect to the
outstanding Securities on the date the conditions set forth below are satisfied
("defeasance"). For this purpose, defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be "outstanding"
only for the purposes of the Sections of and matters under this Indenture
referred to in (i) and (ii) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following, which
shall survive until otherwise terminated or discharged hereunder: (i) the rights
of Holders of outstanding Securities to receive, solely from the trust fund
described in paragraph (d) below and as more fully set forth in such paragraph,
payments in respect of the principal of and interest on such Securities when
such payments are due, (ii) the Company's obligations with respect to such
Securities under Sections 2.03, 2.05, 2.06, 2.07 and 4.04, and, with respect to
the Trustee, under Section 7.07, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (iv) this Section 8.01 and Sections 8.03
and 8.04. Subject to compliance with this Section 8.01, the Company may exercise
its option under this paragraph (b) notwithstanding the prior exercise of its
option under paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under the last sentence of paragraph
(a) of the option applicable to this paragraph (c), the Company shall be
released and discharged from its obligations under any covenant contained in
Article 4 (except for Sections 4.01 and 4.04) and Article 5 with respect to the
outstanding Securities on and after the date the conditions set forth below are
satisfied ("covenant defeasance"), and the Securities shall thereafter be deemed
to be not "outstanding" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to the outstanding Securities, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any
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reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01 but, except as specified above, the remainder of
this Indenture (including without limitation obligations set forth in Sections
8.03 and 8.04 hereof) and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to the application of either
paragraph (b) or (c) above to the outstanding Securities:
(1) the Company has irrevocably deposited in trust with the
Trustee or, at the option of the Trustee, with a trustee, satisfactory
to the Trustee and the Company under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, money or
United States Government Obligations, or a combination thereof,
sufficient, without consideration of the reinvestment of interest, in
the opinion of the chief financial officer of the Company expressed in
a written certificate delivered to the Trustee, to pay, at maturity,
principal and interest on the Securities; provided that (i) the trustee
of the irrevocable trust shall have been irrevocably instructed to pay
such money or the proceeds of such United States Government
Obligations to the Trustee, (ii) the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such
United States Government Obligations to the payment of said principal
and interest with respect to the Securities, and (iii) such deposit
does not violate Article 11 hereof;
(2) the Company has delivered to the Trustee an Officers'
Certificate stating that (A) all conditions provided for relating to
either the legal defeasance under paragraph (b) above or the covenant
defeasance under paragraph (c) above, as the case may be, have been
complied with and (B) if any other Indebtedness of the Company shall
then be outstanding, such legal defeasance or covenant defeasance will
not violate the provisions of the agreements or instruments evidencing
such Indebtedness;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(4) such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default or Event of
Default under, this Indenture or any other agreement or instrument to
which the Company is a party or by which it is bound;
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(5) in the case of an election under paragraph (b) above, the
Company shall have delivered to the Trustee an Opinion of Counsel from
nationally recognized counsel reasonably acceptable to the Trustee
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the
date of this Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that the Holders
of the outstanding Securities will not recognize income, gain or loss
for federal income tax purposes as a result of such defeasance and will
be subject to federal income tax on the same amount and in the same
manner and at the same time as would have been the case if such
defeasance had not occurred; and
(6) in the case of an election under paragraph (c) above, the
Company shall have delivered to the Trustee an Opinion of Counsel from
nationally recognized counsel reasonably acceptable to the Trustee (i)
to the effect that the Holders of the outstanding Securities will
recognize income, gain or loss for federal income tax purposes in the
same amount and in the same manner and at the same time as would have
been the case if such covenant defeasance had not occurred or (ii) that
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling to the foregoing effect.
After such irrevocable deposit made pursuant to this Section 8.01 and
satisfaction of the other conditions set forth herein, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified above.
As used herein, "United States Government Obligations" means
obligations for which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
SECTION 8.02 APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 8.01. It shall apply the
deposited money and the money from United States Government Obligations through
the Paying Agent and in accordance with this Indenture to the payment of
principal and interest on the Securities. Money and securities so held in trust
are not subject to Article 11.
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SECTION 8.03 REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; provided, however, that the Company shall have first caused
notice of such payment to the Company to be mailed to each Securityholder
entitled thereto no less than 30 days prior to such payment. After payment to
the Company, Securityholders entitled to the money must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another Person.
SECTION 8.04 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money in
accordance with Section 8.02 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 Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.01 until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.02; provided, however, that if
the Company makes any payment of interest on or principal of any Security
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01 WITHOUT THE CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture or the Securities
without notice to or the consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01;
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(3) to provide for uncertificated Securities in addition to
certificated Securities;
(4) to make any change that does not adversely affect the
legal rights hereunder of any Securityholder;
(5) to surrender any right or power herein conferred upon the
Company; or
(6) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of the Indenture under the TIA, or under any similar
federal statute hereafter enacted.
SECTION 9.02 WITH THE CONSENT OF HOLDERS.
Subject to Section 6.07, the Company and the Trustee may amend this
Indenture or the Securities with the written consent of the Holders of at least
a majority in principal amount of the then outstanding Securities.
Subject to Sections 6.04 and 6.07, the Holders of a majority in
principal amount of the Securities then outstanding may also waive compliance in
a particular instance by the Company with any provision of this Indenture or the
Securities.
However, without the consent of each Securityholder affected, an
amendment or waiver under this Section may not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the principal of or change the fixed maturity of
any Security or alter the redemption provisions with respect thereto;
(4) make any Security payable in money other than that stated
in the Security;
(5) make any change in Sections 6.04, 6.07 or 9.02 (this
sentence); or
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(6) waive a default in the payment of the principal of, or
interest on, any Security.
To secure a consent of the Holders under this Section, it shall not be
necessary for the Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing the amendment
or waiver.
After the issuance of any Securities, an amendment under this Section
or under Section 9.01 may not make any change that adversely affects in any
material respect the rights under Article 11 of the holders of Senior Debt,
unless such holders consent to the change.
SECTION 9.03 COMPLIANCE WITH THE TRUST INDENTURE ACT.
Every amendment to this Indenture or the Securities shall be set forth
in a supplemental indenture that complies with the TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his or her Security or portion of a Security if the Trustee
receives the notice of revocation before the date on which the Trustee receives
an Officers' Certificate certifying that the Holders of the requisite principal
amount of Securities have consented to the amendment or waiver.
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 or
waiver. If a record date is fixed, then notwithstanding the provisions 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 consent to such amendment or waiver or to revoke any consent
previously given, whether or not such persons continue to be Holders after such
record date. No consent shall be valid or
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effective for more than 90 days after such record date unless consents from
Holders of the principal amount of Securities required hereunder for such
amendment or waiver to be effective shall have also been given and not revoked
within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Securityholder, unless it is of the type described in any of clauses (1) through
(6) of Section 9.02. In such case, the amendment or waiver shall bind each
Holder of a Security who has consented to it.
SECTION 9.05 NOTATION ON OR EXCHANGE OF SECURITIES.
The Trustee may place an appropriate notation about an amendment or
waiver on any Security thereafter authenticated. The Company in exchange for all
Securities may issue and the Trustee shall authenticate new Securities that
reflect the amendment or waiver.
SECTION 9.06 THE TRUSTEE PROTECTED.
The Trustee shall sign all supplemental indentures, except that the
Trustee need not sign any supplemental indenture that adversely affects its
rights. The Company may not sign an amendment or supplement until the Board of
Directors approves it. The Trustee, subject to Sections 7.01 and 7.02, shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that any amendment, supplement or waiver is authorized or
permitted by this Indenture and complies with the provisions of this Article 9.
ARTICLE 10
GENERAL PROVISIONS
SECTION 10.01 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
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SECTION 10.02 NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail, with postage prepaid, to the other's address stated in Section 10.10. The
Company or the Trustee by notice to the other may designate an additional or
different address for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail, with postage prepaid, to his or her address shown on the
register kept by the Registrar. Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency with respect
to other Securityholders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
SECTION 10.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 10.04 CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of
such person, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
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(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate.
SECTION 10.06 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 10.07 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the City of New York are not required to be open, and a business
day is any day that is not a Legal Holiday. If a payment date is a Legal Holiday
at a place of payment, payment may be made at that place on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
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SECTION 10.08 NO RECOURSE AGAINST OTHERS.
No director, officer, employee or shareholder, as such, of the Company
from time to time shall have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. Each Securityholder
(including each holder of a beneficial interest in a Security) by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the Securities. Each of such directors, officers,
employees and shareholders is a third party beneficiary of this Section 10.08.
SECTION 10.09 COUNTERPARTS.
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 10.10 OTHER PROVISIONS.
"Officer" means Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, the Chief Accounting Officer, any
Executive Vice President, Senior Vice President, any Vice President, the
Treasurer, any other Executive Officer, the Secretary, any Assistant Treasurer
or any Assistant Secretary of the Company.
The Company initially appoints the Trustee as Paying Agent, Registrar
and authenticating agent; and the Trustee accepts such appointments.
The first certificate delivered pursuant to Section 4.03 shall be for
the first full fiscal quarter of the Company following the issuance of
Securities hereunder.
The reporting date for Section 7.06 is September 15 of each year. The
first reporting date is the first September 15 following the issuance of
Securities hereunder.
The Trustee shall always have, or shall be a subsidiary of a bank or
bank holding company which has, a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
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<PAGE> 76
The Company's address is:
Del Webb Corporation
6001 N. 24th Street
Phoenix, AZ 85016
Attention: General Counsel
The Trustee's address is:
Bank of Montreal Trust Company
Wall Street Plaza
88 Pine Street, 19th Floor
New York, NY 10005
SECTION 10.11 GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE
AND THE SECURITIES, WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF.
If any action or proceeding shall be brought by a Holder of any of the
Securities or by the Trustee in order to enforce any right or remedy under this
Indenture or under the Securities, the Company hereby consents and will submit
to the jurisdiction of the courts of the State of New York sitting in the City
of New York or any federal court sitting in the City of New York. The Company
hereby agrees to accept service of process by notice given to it pursuant to the
provisions of Section 10.02.
SECTION 10.12 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a subsidiary. Any such other indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 10.13 SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
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SECTION 10.14 SEVERABILITY.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.15 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
ARTICLE 11
SUBORDINATION
SECTION 11.01 AGREEMENT TO SUBORDINATE.
The Company agrees, and each Securityholder by accepting a Security
agrees, that the indebtedness evidenced by the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article, to
the prior payment in full of all Senior Debt and that the subordination is for
the benefit of the holders of Senior Debt.
SECTION 11.02 CERTAIN DEFINITIONS.
"Debt" of any Person, means any indebtedness, contingent or otherwise,
(x) in respect of borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (y)
evidenced by bonds, notes, debentures or similar instruments (except any of the
foregoing that constitutes a trade payable) or (z) evidenced by letters of
credit.
"Designated Senior Debt" means (i) Senior Debt of the Company permitted
to be incurred hereunder under any institutional credit agreement and (ii) any
other Senior Debt permitted to be incurred hereunder, the principal amount of
which is $25 million or more.
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"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Debt.
"Senior Debt" means all present and future Debt created, incurred,
assumed or guaranteed (to the extent of the guarantee) by the Company (and all
renewals, extensions or refundings thereof), unless the instrument under which
such Debt is created, incurred, assumed or guaranteed provides that such Debt is
not senior or superior in right of payment to the Securities. Notwithstanding
anything to the contrary in the foregoing, Senior Debt shall not include (i) any
Debt of the Company to any of its subsidiaries, (ii) any Debt of the Company or
guarantees of Debt of the Company which by its terms or the terms of the
instrument creating or evidencing it expressly provides that such Debt or
guarantee is expressly subordinated in right of payment to any other Debt of the
Company, (iii) the Outstanding Debentures or (iv) guarantees by the Company of
Debt (a) outstanding at the date hereof or (b) which may be outstanding in the
future, except that Senior Debt shall include any present and future guarantees
that provide by their terms that they constitute Senior Debt and the Repayment
Guaranty (Limited), dated as of June 30, 1992, from the Company to Bank One,
Arizona, NA with respect to certain indebtedness of The Villages at Desert
Hills, Inc. The Securities are not senior or superior in right of payment to the
Outstanding Debentures and rank pari passu in right of payment to the
Outstanding Debentures.
SECTION 11.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property:
(1) holders of Senior Debt shall be entitled to receive
payment in full in cash of the principal of and interest (including
interest accruing after the commencement of any such proceeding) to the
date of payment on the Senior Debt before Securityholders shall be
entitled to receive any payment of principal of or interest on
Securities, except to the extent that Securityholders receive
securities that are subordinated to Senior Debt to at least the same
extent as the Securities; and
(2) until the Senior Debt is paid in full in cash, any
distribution to which Securityholders would be entitled but for this
Article shall be made to holders of Senior Debt as their interests may
appear, except to the extent that
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Securityholders receive securities that are subordinated to Senior Debt
to at least the same extent as the Securities.
For purposes of this Article 11, a distribution may consist of cash,
securities or other property, by set-off or otherwise.
SECTION 11.04 DEFAULT ON DESIGNATED SENIOR DEBT.
The Company may not pay principal of or interest on the Securities and
may not acquire from the Trustee or any Securityholder any Securities for cash
or property (other than securities that are subordinated to at least the same
extent as the Securities are subordinated to Senior Debt) until all Senior Debt
has been paid in full if:
(i) a default in the payment of any principal or other
obligations with respect to Designated Senior Debt occurs and is
continuing beyond any applicable grace period in the agreement,
indenture or other document governing such Designated Senior Debt; or
(ii) a default, other than a payment default, on Designated
Senior Debt occurs and is continuing that then permits holders of the
Designated Senior Debt to accelerate its maturity and the Trustee
receives a notice of the default from a person who may give it pursuant
to Section 11.12 hereof requesting that payment of principal or
interest with respect to the Securities be prohibited.
The Company may and shall resume payments on the Securities and may acquire them
upon the earlier of:
(1) the date upon which the default is cured or waived, or
(2) (2) in the case of a default and notice referred to in
Section 11.04(ii) hereof, the passage of 179 days after such notice is
received (the "Payment Blockage Period"),
if this Article otherwise permits the payment or acquisition at the time of such
payment or acquisition.
Only one Payment Blockage Period may be commenced within any
consecutive 365-day period with respect to the Securities. For all purposes of
this Section 11.04, no nonpayment default that existed or was continuing on the
date of com-
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mencement of any Payment Blockage Period shall be, or be made, the basis for the
commencement of a second Payment Blockage Period unless such default shall have
been cured or waived for a period of not less than 180 days.
SECTION 11.05 ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration. The Company shall pay the Securities when 179 days pass after the
acceleration occurs if this Article permits the payment at that time; provided,
however, that if no Senior Debt is outstanding at the time of such acceleration,
the Company shall pay the Securities in accordance with the provisions of
Article 6.
SECTION 11.06 WHEN DISTRIBUTIONS MUST BE PAID OVER.
In the event that the Company shall make any payment to the Trustee on
account of the principal or interest on the Securities at a time when the
Trustee shall have received notice in accordance with Section 11.12 that such
payment is prohibited by Section 11.03 or 11.04, such payment shall be held by
the Trustee in trust for the benefit of, and shall forthwith be paid over and
delivered, upon written request to, the holders of Senior Debt (pro rata as to
each of such holders on the basis of the respective amounts of Senior Debt held
by them) or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Senior Debt
remaining unpaid to the extent necessary to pay all Senior Debt in full in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
If a distribution is made to Securityholders that because of this
Article should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Debt and, upon written
request, pay it over to them as their interests may appear for application to
the payment of all Senior Debt remaining unpaid to the extent necessary to pay
all Senior Debt in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.
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SECTION 11.07 NOTICE BY THE COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of principal of or
interest on the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior Debt
provided in this Article. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 11.08 SUBROGATION.
After all Senior Debt is paid in full and until the Securities are paid
in full, Securityholders shall be subrogated to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Securityholders have been applied to the
payment of Senior Debt. A distribution made under this Article to holders of
Senior Debt which otherwise would have been made to Securityholders is not, as
between the Company and Securityholders, a payment by the Company on Senior
Debt.
SECTION 11.09 RELATIVE RIGHTS.
This Article defines the relative rights of Securityholders and holders
of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms;
(2) affect the relative rights of Securityholders and
creditors of the Company, other than their rights in relation to
holders of Senior Debt; or
(3) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or Event of Default, subject to
the rights of holders of Senior Debt to receive distributions otherwise
payable to Securityholders.
If the Company fails because of this Article to pay principal of or
interest on a Security on the due date, the failure is still a Default or Event
of Default.
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SECTION 11.10 SUBORDINATION MAY NOT BE IMPAIRED BY THE
COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the indebtedness evidenced by the Securities shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.
SECTION 11.11 DISTRIBUTION OR NOTICE TO THE REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Securityholders shall be entitled to
rely conclusively upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative (as to the Senior
Debt for which it is the Representative) or of any trustee in bankruptcy,
liquidating trustee, Custodian, receiver or agent for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt and other Debt of the 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 11.
SECTION 11.12 RIGHTS OF THE TRUSTEE AND PAYING AGENT.
Notwithstanding any provision of this Article 11 or any other provision
of this Indenture, the Trustee and Paying Agent shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment to or by the Trustee or a Paying Agent or the taking of any other
action (pursuant to this Article 11) by the Trustee or a Paying Agent unless and
until the Trustee or such Paying Agent, as the case may be, shall have received
at its office specified in Section 10.10 written notice thereof from the
Company, a Representative or a holder of Senior Debt entitled to give such
notice and, prior to the receipt of any such written notice, the Trustee and
such Paying Agent shall be entitled in all respects conclusively to assume that
no such fact exists. The Trustee or Paying Agent may continue to make payments
on the Securities unless it receives such a notice at least three business days
prior to the date upon which payment is due.
The Trustee shall be entitled to rely in good faith on the delivery to
it of a written notice by a Person representing himself, herself or itself to be
a Representative
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or a holder of Senior Debt to establish that such notice has been given by a
Representative or a holder of such Senior Debt. Only the Company, a
Representative or a holder of Senior Debt that has no Representative may give
the notice.
In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article 11, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt 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 11, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the benefit
of such Person pursuant to the terms of the this Indenture pending judicial
determination as to the rights of such Person to receive such payment.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
SECTION 11.13 NO FIDUCIARY DUTY TO HOLDERS OF SENIOR DEBT.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee or Paying Agent. Neither the Trustee nor the
Paying Agent shall be deemed to owe any fiduciary duty to the holders of such
Senior Debt, and the Trustee shall not be liable to any holder of such Senior
Debt if it shall, in the absence of bad faith, pay over or deliver to holders of
Securities, the Company or any other person monies or assets to which any holder
of such Senior Debt shall be entitled by virtue of this Article 11 or otherwise.
The parties have caused this Indenture to be duly executed and
attested, all as of the date first above written, signifying their agreements
contained in this Indenture.
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SIGNATURES
DEL WEBB CORPORATION
By:____________________________
Name:
Title:
BANK OF MONTREAL TRUST COMPANY
By:____________________________
Name:
Title:
<PAGE> 85
EXHIBIT A
(Face of Security)
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY
TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN SUCH LIMITED CIRCUMSTANCES. EVERY SECURITY DELIVERED UPON REGISTRATION OF
TRANSFER OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS GLOBAL SECURITY SHALL BE A
GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS TO BE MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-1
<PAGE> 86
Registered No. ____ $ 150,000,000
CUSIP 947423 AK 5
DEL WEBB CORPORATION
promises to pay to CEDE & CO. or registered assigns the principal sum of ONE
HUNDRED FIFTY MILLION DOLLARS ($150,000,000) on February 15, 2010
10 1/4% SENIOR SUBORDINATED DEBENTURE
DUE FEBRUARY 15, 2010
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
A-2
<PAGE> 87
Dated: February , 1999 DEL WEBB CORPORATION
By____________________________
Name:
Title:
By____________________________
Name:
Title:
This is one of the Securities mentioned in the within-mentioned Indenture:
BANK OF MONTREAL TRUST
COMPANY, as Trustee
By_________________________________
Authorized Signatory
(SEAL)
A-3
<PAGE> 88
(Back of Security)
10 1/4% SENIOR SUBORDINATED DEBENTURE DUE FEBRUARY 15, 2010
1. INTEREST. Del Webb Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semiannually on
February 15 and August 15 of each year, commencing August 15, 1999. Interest on
the Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Securities
(except defaulted interest) to the Persons who are registered holders of
Securities at the close of business on the record date for the next interest
payment date even though Securities are cancelled after the record date and on
or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal and interest by check payable in such money. It may mail an interest
check to a Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Bank of Montreal Trust Company (together
with any successor trustee under the indenture referred to below, the
"Trustee"), will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without prior notice. Subject to certain limitations
in the Indenture, the Company or any of its subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Securities under an Indenture
dated as of February 18, 1999 (the "Indenture") between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of the Indenture.
The Securities are subject to, and qualified by, all such terms, certain of
which are summarized hereon, and Securityholders are referred to the Indenture
and such Act for a statement of such terms. The Securities are unsecured
general obligations of the Company limited to $200,000,000 in aggregate
principal amount. Capitalized terms not defined herein have the same meaning as
is given to them in the Indenture.
A-4
<PAGE> 89
5. OPTIONAL REDEMPTION. The Company may not redeem the Securities prior
to February 15, 2004. Thereafter, the Company may redeem all the Securities at
any time or some of them from time to time at the redemption prices (expressed
in percentages of principal amount) set forth below plus accrued interest to the
redemption date, if redeemed during the 12-month period beginning February 15 of
the years starting with the year indicated below.
<TABLE>
<CAPTION>
Year Price (% of par)
---- ----------------
<S> <C>
2004 105.125
2005 103.844
2006 102.563
2007 101.281
2008 and thereafter 100.000
</TABLE>
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each holder of
Securities to be redeemed at his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. In the event of a redemption of less than all of the
Securities, the Securities will be chosen for redemption by the Trustee pro
rata, by lot or by another means that is in compliance with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed. On and after the redemption date, interest ceases to accrue on
Securities or portions of them called for redemption unless the Company defaults
in the payment of the redemption price.
If this Security is redeemed subsequent to a record date with respect
to any interest payment date specified above and on or prior to such interest
payment date, then any accrued interest will be paid to the person in whose name
this Security is registered at the close of business on such record date.
7. CHANGE OF CONTROL. Upon a Change of Control, the Company shall make
a Change of Control Offer to purchase all outstanding Securities at a price
equal to 101% of the aggregate principal amount of the Securities, plus accrued
and unpaid interest to the date of purchase, such offer to be made as provided
in the Indenture. To accept the Change of Control Offer, the Holder hereof must
comply with the terms thereof, including surrendering this Security, with the
"Option of Holder to Elect Purchase" portion hereof completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent, at the address
specified in the notice
A-5
<PAGE> 90
of the Change of Control Offer mailed to Holders as provided in the Indenture,
prior to termination of the Change of Control Offer.
8. NET WORTH. If the Company's Consolidated Tangible Net Worth at the
end of each of any two consecutive fiscal quarters (the last day of the second
such fiscal quarter being referred to as a Deficiency Date) is less than $125
million, the Company shall offer to purchase (a "Net Worth Offer") 10% of the
principal amount of Securities originally issued under the Indenture (or such
lesser amount as may be outstanding at the time the Net Worth Offer is made) at
a purchase price equal to 100% of the aggregate principal amount thereof, plus
accrued and unpaid interest to the purchase date, such Net Worth Offer to be
made as provided in the Indenture; provided, however, that no such Net Worth
Offer shall be required if, after the Deficiency Date but prior to the timely
delivery of the Officers' Certificate required by the Indenture, capital is
contributed or otherwise paid to the Company or its Restricted Subsidiaries
sufficient to increase the Company's Consolidated Tangible Net Worth to $125
million or more. To accept the Net Worth Offer, the Holder hereof must comply
with the terms thereof, including surrendering this Security, with the "Option
of Holder to Elect Purchase" portion hereof completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent, at the address
specified in the notice of the Net Worth Offer mailed to the Holders as provided
in the Indenture, prior to termination of the Net Worth Offer. In no event
shall the Company's failure to meet the minimum Consolidated Tangible Net Worth
at the end of any fiscal quarter be counted towards the making of more than one
Net Worth Offer.
9. SUBORDINATION. To the extent set forth in Article 11 of the
Indenture, the Securities are subordinated to Senior Debt, which means all
present or future Debt (defined below) created, incurred, assumed or guaranteed
(to the extent of the guarantee) by the Company (and any renewals, extensions or
refundings thereof), unless the instrument under which such Debt is created,
incurred, assumed or guaranteed provides that such Debt is not senior or
superior in right of payment to the Securities. Notwithstanding anything to the
contrary in the foregoing, Senior Debt shall not include (i) any Debt of the
Company to any of its subsidiaries, (ii) any Debt of the Company or guarantees
of Debt of the Company which by its terms or the terms of the instrument
creating or evidencing it expressly provides that such Debt or guarantee is
expressly subordinated in right of payment to any other Debt of the Company,
(iii) the Outstanding Debentures or (iv) guarantees by the Company of Debt (a)
outstanding at the date of the Indenture or (b) which may be outstanding in the
future, except that Senior Debt shall include any present and future guarantees
that provide by their terms that they constitute Senior Debt and the Repayment
Guaranty (Limited) dated as of June 30, 1992, from the Company to Bank One,
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Arizona, NA with respect to certain indebtedness of The Villages at Desert
Hills, Inc. Debt of any Person is any indebtedness, contingent or otherwise, (x)
in respect of borrowed money (whether or not the recourse of the lender is to
the whole of the assets of such Person or only to a portion thereof), (y)
evidenced by bonds, notes, debentures or similar instruments (except any of the
foregoing that constitutes a trade payable) or (z) evidenced by letters of
credit. To the extent provided in the Indenture, Senior Debt must be paid
before the Securities may be paid. The Company agrees, and each Securityholder
by accepting a Security agrees, to the subordination and authorizes the Trustee
to give it effect.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. As a condition of transfer, the
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not exchange or register the transfer of any Security or portion of a
Security selected for redemption. Also, it need not exchange or register the
transfer of any Securities for a period of 15 days before a selection of
Securities to be redeemed.
11. PERSONS DEEMED OWNERS. The registered Holder of a Security may be
treated as its owner for all purposes. Owners of beneficial interests in a
Global Security, as such, are not registered Holders under the Indenture and
will not be entitled to the rights of registered Holders hereunder or under the
Indenture.
12. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture or the Securities may be amended with the consent of the Holders of a
least a majority in principal amount of the then outstanding Securities and any
existing default may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities. Without the consent of any
Securityholder, the Indenture or the Securities may be amended: to cure any
ambiguity, defect or inconsistency; to provide for assumption of the Company's
obligations to Securityholders; to make any change that does not adversely
affect the rights of any Securityholder; to provide for uncertificated
Securities in addition to certificated Securities; to surrender a right or power
conferred by the Indenture upon the Company; or to modify the Indenture to
effect its qualification under the Trust Indenture Act.
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13. DEFAULTS AND REMEDIES. An Event of Default is: default for 30 days
in payment of interest on the Securities; default in payment of principal of the
Securities; failure by the Company for 60 days (10 days with respect to failure
to comply with the Change of Control covenant) after notice to it to comply with
any of its other agreements in the Indenture or the Securities (except that with
respect to certain other covenants, such defaults shall be Events of Default
with such notice but without such passage of time); certain defaults under and
acceleration prior to maturity of certain indebtedness; certain final judgments
which remain undischarged; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Securities may declare all
the Securities to be due and payable immediately, except that in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Securities become due and payable without further action or notice.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company must furnish quarterly
compliance certificates to the Trustee.
14. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its
Affiliates, in their individual or any other capacities, may make or continue
loans to or guaranteed by, accept deposits from and perform services for, the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not Trustee.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee or
stockholder, as such, of the Company shall have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder and each beneficial owner of an interest in a
Global Security by accepting a Security or such beneficial interest, as the case
may be, waives and releases all such liability. The waiver and release are part
of the consideration for the Securities and beneficial interests, as the case
may be.
16. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
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17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN CO = 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 Minor
Act.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture. Requests may be made to: Treasurer, Del
Webb Corporation, 6001 North 24th Street, Phoenix, AZ 85016.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.
________________________________________________________________________________
Date:_________________ Your Signature:____________________________________
________________________________________________________________________________
(Sign exactly as your name appears on the face of this Security)
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Signature(s) must be guaranteed by an
eligible guarantor institution (banks,
stockbrokers, savings and loan
associations and credit unions) with
membership in an approved signature
guarantee medallion program pursuant
to Securities and Exchange Commission
Rule 17Ad-15 if this Security is to be
delivered, other than to and in the
name of the registered holder.
_______________________________________
Guaranteeing Institution
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Indenture and paragraph 7 or 8
of this Security, check the box: / /
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.14 or Section 4.15 of the Indenture and
paragraph 7 or 8 of this Security, state the amount: $________________
Date:___________________ Your Signature:____________________________________
________________________________________________________________________________
(Sign exactly as your name appears on the face of this Security)
Signature(s) must be guaranteed by an
eligible guarantor institution (banks,
stockbrokers, savings and loan
associations and credit unions) with
membership in an approved signature
guarantee medallion program pursuant to
Securities and Exchange Commission Rule
17Ad-15 if this Security is to be
delivered, other than to and in the
name of the registered holder.
_______________________________________
Guaranteeing Institution
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