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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT: OCTOBER 14, 1997
(DATE OF EARLIEST EVENT REPORTED)
KAUFMAN AND BROAD HOME CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION)
1-9195 95-3666267
(COMMISSION FILE (I.R.S. EMPLOYER
NUMBER) IDENTIFICATION NO.)
10990 WILSHIRE BOULEVARD, CALIFORNIA 90024
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(310) 231-4000
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ITEM 5.
Exhibits are filed herewith in connection with the issuance by
Kaufman and Broad Home Corporation (the "Company") of its 7-3/4% Senior Notes
due October 15, 2004 pursuant to Registration Statement Nos. 333-14977 and
33-50732.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
EXHIBITS
Exhibit
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1.4 Form of Underwriting Agreement dated as of October 8, 1997
between the Company and Goldman, Sachs & Co., on behalf of
itself and NationsBanc Montgomery Securities, Inc.
4.13 Form of Senior Indenture dated as of October 14, 1997
between the Company and Suntrust Bank, Atlanta, as Trustee.
4.14 Form of Senior Note.
4.15 Form of Officers' Certificate dated as of October 14, 1997
establishing the form and terms of the Company's 7-3/4% Senior
Notes due October 15, 2004.
12 Statement of Computation of Ratios.
25.1 Statement of eligibility and qualification of the Trustee
under the Trust Indenture Act of 1939.
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.
KAUFMAN AND BROAD HOME CORPORATION
By: /s/ KIMBERLY N. KING
----------------------------------
Kimberly N. King
Corporate Secretary and
Associate Counsel
Dated: October 14, 1997
===============================================================================
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EXHIBIT 1.4
KAUFMAN AND BROAD HOME CORPORATION
(A DELAWARE CORPORATION)
$175,000,000
7-3/4% SENIOR NOTES DUE OCTOBER 15, 2004
UNDERWRITING AGREEMENT
October 8, 1997
Goldman, Sachs & Co.
NationsBanc Montgomery Securities, Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Kaufman and Broad Home Corporation, a Delaware corporation (the
"Company"), confirms its agreement with Goldman, Sachs & Co. and each of the
other Underwriters named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Goldman, Sachs & Co. and
NationsBanc Montgomery Securities, Inc. are acting as representatives (in such
capacity, the "Representatives"), with respect to the sale by the Company and
the purchase by the Underwriters, acting severally and not jointly, of
$175,000,000 aggregate principal amount of the Company's 7-3/4% Senior Notes
due October 15, 2004 (the "Securities"). The Securities are to be issued
pursuant to an indenture dated as of October 14, 1997 (the "Indenture", which
term as used herein includes the instrument establishing the form and terms of
the Securities) between the Company and SunTrust Bank, Atlanta, as trustee (the
"Trustee").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-50732) (the "Prior
Registration Statement") for the registration under the Securities Act of 1933
(the "1933 Act") of debt securities, which registration statement was
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declared effective by the Commission on August 20, 1992 and copies of which
have heretofore been delivered to you. The Company has also filed with the
Commission a registration statement on Form S-3 (No. 333-14977) (the "Current
Registration Statement") for the registration under the 1933 Act of additional
debt securities, which registration statement was declared effective on
November 12, 1996 and copies of which have heretofore been delivered to you.
The Current Registration Statement also constituted post-effective amendment
no. 1 to the Prior Registration Statement. The Indenture has been qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Each of
the Prior Registration Statement and the Current Registration Statement, as
amended at the date of this Agreement and including all documents incorporated
or deemed to be incorporated by reference therein, is hereinafter referred to
as, individually, a "Registration Statement" and, collectively, the
"Registration Statements". The Company proposes to file with the Commission
pursuant to Rule 424(b) of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") the Prospectus Supplement (as defined
in Section 3(i) hereof) and the related prospectus dated October 8, 1997 (the
"Base Prospectus"), and has previously advised you of all further information
(financial and other) with respect to the Company set forth therein. The Base
Prospectus together with the Prospectus Supplement, in their respective forms
on the date hereof (being the forms in which they are to be filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations), including all
documents incorporated or deemed to be incorporated by reference therein
through the date hereof, are hereinafter referred to as, collectively, the
"Prospectus", except that if any revised prospectus or prospectus supplement
shall be provided to the Underwriters by the Company for use in connection with
the offering and sale of the Securities which differs from the Prospectus
(whether or not such revised prospectus or prospectus supplement is required to
be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations),
the term "Prospectus" shall refer to such revised prospectus or prospectus
supplement, as the case may be, from and after the time it is first provided to
the Underwriters for such use. Unless the context otherwise requires, all
references in this Agreement to documents, financial statements and schedules
and other information which is "contained", "included", "stated", "described
in" or "referred to" in any Registration Statement or the Prospectus (and all
other references of like import) shall be deemed to mean and include all such
documents, financial statements and schedules and other information which is or
is deemed to be incorporated by reference in such Registration Statement or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to any Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the "1934 Act") after the date of this Agreement which is
or is deemed to be incorporated by reference in such Registration Statement or
the Prospectus, as the case may be.
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The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter as of
the date hereof (such date being hereinafter referred to as the "Representation
Date") as follows:
(i) The Company meets the requirements for use of
Form S-3 under the 1933 Act and the 1933 Act Regulations. The Prior
Registration Statement, at the time it became effective, and the
Registration Statements and the Base Prospectus, at the time the
Current Registration Statement became effective and as of the
Representation Date, complied and comply in all material respects with
the requirements of the 1933 Act, the 1933 Act Regulations (including
Rule 415(a) of the 1933 Act Regulations), the 1939 Act and the rules
and regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and did not and as of the Representation Date 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 not misleading. The Prospectus, at the
Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Securities which
differs from the Prospectus filed with the Commission pursuant to Rule
424(b) of the 1933 Act Regulations, in which case at the time it is
first provided to the Underwriters for such use) and at the Closing
Time referred to in Section 2 hereof, does not and will not include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
(a) shall not apply to statements in or omissions from any
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through the Representatives expressly for use in such
Registration Statement or the Prospectus or the information contained
in any Statement of Eligibility of a trustee under the 1939 Act filed
or incorporated by reference as an exhibit to any Registration
Statement (a "Form T-1").
(ii) Ernst & Young LLP, whose reports are
incorporated by reference into the Registration Statements, are
independent public accountants with respect to the
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Company and its subsidiaries as required by the 1933 Act and the 1933
Act Regulations.
(iii) The financial statements included or
incorporated by reference in the Registration Statements and the
Prospectus present fairly the financial position of the Company and
its consolidated subsidiaries as at the dates indicated and the
results of operations of the Company and its consolidated subsidiaries
for the periods specified; except as otherwise stated in the
Registration Statements, said financial statements have been prepared
in conformity with generally accepted accounting principles in the
United States applied on a consistent basis; the supporting schedules
included or incorporated by reference in the Registration Statements
present fairly the information required to be stated therein; the
Company's ratios of earnings to fixed charges and of earnings to
combined fixed charges and preferred stock dividends (including the
amounts the ratios would have been were interest on the outstanding
collateralized mortgage obligations of the Company's wholly owned
limited purpose financing subsidiaries included in such ratios'
calculation) included in the Prospectus Supplement under the caption
"Selected Consolidated Financial Data," in the Base Prospectus under
the caption "Consolidated Ratios of Earnings to Fixed Charges and of
Earnings to Combined Fixed Charges and Preferred Stock Dividends" and
in Exhibit 12 to the Current Registration Statement have been
calculated in compliance with Item 503(d) of Regulation S-K of the
Commission; and the pro forma financial statements, if any, and
related notes thereto included in the Registration Statements and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(iv) Since the respective dates as of which
information is given in the Registration Statements and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company
and its subsidiaries (which term, as used in this Agreement, includes
without limitation consolidated joint ventures in which the Company or
any of its other subsidiaries is a participant and limited and general
partnerships in which the Company or any of its other subsidiaries
owns partnership interests (such joint ventures and limited and
general partnerships being hereinafter called, collectively, the
"Partnerships")) considered as one enterprise, whether or not arising
in the
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ordinary course of business, (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends in
customary amounts per share on the common stock, par value $1.00 per
share (the "Common Stock"), there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock.
(v) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
(vi) Each Significant Subsidiary (as defined below)
is either a corporation or a limited partnership. Each Significant
Subsidiary has been duly organized and is validly existing as a
corporation or limited partnership, as the case may be, in good
standing under the laws of the jurisdiction of its organization, has
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; all of the issued
and outstanding capital stock of each Significant Subsidiary which is
a corporation has been duly authorized and validly issued, is fully
paid and non-assessable and is owned (except for directors qualifying
shares and a nominal number of shares held by affiliated parties) by
the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and all of the outstanding equity interests in each
Significant Subsidiary which is a Partnership have been duly
authorized (if applicable) and validly issued, are fully paid and
non-assessable and are owned by the Company (except to the extent that
a minority interest in the
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Partnership is reflected in the Company's consolidated financial
statements included or incorporated by reference in the Prospectus),
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. For
purposes of this Agreement, "Significant Subsidiary" means any
subsidiary of the Company (including, without limitation, any
Partnership) that is a "significant subsidiary" as defined in Rule
1-02 of Regulation S-X (as in effect on January 1, 1996), but
substituting "5%" for "10%" wherever "10%" appears in such definition.
(vii) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements, employee benefit plans referred to or
incorporated by reference in the Prospectus); the shares of issued and
outstanding Common Stock have been duly authorized and validly issued
and are fully paid and non-assessable; the Common Stock, the Company's
authorized but unissued special common stock, par value $1.00 per
share (the "Special Common Stock"), and the Company's authorized and
unissued preferred stock, par value $1.00 per share (the "Preferred
Stock"), conform to the respective statements relating thereto
included in the Prospectus; the Securities have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement
and, when issued by the Company, authenticated by the Trustee and
delivered pursuant to the provisions of the Indenture and this
Agreement against payment of the consideration set forth herein, the
Securities will have been duly executed and delivered by the Company
and will constitute valid and binding obligations of the Company
enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles, and will be
entitled to the benefits of the Indenture; the Indenture has been duly
authorized by the Company and, at Closing Time, will have been duly
executed and delivered by the Company and will constitute a valid and
binding agreement of the Company enforceable in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally or by general equitable
principles; the Securities and the Indenture conform in all material
respects to the descriptions thereof contained in the Prospectus; and,
after giving effect to the sale of Securities and the sale of any
other securities registered pursuant to any Registration Statement to
be issued prior to the delivery of the Securities, the aggregate
amount of Securities which will have been issued and sold by the
Company will not exceed the amount of theretofore unsold
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securities registered pursuant to the Registration Statements.
(viii) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or in default in the
performance or observance of (A) any obligation, agreement, covenant
or condition contained in the Company's 1997 Revolving Loan Agreement
dated as of April 21, 1997 (the "Loan Agreement") with Bank of America
National Trust and Savings Association, as administrative agent, and
the other parties thereto, the Company's 9-3/8% Senior Subordinated
Notes due 2003 (the "9-3/8% Senior Subordinated Notes") or the
Indenture dated as of May 1, 1993 between the Company and The First
National Bank of Boston pursuant to which the 9-3/8% Senior
Subordinated Notes were issued (the "9-3/8% Senior Subordinated
Indenture"), or the Company's 9-5/8% Senior Subordinated Notes due
2007 (the "9-5/8% Senior Subordinated Notes") or the Indenture dated
as of November 19, 1996 between the Company and Suntrust Bank, Atlanta
pursuant to which the 9-5/8% Senior Subordinated Notes were issued,
including the instrument establishing the form and terms of the 9-5/8%
Senior Subordinated Notes (the "9-5/8% Senior Subordinated Indenture")
(the Loan Agreement, the 9-3/8% Senior Subordinated Notes, the 9-3/8%
Senior Subordinated Indenture, the 9-5/8% Senior Subordinated Notes
and the 9-5/8% Senior Subordinated Indenture are hereinafter called,
collectively, the "Subject Instruments" and, individually, a "Subject
Instrument") or (B) any obligation, agreement, covenant or condition
contained in any other contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company or any of the
Significant Subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or
any of the Significant Subsidiaries is subject, which default or
violation would have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise; and the execution, delivery and performance of this
Agreement, the Indenture and the Securities and the consummation of
the transactions contemplated herein and therein and compliance by the
Company with its obligations hereunder and thereunder, have been duly
authorized by all necessary corporate action and will not conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Significant
Subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any
of the Significant Subsidiaries is a party or by which it or any of
them may be bound (including, without limitation, the Subject
Instruments), or to which any of the property or assets of the Company
or any of the Significant Subsidiaries is
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subject, except (other than in the case of the Subject Instruments)
for a conflict, breach, default, lien, charge or encumbrance which
would not have a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise, nor
will such action result in any violation of the provisions of the
charter, by-laws or other corresponding organizational documents of
the Company or any of the Significant Subsidiaries or any applicable
law, administrative regulation or administrative or court order or
decree.
(ix) There is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any of its subsidiaries, which is required to
be disclosed in the Registration Statements (other than as disclosed
therein), or which is not so disclosed and (net of reserves and
insurance) the Company believes might result in any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or which might materially
and adversely affect the properties or assets thereof or which might
materially and adversely affect the consummation of this Agreement;
all pending legal or governmental proceedings to which the Company or
any subsidiary is a party or of which any of their respective property
or assets is the subject which are not described in or incorporated by
reference in the Registration Statements, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate and net of reserves and insurance, not material to the
Company and its subsidiaries considered as one enterprise; and there
are no contracts or documents of the Company or any of its
subsidiaries which are required to be filed as exhibits to, or
incorporated by reference in, the Registration Statements by the 1933
Act or by the 1933 Act Regulations which have not been so filed or
incorporated by reference.
(x) No authorization, approval or consent of any
court or governmental authority or agency is necessary in connection
with the issuance and sale of the Securities hereunder or the
consummation by the Company of any of the other transactions
contemplated hereby, except such as may be required and have been
obtained under the 1933 Act, the 1933 Act Regulations and the 1939 Act
and such as may be required under state securities laws.
(xi) This Agreement has been duly authorized, executed
and delivered by the Company.
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(xii) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the 1934 Act and the
1934 Act Regulations, and, when read together with the other
information in the Prospectus, at the respective times the
Registration Statements and any amendments thereto became effective,
at the Representation Date and at Closing Time did not, do 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 the light of the circumstances under
which they were made, not misleading.
(xiii) The Company has complied with, and is and will
be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as
Section 517.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(xiv) The Securities and the Indenture conform in all
material respects to the respective statements relating thereto
contained in the Prospectus.
(xv) The Securities rank and will rank pari passu in
right of payment with all other unsecured, unsubordinated indebtedness
of the Company, including, without limitation, borrowings under the
Loan Agreement.
(xvi) There are no holders of securities of the
Company with currently exercisable registration rights to have any
securities registered as part of the Registration Statements or
included in the offering contemplated by this Agreement.
(xvii) The Company and each of the Significant
Subsidiaries have good and marketable title to all of their respective
properties, in each case free and clear of all liens, encumbrances and
defects, except (i) customary liens and encumbrances arising in the
ordinary course of the Company's construction and development business
and the financing thereof, (ii) as stated or incorporated by reference
in the Prospectus or (iii) such as do not materially affect the value
of such properties in the aggregate to the Company and its
subsidiaries considered as one enterprise and do not materially
interfere with the use made and proposed to be made of such
properties.
(xviii) The Company and its Significant Subsidiaries
possess such certificates, authorities and permits issued by the
appropriate state, federal and foreign regulatory agencies or bodies
necessary to conduct all material aspects
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of the business now operated by them, and neither the Company nor any
of its Significant Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(xix) No default or event of default with respect to
any Indebtedness (as such term is defined the Prospectus) of the
Company or any of its Significant Subsidiaries entitling, or which,
with notice or lapse of time or both, would entitle, the holders
thereof to accelerate the maturity thereof exists or will exist as a
result of the execution and delivery of this Agreement or the
Indenture, the issuance and sale of the Securities or the consummation
of the transactions contemplated hereby or thereby.
(xx) The Company and each of the Significant
Subsidiaries have filed all tax returns required to be filed, which
returns, as amended, are complete and correct in all material
respects, and neither the Company nor any Significant Subsidiary is in
default in the payment of any taxes which were payable pursuant to
said returns or any assessments with respect to said returns which
would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise.
(xxi) The Company and its Significant Subsidiaries
maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed in
accordance with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(b) Any certificate signed by any officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
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SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter, severally and not
jointly, agrees to purchase from the Company, at 98.39% of the principal amount
thereof, the aggregate principal amount of Securities set forth in Schedule A
opposite the name of such Underwriter, plus any additional aggregate principal
amount of Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for the Securities shall be made
at the offices of the Company, 10990 Wilshire Boulevard, Los Angeles,
California, or at such other place as shall be agreed upon by the
Representatives and the Company, at 7:00 a.m., California time, on October 14,
1997, or such other time not later than ten business days after such date as
shall be agreed upon by the Representatives and the Company (such time and date
of payment and delivery of the Securities being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately available
funds to a bank account designated by the Company, against delivery to the
Representatives for the respective accounts of the several Underwriters of
certificates for the Securities to be purchased by them. Certificates for the
Securities shall be in such denominations and registered in such names as the
Representatives may request in writing at least one full business day before
Closing Time. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Securities which it has agreed to
purchase. Goldman, Sachs & Co., individually and not as a representative of
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for any Securities to be purchased by any Underwriter whose
payment therefor has not been received by the Closing Time, but such payment
shall not relieve such Underwriter from its obligations hereunder. The
certificates for the Securities will be made available for examination and
packaging by the Representatives not later than 10:00 a.m. (New York City time)
on the last business day prior to Closing Time in New York, New York.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) The Company will notify the Representatives
immediately, and confirm the notice in writing, (i) of the
effectiveness of any post-effective amendment to any Registration
Statement, (ii) of the mailing or the delivery to the Commission for
filing of the Prospectus or any amendment to any Registration
Statement or amendment or
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supplement to the Prospectus or any document to be filed pursuant to
the 1934 Act during any period when the Prospectus is required to be
delivered under the 1933 Act, (iii) of the receipt of any comments or
inquiries from the Commission relating to any Registration Statement
or Prospectus, (iv) of any request by the Commission for any amendment
to any Registration Statement or any amendment or supplement to the
Prospectus or for additional information and (v) of the issuance by
the Commission of any stop order suspending the effectiveness of any
Registration Statement or the initiation of any proceedings for that
purpose. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain
the lifting thereof at the earliest possible moment.
(b) The Company will give the Representative notice of
its intention to file or prepare any post-effective amendment to any
Registration Statement or any amendment or supplement to the
Prospectus (including any revised prospectus which the Company
proposes for use by the Underwriters in connection with the offering
of the Securities which differs from the Prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations,
whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish the
Representatives with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file any such amendment or supplement or use
any such prospectus to which the Representatives or counsel for the
Underwriters shall reasonably object.
(c) The Company has delivered to the Representatives one
signed copy of each Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed
to be incorporated by reference therein) and will also deliver to the
Representatives as many conformed copies of the Registration
Statements as originally filed and of each amendment thereto (without
exhibits) as the Representatives may reasonably request.
(d) The Company will furnish to each Underwriter, from
time to time during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of
the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request for the purposes contemplated by the 1933 Act or
the 1934 Act or the respective applicable rules and regulations of the
Commission thereunder.
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(e) If any event shall occur as a result of which it is
necessary, in the opinion of counsel for the Underwriters, to amend or
supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, the Company will forthwith amend or
supplement the Prospectus (in form and substance satisfactory to the
Representatives and counsel for the Underwriters) so that, as so
amended or supplemented, the Prospectus will not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Company will furnish to the Underwriters a
reasonable number of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under
the applicable securities laws of such states and other jurisdictions
of the United States as the Representatives may designate; provided,
however, that the Company shall not be obligated to qualify as a
foreign corporation in any jurisdiction in which it is not so
qualified. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such
qualification in effect for so long as may be required by applicable
law. The Company will promptly advise the Representatives of the
receipt by the Company of any notification with respect to the
suspension of qualification of the Securities for sale in any state or
jurisdiction or the initiating or threatening of any proceeding for
such purpose.
(g) The Company will make generally available to its
security holders as soon as practicable, but not later than 60 days
after the close of the period covered thereby (or 120 days in the case
of the close of the Company's fiscal year), an earnings statement (in
form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve month period beginning not later than
the first day of the Company's fiscal quarter next following the date
of this Agreement.
(h) The Company will use the net proceeds received by it
from the sale of the Securities in the manner to be specified in the
Prospectus Supplement under "Use of Proceeds".
(i) Immediately following the execution of this
Agreement, the Company will prepare a prospectus supplement, dated the
date hereof (the "Prospectus Supplement"), containing the terms of the
Securities, the plan of distri-
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<PAGE> 14
bution thereof and such other information as may be required by the
1933 Act or the 1933 Act Regulations or as the Representatives and the
Company deem appropriate, and will file or transmit for filing with
the Commission in accordance with such Rule 424(b) of the 1933 Act
Regulations copies of the Prospectus (including such Prospectus
Supplement).
(j) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file
all documents required to be filed with the Commission pursuant to
Sections 13, 14 or 15 of the 1934 Act within the time periods required
by the 1934 Act and the 1934 Act Regulations.
(k) During a period from the date of this Agreement
through November 14, 1997, the Company will not, without the prior
written consent of Goldman, Sachs & Co., directly or indirectly, sell,
offer to sell, grant any option for the sale of, or otherwise dispose
of, any debt securities or any securities convertible into or
exchangeable or exercisable for any debt securities (except for the
Securities sold to the Underwriters pursuant to this Agreement);
provided that the foregoing shall not prevent the Company from making
borrowings under the Loan Agreement or under bank credit lines.
(l) In accordance with the Cuba Act, if applicable, and
without limitation to the provisions of Sections 6 and 7 hereof, the
Company agrees to indemnify and hold harmless the Underwriters from
and against any and all loss, liability, claim, damage and expense
whatsoever (including fees and disbursements of counsel), as incurred,
arising out of any violation by the Company of the Cuba Act, if
applicable.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of each Registration Statement as originally filed
and of each amendment thereto, (ii) the printing or reproduction of this
Agreement and the Indenture (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel and accountants, (v) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey, (vi) the printing and
delivery to the Underwriters of copies of each Registration Statement as
originally filed and of each amendment thereto, of the preliminary prospectuses
and any preliminary prospectus supplements, and of the Prospectus and any
amendments or supple-
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<PAGE> 15
ments thereto, (vii) the printing and delivery to the Underwriters of copies of
the Blue Sky Survey, (viii) the fees and expenses of the Trustee, including the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities, (ix) any fees payable in connection with the
rating of the Securities; and (x) any fees and expenses of a depositary in
connection with holding the Securities in book-entry form.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5 or Section 9(a)(i), the Company shall
reimburse the Underwriters for all of its out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriter's Obligations. The obligations
of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company herein contained, to the
performance by the Company of its obligations hereunder, and to the following
further conditions:
(a) At Closing Time no stop order suspending the
effectiveness of any Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission. The Prospectus (including the Prospectus Supplement
referred to in Section 3(i) hereof) shall have been filed or
transmitted for filing with the Commission pursuant to Rule 424(b) of
the 1933 Act Regulations within the prescribed time period, and prior
to Closing Time the Company shall have provided evidence satisfactory
to the Representatives of such timely filing or transmittal.
(b) At Closing Time the Representatives shall have
received:
(1) The favorable opinion, dated as of Closing Time, of
Munger, Tolles & Olson LLP, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) The Indenture (which term, as used in such
opinion, shall include the Officer's Certificate establishing
the form and terms of the Notes) has been duly authorized,
executed and delivered by the Company and (assuming the due
authorization, execution and delivery thereof by the Trustee)
constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
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<PAGE> 16
except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting enforcement of
creditors' rights generally or by general equitable
principles.
(iii) The Securities are in the form established
pursuant to the Indenture, have been duly authorized for
issuance and sale by the Company and, when executed by the
Company and authenticated by the Trustee in the manner
provided for in the Indenture and delivered pursuant to the
provisions of the Indenture and this Agreement against payment
of the purchase price therefor specified herein, will
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting enforcement of
creditors' rights generally or by general equitable
principles, and will be entitled to the benefits of the
Indenture.
(iv) The issuance and delivery of the Securities,
the execution and delivery of this Agreement and the
Indenture, and the consummation of the transactions
contemplated herein and therein, will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
Significant Subsidiaries pursuant to, the 9-3/8% Senior
Subordinated Notes, the 9-3/8% Senior Subordinated Indenture,
the 9-5/8% Senior Subordinated Notes or the 9-5/8% Senior
Subordinated Indenture.
(v) The Indenture has been qualified under the
1939 Act.
(vi) This Agreement has been duly authorized,
executed and delivered by the Company.
(vii) The Securities and the Indenture conform in
all material respects to the descriptions thereof contained in
the Prospectus.
(viii) Each Registration Statement is effective
under the 1933 Act and, to the best of such counsel's
knowledge and information, no stop order suspending the
effectiveness of any Registration Statement has been issued
under the 1933 Act or proceedings therefor initiated or
threatened by the Commission.
In rendering such opinion, such counsel shall state that,
insofar as such opinion concerns the Indenture, the Securities or this
Agreement (all of which are governed by
16
<PAGE> 17
the laws of the State of New York), such counsel has assumed without
investigation that the law of the State of New York is the same as the
law of the State of California.
(2) The favorable opinion, dated as of Closing Time, of
Kimberly N. King, Esq., Associate Counsel of the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus.
(ii) To the best of such counsel's knowledge and
information, the Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required,
except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries (as such term is
defined in this Agreement) considered as one enterprise.
(iii) Each of the Company's Significant Domestic
Subsidiaries (as defined below) has been duly organized and is
validly existing as a corporation or limited partnership, as
the case may be, in good standing under the laws of the
jurisdiction of its incorporation or formation, as the case
may be, has power and authority as a corporation or limited
partnership, as the case may be to own, lease and operate its
properties and to conduct its business as described in the
Prospectus and, to the best of such counsel's knowledge and
information, is duly qualified to transact business and is in
good standing in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure
to so qualify would not have a material adverse effect on the
Company and its subsidiaries considered as one enterprise or
on their consolidated financial condition or earnings; to the
best of such counsel's knowledge and information, all of the
issued and outstanding capital stock of each such Significant
Domestic Subsidiary which is a corporation has been duly
authorized and validly issued, is fully paid and
non-assessable and is owned (except for directors qualifying
shares and a nominal number of shares held by affiliated
parties) by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge,
lien,
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<PAGE> 18
encumbrance, claim or equity; and to the best of such
counsel's knowledge and information, all of the issued and
outstanding partnership interests in each such Significant
Domestic Subsidiary which is a limited partnership have been
duly authorized (if applicable) and validly issued, are fully
paid and non-assessable and are owned by the Company (except
to the extent that a minority interest in such limited
partnership is reflected in the Company's consolidated
financial statements included or incorporated by reference in
the Prospectus), directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. As used in this Agreement, the
term "Significant Domestic Subsidiaries" means all Significant
Subsidiaries other than any Significant Subsidiaries organized
and existing under the laws of any jurisdiction other than the
United States of America, any State thereof or the District of
Columbia.
(iv) The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus
under "Capitalization" (except for subsequent issuances, if
any, pursuant to the exercise of options issued under employee
benefit plans referred to in the Prospectus or in the
documents incorporated by reference therein); and the shares
of issued and outstanding Common Stock have been duly
authorized and validly issued and are fully paid and
non-assessable.
(v) To the best of such counsel's knowledge and
information, there are no statutes or regulations required to
be described in the Registration Statements or the Prospectus
or in the documents incorporated by reference therein which
are not described as required and there are no legal or
governmental proceedings pending or threatened which are
required to be disclosed in the Registration Statements or in
the documents incorporated by reference therein, other than
those disclosed therein, and all pending legal or governmental
proceedings to which the Company or any subsidiary is a party
or to which any of their property is subject which are not
described in or incorporated by reference in the Registration
Statements, including ordinary routine litigation incidental
to the business, are, considered in the aggregate and net of
reserves and insurance, not material to the Company and its
subsidiaries considered as one enterprise.
(vi) The information under "Item 1.
Business--Regulation and Environmental Matters" and "Item 3.
Legal Proceedings" in the Company's 1996 Annual Report and in
Item 15 in Part II of the Registration Statements, to the
extent that such information
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<PAGE> 19
constitutes matters of law, summaries of legal matters,
summaries of securities, instruments, agreements or other
documents or legal conclusions, has been reviewed by such
counsel and is correct in all material respects.
(vii) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required
to be described or referred to in the Registration Statements
or to be filed or incorporated by reference as exhibits
thereto other than those described or referred to or filed as
exhibits thereto, the descriptions thereof or references
thereto are correct, and, to the best of such counsel's
knowledge, no default exists in the due performance or
observance of any obligation, agreement, covenant or condition
contained in (A) any Subject Instrument or (B) any other
contract, indenture, mortgage, loan agreement, note, lease or
other instrument so described, referred to or filed or
incorporated by reference, which default (other than in the
case of the Subject Instruments) could have a material adverse
effect on the Company and its subsidiaries considered as one
enterprise or on their consolidated financial condition or
earnings.
(viii) No authorization, approval, consent or order
of any court or governmental authority or agency is required
in connection with the sale of the Securities to the
Underwriters, except such as may be required under the 1933
Act, the 1933 Act Regulations, the 1939 Act, the 1939 Act
Regulations or state securities laws.
(ix) The issuance and delivery of the Securities,
the execution and delivery of this Agreement and the Indenture
(which term, as used in such opinion, shall include the
Officer's Certificate establishing the form and terms of the
Securities), and the consummation of the transactions
contemplated herein and therein, will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
Significant Subsidiaries pursuant to, (A) any Subject
Instrument or (B) to the best of such counsel's knowledge and
information, any other contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
Company or any of its Significant Subsidiaries is a party or
by which it or any of them may be bound, or to which any of
the property or assets of the Company or any of its
Significant Subsidiaries is subject, nor will such action
result in any violation of the provisions of the charter or
by-laws of the Company, or any applicable
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<PAGE> 20
law, administrative regulation or administrative or court
decree.
(x) The documents incorporated or deemed to be
incorporated by reference in the Prospectus (other than the
financial statements and supporting schedules included or
incorporated by reference therein, as to which no opinion need
be rendered), at the time they were filed with the Commission,
complied as to form in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations.
(xi) At the respective times the Registration
Statements became effective, the Registration Statements
(other than the financial statements and supporting schedules
included or incorporated by reference therein and any Form
T-1, as to which no opinion need be rendered) complied as to
form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations.
(xii) To the best of such counsel's knowledge and
information, no default with respect to any Indebtedness (as
such term is defined in the Prospectus) of the Company or any
of its subsidiaries entitling, or which, with notice or lapse
of time or both, would entitle, the holders thereof to
accelerate the maturity thereof exists or will exist as a
result of the execution and delivery of this Agreement or the
Indenture, the issuance and sale of the Securities or the
consummation of the transactions contemplated hereby or
thereby.
In rendering such opinion, such counsel shall state
that, insofar as such opinion concerns the Indenture, the
Securities or this Agreement (all of which are governed by the
laws of the State of New York), such counsel has assumed
without investigation that the law of the State of New York is
the same as the law of the State of California. In addition,
in rendering such opinion, such counsel may, as to other
matters governed by the law of any jurisdiction other than the
law of the State of California, the General Corporation Law of
the State of Delaware and the federal law of the United States
of America, either (a) assume without any investigation that
the law of the State of California is the same as the law
governing such other matters for all purposes relevant to such
opinion or (b) rely on an opinion or opinions of local counsel
satisfactory to the Representatives, so long as each such
opinion shall be dated as of the Closing Time and in form and
substance satisfactory to the Representatives, and shall
expressly permit the Underwriters to rely thereon as if such
opinion were addressed to the Underwriter.
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<PAGE> 21
(3) The favorable opinion, dated as of Closing Time,
of Brown & Wood LLP, counsel for the Underwriters, with
respect to the matters set forth in (i) through (iii) and (v)
through (viii) of subsection (b)(1) of this Section and in
(xi) of subsection (b)(2) of this Section.
(4) In giving their opinions required by subsections
(b)(1), (b)(2) and (b)(3), respectively, of this Section,
Munger, Tolles & Olson LLP, Barton P. Pachino and Brown & Wood
LLP shall each additionally state that nothing has come to
their attention that would lead them to believe that either
Registration Statement (except for financial statements and
schedules and other financial data included therein and any
Form T-1, as to which counsel need make no statement), at the
time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or that the Prospectus (except for financial
statements and schedules and other financial data included
therein, as to which counsel need make no statement), at the
Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the
Company for use in connection with the offering of the
Securities which differs from the Prospectus filed with at the
Commission pursuant to Rule 424(b) of the 1933 Act
Regulations, in which case at the time it is first provided to
the Underwriters for such use) or at Closing Time, included or
includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(c) At Closing Time, there shall not have been, since the
date hereof or since the respective dates as of which information is
given in the Registration Statements and the Prospectus, any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties in Section 1 are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the
Company has complied with all agreements and satisfied all conditions
on its part to be performed or
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<PAGE> 22
satisfied at or prior to Closing Time, (iv) no stop order suspending
the effectiveness of any Registration Statement has been issued and,
to the best of such officer's knowledge and information, no
proceedings for that purpose have been initiated or threatened by the
Commission and (v) the rating assigned by any nationally recognized
statistical rating organization to any debt securities of the Company
has not been lowered and no such rating agency has publicly announced
that it has placed any debt securities of the Company on what is
commonly termed a "watch list" for a possible downgrading. As used in
this Section 5(c), the term "Prospectus" means the Prospectus in the
form first used to confirm sales of the Securities.
(d) At the Closing Time, the Representatives shall have
received from Ernst & Young LLP a letter dated such date, in form and
substance satisfactory to the Underwriter, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
financial information included and incorporated by reference in the
Registration Statements and the Prospectus (including, without
limitation, any pro forma financial statements).
(e) At Closing Time, the Securities shall have a rating
of at least Ba2 from Moody's Investor's Service Inc. and BB from
Standard & Poor's, and the Company shall have delivered to the
Representatives a letter from each such rating agency or other
evidence satisfactory to the Underwriter, confirming that the
Securities have such ratings.
(f) Prior to the Closing Time, the Company shall have
filed a listing application with the New York Stock Exchange (the
"NYSE") to list the Securities on the NYSE and, at the Closing Time,
either (i) the Securities shall have been approved for listing on the
NYSE, subject to official notice of issuance, or (ii) nothing shall
have come to the attention of the Representatives which shall have
caused them to believe that the Securities will not be approved for
listing on the NYSE promptly after the Closing Time.
(g) At Closing Time, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated and related proceedings,
or in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall
be satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
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<PAGE> 23
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof.
Notwithstanding any such termination, the provisions of Sections 4, 6, 7 and 8
shall remain in effect.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, any preliminary
prospectus supplement or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by Goldman, Sachs & Co.), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
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<PAGE> 24
provided, however, that (A) the foregoing indemnity agreement shall not apply
to any loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or omission (1)
made in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives expressly for use in
a Registration Statement (or any amendment thereto) or any preliminary
prospectus, preliminary prospectus supplement or the Prospectus (or any
amendment or supplement thereto) or (2) in the Form T-1; and (B) the foregoing
indemnity agreement with respect to any preliminary prospectus or preliminary
prospectus supplement shall not inure to the benefit of the Underwriter from
whom the person asserting any such losses, claims, damages or liabilities
purchased Securities, or any person controlling such Underwriter, if a copy of
the Prospectus (as may then be amended or supplemented if the Company shall
have furnished any amendments or supplements thereto, but excluding documents
incorporated by reference therein) was not sent or given by or on behalf of
such Underwriter to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Securities to such person and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense, except that this clause
(B) shall not be applicable if such defect shall have been corrected in a
document which is incorporated or deemed to be incorporated by reference in the
Prospectus.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed any
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in any
Registration Statement (or any amendment thereto) or any preliminary
prospectus, preliminary prospectus supplement or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representative expressly for use in such Registration Statement (or any
amendment thereto) or such preliminary prospectus, such preliminary prospectus
supplement or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give written notice as promptly
as reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of any such action. In no event shall the indemnifying parties
be liable for fees and expenses of
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<PAGE> 25
more than one counsel (in addition to any local counsel) separate from their
own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and one or more of the Underwriters, as incurred, in
such proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount (calculated as
described below) with respect to the Securities bears to the public offering
price (calculated as described below) of the Securities and the Company is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of the preceding sentence, the
public offering price of the Securities shall be deemed to be equal to 100% of
the principal amount thereof and the underwriting discount shall be deemed to
be equal to 1.61% of the principal amount thereof. For purposes of this
Section, each person, if any, who controls an Underwriter within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed any Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the aggregate principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
25
<PAGE> 26
(a) The Representatives may terminate this Agreement, by notice to
the Company, at any time at or prior to Closing Time (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in any Registration Statement, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or any outbreak of hostilities or escalation thereof or other
calamity or crisis the effect of which is such as to make it, in the judgment
of the Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in the securities
of the Company has been suspended by the Commission or a national securities
exchange, or if trading generally on either the American Stock Exchange or the
New York Stock Exchange has been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said Exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium has been declared by
either federal, New York or California authorities, (iv) if the rating assigned
by any nationally recognized statistical rating organization to any debt
securities of the Company shall have been lowered or if any such rating agency
shall have publicly announced that it has placed any debt securities of the
Company on what is commonly termed a "watch list" for a possible downgrading.
As used in this Section 9(a), the term "Prospectus" means the Prospectus in the
form first used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except
as provided in Section 4 hereof. Notwithstanding any such termination, the
provisions of Sections 4, 6, 7 and 8 shall remain in effect.
SECTION 10. Default by One of the Underwriters. If one of the
Underwriters shall fail at Closing Time to purchase the Securities which it is
obligated to purchase under this Agreement (the "Defaulted Securities"), the
non-defaulting Underwriter shall have the right, within 24 hours thereafter, to
make arrangements for such non-defaulting Underwriter or any other underwriters
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the non-defaulting Underwriter shall not have completed such arrangements
within such 24-hour period, then:
(a) if the aggregate principal amount of the Defaulted
Securities does not exceed 10% of the aggregate principal amount of
Securities to be purchased at Closing Time, the
26
<PAGE> 27
non-defaulting Underwriter shall be obligated to purchase all of the
Securities, or
(b) if the Defaulted Securities exceeds 10% of the
aggregate principal amount of Securities to be purchased at Closing
Time, this Agreement shall terminate without liability on the part of
the non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement either the non-defaulting Underwriter or the
Company shall have the right to postpone Closing Time for a period not
exceeding seven days in order to effect any required changes in the
Registration Statements or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to them at Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Registration Department; notices
to the Company shall be directed to it at 10990 Wilshire Boulevard, Los
Angeles, California 90024 attention of Michael F. Henn, Senior Vice President
and Chief Financial Officer.
SECTION 12. Parties. This Agreement shall inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Company
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. Governing Law and Time. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be
27
<PAGE> 28
performed in said State. Unless otherwise set forth herein, specified times of
day refer to New York City time.
28
<PAGE> 29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its
terms.
Very truly yours,
KAUFMAN AND BROAD HOME CORPORATION
By:_________________________________
Name:
Title:
CONFIRMED AND ACCEPTED
as of the date first above written:
GOLDMAN, SACHS & CO.
NATIONSBANC MONTGOMERY SECURITIES, INC.
By:________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE> 30
SCHEDULE A
<TABLE>
<CAPTION>
Aggregate
Principal
Amount
Name of Underwriter of Securities
------------------- -------------
<S> <C>
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . . . . . $148,750,000
NationsBanc Montgomery Securities, Inc. . . . . . . . . . . . . . . . . 26,250,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $175,000,000
</TABLE>
30
<PAGE> 1
EXHIBIT 4.13
================================================================================
KAUFMAN AND BROAD HOME CORPORATION
AND
SUNTRUST BANK, ATLANTA, as Trustee
Senior Debt Indenture
Dated as of October 14, 1997
----------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE ONE
DEFINITIONS........................................................................................1
SECTION 1.1 Certain Terms Defined.................................................................1
Authenticating Agent........................................................................1
Authorized Newspaper........................................................................1
Board of Directors..........................................................................2
Board Resolution............................................................................2
Business Day................................................................................2
Commission..................................................................................2
Corporate Trust Office......................................................................2
Coupon......................................................................................2
covenant defeasance.........................................................................2
Depositary..................................................................................2
Dollar......................................................................................2
ECU.........................................................................................2
Event of Default............................................................................2
Foreign Currency............................................................................2
Holder......................................................................................2
Holder of Securities........................................................................2
Securityholder..............................................................................2
Indenture...................................................................................2
Interest....................................................................................3
Issuer......................................................................................3
Issuer Order................................................................................3
Judgment Currency...........................................................................3
Officers' Certificate.......................................................................3
Opinion of Counsel..........................................................................3
Original Issue Discount Security............................................................3
Outstanding.................................................................................3
Periodic Offering...........................................................................3
Person......................................................................................4
principal...................................................................................4
record date.................................................................................4
Registered Global Security..................................................................4
Registered Security.........................................................................4
Required Currency...........................................................................4
Responsible Officer.........................................................................4
Security....................................................................................4
Securities..................................................................................4
Trust Indenture Act of 1939.................................................................4
Trustee.....................................................................................4
Unregistered Security.......................................................................4
U.S. Government Obligations.................................................................4
Yield to Maturity...........................................................................4
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE TWO
SECURITIES.........................................................................................5
SECTION 2.1 Forms Generally.......................................................................5
SECTION 2.2 Form of Trustee's Certificate of Authentication.......................................5
SECTION 2.3 Amount Unlimited; Issuable in Series..................................................5
SECTION 2.4 Authentication and Delivery of Securities.............................................7
SECTION 2.5 Execution of Securities...............................................................9
SECTION 2.6 Certificate of Authentication.........................................................9
SECTION 2.7 Denomination and Date of Securities; Payments of Interest.............................9
SECTION 2.8 Registration, Transfer and Exchange..................................................10
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities............................12
SECTION 2.10 Cancellation of Securities; Destruction Thereof.....................................13
SECTION 2.11 Temporary Securities................................................................13
ARTICLE THREE
COVENANTS OF THE ISSUER...........................................................................14
SECTION 3.1 Payment of Principal and Interest....................................................14
SECTION 3.2 Offices for Payments, etc............................................................14
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee...................................15
SECTION 3.4 Paying Agents........................................................................15
SECTION 3.5 Written Statement to Trustee.........................................................16
SECTION 3.6 Luxembourg Publications..............................................................16
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE............................................................................16
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders...16
SECTION 4.2 Reports by the Issuer................................................................16
SECTION 4.3 Reports by the Trustee...............................................................16
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT...............................................................................16
SECTION 5.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default................16
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt........................18
SECTION 5.3 Application of Proceeds..............................................................20
SECTION 5.4 Suits for Enforcement................................................................20
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings..................................21
SECTION 5.6 Limitations on Suits by Securityholders..............................................21
SECTION 5.7 Unconditional Right of Securityholders to Institute Certain Suits....................21
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default..............21
SECTION 5.9 Control by Holders of Securities.....................................................22
SECTION 5.10 Waiver of Past Defaults.............................................................22
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in Certain Circumstances........22
SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay Costs........................23
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE SIX
CONCERNING THE TRUSTEE............................................................................23
SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default.........23
SECTION 6.2 Certain Rights of the Trustee........................................................24
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities or Application
of Proceeds Thereof..................................................................25
SECTION 6.4 Trustee and Agents May Hold Securities or Coupons; Collections, etc..................25
SECTION 6.5 Moneys Held by Trustee...............................................................25
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior Claim......................25
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc...............................25
SECTION 6.8 Indentures Not Creating Potential Conflicting Interests for the Trustee..............26
SECTION 6.9 Persons Eligible for Appointment as Trustee..........................................26
SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee...........................26
SECTION 6.11 Acceptance of Appointment by Successor Trustee......................................27
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee..............28
SECTION 6.13 Appointment of Authenticating Agent.................................................28
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS....................................................................29
SECTION 7.1 Evidence of Action Taken by Securityholders..........................................29
SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities.......................29
SECTION 7.3 Holders to Be Treated as Owners......................................................30
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding....................................30
SECTION 7.5 Right of Revocation of Action Taken..................................................30
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES...........................................................................31
SECTION 8.1 Supplemental Indentures Without Consent of Securityholders...........................31
SECTION 8.2 Supplemental Indentures With Consent of Securityholders..............................32
SECTION 8.3 Effect of Supplemental Indenture.....................................................33
SECTION 8.4 Documents to Be Given to Trustee.....................................................33
SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures.........................33
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.........................................................33
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms.......................................33
SECTION 9.2 Successor Corporation Substituted....................................................34
SECTION 9.3 Opinion of Counsel Delivered to Trustee..............................................34
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS..................................................................................34
SECTION 10.1 Satisfaction and Discharge of Indenture.............................................34
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of Securities.................38
SECTION 10.3 Repayment of Moneys Held by Paying Agent............................................38
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years...........38
SECTION 10.5 Indemnity for U.S. Government Obligations...........................................38
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS..........................................................................39
SECTION 11.1 Incorporators, Stockholders, Officers and Directors of Issuer Exempt
from Individual Liability...........................................................39
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of
Securities and Coupons..............................................................39
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.................................39
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of Securities and Coupons........39
SECTION 11.5 Officers' Certificates and Opinions of Counsel; Statements to Be Contained
Therein ............................................................................39
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays.....................................40
SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939.............40
SECTION 11.8 New York Law to Govern..............................................................40
SECTION 11.9 Counterparts........................................................................40
SECTION 11.10 Effect of Headings.................................................................41
SECTION 11.11 Securities in a Foreign Currency or in ECU.........................................41
SECTION 11.12 Judgment Currency..................................................................41
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS........................................................42
SECTION 12.1 Applicability of Article............................................................42
SECTION 12.2 Notice of Redemption; Partial Redemptions...........................................42
SECTION 12.3 Payment of Securities Called for Redemption.........................................43
SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption.......43
SECTION 12.5 Mandatory and Optional Sinking Funds................................................43
</TABLE>
iv
<PAGE> 6
THIS INDENTURE, dated as of October 14, 1997 between KAUFMAN AND BROAD
HOME CORPORATION, a Delaware corporation (the "Issuer"), and SUNTRUST BANK,
ATLANTA, as trustee (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue from time to time of its
unsecured debentures, notes or other evidences of indebtedness to be issued in
one or more series (the "Securities") up to such principal amount or amounts as
may from time to time be authorized in accordance with the terms of this
Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of this
Indenture to provide, among other things, for the authentication, delivery and
administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture and
agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by
the Holders thereof, the Issuer and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective Holders from time to time
of the Securities and of the coupons, if any, appertaining thereto as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section. All other terms used in this
Indenture that are defined in the Trust Indenture Act of 1939 or the definitions
of which in the Securities Act of 1933 are referred to in the Trust Indenture
Act of 1939, including terms defined therein by reference to the Securities Act
of 1933 (except as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the date of this
Indenture. Except as otherwise provided with respect to the Securities of any
series as contemplated by Section 2.3, all accounting terms used herein and not
expressly defined shall have the meanings assigned to such terms in accordance
with generally accepted accounting principles, and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision. The terms
defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular.
"Authenticating Agent" shall have the meaning set forth in Section 6.13.
"Authorized Newspaper" means a newspaper (which, in the case of The City
of New York, will, if practicable, be The Wall Street Journal (Eastern Edition),
in the case of the United Kingdom, will, if practicable, be the Financial Times
(London Edition) and, in the case of Luxembourg, will, if practicable, be the
Luxemburger Wort) published in an official language of the country of
publication customarily published at least once a day for
1
<PAGE> 7
at least five days in each calendar week and of general circulation in The City
of New York, the United Kingdom or in Luxembourg, as applicable. If it shall be
impractical in the opinion of the Trustee to make any publication of any notice
required hereby in an Authorized Newspaper, any publication or other notice in
lieu thereof which is made or given with the approval of the Trustee shall
constitute a sufficient publication of such notice.
"Board of Directors" means either the Board of Directors of the Issuer or
any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions, certified by
the secretary or an assistant secretary of the Issuer to have been duly adopted
or consented to by the Board of Directors and to be in full force and effect,
and delivered to the Trustee.
"Business Day" means, with respect to any Security, a day that in the city
(or in any of the cities, if more than one) in which amounts are payable, as
specified in the form of such Security or in or pursuant to this Indenture, is
not a day on which banking institutions are authorized or required by law or
regulation to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution and delivery of this Indenture such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located in Atlanta, Georgia.
"Coupon" means any interest coupon appertaining to a Security.
"covenant defeasance" shall have the meaning set forth in Section 10.1(C).
"Depositary" means, with respect to the Securities of any series issuable
or issued in the form of one or more Registered Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean or include each Person who is
then a Depositary hereunder, and if at any time there is more than one such
Person, "Depositary" as used with respect to the Securities of any such series
shall mean the Depositary with respect to the Registered Global Securities of
that series.
"Dollar" means the coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.
"Event of Default" means, except as otherwise provided with respect to the
Securities of any series as contemplated by Section 2.3, any event or condition
specified as such in Section 5.1.
"Foreign Currency" means such coin or currency issued by the government of
a country other than the United States as at the time of payment is legal tender
for the payment of public or private debts in such country.
"Holder", "Holder of Securities", "Securityholder" or other similar terms
mean (a) in the case of any Registered Security, the Person in whose name such
Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof, and (b) in the case of any
Unregistered Security, the bearer of such Security, or any Coupon appertaining
thereto, as the case may be.
"Indenture" means this instrument as originally executed and delivered or,
if amended or supplemented as herein provided, as so amended or supplemented or
both, and shall include the forms and terms of particular series
2
<PAGE> 8
of Securities established as contemplated hereunder.
"Interest" means, when used with respect to non-interest bearing
Securities, interest payable after maturity.
"Issuer" means Kaufman and Broad Home Corporation, a Delaware corporation
and, subject to Article Nine, its successors and permitted assigns.
"Issuer Order" means a written statement, request or order of the Issuer
signed in its name by the chairman or vice chairman of the Board of Directors,
the chief executive officer, the president, any vice president or the
treasurer of the Issuer.
"Judgment Currency" shall have the meaning set forth in Section 11.12.
"Officers' Certificate" means a certificate signed by the chairman or vice
chairman of the Board of Directors, the chief executive officer, the president
or any vice president and by the treasurer or the secretary or any assistant
secretary of the Issuer and delivered to the Trustee. Each such certificate
shall comply with Section 314 of the Trust Indenture Act of 1939 and include the
statements provided for in Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by the General
Counsel of the Issuer or by such other legal counsel who may be an employee of
or counsel to the Issuer and who shall be satisfactory to the Trustee. Each such
opinion shall comply with Section 314 of the Trust Indenture Act of 1939 and
include the statements provided for in Section 11.5.
"Original Issue Discount Security" means any Security that provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"Outstanding", when used with reference to Securities, shall, subject to
the provisions of Section 7.4, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption
of which moneys or U.S. Government Obligations (as provided for in Section
10.1) in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Issuer) or shall have
been set aside, segregated and held in trust by the Issuer for the Holders
of such Securities (if the Issuer shall act as its own paying agent if
permitted to do so hereunder), provided that if such Securities, or
portions thereof, are to be redeemed prior to the maturity thereof, notice
of such redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
and
(c) Securities which shall have been paid or in substitution for
which other Securities shall have been authenticated and delivered
pursuant to the terms of Section 2.9 (except with respect to any such
Security as to which proof satisfactory to the Trustee is presented that
such Security is held by a Person in whose hands such Security is a legal,
valid and binding obligation of the Issuer).
In determining whether the Holders of the requisite principal amount of
Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 5.1.
"Periodic Offering" means an offering of Securities of a series from time
to time, the specific terms of which Securities, including, without limitation,
the rate or rates of interest, if any, thereon, the stated maturity or
3
<PAGE> 9
maturities thereof and the redemption provisions, if any, with respect thereto,
are to be determined by the Issuer or its agents upon the issuance of such
Securities.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"principal" whenever used with reference to the Securities or any Security
or any portion thereof, shall be deemed to include "and premium, if any".
"record date" shall have the meaning set forth in Section 2.7.
"Registered Global Security", means a Security evidencing all or a part of
a series of Registered Securities, issued to the Depositary for such series in
accordance with Section 2.4, and bearing the legend prescribed in Section 2.4.
"Registered Security" means any Security registered on the Security
register of the Issuer.
"Required Currency" shall have the meaning set forth in Section 11.12.
"Responsible Officer" when used with respect to the Trustee means the
chairman of its Board of Directors, any vice chairman of its Board of Directors,
the chairman of its trust committee, the chairman of its executive committee,
any vice chairman of its executive committee, the president, any vice president
(whether or not designated by numbers or words added before or after the title
"vice president"), the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject.
"Security" or "Securities" has the meaning stated in the first recital of
this Indenture, or, as the case may be, Securities that have been authenticated
and delivered under this Indenture.
"Trust Indenture Act of 1939" (except as otherwise provided in Section
8.3) means the Trust Indenture Act of 1939 as in force at the date as of which
this Indenture was originally executed.
"Trustee" means the Person identified as "Trustee" in the first paragraph
hereof and, subject to the provisions of Article Six, shall also include any
successor trustee. "Trustee" shall also mean or include each Person who is then
a trustee hereunder and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
trustee with respect to the Securities of such series.
"Unregistered Security" means any Security other than a Registered
Security.
"U.S. Government Obligations" means direct obligations of the United
States of America, backed by its full faith and credit.
"Yield to Maturity" means the yield to maturity on a series of Securities,
calculated at the time of issuance of such series, or, if applicable, at the
most recent redetermination of interest on such series, and calculated in
accordance with accepted financial practice.
4
<PAGE> 10
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series and the
Coupons, if any, to be attached thereto shall be substantially in such form (not
inconsistent with this Indenture) as shall be established by or pursuant to one
or more Board Resolutions or Officers' Certificates or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends or endorsements, not inconsistent with the provisions of this Indenture,
as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities and Coupons, if any, as evidenced by their execution of such
Securities and Coupons.
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The Trustee's
certificate of authentication on all Securities shall be in substantially the
following form:
"This is one of the Securities referred to in the within-mentioned Indenture.
SUNTRUST BANK, ATLANTA,
as Trustee
By_________________________________________
Authorized Officer"
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Trustee's Certificate of
Authentication to be borne by the Securities of such series shall be
substantially as follows:
"This is one of the Securities referred to in the within-mentioned Indenture.
SUNTRUST BANK, ATLANTA,
as Authenticating Agent
By_________________________________________
Authorized Officer"
SECTION 2.3 Amount Unlimited; Issuable in Series. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.
The Securities may be issued in one or more series and the Securities of
each such series shall rank equally and pari passu with the Securities of each
other such series and with all other unsecured and unsubordinated debt of the
Issuer. There shall be established in or pursuant to one or more Board
Resolutions or
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Officers' Certificates or in one or more indentures supplemental hereto, prior
to the initial issuance of Securities of any series,
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all other
series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3
or pursuant to any provision of this Indenture providing for redemption,
repayment or repurchase of Securities of such series in whole or in part);
(3) if other than Dollars, the coin or currency in which the
Securities of that series are denominated (including, but not limited to,
any Foreign Currency or ECU);
(4) the date or dates on which the principal of the Securities of
the series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall
accrue, on which such interest shall be payable and (in the case of
Registered Securities) on which a record shall be taken for the
determination of Holders to whom interest is payable and/or the method by
which such rate or rates or date or dates shall be determined;
(6) the place or places where the principal of and any interest on
Securities of the series shall be payable (if other than as provided in
Section 3.2);
(7) the right, if any, of the Issuer to redeem Securities, in
whole or in part, at its option and the period or periods within which,
the price or prices at which and any terms and conditions upon which
Securities of the series may be so redeemed, pursuant to any sinking fund
or otherwise;
(8) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof
and the price or prices at which and the period or periods within which
and any terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof in the case of Registered Securities, or $1,000 and
$5,000 in the case of Unregistered Securities, the denominations in which
Securities of the series shall be issuable;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the maturity thereof;
(11) if other than the coin or currency in which the Securities of
that series are denominated, the coin or currency in which payment of the
principal of or interest on the Securities of such series shall be
payable;
(12) if the principal of or interest on the Securities of such
series are to be payable, at the election of the Issuer or a Holder
thereof, in a coin or currency other than that in which the Securities are
denominated, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(13) if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to an index
based on a coin or currency other than that in which the Securities of the
series are denominated, the manner in which such amounts shall be
determined;
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(14) the terms on which the Securities may be converted or
exchanged for stock or other securities of the Issuer or other entities,
any specific terms relating to the adjustment thereof and the period
during which such Securities may be converted or exchanged;
(15) whether the Securities of the series will be issuable as
Registered Securities (and if so, whether such Securities will be issuable
as Registered Global Securities) or Unregistered Securities (with or
without Coupons), or any combination of the foregoing, any restrictions
applicable to the offer, sale or delivery of Unregistered Securities or
the payment of interest thereon and, if other than as provided in Section
2.8, the terms upon which Unregistered Securities of any series may be
exchanged for Registered Securities of such series and vice versa;
(16) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a Person who is
not a U.S. Person in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether the Issuer will have the option
to redeem such Securities rather than pay such additional amounts;
(17) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, the
form and terms of such certificates, documents or conditions;
(18) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the
Securities of such series;
(19) any deletions from, modifications of or additions to the
defined terms, Events of Default, covenants or other provisions of this
Indenture with respect to the Securities of such series; and
(20) any other terms of the series.
All Securities of any one series and Coupons, if any, appertaining
thereto, shall be substantially identical, except in the case of Registered
Securities as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above or
as set forth in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or pursuant
to such Board Resolution, such Officers' Certificate or in any such indenture
supplemental hereto.
SECTION 2.4 Authentication and Delivery of Securities. The Issuer may
deliver Securities of any series having attached thereto appropriate Coupons, if
any, executed by the Issuer to the Trustee for authentication together with the
applicable documents referred to below in this Section, and the Trustee shall
thereupon authenticate and deliver such Securities to or upon the order of the
Issuer (contained in the Issuer Order referred to below in this Section) or
pursuant to such procedures acceptable to the Trustee and to such recipients as
may be specified from time to time by an Issuer Order. If provided for in such
procedures, such Issuer Order may authorize authentication and delivery pursuant
to oral or electronic instructions from the Issuer or its duly authorized agent.
In authenticating such Securities and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive (in the case of subparagraphs 2, 3 and 4 below only at or
before the time of the first request of the Issuer to the Trustee to
authenticate Securities of such series, provided that such documents reasonably
contemplate all Securities of such series) and (subject to Section 6.1) shall be
fully protected in relying upon, unless and until such documents have been
superseded or revoked:
(1) an Issuer Order requesting such authentication and setting
forth delivery instructions if the Securities and Coupons, if any, are not
to be delivered to the Issuer, provided that, with respect to Securities
of a series subject to a Periodic Offering, (a) such Issuer Order may be
delivered by the Issuer to the Trustee prior to the delivery to the
Trustee of such Securities for authentication and delivery, (b) the
Trustee shall authenticate and deliver Securities of such series for
original issue from time to time, in an aggregate principal amount not
exceeding the aggregate principal amount established for such series,
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pursuant to an Issuer Order or pursuant to procedures acceptable to the
Trustee as may be specified from time to time by an Issuer Order, (c) the
maturity date or dates, interest rate or rates and any other terms of
Securities of such series shall be determined by an Issuer Order or
pursuant to such procedures and (d) if provided for in such procedures,
such Issuer Order may authorize authentication and delivery pursuant to
oral or electronic instructions from the Issuer or its duly authorized
agent or agents, which oral instructions shall be promptly confirmed in
writing;
(2) any Board Resolution, Officers' Certificate and/or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant
to which the forms and terms of the Securities and Coupons, if any, were
established;
(3) an Officers' Certificate stating that the form or forms and
terms of the Securities and Coupons, if any, have been established
pursuant to Sections 2.1 and 2.3 and comply with this Indenture, and
covering such other matters as the Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion of Counsel, or
a letter addressed to the Trustee permitting it to rely on an Opinion of
Counsel, substantially to the effect that:
(a) the forms of the Securities and Coupons, if any, have
been duly authorized and established in conformity with the
provisions of this Indenture;
(b) in the case of an underwritten offering, the terms of
the Securities have been duly authorized and established in
conformity with the provisions of this Indenture, and, in the case
of an offering that is not underwritten, certain terms of the
Securities have been established pursuant to a Board Resolution, an
Officers' Certificate or a supplemental indenture in accordance with
this Indenture, and when such other terms as are to be established
pursuant to procedures set forth in an Issuer Order shall have been
established, all such terms will have been duly authorized by the
Issuer and will have been established in conformity with the
provisions of this Indenture;
(c) when the Securities and Coupons, if any, have been
executed by the Issuer and authenticated by the Trustee in
accordance with the provisions of this Indenture and delivered to
and duly paid for by the purchasers thereof, they will have been
duly issued under this Indenture and will be valid and legally
binding obligations of the Issuer, enforceable in accordance with
their respective terms, and will be entitled to the benefits of this
Indenture; and
(d) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, the Securities
and Coupons, if any, will not contravene any provision of applicable
law or the certificate of incorporation or by-laws of the Issuer or
any agreement or other instrument binding upon the Issuer or any of
its subsidiaries that is material to the Issuer and its
subsidiaries, considered as one enterprise, or, to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Issuer or any subsidiary, and no consent, approval or authorization
of any governmental body or agency is required for the performance
by the Issuer of its obligations under the Securities and Coupons,
if any, except such as are specified and have been obtained and such
as may be required by the securities or blue sky laws of the various
states in connection with the offer and sale of the Securities and
Coupons, if any.
In rendering such opinions, such counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting the rights and remedies of creditors and is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). Such counsel may assume, as to all matters
governed by the laws of the State of New York, that the laws of the State of
New York are identical to the laws of the State of California insofar as they
concern the opinions expressed therein. Such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the State of New York and the
federal law of the United States, upon opinions of other counsel (copies of
which shall be delivered to the Trustee), who shall be counsel reasonably
satisfactory to the Trustee, in which case the opinion shall state that such
counsel believes he and the
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Trustee are entitled so to rely. Such counsel may also state that, insofar as
such opinion involves factual matters, he has relied, to the extent he deems
proper, upon certificates of officers of the Issuer and its subsidiaries and
certificates of public officials.
The Trustee shall have the right to decline to authenticate and deliver
any Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken by the Issuer or if the
Trustee in good faith by its board of directors or board of trustees, executive
committee, or a trust committee of directors or trustees or Responsible Officers
shall determine that such action would expose the Trustee to personal liability
to existing Holders or would affect the Trustee's own rights, duties or
immunities under the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the Securities
of a series are to be issued in the form of one or more Registered Global
Securities, then the Issuer shall execute and the Trustee shall, in accordance
with this Section and the Issuer Order with respect to such series, authenticate
and deliver one or more Registered Global Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate principal amount of
all of the Securities of such series issued and not yet cancelled, (ii) shall be
registered in the name of the Depositary for such Registered Global Security or
Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instructions and
(iv) shall bear a legend substantially to the following effect: "Unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time of
its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Securities Exchange Act of 1934 and any other
applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities and, if applicable,
each Coupon appertaining thereto shall be signed on behalf of the Issuer by the
chairman or vice chairman of its Board of Directors or its chief executive
officer, its president or any vice president or its treasurer, under its
corporate seal (except in the case of Coupons) which may, but need not, be
attested. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. The seal of the Issuer may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects in
any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the Coupon so signed
appertains) shall be authenticated and delivered by the Trustee or disposed of
by the Issuer, such Security or Coupon nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security or Coupon
had not ceased to be such officer of the Issuer; and any Security or Coupon may
be signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the
Issuer, although at the date of the execution and delivery of this Indenture any
such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities as shall
bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, employees or other signatories, shall be entitled to
the benefits of this Indenture or be valid or obligatory for any purpose. No
Coupon shall be entitled to the benefits of this Indenture or shall be valid and
obligatory for any purpose until the certificate of authentication on the
Security to which such Coupon appertains shall have been duly executed by the
Trustee. The execution of such certificate by the Trustee upon any Security
executed by the Issuer shall be conclusive evidence that the Security so
authenticated has been duly authenticated and delivered hereunder and that the
Holder is entitled to the benefits of this Indenture.
SECTION 2.7 Denomination and Date of Securities; Payments of Interest. The
Securities of each series
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shall be issuable as Registered Securities or Unregistered Securities in
denominations established as contemplated by Section 2.3 or, with respect to the
Registered Securities of any series, if not so established, in denominations of
$1,000 and any integral multiple thereof. If denominations of Unregistered
Securities of any series are not so established, such Securities shall be
issuable in denominations of $1,000 and $5,000. The Securities of each series
shall be numbered, lettered or otherwise distinguished in such manner or in
accordance with such plan as the officers of the Issuer executing the same may
determine with the approval of the Trustee, as evidenced by the execution and
authentication thereof.
Each Registered Security shall be dated the date of its authentication.
Each Unregistered Security shall be dated as provided in the resolution or
resolutions of the Board of Directors, Officers' Certificate or supplemental
indenture referred to in Section 2.3. The Securities of each series shall bear
interest, if any, from the date, and such interest shall be payable on the
dates, established as contemplated by Section 2.3.
Except as otherwise provided as contemplated pursuant to Section 2.3 with
respect to the Securities of any series, the Person in whose name any Registered
Security of any series is registered at the close of business on any record date
applicable to such series with respect to any interest payment date for such
series shall be entitled to receive the interest, if any, payable on such
interest payment date notwithstanding any transfer or exchange of such
Registered Security subsequent to the record date and prior to such interest
payment date, except if and to the extent the Issuer shall default in the
payment of the interest due on such interest payment date for such series, in
which case such defaulted interest shall be paid to the Persons in whose names
Registered Securities of such series are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice given
by mail by or on behalf of the Issuer to the Holders of such Registered
Securities not less than 15 days preceding such subsequent record date. The term
"record date" as used with respect to any interest payment date (except a date
for payment of defaulted interest) for the Securities of any series shall mean
the date specified as such in the terms of the Registered Securities of such
series established as contemplated by Section 2.3, or, if no such date is so
established, if such interest payment date is the first day of a calendar month,
the fifteenth day of the next preceding calendar month or, if such interest
payment date is the fifteenth day of a calendar month, the first day of such
calendar month, whether or not such record date is a Business Day.
SECTION 2.8 Registration, Transfer and Exchange. The Issuer will keep at
each office or agency to be maintained for the purpose as provided in Section
3.2 for each series of Securities a register or registers in which, subject to
such reasonable regulations as it may prescribe, it will provide for the
registration of Registered Securities of such series and the registration of
transfer of Registered Securities of such series. Such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Registered Security or Registered Securities of the same series in
authorized denominations for a like aggregate principal amount.
Unregistered Securities (except for any temporary global Unregistered
Securities) and Coupons (except for Coupons attached to any temporary global
Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of any series
(other than a Registered Global Security, except as set forth below) may be
exchanged for a Registered Security or Registered Securities of such series
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Registered Securities to be exchanged at the agency of the
Issuer that shall be maintained for such purpose in accordance with Section 3.2
and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. If the Securities of any series are issued in both registered and
unregistered form, except as otherwise specified pursuant to Section 2.3, at the
option of the Holder thereof, Unregistered Securities of any series may be
exchanged for Registered Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.2, with, in the case
of Unregistered Securities that have Coupons
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attached, all unmatured Coupons and all matured Coupons in default thereto
appertaining, and upon payment, if the Issuer shall so require, of the charges
hereinafter provided. At the option of the Holder thereof, if Unregistered
Securities of any series, maturity date and interest rate are issued in more
than one authorized denomination, except as otherwise specified pursuant to
Section 2.3, such Unregistered Securities may be exchanged for Unregistered
Securities of such series having authorized denominations and an equal aggregate
principal amount, upon surrender of such Unregistered Securities to be exchanged
at the agency of the Issuer that shall be maintained for such purpose in
accordance with Section 3.2 or as specified pursuant to Section 2.3, with, in
the case of Unregistered Securities that have Coupons attached, all unmatured
Coupons and all matured Coupons in default thereto appertaining, and upon
payment, if the Issuer shall so require, of the charges hereinafter provided.
Unless otherwise specified pursuant to Section 2.3, Registered Securities of any
series may not be exchanged for Unregistered Securities of such series. Whenever
any Securities are so surrendered for exchange, the Issuer shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive. All Securities and Coupons
surrendered upon any exchange or transfer provided for in this Indenture shall
be promptly cancelled and disposed of by the Trustee and the Trustee will
deliver a certificate of disposition thereof to the Issuer.
Except as otherwise provided with respect to the Securities of any series
as contemplated by Section 2.3, all Registered Securities presented for
registration of transfer, exchange, redemption, repurchase or payment shall (if
so required by the Issuer or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
The Issuer shall not be required to exchange or register a transfer of (a)
any Securities of any series for a period of 15 days next preceding the first
mailing of notice of redemption of Securities of such series to be redeemed or
(b) any Securities selected, called or being called for redemption, in whole or
in part, except, in the case of any Security to be redeemed in part, the portion
thereof not so to be redeemed.
Notwithstanding any other provision of this Section 2.8, unless and until
it is exchanged in whole or in part for Securities in definitive registered
form, a Registered Global Security representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.
If at any time the Depositary for any Registered Securities of a series
represented by one or more Registered Global Securities notifies the Issuer that
it is unwilling or unable to continue as Depositary for such Registered
Securities or if at any time the Depositary for such Registered Securities shall
no longer be eligible under Section 2.4, the Issuer shall appoint a successor
Depositary eligible under Section 2.4 with respect to such Registered
Securities. If a successor Depositary eligible under Section 2.4 for such
Registered Securities is not appointed by the Issuer within 90 days after the
Issuer receives such notice or becomes aware of such ineligibility, the Issuer's
election pursuant to Section 2.3 that such Registered Securities be represented
by one or more Registered Global Securities shall no longer be effective and the
Issuer will execute, and the Trustee, upon receipt of an Officers' Certificate
for the authentication and delivery of definitive Securities of such series,
will authenticate and deliver, Securities of such series in definitive
registered form without coupons, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Registered
Global Security or Securities representing such Registered Securities in
exchange for such Registered Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that the
Registered Securities of any series issued in the form of one or more Registered
Global Securities shall no longer be represented by a Registered Global Security
or Securities. In such event the Issuer will execute, and the Trustee, upon
receipt of an Officers' Certificate for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver,
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Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Registered Global Security or Securities representing
such Registered Securities, in exchange for such Registered Global Security or
Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Registered Global Security, the Depositary for such
Registered Global Security may surrender such Registered Global Security in
exchange in whole or in part for Securities of the same series in definitive
registered form on such terms as are acceptable to the Issuer and such
Depositary. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary a new Registered
Security or Securities of the same series, of any authorized denominations
as requested by such Person, in an aggregate principal amount equal to and
in exchange for such Person's beneficial interest in the Registered Global
Security; and
(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal amount
of the surrendered Registered Global Security and the aggregate principal
amount of Registered Securities authenticated and delivered pursuant to
clause (i) above.
Upon the exchange of a Registered Global Security for Securities in
definitive registered form without coupons, in authorized denominations, such
Registered Global Security shall be cancelled by the Trustee or an agent of the
Issuer or the Trustee. Securities in definitive registered form without coupons
issued in exchange for a Registered Global Security pursuant to this Section 2.8
shall be registered in such names and in such authorized denominations as the
Depositary for such Registered Global Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee or
an agent of the Issuer or the Trustee. The Trustee or such agent shall deliver
such Securities to or as directed by the Persons in whose names such Securities
are so registered.
All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, none of the Issuer, the Trustee or any agent of the
Issuer or the Trustee (any of which, other than the Issuer, shall rely on an
Officers' Certificate and an Opinion of Counsel) shall be required to exchange
any Unregistered Security for a Registered Security if such exchange would
result in adverse Federal income tax consequences to the Issuer (such as, for
example, the inability of the Issuer to deduct from its income, as computed for
Federal income tax purposes, the interest payable on the Unregistered
Securities) under then applicable United States Federal income tax laws.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities. In
case any temporary or definitive Security or any Coupon appertaining to any
Security shall become mutilated, defaced or be destroyed, lost or stolen, the
Issuer shall execute, and upon the written request of any officer of the Issuer,
the Trustee shall authenticate and deliver a new Security of the same series,
maturity date and interest rate, bearing a number or other distinguishing symbol
not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and in substitution for the
Security so destroyed, lost or stolen with Coupons corresponding to the Coupons
appertaining to the Securities so mutilated, defaced, destroyed, lost or stolen,
or in exchange or substitution for the Security to which such mutilated,
defaced, destroyed, lost or stolen Coupon appertained, with Coupons appertaining
thereto corresponding to the Coupons so mutilated, defaced, destroyed, lost or
stolen. In every case the applicant for a substitute Security or Coupon shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the
Trustee such security or indemnity as may be required by them to indemnify and
defend and to save each of them harmless and, in every case of destruction, loss
or theft, evidence to their satisfaction of the destruction, loss or theft of
such Security or Coupon and of the ownership thereof and in the case of
mutilation or defacement shall surrender the Security and related Coupons to the
Trustee or such agent.
Upon the issuance of any substitute Security or Coupon, the Issuer may
require the payment of a sum
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sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee or its agent) connected therewith. In case any Security or Coupon which
has matured or is about to mature or has been called for redemption in full
shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer
may instead of issuing a substitute Security, pay or authorize the payment of
the same or the relevant Coupon (without surrender thereof except in the case of
a mutilated or defaced Security or Coupon), if the applicant for such payment
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as any of them may require to save each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and the Trustee and any agent of the
Issuer or the Trustee evidence to their satisfaction of the destruction, loss or
theft of such Security or Coupon and of the ownership thereof.
Every substitute Security or Coupon of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security or
Coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Security
or Coupon shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and all other
Securities or Coupons of such series duly authenticated and delivered hereunder.
All Securities and Coupons shall be held and owned upon the express condition
that, to the extent permitted by law, the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, defaced or destroyed,
lost or stolen Securities and Coupons and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Destruction Thereof. All
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund or any obligation of the Issuer to redeem, repurchase or repay
Securities, if surrendered to the Issuer or any agent of the Issuer or the
Trustee or any agent of the Trustee, shall be delivered to the Trustee or its
agent for cancellation or, if surrendered to the Trustee, shall be cancelled by
it; and no Securities or Coupons shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee or
its agent shall dispose of cancelled Securities and Coupons held by it and
deliver a certificate of disposition to the Issuer. If the Issuer or its agent
shall acquire any of the Securities or Coupons, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Securities or Coupons unless and until the same are delivered to the Trustee or
its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of definitive
Securities for any series, the Issuer may execute and the Trustee shall
authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as Registered Securities without Coupons, or as Unregistered Securities
with or without Coupons attached thereto, of any authorized denomination, and
substantially in the form of the definitive Securities of such series but with
such omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of the
Trustee as evidenced by the execution and authentication thereof. Temporary
Securities may contain such references to any provisions of this Indenture as
may be appropriate. Every temporary Security shall be executed by the Issuer and
be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive
Securities of such series and thereupon temporary Registered Securities of such
series may be surrendered in exchange therefor without charge at each office or
agency to be maintained by the Issuer for that purpose pursuant to Section 3.2
and, in the case of Unregistered Securities, at any agency maintained by the
Issuer for such purpose as specified pursuant to Section 3.2, and the Trustee
shall authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the same
series having authorized denominations and, in the case of Unregistered
Securities, having attached thereto any appropriate Coupons. Until so exchanged,
the temporary Securities of any series shall be entitled to the same benefits
under this Indenture as definitive Securities of such series, unless otherwise
established pursuant to Section 2.3. The provisions of this Section are subject
to any restrictions or limitations on the issue and delivery of temporary
Unregistered Securities of any series that may be established pursuant to
Section 2.3 (including any provision that
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Unregistered Securities of such series initially be issued in the form of a
single global Unregistered Security to be delivered to a depositary or agency
located outside the United States and the procedures pursuant to which
definitive or global Unregistered Securities of such series would be issued in
exchange for such temporary global Unregistered Security).
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer covenants and
agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such series (together with any additional amounts payable
pursuant to the terms of such Securities) at the place or places, at the
respective times and in the manner provided in such Securities and in the
Coupons, if any, appertaining thereto and in this Indenture. The interest on
Securities with Coupons attached (together with any additional amounts payable
pursuant to the terms of such Securities) shall be payable only upon
presentation and surrender of the several Coupons for such interest installments
as are evidenced thereby as they severally mature. If any temporary Unregistered
Security provides that interest thereon may be paid while such Security is in
temporary form, the interest on any such temporary Unregistered Security
(together with any additional amounts payable pursuant to the terms of such
Security) shall be paid, as to the installments of interest evidenced by Coupons
attached thereto, if any, only upon presentation and surrender thereof, and, as
to the other installments of interest, if any, only upon presentation of such
Securities for notation thereon of the payment of such interest, in each case
subject to any restrictions that may be established pursuant to Section 2.3. The
interest on Registered Securities (together with any additional amounts payable
pursuant to the terms of such Securities) shall be payable only to or upon the
written order of the Holders thereof and, at the option of the Issuer, may
(except as otherwise provided as contemplated pursuant to Section 2.3 with
respect to the Securities of any series) be paid by wire transfer or by mailing
checks for such interest payable to or upon the written order of such Holders at
their last addresses as they appear on the registry books of the Issuer.
SECTION 3.2 Offices for Payments, etc. So long as any Registered
Securities are authorized for issuance pursuant to this Indenture or are
Outstanding hereunder, the Issuer will maintain in the Borough of Manhattan,
City of New York, an office or agency where the Registered Securities of each
series may be presented for payment, where the Securities of each series may be
presented for exchange as is provided in this Indenture and, if applicable,
pursuant to Section 2.3 and where the Registered Securities of each series may
be presented for registration of transfer as in this Indenture provided.
The Issuer will maintain one or more offices or agencies in a city or
cities located outside the United States (including any city in which such an
agency is required to be maintained under the rules of any stock exchange on
which the Securities of such series are listed) where the Unregistered
Securities, if any, of each series and Coupons, if any, appertaining thereto may
be presented for payment. No payment on any Unregistered Security or Coupon will
be made upon presentation of such Unregistered Security or Coupon at an agency
of the Issuer within the United States nor will any payment be made by transfer
to an account in, or by mail to an address in, the United States unless pursuant
to applicable United States laws and regulations then in effect such payment can
be made without adverse tax consequences to the Issuer. Notwithstanding the
foregoing, payments in Dollars of Unregistered Securities of any series and
Coupons appertaining thereto which are payable in Dollars may be made at an
agency of the Issuer maintained in the Borough of Manhattan, City of New York,
if such payment in Dollars at each agency maintained by the Issuer outside the
United States for payment on such Unregistered Securities is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Issuer will maintain in the Borough of Manhattan, City of New York, an
office or agency where notices and demands to or upon the Issuer in respect of
the Securities of any series, the Coupons appertaining thereto or this Indenture
may be served. The agent of the Trustee, First Chicago Trust Company of New
York, 14 Wall Street, New York, New York 10005, shall be the initial such office
or agency for all of the purposes set forth in this paragraph and in the first
paragraph of this Section 3.2 unless the Issuer shall maintain some other office
or
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agency for such purposes and shall give prompt written notice to the Trustee of
the location, and any change in the location, of such other office or agency.
The Issuer will give to the Trustee written notice of the location of each
such office or agency and of any change of location thereof. In case the Issuer
shall fail to maintain any agency required by this Section to be located in the
Borough of Manhattan, City of New York, or shall fail to give such notice of the
location or of any change in the location of any of the above agencies,
presentations and demands may be made and notices may be served at the Corporate
Trust Office of the Trustee.
The Issuer may from time to time designate one or more additional offices
or agencies where the Securities of a series and any Coupons appertaining
thereto may be presented for payment, where the Securities of that series may be
presented for exchange as provided in this Indenture and pursuant to Section 2.3
and where the Registered Securities of that series may be presented for
registration of transfer as in this Indenture provided, and the Issuer may from
time to time rescind any such designation, as the Issuer may deem desirable or
expedient; provided, however, that no such designation or rescission shall in
any manner relieve the Issuer of its obligation to maintain the offices or
agencies provided for in this Section. The Issuer will give to the Trustee
prompt written notice of any such designation or rescission thereof.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each series of Securities
hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a paying
agent other than the Trustee with respect to the Securities of any series, it
will cause such paying agent to execute and deliver to the Trustee an instrument
in which such agent shall agree with the Trustee, subject to the provisions of
this Section,
(a) that it will hold all sums received by it as such agent for
the payment of the principal of or interest on the Securities of such
series (whether such sums have been paid to it by the Issuer or by any
other obligor on the Securities of such series) in trust for the benefit
of the Holders of the Securities of such series, or Coupons appertaining
thereto, if any, or of the Trustee,
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities of such series) to make
any payment of the principal of or interest on the Securities of such
series when the same shall be due and payable, and
(c) that it will pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request at any time during the
continuance of the failure referred to in clause (b) above.
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a sum
sufficient to pay such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of any
failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the principal
of or interest on the Securities of such series, set aside, segregate and hold
in trust for the benefit of the Holders of the Securities of such series or the
Coupons appertaining thereto a sum sufficient to pay such principal or interest
so becoming due. The Issuer will promptly notify the Trustee of any failure to
take such action.
Anything in this Section to the contrary notwithstanding, but subject to
Section 10.1, the Issuer may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to one or more or all series of
Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for any such series by the Issuer or any paying
agent hereunder, as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the agreement to
hold sums in trust as provided
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in this Section is subject to the provisions of Sections 10.3 and 10.4.
SECTION 3.5 Written Statement to Trustee. The Issuer will furnish to the
Trustee within 120 days after the end of each fiscal year of the Issuer
(beginning with the fiscal year ending on November 30, 1997) a brief certificate
(which need not comply with Section 11.5) from the principal executive,
financial or accounting officer of the Issuer as to his or her knowledge of the
Issuer's compliance with all conditions and covenants under the Indenture (such
compliance to be determined without regard to any period of grace or requirement
of notice provided under the Indenture).
SECTION 3.6 Luxembourg Publications. In the event of the publication of
any notice pursuant to Section 5.11, 6.8, 6.10(a), 6.11, 8.2, 10.4, 12.2 or
12.5, the party making such publication in the Borough of Manhattan, The City of
New York and London shall also, to the extent that notice is required to be
given to Holders of Securities of any series by applicable Luxembourg law or
stock exchange regulation, as evidenced by an Officers' Certificate delivered to
such party, make a similar publication in Luxembourg.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. If and so long as the Trustee shall not be the
Security registrar for the Securities of any series, the Issuer and any other
obligor on the Securities will furnish or cause to be furnished to the Trustee a
list in such form as the Trustee may reasonably require of the names and
addresses of the Holders of the Registered Securities of such series pursuant to
Section 312 of the Trust Indenture Act of 1939 (a) semi-annually not more than
15 days after each record date for the payment of interest on such Registered
Securities, as hereinabove specified, as of such record date and on dates to be
determined pursuant to Section 2.3 for non-interest bearing Registered
Securities in each year, and (b) at such other times as the Trustee may request
in writing, within thirty days after receipt by the Issuer of any such request
as of a date not more than 15 days prior to the time such information is
furnished.
SECTION 4.2 Reports by the Issuer. The Issuer covenants to file with the
Trustee, within 15 days after the Issuer is required to file the same with the
Commission, copies of the annual reports and of the information, documents, and
other reports that the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
or pursuant to Section 314 of the Trust Indenture Act of 1939.
SECTION 4.3 Reports by the Trustee. Any Trustee's report required under
Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on or
before the 60th day after each May 15 beginning with the May 15 following the
date of this Indenture, as provided in Section 313(c) of the Trust Indenture Act
of 1939, so long as any Securities are Outstanding hereunder, and shall be dated
as of a date convenient to the Trustee no more than 60 days prior thereto.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of Maturity; Waiver of
Default. Except as otherwise provided with respect to the Securities of any
series as contemplated by Section 2.3, "Event of Default" with respect to
Securities of any series wherever used herein, means each one of the following
events which shall have occurred and be continuing (whatever the reason for such
Event of Default and whether it shall be voluntary
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or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any installment of interest upon any
of the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal of
any of the Securities of such series as and when the same shall become due
and payable either at maturity, upon any redemption, by declaration or
otherwise; or
(c) default in the payment of any sinking fund installment as and
when the same shall become due and payable by the terms of the Securities
of such series; or
(d) failure on the part of the Issuer duly to observe or perform
any other of the covenants or agreements on the part of the Issuer in the
Securities of such series or in this Indenture contained (other than a
covenant or warranty in respect of the Securities of such series a default
in the performance or breach of which is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of Securities other
than such series) for a period of 60 days after the date on which written
notice specifying such failure, stating that such notice is a "Notice of
Default" hereunder and demanding that the Issuer remedy the same, shall
have been given by registered or certified mail, return receipt requested,
or by overnight courier or by hand delivery in each case with evidence of
the receipt of such overnight courier or hand delivery by the Issuer, to
the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders
of at least 25% in aggregate principal amount of the Outstanding
Securities of all series affected thereby; or
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Issuer or
for any substantial part of its property or ordering the winding up or
liquidation of its affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or
(f) the Issuer shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary
case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Issuer or for any substantial
part of its property, or make any general assignment for the benefit of
creditors; or
(g) any other Event of Default provided in the supplemental
indenture, Board Resolution or Officers' Certificate establishing the
terms of such series of Securities or in the form of Security for such
series.
Except as otherwise provided with respect to the Securities of any series
as contemplated by Section 2.3, if an Event of Default described in clauses (a),
(b), (c), (d) or (g) (if the Event of Default under clause (d) or (g), as the
case may be, is with respect to less than all series of Securities then
Outstanding) occurs and is continuing, then, and in each and every such case,
except for any series of Securities the principal of which shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities of such series then Outstanding
hereunder (such series voting as a separate class) by notice in writing to the
Issuer (and to the Trustee if given by Securityholders), may declare the entire
principal (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all Securities of such series, and the interest accrued
thereon, if any, to be due and payable immediately, and upon any such
declaration, the same shall become immediately due and payable. Except as
otherwise provided with respect to the Securities of any series as contemplated
by Section 2.3, if an Event of Default described in clause (d) or (g) (if the
Event of Default under clause (d) or (g), as the case may be, is with
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respect to all series of Securities then Outstanding), clause (e) or (f) occurs
and is continuing, then and in each and every such case, unless the principal of
all the Securities shall have already become due and payable, either the Trustee
or the Holders of not less than 25% in aggregate principal amount of all the
Securities then Outstanding hereunder (treated as one class), by notice in
writing to the Issuer (and to the Trustee if given by Securityholders), may
declare the entire principal (or, if any Securities are Original Issue Discount
Securities, such portion of the principal as may be specified in the terms
thereof) of all the Securities then Outstanding, and interest accrued thereon,
if any, to be due and payable immediately, and upon any such declaration the
same shall become immediately due and payable.
Except as otherwise provided with respect to the Securities of any series
as contemplated by Section 2.3, the foregoing provisions, however, are subject
to the condition that if, at any time after the principal (or, if the Securities
are Original Issue Discount Securities, such portion of the principal as may be
specified in the terms thereof) of the Securities of any series (or of all the
Securities, as the case may be) shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Issuer shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Securities of such series (or of all the Securities, as
the case may be) and the principal of any and all Securities of such series (or
of all the Securities, as the case may be) which shall have become due otherwise
than by acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series (or at the respective rates of interest or Yields to
Maturity of all the Securities, as the case may be) to the date of such payment
or deposit) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, its agents, attorneys
and counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith, and if any and all Events of Default with respect to
the Securities of such series (or with respect to all of the Securities, as the
case may be), other than the non-payment of the principal of Securities which
shall have become due by acceleration, shall have been cured, waived or
otherwise remedied as provided herein -- then and in every such case the Holders
of a majority in aggregate principal amount of all the Securities of such
series, each series voting as a separate class, (or of all the Securities, as
the case may be, voting as a single class) then Outstanding, by written notice
to the Issuer and to the Trustee, may waive all defaults with respect to such
series (or with respect to all the Securities, as the case may be) and rescind
and annul such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the principal of
any Original Issue Discount Securities shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Original Issue
Discount Securities.
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt.
The Issuer covenants that (a) in case default shall be made in the payment of
any installment of interest on any of the Securities of any series when such
interest shall have become due and payable, and such default shall have
continued for a period of 30 days or (b) in case default shall be made in the
payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity of
the Securities of such series or upon any redemption, repurchase or repayment at
the option of the Holders or by declaration or otherwise -- then upon demand of
the Trustee, the Issuer will pay to the Trustee for the benefit of the Holders
of the Securities of such series the whole amount that then shall have become
due and payable on all Securities of such series, and any appurtenant Coupons,
for principal or interest, as the case may be (with interest to the date of such
payment upon the overdue principal and, to the extent that payment of such
interest is enforceable under applicable law, on overdue installments of
interest at the same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in the Securities of such
series); and in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including reasonable compensation to
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the Trustee and each predecessor Trustee, their respective agents, attorneys and
counsel, and any expenses and liabilities incurred, and all advances made, by
the Trustee and each predecessor Trustee except as a result of its negligence or
bad faith.
Until such demand is made by the Trustee, the Issuer may pay the principal
of and interest on the Securities of any series to the Holders, whether or not
the Securities of such series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon the Securities, wherever situated, the moneys adjudged or
decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or any
other obligor upon the Securities under Title 11 of the United States Code or
any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor, or in case
of any other comparable judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of such series) owing and unpaid in respect of the
Securities of any series, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all reasonable expenses and reasonable
liabilities incurred, and all reasonable advances made, by the Trustee and
each predecessor Trustee, except as a result of negligence or bad faith)
and of the Securityholders allowed in any judicial proceedings relative to
the Issuer or other obligor upon the Securities, or to the creditors or
property of the Issuer or such other obligor,
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of the Securities of any series in any election
of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person
performing similar functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the Securityholders to
make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to the Securityholders, to pay
to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other reasonable expenses and
reasonable liabilities incurred, and all reasonable advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or
bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series 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 except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.
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All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series or Coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of any of the
Securities of such series or Coupons appertaining to such Securities or the
production thereof in any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the reasonable expenses, reasonable disbursements and reasonable
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Securities or Coupons appertaining to such Securities in respect of which such
action was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities or Coupons appertaining to such Securities in respect to which
such action was taken, and it shall not be necessary to make any Holders of such
Securities or Coupons appertaining to such Securities parties to any such
proceedings.
SECTION 5.3 Application of Proceeds. Any moneys collected by the Trustee
pursuant to this Article in respect of any series of Securities shall be applied
in the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal or interest, upon
presentation of the several Securities and Coupons appertaining to such
Securities in respect of which moneys have been collected and stamping (or
otherwise noting) thereon the payment, or issuing Securities of such series in
reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such
series of Securities in respect of which moneys have been collected,
including reasonable compensation to the Trustee and each predecessor
Trustee and their respective agents and attorneys and of all reasonable
expenses and reasonable liabilities incurred, and all reasonable advances
made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith;
SECOND: In case the principal of the Securities of such series in
respect of which moneys have been collected shall not have become and be
then due and payable, to the payment of interest on the Securities of such
series in default in the order of the maturity of the installments of
such interest, with interest (to the extent that such interest has
been collected by the Trustee and to the extent permitted by law) upon the
overdue installments of interest at the same rate as the rate of interest
or Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made ratably to the
Persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such series in
respect of which moneys have been collected shall have become and shall be
then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities of such series for principal and interest,
with interest upon the overdue principal and (to the extent that such
interest has been collected by the Trustee and to the extent permitted by
law) upon overdue installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of such series; and in case such
moneys shall be insufficient to pay in full the whole amount so due and
unpaid upon the Securities of such series, then to the payment of such
principal and interest or Yield to Maturity, without preference or
priority of principal over interest or Yield to Maturity, or of interest
or Yield to Maturity over principal, or of any installment of interest
over any other installment of interest, or of any Security of such series
over any other Security of such series, ratably to the aggregate of such
principal and accrued and unpaid interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the Issuer or
any other Person lawfully entitled thereto.
SECTION 5.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
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Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings. In case
the Trustee shall have proceeded to enforce any right under this Indenture and
such proceedings shall have been discontinued or abandoned for any reason, or
shall have been determined adversely to the Trustee, then and in every such case
the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
SECTION 5.6 Limitations on Suits by Securityholders. No Holder of any
Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to institute
any action or proceeding at law or in equity or in bankruptcy or otherwise upon
or under or with respect to this Indenture, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any other
remedy hereunder, unless such Holder previously shall have given to the Trustee
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding shall have
made written request upon the Trustee to institute such action or proceedings in
its own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the reasonable costs, expenses
and liabilities to be incurred therein or thereby and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceeding and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to
Section 5.9; it being understood and intended, and being expressly covenanted by
the taker and Holder of every Security or Coupon with every other taker and
Holder and the Trustee, that no one or more Holders of Securities of any series
or Coupons appertaining to such Securities shall have any right in any manner
whatever by virtue or by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other such Holder of Securities or
Coupons appertaining to such Securities, or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of the applicable series and Coupons
appertaining to such Securities. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 5.7 Unconditional Right of Securityholders to Institute Certain
Suits. Notwithstanding any other provision in this Indenture and any provision
of any Security, the right of any Holder of any Security or Coupon to receive
payment of the principal of and interest on such Security or Coupon on or after
the respective due dates expressed in this Indenture, such Security or Coupon,
or to institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver
of Default. Except as provided in Section 5.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders of Securities or
Coupons is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Securities or
Coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 5.6, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Securities or
Coupons may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Holders of Securities or Coupons.
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SECTION 5.9 Control by Holders of Securities. Except as otherwise provided
with respect to the Securities of any series as contemplated by Section 2.3, the
Holders of a majority in aggregate principal amount of (i) the Securities of all
series affected (with all such series voting as a single class) at the time
Outstanding or (ii) if provided with respect to the Securities of any series as
contemplated by Section 2.3, the Securities of any series affected (with each
such series voting as a separate class), shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee with
respect to the Securities of all series so affected or with respect to the
Securities of such series, as the case may be, by this Indenture; provided that
such direction shall not be otherwise than in accordance with law and the
provisions of this Indenture and provided further that (subject to the
provisions of Section 6.1) the Trustee shall have the right to decline to follow
any such direction if the Trustee, being advised by counsel, shall determine
that the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith by its board of directors, the executive committee, or a
trust committee of directors or Responsible Officers of the Trustee shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability or if the Trustee in good faith shall so determine that
the actions or forebearances specified in or pursuant to such direction would be
unduly prejudicial to the interests of Holders of the Securities of all series
so affected or with respect to the Securities of such series, as the case may
be, not joining in the giving of said direction, it being understood that
(subject to Section 6.1) the Trustee shall have no duty to ascertain whether or
not such actions or forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
SECTION 5.10 Waiver of Past Defaults. Except as otherwise provided with
respect to the Securities of any series as contemplated by Section 2.3, prior to
a declaration of the acceleration of the maturity of the Securities of any
series as provided in Section 5.1, the Holders of not less than a majority in
aggregate principal amount of the Securities of such series at the time
Outstanding (such series voting as a separate class) may on behalf of the
Holders of all the Securities of such series waive any past default or Event of
Default described in clause (d) or (g) of Section 5.1 that relates to such
series of Securities but to less than all series of Securities then Outstanding,
except a default in respect of a covenant or provision hereof that cannot be
modified or amended without the consent of each Holder affected. Except as
otherwise provided with respect to the Securities of any series as contemplated
by Section 2.3, prior to the acceleration of the maturity of the Securities of
any series as provided in Section 5.1, the Holders of not less than a majority
in aggregate principal amount of all the Securities at the time Outstanding
(voting as a single class) may on behalf of all Holders waive any past default
or Event of Default described in clause (d) or (g) of Section 5.1 that relates
to all series of Securities then Outstanding, or described in clause (e) or (f)
of Section 5.1, except a default in respect of a covenant or provision hereof
that cannot be modified or amended without the consent of the Holder of each
Security affected. In the case of any such waiver, the Issuer, the Trustee and
the Holders of all such Securities shall be restored to their former positions
and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall, within ninety days after the
occurrence of a default with respect to the Securities of any series, give
notice of all defaults with respect to that series known to the Trustee (i) if
any Unregistered Securities of that series are then Outstanding, to the Holders
thereof, by publication at least once in an Authorized Newspaper in the Borough
of Manhattan, The City of New York and at least once in an Authorized Newspaper
in London (and, if required by Section 3.6, at least once in an Authorized
Newspaper in Luxembourg) and (ii) by first class mail, postage prepaid, to all
Holders of Securities of such series, as the names and addresses of such Holders
appear on the registry books, unless in each case such defaults shall have been
cured before the mailing or publication of such notice (the term "default" for
the purpose of this Section being hereby defined to mean any event or condition
which is, or with notice or lapse of time or both would become, an Event of
Default); provided that, except in the
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case of default in the payment of the principal of or interest on any of the
Securities of such series, or in the payment of any sinking fund installment on
such series, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors or trustees and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Securityholders of such series.
SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay Costs.
Except as otherwise provided with respect to the Securities of any series as
contemplated by Section 2.3, all parties to this Indenture agree, and each
Holder of any Security or Coupon by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, 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, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Securityholder or
group of Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such series then Outstanding,
or, in the case of any suit relating to or arising under clause (d) or (g) of
Section 5.1 (if the suit relates to Securities of more than one but less than
all series), l0% in aggregate principal amount of Securities then Outstanding
and affected thereby, or in the case of any suit relating to or arising under
clause (d) or (g) (if the suit under clause (d) or (g) relates to all the
Securities then Outstanding), clause (e) or (f) of Section 5.1, 10% in aggregate
principal amount of all Securities then Outstanding, or to any suit instituted
by any Securityholder for the enforcement of the payment of the principal of or
interest on any Security on or after the due date expressed in such Security or
any date fixed for redemption.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During Default;
Prior to Default. With respect to the Holders of any series of Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default with
respect to the Securities of such series and after the curing or waiving of all
Events of Default which may have occurred with respect to such series,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default with respect to the
Securities of a series has occurred (which has not been cured or waived) the
Trustee shall exercise with respect to such series of Securities such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any series and after the curing or waiving of all such
Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect
to the Securities of such series shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
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any statements, certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture; but in the
case of any such statements, certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 5.9 relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
The provisions of this Section 6.1 are in furtherance of and subject to
Section 315 of the Trust Indenture Act of 1939.
SECTION 6.2 Certain Rights of the Trustee. In furtherance of and subject
to the Trust Indenture Act of 1939, and subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon, security or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors may
be evidenced to the Trustee by a copy thereof certified by the secretary
or an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any written advice or
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in reliance thereon in accordance with
such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request, order
or direction of any of the Securityholders pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default with respect to
the Securities of any series hereunder and after the curing or waiving of
all Events of Default with respect to the Securities of any series, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal,
bond, debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the Holders of not less than a majority
in aggregate principal amount of the Securities of all
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series affected then Outstanding; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Issuer or, if paid by the Trustee or
any predecessor Trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein and
in the Securities, except the Trustee's certificates of authentication, shall be
taken as the statements of the Issuer, and the Trustee assumes no responsibility
for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or of the Securities or Coupons. The
Trustee shall not be accountable for the use or application by the Issuer of any
of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities or Coupons;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
or Coupons with the same rights it would have if it were not the Trustee or such
agent and may otherwise deal with the Issuer and receive, collect, hold and
retain collections from the Issuer with the same rights it would have if it were
not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of Section
10.4 hereof, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or
the Trustee shall be under any liability for interest on any moneys received by
it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior
Claim. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable compensation (which, to the
extent permitted by law, shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust) and the Issuer covenants
and agrees to pay or reimburse the Trustee and each predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by or on behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all agents and other persons not regularly in its employ) except
any such expense, disbursement or advance as may arise from its negligence or
bad faith. The Issuer also covenants to indemnify the Trustee and each
predecessor Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of this Indenture or the
trusts hereunder and its duties hereunder, including the costs and expenses of
defending itself against or investigating any claim of liability in the
premises. The obligations of the Issuer under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. Such additional indebtedness shall
be a senior claim to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Securities or Coupons, and the Securities are hereby
subordinated to such senior claim. Any compensation or expense incurred by the
Trustee after a default specified in Section 5.1(e) or 5.1(f) is intended to
constitute an expense of administration under any then applicable bankruptcy or
insolvency law.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless
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other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 6.8 Indentures Not Creating Potential Conflicting Interests for
the Trustee. The following indentures are hereby specifically described for the
purposes of Section 310(b)(1) of the Trust Indenture Act of 1939: None.
SECTION 6.9 Persons Eligible for Appointment as Trustee. The Trustee for
each series of Securities hereunder shall at all times be a corporation having a
combined capital and surplus of at least $100,000,000 and which is eligible in
accordance with the provisions of Section 310(a) of the Trust Indenture Act of
1939. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of a Federal, State or District of
Columbia supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.10.
SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at any time
resign with respect to one or more or all series of Securities by giving written
notice of resignation to the Issuer and (i) if any Unregistered Securities of a
series affected are then Outstanding, by giving notice of such resignation to
the Holders thereof, by publication at least once in an Authorized Newspaper in
the Borough of Manhattan, The City of New York, and at least once in an
Authorized Newspaper in London (and, if required by Section 3.6, at least once
in an Authorized Newspaper in Luxembourg), (ii) if any Unregistered Securities
of a series affected are then Outstanding, by mailing notice of such resignation
to the Holders thereof who have filed their names and addresses with the Trustee
at such addresses as were so furnished to the Trustee and (iii) by mailing
notice of such resignation to the Holders of then Outstanding Registered
Securities of each series affected at their addresses as they shall appear on
the registry books. Upon receiving such notice of resignation, the Issuer shall
promptly appoint a successor trustee or trustees with respect to the applicable
series by written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Securityholder
who has been a bona fide Holder of a Security or Securities of the applicable
series for at least six months may, subject to the provisions of Section 5.12,
on behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939 with respect to
any series of Securities after written request therefor by the
Issuer or by any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and Section 310(a) of the Trust
Indenture Act of 1939 and shall fail to resign after written request
therefor by the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator of the Trustee
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or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of Directors
of the Issuer, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 5.12, any Securityholder who has been a bona fide Holder of a Security
or Securities of such series for at least six months may on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee with
respect to such series. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding may at any time remove the
Trustee with respect to Securities of such series and appoint a successor
trustee with respect to the Securities of such series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 7.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any series
and any appointment of a successor trustee with respect to such series pursuant
to any of the provisions of this Section 6.10 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any successor
trustee appointed as provided in Section 6.10 shall execute and deliver to the
Issuer and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
with respect to all or any applicable series shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all rights, powers, duties and obligations with respect to such
series of its predecessor hereunder, with like effect as if originally named as
trustee for such series hereunder; but, nevertheless, on the written request of
the Issuer or of the successor trustee, upon payment of its charges then unpaid,
the trustee ceasing to act shall, subject to Section 10.4, pay over to the
successor trustee all moneys at the time held by it hereunder and shall execute
and deliver an instrument transferring to such successor trustee all such
rights, powers, duties and obligations. Upon request of any such successor
trustee, the Issuer shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of one
or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto that shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor Trustee with respect to the
Securities of any series as to which the predecessor Trustee is not retiring
shall continue to be vested in the predecessor Trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such trustees co-trustees of the same trust and that
each such trustee shall be trustee of a trust or trusts under separate
indentures.
No successor trustee with respect to any series of Securities shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under Section 310(b) of the
Trust Indenture Act of 1939 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Issuer shall give notice thereof (a) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof, by
publication of such notice at least once in an Authorized Newspaper in the
Borough of Manhattan, The City of New York and at least once in an Authorized
Newspaper in London (and, if required by Section 3.6, at least once in an
Authorized Newspaper in Luxembourg), (b) if any Unregistered Securities of a
series affected are
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then Outstanding, to the Holders thereof who have filed their names and
addresses with the Trustee by mailing such notice to such Holders at such
addresses as were so furnished to the Trustee (and the Trustee shall make such
information available to the Issuer for such purpose) and (c) to the Holders of
Registered Securities of each series affected, by mailing such notice to such
Holders at their addresses as they shall appear on the registry books. If the
acceptance of appointment is substantially contemporaneous with the resignation,
then the notice called for by the preceding sentence may be combined with the
notice called for by Section 6.10. If the Issuer fails to give such notice
within ten days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be given at the expense of the
Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business
of Trustee. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided that such corporation shall be
qualified under Section 310(b) of the Trust Indenture Act of 1939 and eligible
under the provisions of Section 6.9, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. The successor of the Trustee shall
promptly provide notice of such succession to the Holders of Securities then
Outstanding in the manner provided in Section 11.4.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities of
such series or in this Indenture provided that the certificate of the Trustee
shall have; provided, that the right to adopt the certificate of authentication
of any predecessor Trustee or to authenticate Securities of any series in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
SECTION 6.13 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or repurchase or pursuant to
Section 2.9. Securities of each such series authenticated by such Authenticating
Agent shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee. Whenever
reference is made in this Indenture to the authentication and delivery of
Securities of any series by the Trustee or to the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent for such series and
a certificate of authentication executed on behalf of the Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any State, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $5,000,000 (determined
as provided in Section 6.9 with respect to the Trustee) and subject to
supervision or examination by Federal or State authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Securities for which it served as Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such Authenticating Agent. Any Authenticating Agent may at any
time, and if it shall cease to be eligible shall, resign by giving written
notice of resignation to the Trustee and to the Issuer.
Upon receiving such a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.13 with respect
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to one or more series of Securities, the Trustee shall upon receipt of an Issuer
Order appoint a successor Authenticating Agent and the Issuer shall provide
notice of such appointment to all Holders of Securities of each such series in
the manner and to the extent provided in Section 11.4. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent. The
Issuer agrees to pay to the Authenticating Agent for any series from time to
time reasonable compensation. The Authenticating Agent for the Securities of any
series shall have no responsibility or liability for any action taken by it as
such at the direction of the Trustee.
Sections 6.2, 6.3, 6.4, 6.6 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders of any or all series may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such specified percentage of Securityholders in Person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and
(subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument by
a Securityholder or his agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instruments acknowledged
to him the execution thereof, or by an affidavit of a witness to such
execution sworn to before any such notary or other such officer. Where
such execution is by or on behalf of any legal entity other than an
individual, such certificate or affidavit shall also constitute sufficient
proof of the authority of the Person executing the same. The fact of the
holding by any Holder of an Unregistered Security of any series, and the
identifying number of such Security and the date of his holding the same,
may be proved by the production of such Security or by a certificate
executed by any trust company, bank, banker or recognized securities
dealer wherever situated satisfactory to the Trustee, if such certificate
shall be deemed by the Trustee to be satisfactory, and each such
certificate shall be dated and shall state that on the date thereof an
Unregistered Security of such series bearing a specified identifying
number was deposited with or exhibited to such trust company, bank, banker
or recognized securities dealer by the Person named in such certificate.
Any such certificate may be issued in respect of one or more Unregistered
Securities of one or more series specified therein. The holding by the
Person named in any such certificate of any Unregistered Securities of any
series specified therein shall be presumed to continue for a period of one
year from the date of such certificate unless at the time of any
determination of such holding (1) another certificate bearing a later date
issued in respect of the same Unregistered Securities shall be produced,
or (2) the Unregistered Security of such series specified in such
certificate shall be produced by some other Person, or (3) the
Unregistered Security of such series specified in such certificate shall
have ceased to be Outstanding. Subject to Sections 6.1 and 6.2, the fact
and date of the execution of any such instrument and the amount and
numbers of Unregistered Securities of any series held by the Person so
executing such instrument and the amount and numbers of any Unregistered
Security or Securities of such series may also be proven in accordance
with such reasonable rules and regulations as may be prescribed by the
Trustee
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for such series or in any other manner which the Trustee for such
series may deem sufficient.
(b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security register or by a certificate of
the Security registrar.
The Issuer may set a record date for purposes of determining the identity
of Holders of Registered Securities of any series entitled to vote or consent to
any action referred to in Section 7.1, which record date may be set at any time
or from time to time by notice to the Trustee, for any date or dates (in the
case of any adjournment or reconsideration) not more than 60 days nor less than
five days prior to the proposed date of such vote or consent, and thereafter,
notwithstanding any other provisions hereof, with respect to Registered
Securities of any series, only Holders of Registered Securities of such series
of record at the close of business on such record date shall be entitled to so
vote or give such consent or revoke such vote or consent; provided that no
authorization, vote or consent by the Holders of Registered Securities on a
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after such record
date.
SECTION 7.3 Holders to Be Treated as Owners. The Issuer, the Trustee and
any agent of the Issuer or the Trustee may deem and treat the Person in whose
name any Security shall be registered upon the Security register for such series
as the absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the principal of and,
subject to the provisions of this Indenture, interest on such Security and for
all other purposes; and neither the Issuer nor the Trustee nor any agent of the
Issuer or the Trustee shall be affected by any notice to the contrary. The
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the absolute
owner of such Unregistered Security or Coupon (whether or not such Unregistered
Security or Coupon shall be overdue) for the purpose of receiving payment
thereof or on account thereof and for all other purposes and neither the Issuer,
the Trustee, nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such Person, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Unregistered Security or Coupon.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities that are owned by the Issuer
or any other obligor on the Securities with respect to which such determination
is being made or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuer or any other
obligor on the Securities with respect to which such determination is being made
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver
only Securities that the Trustee knows are so owned shall be so disregarded.
Securities so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Issuer or any other obligor upon the Securities or any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer or any other obligor on the Securities. In case
of a dispute as to such right, the advice of counsel shall be full protection in
respect of any decision made by the Trustee in accordance with such advice. Upon
request of the Trustee, the Issuer shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Securities, if any, known by
the Issuer to be owned or held by or for the account of any of the
above-described Persons; and, subject to Sections 6.1 and 6.2, the Trustee shall
be entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior to (but
not after) the evidencing to the Trustee, as provided in Section 7.1, of the
taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such
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action so far as concerns such Security. Except as aforesaid any such action
taken by the Holder of any Security shall be conclusive and binding upon such
Holder and upon all future Holders and owners of such Security and of any
Securities issued in exchange or substitution therefor or on registration of
transfer thereof, irrespective of whether or not any notation in regard thereto
is made upon any such Security. Any action taken by the Holders of the
percentage in aggregate principal amount of the Securities of any or all series,
as the case may be, specified in this Indenture in connection with such action
shall be conclusively binding upon the Issuer, the Trustee and the Holders of
all the Securities affected by such action.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of Securityholders.
The Issuer, when authorized by a resolution of its Board of Directors (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in accordance
with or pursuant to an Issuer Order), and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental hereto for one or
more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities of one or more series any property or
assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article Nine;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
reasonably consider to be for the protection of the Holders of Securities
or Coupons (or any series thereof), and to make the occurrence, or the
occurrence and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an Event of Default permitting the
enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided, that in respect of any such
additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default
(which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such an
Event of Default or may limit the remedies available to the Trustee upon
such an Event of Default or may limit the right of the Holders of a
majority in aggregate principal amount of the Securities of such series to
waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or in
any supplemental indenture, or to make any other changes or provisions as
the Issuer may deem necessary or desirable, provided that no such action
shall adversely affect the interests of the Holders of the Securities or
Coupons;
(e) to establish the forms or terms of Securities of any series or
of the Coupons appertaining to such Securities as permitted by Sections
2.1 and 2.3;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant
to the requirements of Section 6.11; and
(g) to add to, change or eliminate any of the provisions of this
Indenture (which addition, change or elimination may apply to one or more
series of Securities), provided that any such addition, change or
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elimination shall neither (A) apply to any Security of any series created
prior to the execution of such supplemental indenture and entitled to the
benefit of such provision nor (B) modify the rights of the Holder of any
such Security with respect to such provision.
The Trustee is hereby authorized to join with the Issuer in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations that may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Securities at
the time Outstanding, notwithstanding any of the provisions of Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent of Securityholders. With
the consent (evidenced as provided in Article Seven) of the Holders of not less
than a majority in aggregate principal amount of the Securities at the time
Outstanding of all series affected by such supplemental indenture (voting as one
class), the Issuer, when authorized by a resolution of its Board of Directors
(which resolution may provide general terms or parameters for such action and
may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series or of the Coupons appertaining to such
Securities; provided, that no such supplemental indenture shall (a) extend the
final maturity of any Security, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable on redemption or repurchase thereof, or make the principal
thereof (including any amount in respect of original issue discount), or
interest thereon payable in any coin or currency other than that provided in the
Securities and Coupons or in accordance with the terms thereof, or reduce the
amount of the principal of an Original Issue Discount Security that would be due
and payable upon an acceleration of the maturity thereof pursuant to Section 5.1
or the amount thereof provable in bankruptcy pursuant to Section 5.2 or modify
the percentage of Holders required pursuant to Section 5.1 or 5.10 to waive any
default or to rescind and annul any declaration of acceleration, or alter the
provisions of Section 11.11 or 11.12 or impair or affect the right of any
Securityholder to institute suit for the payment thereof or, if the Securities
provide therefor, any right of repayment, repurchase or redemption at the option
of the Securityholder, in each case without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security so
affected; provided further that if the terms of the Securities of any series so
provides as contemplated by Section 2.3, no such supplemental indenture shall
affect the Securities of such series without the consent of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
Outstanding of such series (voting as a separate class).
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of Holders of Securities of such series, or of Coupons appertaining to
such Securities, with respect to such covenant or provision, shall be deemed not
to affect the rights under this Indenture of the Holders of Securities of any
other series or of the Coupons appertaining to such Securities.
Upon the request of the Issuer, accompanied by a copy of a resolution of
the Board of Directors (which resolution may provide general terms or parameters
for such action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order) certified by the
secretary or an assistant secretary of the Issuer authorizing the execution of
any such supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of the Holders of the Securities as aforesaid and other
documents, if any, required by Section 7.1, the Trustee shall join with the
Issuer in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such
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supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give notice thereof (i) to the Holders of then Outstanding Registered
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on the
Security register, (ii) if any Unregistered Securities of a series affected
thereby are then Outstanding, to the Holders thereof who have filed their names
and addresses with the Trustee, by mailing a notice thereof by first-class mail
to such Holders at such addresses as were so furnished to the Trustee and (iii)
if any Unregistered Securities of a series affected thereby are then
Outstanding, to all Holders thereof, by publication of a notice thereof at least
once in an Authorized Newspaper in the Borough of Manhattan, The City of New
York and at least once in an Authorized Newspaper in London (and, if required by
Section 3.6, at least once in an Authorized Newspaper in Luxembourg), and in
each case such notice shall set forth in general terms the substance of such
supplemental indenture. Any failure of the Issuer to give such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes. Each supplemental indenture shall comply with the Trust Indenture
Act of 1939 as in effect at the time it is entered into.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject to the
provisions of Sections 6.1 and 6.2, may receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 8 complies with the applicable provisions of
this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by the Trustee for such series as to any matter
provided for by such supplemental indenture or as to any action taken by
Securityholders. If the Issuer or the Trustee shall so determine, new Securities
of any series so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Issuer, authenticated by the
Trustee and delivered in exchange for the Securities of such series then
Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms. The Issuer
covenants that it will not merge or consolidate with or into any other Person or
sell, lease or convey all or substantially all of its assets to any other
Person, unless (i) either the Issuer shall be the continuing corporation, or the
successor corporation or the Person which acquires by sale, lease or conveyance
all or substantially all the assets of the Issuer (if other than the Issuer)
shall be a corporation organized and existing under the laws of the United
States of America or any State thereof or the District of Columbia and shall
expressly assume the due and punctual payment of the principal of and interest
on all the Securities and Coupons, if any, according to their tenor, and the due
and punctual
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performance and observance of all of the covenants and conditions of this
Indenture and of the Securities to be performed or observed by the Issuer, by
supplemental indenture satisfactory to the Trustee, executed and delivered to
the Trustee by such corporation, and (ii) the Issuer or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale, lease or conveyance, be in default in the
performance of any such covenant or condition.
SECTION 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale, lease or conveyance, and following such an
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Issuer, with the same effect as if it had
been named herein. Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Issuer prior to such
succession any or all of the Securities issuable hereunder that together with
any Coupons appertaining thereto theretofore shall not have been signed by the
Issuer and delivered to the Trustee; and, upon the order of such successor
corporation, instead of the Issuer, and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities together with any Coupons appertaining thereto that
previously shall have been signed and delivered by the officers of the Issuer to
the Trustee for authentication, and any Securities that such successor
corporation thereafter shall cause to be signed and delivered to the Trustee for
that purpose. All of the Securities so issued together with any Coupons
appertaining thereto shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance such
changes in phrasing and form (but not in substance) may be made in the
Securities and Coupons thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance by
way of lease) the Issuer or any successor corporation that shall theretofore
have become such in the manner described in this Article shall be discharged
from all obligations and covenants under this Indenture and the Securities and
may be liquidated and dissolved.
SECTION 9.3 Opinion of Counsel Delivered to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale, lease or
conveyance, and any such assumption, and any such liquidation or dissolution,
complies with the applicable provisions of this Indenture.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at any time
(a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Securities of any series Outstanding hereunder and all
unmatured Coupons appertaining thereto (other than Securities of such series and
Coupons appertaining thereto that have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 2.9) as and when the same
shall have become due and payable, or (b) the Issuer shall have delivered to the
Trustee for cancellation all Securities of any series theretofore authenticated
and all unmatured Coupons appertaining thereto (other than any Securities of
such series and Coupons appertaining thereto that shall have been destroyed,
lost or stolen and that shall have been replaced or paid as provided in Section
2.9) or (c) in the case of any series of Securities where the exact amount
(including the currency of payment) of principal of and interest due on which
can be determined at the time of making the deposit referred to in clause (ii)
below, (i) all the Securities of such series and all unmatured Coupons
appertaining thereto not theretofore delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due and
payable within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and (ii) the Issuer shall have irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust
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funds for the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of the
Securities of such series and Coupons appertaining thereto cash in an amount
sufficient (without investment of such cash) in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (A) the principal of and
interest on all Securities of such series and Coupons appertaining thereto on
each date that such principal or interest is or may, through the repurchase,
redemption or repayment at the option of the Issuer or the Holders thereof,
become due and payable and (B) any mandatory sinking fund payments on the dates
on which such payments are due and payable in accordance with the terms of the
Indenture and the Securities of such series; and if, in any such case, the
Issuer shall also pay or cause to be paid all other sums payable hereunder by
the Issuer and the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to such discharge of this Indenture have been complied
with, then this Indenture shall cease to be of further effect with respect to
the Securities of such Series and the Coupons appertaining thereto (except as to
(i) rights of registration of transfer and exchange of Securities of such Series
and of Coupons appertaining thereto and the Issuer's right of optional
redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost or
stolen Securities or Coupons, (iii) rights of Holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon acceleration)
or dates called for redemption, and remaining rights of the Holders to receive
mandatory sinking fund payments, if any, (iv) the rights, obligations, duties
and immunities of the Trustee hereunder, (v) the rights of the Holders of
Securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to all
or any of them, and (vi) the rights and obligations of the Issuer and the
Trustee and the rights of the Holders of the Securities under Sections 3.1, 3.2,
3.3 and Articles Eight and Ten (solely insofar as it relates to the surviving
rights and obligations with respect to the Securities under this Indenture)) and
the Trustee, on demand of the Issuer accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Issuer, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture. The Issuer agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred and to compensate the Trustee for
any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities of such series.
(B) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities the exact amounts (including
the currency of payment) of principal of and interest due on which can be
determined at the time of making the deposit referred to in clause (a) below,
the Issuer shall be deemed to have paid and discharged the entire indebtedness
on all the Securities of such a series and the Coupons appertaining thereto on
the 91st day after the date of the deposit referred to in clause (a) below, and
the provisions of this Indenture with respect to the Securities of such series
and Coupons appertaining thereto shall no longer be in effect (except as to (i)
rights of registration of transfer and exchange of Securities of such series and
of Coupons appertaining thereto and the Issuer's right of optional redemption,
if any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen
Securities or Coupons, (iii) rights of Holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon acceleration)
or dates called for redemption, and remaining rights of the Holders to receive
mandatory sinking fund payments, if any, (iv) the rights, obligations, duties
and immunities of the Trustee hereunder, (v) the rights of the Holders of
Securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to all
or any of them and (vi) the rights and obligations of the Issuer and the Trustee
under Sections 3.1, 3.2, 3.3 and Articles Eight and Ten (solely insofar as it
relates to the surviving rights and obligations with respect to the Securities
under this Indenture)) ("defeasance"), and the Trustee, at the expense of the
Issuer, shall at the Issuer's request, execute proper instruments acknowledging
the same, if
(a) with reference to this provision the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as trust
funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefit
of the Holders of the Securities of such series and Coupons appertaining
thereto, (i) cash in an amount, or (ii) in the case of any series of
Securities the payments on which may only be made in Dollars, U.S.
Government Obligations,
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maturing as to principal and interest at such times and in such amounts as
will insure the availability of cash in an amount or (iii) a combination
thereof, sufficient (without investment of such cash or reinvestment of
any interest or proceeds from such U.S. Government Obligations), in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay (A) the principal of and interest on all Securities of such series and
Coupons appertaining thereto on each date that such principal or interest
is or may, through the repurchase, redemption or repayment at the option
of the Issuer or the Holders thereof, become due and payable and (B) any
mandatory sinking fund payments on the dates on which such payments are
due and payable in accordance with the terms of the Indenture and the
Securities of such series;
(b) no Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to the
Securities of such series shall have occurred and be continuing on the
date of such deposit or, except as may otherwise be provided with respect
to the Securities of such series as contemplated by Section 2.3, insofar
as subsections 5.1(e) and (f) are concerned, at any time during the period
ending on and including the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until
the expiration of such period);
(c) such defeasance shall not cause the Trustee to have a
conflicting interest as defined in Section 6.8 and for purposes of the
Trust Indenture Act of 1939 with respect to any securities of the Issuer;
(d) such defeasance shall not result in a breach or violation of,
or constitute a default under, this Indenture or any Securities or any
other agreement or instrument to which the Issuer is a party or by which
it is bound;
(e) such defeasance shall not cause any Securities then listed on
any registered national securities exchange under the Securities Exchange
Act of 1934, as amended, to be delisted;
(f) the Issuer has delivered to the Trustee an Officers'
Certificate and Opinion of Counsel (i) to the effect that (x) the Issuer
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 applicable federal income tax law, in either case to the effect
that, and based thereon such Officers' Certificate and Opinion of Counsel
shall confirm that, the Holders of the Securities of such series and
Coupons appertaining thereto will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such deposit, defeasance and discharge had not occurred, and (ii) to the
effect that the trust arising from such deposit shall not constitute an
"investment company" or an entity "controlled" by an "investment company"
as such terms are defined in the Investment Company Act of 1940, as
amended;
(g) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer and the Issuer has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with; and
(h) the Issuer has delivered to the Trustee an Opinion of Counsel
to the effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, except that if a court were to rule under any such law in any
case or proceeding that the trust funds remained property of the Issuer,
no opinion is given as to the effect of such laws on the trust funds
except the following: (A) assuming such trust funds remained in the
Trustee's possession prior to such court ruling to the extent not paid to
Holders of Securities of such series and Coupons appertaining thereto, the
Trustee will hold, for the benefit of such Holders, a valid and perfected
security interest in such trust funds that is not avoidable in bankruptcy
or otherwise and (B) such Holders will be entitled to receive adequate
protection of their interests in such trust funds if such trust funds are
used.
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(C) The Issuer shall be released from its obligations under Section 9.1
and any other covenants which, pursuant to Section 2.3, are expressly made
subject to the provisions of this Section 10.1(C), with respect to the
Securities of any Series, and any Coupons appertaining thereto Outstanding on
and after the date the conditions set forth below are satisfied (hereinafter,
"covenant defeasance"). For this purpose, such covenant defeasance means that,
with respect to the Outstanding Securities of such Series, the Issuer may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in such Section 9.1 or any such other covenants, whether
directly or indirectly by reason of any reference elsewhere herein to such
Section 9.1 or any such other covenants or by reason of any reference in such
Section 9.1 or any such other covenants to any other provision herein or in any
other document and such omission to comply shall not constitute an Event of
Default under Section 5.1, but the remainder of this Indenture and such
Securities and Coupons shall be unaffected thereby. The following shall be the
conditions to application of this subsection (C) of this Section 10.1:
(a) The Issuer has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds in trust for the
purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of the Securities
of such series and Coupons appertaining thereto, (i) cash in an amount, or
(ii) in the case of any series of Securities the payments on which may
only be made in Dollars, U.S. Government Obligations maturing as to
principal and interest at such times and in such amounts as will insure
the availability of cash in an amount or (iii) a combination thereof,
sufficient (without investment of such cash or reinvestment of any
interest or proceeds from such U.S. Government Obligations), in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay (A) the principal of and interest on all Securities of such series and
Coupons appertaining thereto on each date that such principal or interest
is or may, through the repurchase, redemption or repayment at the option
of the Issuer or the Holders thereof, become due and payable and (B) any
mandatory sinking fund payments on the dates on which such payments are
due and payable in accordance with the terms of the Indenture and the
Securities of such series;
(b) no Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to the
Securities of such series shall have occurred and be continuing on the
date of such deposit or, except as may otherwise be provided with respect
to the Securities of such series as contemplated by Section 2.3, insofar
as subsections 5.1(e) and (f) are concerned, at any time during the period
ending on and including the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until
the expiration of such period);
(c) such covenant defeasance shall not cause the Trustee to have a
conflicting interest as defined in Section 6.8 and for purposes of the
Trust Indenture Act of 1939 with respect to any securities of the Issuer;
(d) such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any
Securities or any other agreement or instrument to which the Issuer is a
party or by which it is bound;
(e) such covenant defeasance shall not cause any Securities then
listed on any registered national securities exchange under the Securities
Exchange Act of 1934, as amended, to be delisted;
(f) the Issuer shall have delivered to the Trustee an Opinion of
Counsel (i) to the effect that the Holders of the Securities of such
series and Coupons appertaining thereto will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred, and (ii) to the effect that the
trust arising from such deposit shall not constitute an "investment
company" or an entity "controlled" by an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended;
(g) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer and the Issuer shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each
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stating that all conditions precedent provided for relating to the
covenant defeasance contemplated by this provision have been complied
with; and
(h) the Issuer has delivered to the Trustee an Opinion of Counsel
to the effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, except that if a court were to rule under any such law in any
case or proceeding that the trust funds remained property of the Issuer,
no opinion is given as to the effect of such laws on the trust funds
except the following: (A) assuming such trust funds remained in the
Trustee's possession prior to such court ruling to the extent not paid to
Holders of Securities of such series and Coupons appertaining thereto, the
Trustee will hold, for the benefit of such Holders, a valid and perfected
security interest in such trust funds that is not avoidable in bankruptcy
or otherwise and (B) such Holders will be entitled to receive adequate
protection of their interests in such trust funds if such trust funds are
used.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 10.4, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 10.1 shall be held in trust and applied by it
to the payment, either directly or through any paying agent (other than the
Issuer acting as its own paying agent), to the Holders of the Securities of such
series and of Coupons appertaining thereto for the payment or redemption or
repurchase of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to Securities of
any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed
for Two Years. Any moneys deposited with or paid to the Trustee or any paying
agent for the payment of the principal of or interest on any Security of any
series or Coupons attached thereto and not applied but remaining unclaimed for
two years after the date upon which such principal or interest shall have become
due and payable, shall, upon the written request of the Issuer and unless
otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee for such series
or such paying agent, and the Holder of the Securities of such series and of any
Coupons appertaining thereto shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property laws,
thereafter look only to the Issuer for any payment that such Holder may be
entitled to collect, and all liability of the Trustee or any paying agent with
respect to such moneys shall thereupon cease; provided, however, that the
Trustee or such paying agent, before being required to make any such repayment
with respect to moneys deposited with it for any payment (a) in respect of
Registered Securities of any series, shall at the expense of the Issuer, mail by
first-class mail to Holders of such Securities at their addresses as they shall
appear on the Security register, and (b) in respect of Unregistered Securities
of any series, shall at the expense of the Issuer cause to be published once, in
an Authorized Newspaper in the Borough of Manhattan, The City of New York and
once in an Authorized Newspaper in London (and if required by Section 3.6, once
in an Authorized Newspaper in Luxembourg) notice, that such moneys remain and
that, after a date specified therein, which shall not be less than thirty days
from the date of such mailing or publication, any unclaimed balance of such
money then remaining will be repaid to the Issuer and provided, further, that
the provisions of this Section 10.4 shall not apply with respect to any moneys
deposited with the Trustee pursuant to Section 10.1(B).
SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer shall
pay and indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section
10.1 or the principal or interest received in respect of such obligations.
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ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Stockholders, Officers and Directors of Issuer
Exempt from Individual Liability. No recourse under or upon any obligation,
covenant or agreement contained in this Indenture, or in any Security, or
because of any indebtedness evidenced thereby, shall be had against any
incorporator, as such, or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly (to the
extent permitted by law) waived and released by the acceptance of the Securities
and the Coupons appertaining thereto by the Holders thereof and as part of the
consideration for the issue of the Securities and the Coupons appertaining
thereto.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and
Holders of Securities and Coupons. Nothing in this Indenture, in the Securities
or in the Coupons appertaining thereto, expressed or implied, shall give or be
construed to give to any person, firm or corporation, other than the parties
hereto and their successors and the Holders of the Securities or Coupons, if
any, any legal or equitable right, remedy or claim under this Indenture or under
any covenant or provision herein contained, all such covenants and provisions
being for the sole benefit of the parties hereto and their successors and of the
Holders of the Securities or Coupons, if any.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture. All the
covenants, stipulations, promises and agreements in this Indenture contained by
or on behalf of the Issuer shall bind its successors and permitted assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities and Coupons. Any notice or demand that by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities or Coupons to or on the Issuer may be given or served
by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Issuer is
filed by the Issuer with the Trustee) to Kaufman and Broad Home Corporation,
10990 Wilshire Boulevard, Los Angeles, California 90024, Attention: General
Counsel. Any notice, direction, request or demand by the Issuer or any Holder of
Securities or Coupons to or upon the Trustee shall be deemed to have been
sufficiently given or served by being deposited postage prepaid, first-class
mail (except as otherwise specifically provided herein) addressed (until another
address of the Trustee is filed by the Trustee with the Issuer) to SunTrust
Bank, Atlanta, 58 Edgewood Avenue, Suite 400, Atlanta, Georgia 30303, Attention:
Corporate Trust Department.
Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder entitled thereto, at his last address as it appears in the Security
register. In any case where notice to such Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impracticable to mail notice to the Issuer when such notice
is required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be reasonably satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel; Statements to
Be Contained Therein. Upon any application or demand by the Issuer to the
Trustee to take any action under any of the provisions of this Indenture, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent
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provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include (a) a statement that the Person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate or
opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters or information with respect to which is in the possession of
the Issuer, upon the certificate, statement or opinion of or representations by
an officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with and directed to the Trustee shall contain a statement that such firm
is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. Unless
otherwise provided pursuant to Section 2.3 with respect to the Securities of any
series, if the date of maturity of interest on or principal of the Securities of
any series or any Coupons appertaining thereto or the date fixed for redemption
or repayment of any such Security or Coupon shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the date of maturity or the date fixed for redemption or repayment, and no
interest shall accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture
Act of 1939. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by, or with another provision (an
"incorporated provision") included in this Indenture by operation of, Sections
310 to 318, inclusive, of the Trust Indenture Act of 1939, such imposed duties
or incorporated provision shall control.
SECTION 11.8 New York Law to Govern. This Indenture and each Security and
Coupon shall be deemed to be a contract under the laws of the State of New York,
and for all purposes shall be governed by and construed in accordance with the
laws of such State.
SECTION 11.9 Counterparts. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
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SECTION 11.10 Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 11.11 Securities in a Foreign Currency or in ECU. Unless otherwise
specified in an Officers' Certificate delivered pursuant to Section 2.3 of this
Indenture with respect to a particular series of Securities, whenever for
purposes of this Indenture any action may be taken by the Holders of a specified
percentage in aggregate principal amount of Securities of all series or all
series affected by a particular action at the time Outstanding and, at such
time, there are Outstanding Securities of any series which are denominated in a
coin or currency other than Dollars (including ECUs), then the principal amount
of Securities of such series that shall be deemed to be Outstanding for the
purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate. For purposes of this
Section 11.11, "Market Exchange Rate" shall mean the noon Dollar buying rate in
New York City for cable transfers of that currency as published by the Federal
Reserve Bank of New York; provided, however, in the case of ECUs, Market
Exchange Rate shall mean the rate of exchange determined by the Commission of
the European Communities (or any successor thereto) as published in the Official
Journal of the European Communities (such publication or any successor
publication, the "Journal"). If such Market Exchange Rate is not available for
any reason with respect to such currency, the Trustee shall use, in its sole
discretion and without liability on its part, such quotation of the Federal
Reserve Bank of New York or, in the case of ECUs, the rate of exchange as
published in the Journal, as of the most recent available date, or quotations
or, in the case of ECUs, rates of exchange from one or more major banks in The
City of New York or in the country of issue of the currency in question, which
for purposes of the ECU shall be Brussels, Belgium, or such other quotations or,
in the case of ECU, rates of exchange as the Trustee shall deem appropriate. The
provisions of this paragraph shall apply in determining the equivalent principal
amount in respect of Securities of a series denominated in a currency other than
Dollars in connection with any action taken by Holders of Securities pursuant to
the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Issuer and all Holders.
SECTION 11.12 Judgment Currency. The Issuer agrees, to the extent that it
may effectively do so under applicable law, that (a) if for the purpose of
obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of or interest on the Securities of any series (the
"Required Currency") into a currency in which a judgment will be rendered (the
"Judgment Currency"), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the Required Currency with the Judgment Currency on the day on which
final unappealable judgment is entered, unless such day is not a New York
Banking Day, then, to the extent permitted by applicable law, the rate of
exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Banking Day preceding the
day on which final unappealable judgment is entered and (b) its obligations
under this Indenture to make payments in the Required Currency (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment
(whether or not entered in accordance with subsection (a)), in any currency
other than the Required Currency, except to the extent that such tender or
recovery shall result in the actual receipt, by the payee, of the full amount of
the Required Currency expressed to be payable in respect of such payments, (ii)
shall be enforceable as an alternative or additional cause of action for the
purpose of recovering in the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
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<PAGE> 47
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this Article
shall be applicable to the Securities of any series that are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 2.3 for
Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear upon
the registry books. Notice of redemption to the Holders of Unregistered
Securities to be redeemed as a whole or in part, who have filed their names and
addresses with the Trustee shall be given by mailing notice of such redemption,
by first class mail, postage prepaid, at least 30 days and not more than 60
prior to the date fixed for redemption, to such Holders at such addresses as
were so furnished to the Trustee (and, in the case of any such notice given by
the Issuer, the Trustee shall make such information available to the Issuer for
such purpose). Notice of redemption to all other Holders of Unregistered
Securities shall be published in an Authorized Newspaper in the Borough of
Manhattan, The City of New York and in an Authorized Newspaper in London (and,
if required by Section 3.6, in an Authorized Newspaper in Luxembourg), in each
case, once in each of three successive calendar weeks, the first publication to
be not less than 30 nor more than 60 days prior to the date fixed for
redemption. Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the notice
to the Holder of any Security of a series designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption
of any other Security of such series.
The notice of redemption to each such Holder shall specify the principal
amount of each Security of such series held by such Holder to be redeemed, the
date fixed for redemption, the redemption price, the place or places of payment,
that payment will be made upon presentation and surrender of such Securities
and, in the case of Securities with Coupons attached thereto, of all Coupons
appertaining thereto maturing after the date fixed for redemption, that such
redemption is pursuant to the mandatory or optional sinking fund, or both, if
such be the case, that interest accrued to the date fixed for redemption will be
paid as specified in such notice and that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue. In case
any Security of a series is to be redeemed in part only the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at the
option of the Issuer shall be given by the Issuer or, at the Issuer's request,
by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section, the Issuer will deposit with the Trustee or
with one or more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 3.4) an
amount of money sufficient to redeem on the redemption date all the Securities
of such series so called for redemption at the appropriate redemption price,
together with accrued interest to the date fixed for redemption. The Issuer will
deliver to the Trustee at least 70 days prior to the date fixed for redemption
an Officers' Certificate stating the aggregate principal amount of Securities to
be redeemed. In case of a redemption at the election of the Issuer prior to the
expiration of any restriction on such redemption, the Issuer shall deliver to
the Trustee, prior to the giving of any notice of redemption to Holders pursuant
to this Section, an Officers' Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such Series to be redeemed in whole or in part. Securities may be
redeemed in part in amounts equal to the minimum authorized denomination for
Securities of such series or any
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<PAGE> 48
multiple thereof. The Trustee shall promptly notify the Issuer in writing of the
Securities of such series selected for redemption and, in the case of any
Securities of such series selected for partial redemption, the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities of
any series shall relate, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Security which has
been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice of
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining thereto shall be void,
and, except as provided in Sections 6.5 and 10.2, such Securities shall cease
from and after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
together with all Coupons, if any, appertaining thereto maturing after the date
fixed for redemption, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; provided that
payments of interest becoming due on or prior to the date fixed for redemption
shall be payable in the case of Securities with Coupons attached thereto, to the
Holders of the Coupons for such interest upon surrender thereof, and in the case
of Registered Securities, to the Holders of such Registered Securities
registered as such at the close of business on the relevant record date subject
to the terms and provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal thereof and, to the extent permitted by
law, accrued and unpaid interest thereon, shall, until paid or duly provided
for, bear interest from the date fixed for redemption at the rate of interest or
Yield to Maturity (in the case of an Original Issue Discount Security) borne by
such Security.
If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all appurtenant Coupons maturing after the
date fixed for redemption, the surrender of such missing Coupon or Coupons may
be waived by the Issuer and the Trustee, if there be furnished to each of them
such security or indemnity as they may require to save each of them harmless.
Upon presentation of any Security redeemed in part only, the Issuer shall
execute and the Trustee shall authenticate and deliver to or on the order of the
Holder thereof, at the expense of the Issuer, a new Security or Securities of
such series, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officers' Certificate delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Issuer or (b) an entity specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum amount of
any sinking fund payment provided for by the terms of the Securities of any
series is herein referred to as a "mandatory sinking fund payment," and any
payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment." The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Issuer may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except upon redemption pursuant to the mandatory sinking
fund) by the Issuer or
43
<PAGE> 49
receive credit for Securities of such series (not previously so credited)
theretofore purchased or otherwise acquired (except as aforesaid) by the Issuer
and delivered to the Trustee for cancellation pursuant to Section 2.10, (b)
receive credit for optional sinking fund payments (not previously so credited)
made pursuant to this Section, or (c) receive credit for Securities of such
series (not previously so credited) redeemed by the Issuer through any optional
redemption provision contained in the terms of such series. Securities so
delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment date
for any series, the Issuer will deliver to the Trustee an Officers' Certificate
(which need not contain the statements required by Section 11.5) (a) specifying
the portion of the mandatory sinking fund payment to be satisfied by payment of
cash and the portion to be satisfied by credit of Securities of such series and
the basis for such credit, (b) stating that none of the Securities of such
series has theretofore been so credited, (c) stating that no defaults in the
payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so, specifying
the amount of such optional sinking fund payment that the Issuer intends to pay
on or before the next succeeding sinking fund payment date. Any Securities of
such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefor as aforesaid that have not
theretofore been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such Officers' Certificate (or
reasonably promptly thereafter if acceptable to the Trustee). Such Officers'
Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer
shall become unconditionally obligated to make all the cash payments or payments
therein referred to, if any, on or before the next succeeding sinking fund
payment date. Failure of the Issuer, on or before any such 60th day, to deliver
such Officers' Certificate and Securities specified in this paragraph, if any,
shall not constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Issuer (i) that the mandatory sinking fund payment
for such series due on the next succeeding sinking fund payment date shall be
paid entirely in cash without the option to deliver or credit Securities of such
series in respect thereof and (ii) that the Issuer will make no optional sinking
fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or both) to
be made in cash on the next succeeding sinking fund payment date plus any unused
balance of any preceding sinking fund payments made in cash shall exceed $50,000
(or the equivalent thereof in any Foreign Currency or ECU) or a lesser sum in
Dollars (or the equivalent thereof in any Foreign Currency or ECU) if the Issuer
shall so request with respect to the Securities of any particular series, such
cash shall be applied on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund redemption price
together with accrued interest to the date fixed for redemption. If such amount
shall be $50,000 (or the equivalent thereof in any Foreign Currency or ECU) or
less and the Issuer makes no such request then it shall be carried over until a
sum in excess of $50,000 (or the equivalent thereof in any Foreign Currency or
ECU) is available. The Trustee shall select, in the manner provided in Section
12.2, for redemption on such sinking fund payment date a sufficient principal
amount of Securities of such series to absorb said cash, as nearly as may be,
and shall (if requested in writing by the Issuer) inform the Issuer of the
serial numbers of the Securities of such series (or portions thereof) so
selected. Securities shall be excluded from eligibility for redemption under
this Section if they are identified by registration and certificate number in an
Officers' Certificate delivered to the Trustee at least 60 days prior to the
sinking fund payment date as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Issuer or (b) an entity specifically
identified in such Officers' Certificate as directly or indirectly controlling
or controlled by or under direct or indirect common control with the Issuer. The
Trustee, in the name and at the expense of the Issuer (or the Issuer, if it
shall so request the Trustee in writing) shall cause notice of redemption of the
Securities of such series to be given in substantially the manner provided in
Section 12.2 (and with the effect provided in Section 12.3) for the redemption
of Securities of such series in part at the option of the Issuer. The amount of
any sinking fund payments not so applied or allocated to the redemption of
Securities of such series shall be added to the next cash sinking fund payment
for such series and, together with such payment, shall be applied in accordance
with the provisions of this Section. Any and all sinking fund moneys held on the
stated maturity date of the Securities of any particular series (or earlier, if
such maturity is accelerated) that are not held for the payment or redemption of
particular Securities of such series shall be applied, together with other
moneys, if necessary, sufficient for the purpose, to the payment of the
principal of, and interest on, the Securities of such series at maturity.
44
<PAGE> 50
On or before each sinking fund payment date, the Issuer shall pay to the
Trustee in cash or shall otherwise provide for the payment of all interest
accrued to the date fixed for redemption on Securities to be redeemed on the
next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of a
series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the giving of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default, be deemed to have been
collected under Article Five and held for the payment of all such Securities. In
case such Event of Default shall have been waived as provided in Section 5.10 or
the default cured on or before the sixtieth day preceding the sinking fund
payment date in any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this Section to the
redemption of such Securities.
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<PAGE> 51
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first above written.
KAUFMAN AND BROAD HOME CORPORATION
By: ______________________________________
Title:
[CORPORATE SEAL]
Attest:
By: _________________________
Title:
SUNTRUST BANK, ATLANTA, TRUSTEE
By: ______________________________________
Title:
[CORPORATE SEAL]
Attest:
By: _________________________
Title:
46
<PAGE> 1
EXHIBIT 4.14
[FACE OF NOTE]
KAUFMAN AND BROAD HOME CORPORATION
7-3/4% Senior Note due October 15, 2004
No. R-_________________
$__________________
CUSIP 486168 AE 7
Kaufman and Broad Home Corporation, a Delaware corporation (the
"Issuer"), for value received, hereby promises to pay to_______________, or
registered assigns, the principal sum of________________ Dollars at the Issuer's
office or agency for said purpose in the Borough of Manhattan, The City of New
York, on October 15, 2004, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, semi-annually on April 15 and
October 15 of each year, commencing April 15, 1998, on said principal sum in
like coin or currency, at the rate per annum set forth in the title of this Note
at said office or agency from the April 15 or the October 15, as the case may
be, next preceding the date of this Note to which interest on the Notes has been
paid or duly provided for, unless the date hereof is a date to which interest on
the Notes has been paid or duly provided for, in which case from the date of
this Note, or unless no interest has been paid or duly provided for on the
Notes, in which case from October 14, 1997 until payment of said principal sum
has been made or duly provided for. Notwithstanding the foregoing, if the date
hereof is after April 1 or October 1, as the case may be, and before the
following April 15 or October 15, this Note shall bear interest from such April
15 or October 15; provided, that if the Issuer shall default in the payment of
interest due on such April 15 or October 15, then this Note shall bear interest
from the next preceding April 15 or October 15 to which interest on the Notes
has been paid or duly provided for or, if no interest has been paid or duly
provided for on the Notes, from October 14, 1997. The interest so payable on any
April 15 or October 15 will, except as otherwise provided in the Indenture
referred to on the reverse hereof, be paid to the Person in whose name this Note
(or one or more predecessor Notes) is registered at the close of business on the
April 1 or October 1 preceding such April 15 or October 15, whether or not such
date is a Business Day; provided that, except as otherwise provided in the
Indenture referred to on the reverse hereof, interest may be paid, at the option
of the Issuer, by mailing a check therefor payable to the holder entitled
thereto at his last address as it appears on the Note register.
Reference is made to the further provisions set forth on the reverse hereof.
Such further provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Note shall not be valid or obligatory until the certificate of
authentication hereon shall have been duly signed by the Trustee acting under
the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed
under its corporate seal.
Dated:
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<PAGE> 2
KAUFMAN AND BROAD HOME CORPORATION
_______________________________________________
Secretary
_______________________________________________
Chairman and Chief Executive Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
SUNTRUST BANK, ATLANTA as Trustee
By:__________________________________
Authorized Signatory
[FORM OF REVERSE OF NOTE]
KAUFMAN AND BROAD HOME CORPORATION
7-3/4% Senior Note due October 15, 2004
This Note is one of a duly authorized issue of 7-3/4% Senior Notes due
October 15, 2004 (the "Notes") of the Issuer, limited to the aggregate principal
amount of $175,000,000, issued pursuant to an indenture dated as of October 14,
1997 (as the same may be amended or supplemented from time to time, the
"Indenture"), (which term, as used herein, includes the Officers' Certificate
establishing the terms of the Notes), duly executed and delivered by the Issuer
to SunTrust Bank, Atlanta, Trustee (herein called, together with any successor
in such capacity, the "Trustee"). Reference is hereby made to the Indenture and
all indentures supplemental thereto for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Trustee, the
Issuer and the Holders of the Notes.
In case an Event of Default shall have occurred and be continuing, the
principal of and accrued interest on all the Notes may be declared due and
payable, in the manner and with the effect, and subject to the conditions,
provided in the Indenture. The Indenture provides that in certain events such
declaration and its consequences may be waived by the Holders of a majority in
aggregate principal amount of the Notes then Outstanding and that, prior to any
such declaration, such Holders may waive any past default under the Indenture
and its consequences except a default in the payment of principal of or interest
on any of the Notes and subject to certain further exceptions. Any such consent
or waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Note and any Note which
may be issued in exchange or substitution herefor, whether or not any notation
thereof is made upon this Note or such other Notes.
To the extent permitted by, and as provided and subject to the
limitations in, the Indenture, the Issuer and the Trustee, with the consent of
the Holders of not less than a majority in aggregate principal amount of the
Notes then Outstanding, may execute
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<PAGE> 3
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or any supplemental indenture
or modifying in any manner the rights of the Holders.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the place, times and rate, and in the coin and currency, herein prescribed.
The Notes are issuable only as registered Notes without coupons in
denominations of $1,000 and any integral multiple of $1,000.
At the office or agency of the Issuer referred to on the face hereof,
and in the manner and subject to the limitations provided in the Indenture,
Notes may be exchanged for a like aggregate principal amount of Notes of other
authorized denominations.
Upon due presentation for registration of transfer of this Note at the
above-mentioned office or agency of the Issuer, a new Note or Notes of
authorized denominations, for a like aggregate principal amount, will be issued
to the transferee as provided in the Indenture.
No service charge shall be made for any such transfer or any such
exchange of any Note, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
This Note may not be redeemed at the option of the Issuer.
If at any time there occurs a Change of Control with respect to the
Issuer, each Holder of Notes will have the right, at such Holder's option, to
require the Issuer to repurchase all of such Holder's Notes, or a portion
thereof which is $1,000 or any integral multiple thereof, on the date (the
"Change of Control Repurchase Date") that is 30 Change of Control Business Days
after the date of the Change of Control at a price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest to the Change of
Control Repurchase Date, all upon the terms and subject to the conditions set
forth in the Indenture.
If the Consolidated Net Worth of the Issuer at the end of each of any
two consecutive fiscal quarters is less than $195,000,000 then the Issuer will
make an offer (a "Net Worth Offer") on a date (a "Net Worth Repurchase Date")
falling on or before the last day of the next following fiscal quarter, to
acquire Notes in an aggregate principal amount equal to 10% of the aggregate
principal amount of the Notes initially issued (or such lesser amount of Notes
as may be Outstanding at the time such Net Worth Offer is made) at a purchase
price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest to the Net Worth Repurchase Date, all upon the terms and subject to the
conditions set forth in the Indenture. In no event shall the failure to meet the
minimum Consolidated Net Worth requirement set forth above at the end of any
fiscal quarter be counted toward the making of more than one Net Worth Offer.
The Indenture includes a number of restrictive covenants affecting the
Issuer and certain of its subsidiaries. These restrictive covenants are subject
to a number of important qualifications and exceptions and reference is made to
the Indenture for a description thereof.
-3-
<PAGE> 4
The Issuer, the Trustee, and any agent of the Issuer or the Trustee,
may deem and treat the Holder hereof as the absolute owner of this Note (whether
or not this Note shall be overdue and notwithstanding any notation of ownership
or other writing hereon), for the purpose of receiving payment of, or on account
of, the principal hereof and, subject to the provisions in the Indenture,
interest hereon and for all other purposes, and neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in this Note or because of any indebtedness
evidenced hereby shall be had against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor corporation,
under any rule of law, statute or constitutional provision or by the enforcement
of any assessment or otherwise, all such liability being (to the extent
permitted by law), by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
Certain of the Issuer's obligations under this Note and under the
Indenture with respect to the Notes may be terminated if the Issuer irrevocably
deposits with the Trustee money or U.S. Government Obligations sufficient to pay
and discharge the entire indebtedness on all of the Notes, all upon the terms
and subject to the conditions set forth in the Indenture.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
Terms (whether or not capitalized) used in this Note and not defined
herein which are defined in the Indenture shall have the respective meanings
ascribed thereto in the Indenture.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT
JT TEN - as joint tenants
TEN ENT - as tenants by the entireties .................................
with right of survivorship and (Cust)
not as tenants in common Custodian .......................
(Minor)
under Uniform Gifts to Minors Act
.................................
(State)
Additional abbreviations may also be used though not in the above list.
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<PAGE> 5
ASSIGNMENT/TRANSFER FORM
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
_____________________________________________________________________________
(Insert Social Security or Other Identifying Number of Assignee)
_____________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing __________________________________________________________________
attorney to transfer said Note on the books of the Issuer, with full
power of substitution in the premises.
Dated: _______________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within instrument
in every particular, without alteration
or enlargement or any change whatever.
Signature Guaranteed:
_______________________________________
THE SIGNATURE(S) SHOULD 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 S.E.C. RULE 17Ad-15.
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<PAGE> 1
EXHIBIT 4.15
OFFICERS' CERTIFICATE PURSUANT TO THE
INDENTURE IDENTIFIED BELOW
The undersigned Michael F. Henn, Senior Vice President and Chief Financial
Officer of Kaufman and Broad Home Corporation (the "Issuer"), and Kimberly N.
King, Corporate Secretary and Associate Counsel of the Issuer:
(a) Each hereby certifies that he or she has read and is familiar
with the provisions of Article Two of the Indenture referred to below
relating to the issuance of Securities thereunder; that he or she is
generally familiar with the other provisions of the Indenture and with the
affairs of the Issuer and its corporate acts and proceedings; that, in his
or her opinion, 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 the covenants and conditions have been complied with and,
in his or her opinion, all covenants or conditions provided for in the
Indenture relating to the establishment of a series of Securities and the
form and terms of such series and the issuance, authentication and
delivery of such Securities have been complied with.
(b) Acting pursuant to Article Two of the Indenture referred to
below, do hereby authorize, adopt and approve the following terms for a
series of Securities to be issued under a Senior Indenture dated as of
October 14, 1997 (the "Indenture", which term, as used herein, includes
the form and terms of the Notes (as defined below) established by this
Officers' Certificate), between the Issuer and SunTrust Bank, Atlanta, as
Trustee:
(1) DESIGNATION OF SECURITIES OF THE SERIES:
7 3/4% Senior Notes due October 15, 2004 (the "Notes").
(2) LIMIT ON THE AGGREGATE PRINCIPAL AMOUNT OF NOTES (except for Notes
authenticated and delivered upon registration of transfer, or in exchange for,
or in lieu of, other Notes pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3 of
the Indenture, or Section 11 of this Officers' Certificate or pursuant to any
provision of the Indenture providing for redemption, repayment or repurchase of
Notes in whole or in part):
$175,000,000.
(3) DATE ON WHICH THE PRINCIPAL OF NOTES IS PAYABLE AT MATURITY:
October 15, 2004.
(4) INTEREST ON THE NOTES:
(a) The rate of interest on the Notes and the method of
calculation thereof:
7 3/4% per annum calculated on the basis of a 360-day year of
twelve 30-day months.
(b) The date from which such interest shall accrue:
October 14, 1997.
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(c) Interest payment dates:
April 15 and October 15, commencing April 15, 1998.
(d) Record dates:
April 1 and October 1 (in each case whether or not a Business
Day) next preceding each April 15 and October 15,
respectively.
(5) PLACE OR PLACES WHERE NOTES SHALL BE PAYABLE:
The principal of and interest on the Notes shall be payable, and Notes may
be surrendered for registration of transfer and exchange, in the Borough of
Manhattan, The City of New York at an office or agency maintained by the Issuer
for such purpose pursuant to Section 3.2 of the Indenture. Such office or agency
shall initially be the agent of the Trustee in The City of New York, which on
the date hereof is First Chicago Trust Company of New York, 14 Wall Street, New
York, New York 10005. In addition, so long as the Trustee shall act as trustee
with respect to the Notes, the principal of and interest on the Notes shall be
payable, and Notes may be surrendered for registration of transfer and exchange,
at the office of the Trustee in Atlanta, Georgia designated for such purpose.
(6) WITH RESPECT TO REDEMPTION, IN WHOLE OR IN PART, OF NOTES AT THE
OPTION OF THE ISSUER:
The Notes will not be redeemable at the Issuer's option.
(7) REPURCHASE OF NOTES AT OPTION OF THE HOLDERS UPON CHANGE OF CONTROL:
(a) If at any time there occurs a Change of Control with respect
to the Issuer, each Holder of Notes will have the right, at such Holder's
option, to require the Issuer to repurchase all of such Holder's Notes, or
a portion thereof which is in a principal amount of $1,000 or any integral
multiple thereof, on the date (the "Change of Control Repurchase Date")
that is 30 Change of Control Business Days after the date of the Change of
Control at a price equal to 101% of the principal amount thereof, plus
accrued and unpaid interest to the Change of Control Repurchase Date (the
"Change of Control Repurchase Price").
(b) Within 15 Change of Control Business Days after the occurrence
of a Change of Control, the Issuer or, at the request of the Issuer, the
Trustee will give notice (the "Change of Control Notice"), in the manner
provided in Section 11.4 of the Indenture, to all Holders of the Notes of
the occurrence of such Change of Control and of the Issuer's offer to
repurchase Notes pursuant to the repurchase right arising as a result
thereof and will cause a copy of such notice to be published in an
Authorized Newspaper in The City of New York. If such Change of Control
Notice is given by the Issuer, the Issuer shall also deliver a copy
thereof to the Trustee. Such Change of Control Notice shall contain all
instructions and (except in the case of the published notice) materials
necessary to enable Holders of Notes to surrender their Notes to the
Issuer for repurchase (including (except in the case of the published
notice), without limitation, a form of Change of Control Repurchase Notice
(as defined below)) and, without limitation to the foregoing, shall state:
(i) that the Issuer is offering to repurchase all of the
Notes as a result of a Change of Control pursuant to this Section 7,
and shall state the events causing such Change of Control and the
date of such Change of Control;
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(ii) the Change of Control Repurchase Date;
(iii) the Change of Control Repurchase Price;
(iv) that a Holder electing to have a Note (or any portion
thereof which is a principal amount of $1,000 or any integral
multiple thereof) repurchased will be required to surrender the
Note, duly endorsed by, or accompanied by a written instrument or
instruments of transfer executed by, the Holder or his attorney duly
authorized in writing, together with a duly completed Change of
Control Repurchase Notice, at an address specified in subparagraph
(v) below prior to the Change of Control Repurchase Date (such
notice shall specify the information which the Holder must set forth
in such Change of Control Repurchase Notice, and shall indicate that
copies of the form of Change of Control Repurchase Notice are
available at the office of the Trustee and at each other office or
agency specified in subparagraph (v) below);
(v) the address of the Trustee where Notes may be
surrendered for repurchase pursuant to such Change of Control, and
the name and address of each other office or agency where Notes may
be surrendered for repurchase pursuant to such Change of Control,
which shall include the office or agency in the Borough of
Manhattan, The City of New York maintained with respect to the Notes
pursuant to Section 3.2 of the Indenture and Section 5 of this
Officers' Certificate;
(vi) that the Change of Control Repurchase Price for any Note
which has been duly surrendered, together with a duly completed
Change of Control Repurchase Notice, and not withdrawn will be paid
on the Change of Control Repurchase Date;
(vii) that any Note repurchased by the Issuer on the Change of
Control Repurchase Date shall cease to accrue interest on the Change
of Control Repurchase Date unless the Issuer defaults in making
payment in full of the Change of Control Repurchase Price, and that
any Note which is not surrendered for repurchase or which is
surrendered and thereafter withdrawn shall continue to accrue
interest;
(viii) that Holders who have surrendered Notes for repurchase
will be entitled to withdraw such Notes (or any portion thereof in a
principal amount of $1,000 or any integral multiple thereof) if the
Trustee or any office or agency referred to in clause (v) above, as
the case may be, receives, prior to the Change of Control Repurchase
Date, a telegram, telex, facsimile transmission, letter or hand
delivery notice setting forth the name of the Holder, the
certificate number and the principal amount of the Note (which may
be all or a portion of such principal amount which is $1,000 or an
integral multiple thereof) with respect to which such notice of
withdrawal is being submitted and the principal amount, if any, of
the Note which is not being withdrawn;
(ix) that Holders whose Notes are repurchased only in part
will be issued new Notes equal in principal amount to the
unrepurchased portion of the Notes surrendered, and that Holders
surrendering Notes for repurchase in part may specify the
denomination or denominations (which must be $1,000 or an integral
multiple of $1,000) of the Note or Notes to be issued for the
unrepurchased portion of the Notes being surrendered and that, in
the absence of any such specification, one Note will be issued for
the portion not repurchased; and
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(x) any other procedures the Holder must follow to exercise
its rights under this Section 7.
On the Change of Control Repurchase Date, the Issuer shall accept
for payment all Notes duly surrendered and not withdrawn.
(c) "Change of Control Repurchase Notice" means a written notice
(which may be the form thereof provided by the Issuer pursuant to Section
7(b) or any other written notice which sets forth the information
described below), signed by the Holder or his attorney duly authorized in
writing, stating:
(i) the name and address of the Holder and the certificate
number of the Note which the Holder is delivering to be repurchased;
(ii) if the Note is surrendered for repurchase in part, the
portion of the principal amount of the Note which the Holder is
delivering to be repurchased, which portion must be $1,000 or an
integral multiple thereof,
(iii) if the Note is surrendered for repurchase in part, the
denomination or denominations (which must be $1,000 or any integral
multiple thereof) of the Note or Notes to be issued to the Holder
for the unrepurchased portion of the Note being surrendered,
provided that the failure so to specify such denomination or
denominations shall not constitute a defect in the Change of Control
Repurchase Notice and, in such event, one Note will be issued for
such unrepurchased portion of the Note being surrendered; and
(iv) that such Holder is electing to have such Note (or
portion thereof) repurchased by the Issuer on the Change of Control
Repurchase Date.
The delivery of a Note, by hand, by mail or otherwise, prior to the Change
of Control Repurchase Date to the Trustee or to an office or agency referred to
in Section 7(b)(v) above shall be a condition to the receipt by the Holder of
the Change of Control Repurchase Price therefor.
(8) REPURCHASE OF NOTES DUE TO FAILURE TO MAINTAIN CONSOLIDATED NET
WORTH:
(a) If the Consolidated Net Worth of the Issuer at the end of each
of any two consecutive fiscal quarters (the last day of such second fiscal
quarter being referred to as the "Trigger Date") is less than
$195,000,000, then the Issuer will make an offer (a "Net Worth Offer"), on
a date (a "Net Worth Repurchase Date") falling on or before the last day
of the next following fiscal quarter, to acquire Notes in an aggregate
principal amount equal to 10% of the aggregate principal amount of the
Notes initially issued (or such lesser amount of Notes as may be
outstanding at the time such Net Worth Offer is made) (the "Net Worth
Offer Amount") at a purchase price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest to the Net Worth Repurchase Date
(the "Net Worth Repurchase Price"). The Issuer may credit against its
obligation to purchase Notes on a Net Worth Repurchase Date the principal
amount of Notes acquired by the Issuer and surrendered for cancellation
through optional purchase or optional exchange subsequent to the related
Trigger Date which have not previously been used as a credit against any
obligation to repurchase Notes pursuant to this Section 8. In no event
shall the failure to meet the minimum Consolidated Net Worth requirement
set forth above at the end of any fiscal quarter be counted toward the
making of more than one Net Worth Offer.
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(b) The Issuer 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 Issuer elects to
credit any Notes against its obligation to repurchase Notes as provided
above and shall set forth the amount of such credit and the basis therefor
(including identification of any previously cancelled Notes not
theretofore credited). Such notice shall be accompanied by any Notes
required to be delivered to the Trustee for cancellation, as provided
above, in order to be credited against the Issuer's obligation to
repurchase Notes under this Section 8.
(c) Not less than 30 nor more than 60 days prior to the Net Worth
Repurchase Date, the Issuer or, at the request of the Issuer, the Trustee
will give notice of the Net Worth Offer (the "Net Worth Notice"), in the
manner provided in Section 11.4 of the Indenture, to all Holders of the
Notes and will cause a copy of such notice to be published in an
Authorized Newspaper in The City of New York. If such Net Worth Notice is
given by the Issuer, the Issuer shall also deliver a copy thereof to the
Trustee. The Net Worth Notice sent to Holders shall be accompanied by a
copy of the information regarding the Issuer which is or would be required
to be contained in a Quarterly Report on Form 10-Q for the fiscal quarter
ending on the Trigger Date if such fiscal quarter is one of the Issuer's
first three fiscal quarters. If such fiscal quarter is the Issuer's last
fiscal quarter, a copy of the information which is or would be required to
be contained in an Annual Report on Form 10-K for the fiscal year ending
with such fiscal quarter shall either accompany the Net Worth Notice sent
to Holders or be delivered to Holders not less than 15 days before the Net
Worth Repurchase Date. Such Net Worth Notice shall contain all
instructions and (except in the case of the published notice) materials
necessary to enable Holders of Notes to surrender their Notes to the
Issuer for repurchase (including, without limitation (except in the case
of the published notice), a form of Net Worth Repurchase Notice (as
defined below)) and, without limitation to the foregoing, shall state:
(i) that the Issuer is offering to repurchase Notes in an
aggregate principal amount equal to the Net Worth Offer Amount
pursuant to this Section 8 because its Consolidated Net Worth as of
the end of each of two specified consecutive fiscal quarters was
less than $195,000,000;
(ii) the Net Worth Repurchase Date;
(iii) the Net Worth Offer Amount and the Net Worth Repurchase
Price;
(iv) that a Holder electing to have a Note (or any portion
thereof which is a principal amount of $1,000 or any integral
multiple thereof) repurchased will be required to surrender the
Note, duly endorsed by, or accompanied by a written instrument or
instruments of transfer executed by, the Holder or his attorney duly
authorized in writing, together with a duly completed Net Worth
Repurchase Notice, at an address specified in subparagraph (v) below
prior to the fifth day before the Net Worth Repurchase Date (such
notice shall specify the information which the Holder must set forth
in such Net Worth Repurchase Notice and shall indicate that copies
of the form of Net Worth Repurchase Notice are available at the
office of the Trustee and at each other office or agency specified
in subparagraph (v) below);
(v) the address of the Trustee where Notes may be
surrendered for repurchase pursuant to such Net Worth Offer, and the
name and address of each other office or agency where Notes may be
surrendered for repurchase pursuant to such Net Worth Offer, which
shall include the office or agency in the Borough of Manhattan, The
City of New York
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maintained with respect to the Notes pursuant to Section 3.2 of the
Indenture and Section 5 of this Officers' Certificate;
(vi) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Net Worth Offer Amount, the
Issuer shall select the Notes to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Issuer so
that only Notes in denominations of $1,000, or integral multiples
thereof, shall be repurchased);
(vii) that the Net Worth Repurchase Price for any Note which
has been duly surrendered, together with a duly completed Net Worth
Repurchase Notice, and accepted for payment will be paid on the Net
Worth Repurchase Date;
(viii) that any Note repurchased by the Issuer on the Net
Worth Repurchase Date shall cease to accrue interest on the Net
Worth Repurchase Date unless the Issuer defaults in making payment
in full of the Net Worth Repurchase Price, and that any Note (A)
which is not surrendered for repurchase, (B) which is surrendered
for repurchase but is not accepted for repurchase following pro rata
selection of Notes because the aggregate principal amount of Notes
surrendered exceeds the Net Worth Offer Amount or (C) which is
surrendered and thereafter withdrawn, shall continue to accrue
interest;
(ix) that Holders who have surrendered Notes for repurchase
will be entitled to withdraw such Notes (or any portion thereof in a
principal amount of $1,000 or any integral multiple thereof) if the
Trustee or any office or agency referred to in clause (v) above, as
the case may be, receives, not later than three days prior to the
Net Worth Repurchase Date, a telegram, telex, facsimile
transmission, letter or hand delivery notice setting forth the name
of the Holder, the certificate number and the principal amount of
the Note (which may be all or a portion of such principal amount
which is $1,000 or an integral multiple thereof) with respect to
which such notice of withdrawal is being submitted and the principal
amount, if any, of the Note which is not being withdrawn;
(x) that Holders whose Notes are repurchased only in part
will be issued new Notes equal in principal amount to the
unrepurchased portion of the Notes surrendered, and that Holders
surrendering Notes for repurchase in part may specify the
denomination or denominations (which must be $1,000 or an integral
multiple of $1,000) of the Note or Notes to be issued for the
unrepurchased portion of the Note being surrendered and that, in the
absence of any such specification, one Note will be issued for the
portion not repurchased; and
(xi) any other procedures the Holder must follow to exercise
its rights under this Section 8.
On the Net Worth Repurchase Date, the Issuer shall accept for payment (on
a pro rata basis if required by subparagraph (vi) above) all Notes duly
surrendered and not withdrawn. The Issuer will cause any Notes not accepted for
payment due to such a pro rata repurchase promptly to be mailed or otherwise
delivered to the Holders thereof.
(d) "Net Worth Repurchase Notice" means a written notice (which
may be the form thereof provided by the Issuer pursuant to Section 8(c) or
any other written notice which sets forth the information described
below), signed by the Holder or his attorney duly authorized in writing,
stating:
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(i) the name and address of the Holder and the certificate
number of the Note which the Holder is delivering to be repurchased;
(ii) if the Note is surrendered for repurchase in part, the
portion of the principal amount of the Note which the Holder is
delivering to be repurchased, which portion must be $1,000 or any
integral multiple thereof,
(iii) if the Note is surrendered for repurchase in part, the
denomination or denominations (which must be $1,000 or any integral
multiple thereof) of the Note or Notes to be issued to the Holder
for the unrepurchased portion of the Notes being surrendered,
provided that the failure so to specify such denomination or
denominations shall not constitute a defect in the Net Worth
Repurchase Notice and, in such event, one Note will be issued for
such unrepurchased portion of the Note being surrendered; and
(iv) that such Holder is electing to have such Note (or
portion thereof) repurchased by the Issuer on the Net Worth
Repurchase Date.
The delivery of a Note, by hand, by mail or otherwise, prior to the fifth
day before the Net Worth Repurchase Date to the Trustee or to an office or
agency referred to in Section 8(c)(v) above shall be a condition to the receipt
by the Holder of the Net Worth Repurchase Price therefor.
(9) EFFECT OF NET WORTH REPURCHASE NOTICE OR CHANGE OF CONTROL
REPURCHASE NOTICE; RIGHT OF WITHDRAWAL:
Upon surrender by a Holder of a Note for repurchase pursuant to Section 7
or 8, together with a duly completed Net Worth Repurchase Notice or Change of
Control Repurchase Notice, as the case may be, such Holder shall (unless such
Note is withdrawn as specified in the following paragraph or unless, in the case
of a Net Worth Offer, such Note is not accepted for payment due to pro rata
selection of Notes for repurchase pursuant to Section 8(c)(vi)) thereafter be
entitled to receive, on the Net Worth Repurchase Date or Change of Control
Repurchase Date, as the case may be, the Net Worth Repurchase Price or Change of
Control Repurchase Price, as the case may be, with respect to such Note. On the
Net Worth Repurchase Date or Change of Control Repurchase Date, the Issuer will
pay or cause the Trustee or a paying agent to pay the Holders of Notes which
have been duly surrendered for repurchase and not withdrawn (and, in the case of
Net Worth Offer, which have been accepted for repurchase as described in the
last paragraph of Section 8(c)) the Net Worth Repurchase Price or Change of
Control Repurchase Price, as the case may be.
A Holder who has surrendered a Note for repurchase on a Net Worth
Repurchase Date or Change of Control Repurchase Date, as the case may be, will
be entitled to withdraw such Note (or any portion thereof in a principal amount
of $1,000 or any integral multiple thereof) if the Trustee or any office or
agency referred to in Section 7(b)(v) or Section 8(c)(v), as the case may be,
receives, prior to the Change of Control Repurchase Date or not later than three
days prior to the Net Worth Repurchase Date, as the case may be, a telegram,
telex, facsimile transmission, letter or hand delivery notice setting forth the
information specified in Section 7(b)(viii) or Section 8(c)(ix), as the case may
be.
If any Note is withdrawn in whole, the Issuer shall cause such Note
promptly to be mailed or otherwise delivered to the Holder thereof.
If any Note surrendered for repurchase (and, in the case of a Net Worth
Offer, accepted for repurchase as described in the last paragraph of Section
8(c)) shall not be so paid in full on the relevant Net Worth
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Repurchase Date or Change of Control Repurchase Date, as the case may be, the
principal thereof (including, in the case of a Change of Control Repurchase
Date, the premium thereon) shall, until paid, bear interest from such Net Worth
Repurchase Date or Change of Control Repurchase Date, as the case may be, at the
rate of interest borne by the Notes, and the Issuer shall cause such Note
promptly to be mailed or otherwise delivered to the Holder thereof.
The Issuer shall publicly announce the results of a Net Worth Offer or an
offer made following a Change of Control on or promptly after the Net Worth
Repurchase Date or Change of Control Repurchase Date, as the case may be.
(10) DEPOSIT OF NET WORTH REPURCHASE PRICE OR CHANGE OF CONTROL
REPURCHASE PRICE:
On or prior to the Net Worth Repurchase Date or the Change of Control
Repurchase Date, as the case may be, the Issuer shall deposit with the Trustee
or with a paying agent for the Notes (or, if the Issuer is acting as its own
paying agent, shall set aside, segregate and hold in trust as provided in
Section 3.4 of the Indenture) an amount of cash sufficient to pay the aggregate
Net Worth Repurchase Price or Change of Control Repurchase Price, as the case
may be, for all Notes or portions thereof which have been duly surrendered for
repurchase, not withdrawn and, in the case of a Net Worth Offer, accepted for
payment.
Anything in this Officers' Certificate, the Notes or the Indenture to the
contrary notwithstanding, interest payable on Notes duly surrendered for
repurchase on a Change of Control Repurchase Date or Net Worth Repurchase Date
shall be paid with and in the same manner as the principal of such Notes payable
on such Change of Control Repurchase Date or Net Worth Repurchase Date, as the
case may be.
(11) NOTES REPURCHASED IN PART:
In the case of any Note which is repurchased only in part, the Issuer
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note, without service charge, a new Note or Notes, of any authorized
denominations as specified by such Holder (or, if the Holder shall fail to
specify any such denominations, a single Note in an authorized denomination), in
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Note so surrendered which is not repurchased.
Provisions of this Indenture that apply to the repurchase of all of a Note
pursuant to Section 7 or 8 also apply to the repurchase of a portion of such
Note.
(12) COVENANT TO COMPLY WITH SECURITIES LAWS UPON REPURCHASE OF NOTES:
In connection with any offer to purchase Notes under Sections 7 or 8, the
Issuer will conduct such offer in compliance with applicable securities laws and
regulations, including Section 14(e) of the Exchange Act and Rule 14e-1
thereunder, to the extent applicable.
(13) DENOMINATIONS IN WHICH NOTES ARE ISSUABLE, IF OTHER THAN $1,000 AND
ANY INTEGRAL MULTIPLES THEREOF:
Not Applicable.
(14) IF OTHER THAN THE PRINCIPAL AMOUNT THEREOF, THE PORTION OF THE
PRINCIPAL AMOUNT OF NOTES PAYABLE ON DECLARATION OF ACCELERATION:
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Not Applicable.
(15) WHETHER NOTES ARE ISSUABLE AS REGISTERED SECURITIES, UNREGISTERED
SECURITIES (WITH OR WITHOUT INTEREST COUPONS), OR ANY COMBINATION THEREOF:
The Notes may be issued only in fully registered form without coupons. The
Notes will not be issuable as Registered Global Securities.
(16) ANY OTHER TERMS OF NOTES:
The Issuer covenants and agrees for the benefit of the Holders of the
Notes as follows:
(a) Limitation on Incurrence of Additional Indebtedness
The Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee, extend the maturity of or in any other manner become liable
with respect to, or otherwise become responsible for the payment of
(collectively, "incur), any Indebtedness unless after giving effect to the
incurrence thereof and the receipt and application of the net proceeds
therefrom either (i) the Consolidated Fixed Charge Coverage Ratio of the
Issuer (determined on a pro forma basis for the last four fiscal quarters
of the Issuer for which financial statements are available at the date of
determination) is at least 2 to 1 or (ii) the ratio of Indebtedness of the
Issuer and its Restricted Subsidiaries to Consolidated Net Worth of the
Issuer is less than 3.25 to 1.
Notwithstanding the foregoing, the Issuer and its Restricted
Subsidiaries may incur: (i) Refinancing Indebtedness; (ii) Non-Recourse
Indebtedness incurred for the acquisition or improvement of real property
and secured by mortgage Liens on such real property or improvements; (iii)
Indebtedness to the Issuer or to Restricted Subsidiaries; and (iv)
Indebtedness under the Existing Credit Facility in an aggregate principal
amount at any one time of not more than $500,000,000.
(b) Limitation on Liens
The Issuer will not, and will not permit any of its Restricted
Domestic Subsidiaries to, directly or indirectly, incur or suffer to exist
any Lien upon or with respect to any property or assets of the Issuer or
any of its Restricted Domestic Subsidiaries (including, without
limitation, any Capital Stock of any Restricted Subsidiary owned by the
Issuer or any of its Restricted Domestic Subsidiaries), whether owned on
October 14, 1997 or thereafter acquired, or any income or profits
therefrom, and which Lien secures Indebtedness, whether such Indebtedness
exists on October 14, 1997 or is incurred thereafter, without in any such
case effectively providing that the Notes (together with, if the Issuer
shall so determine, any other Indebtedness or obligations of the Issuer or
such Restricted Domestic Subsidiary ranking equally with the Notes) shall
be secured equally and ratably with the Indebtedness so secured, except
that the foregoing restrictions shall not apply to Permitted Liens.
(c) Limitation on Indebtedness of Restricted Domestic Subsidiaries
The Issuer will not permit any of its Restricted Domestic
Subsidiaries, directly or indirectly, to incur or permit to be outstanding
any Indebtedness other than: (i) guarantees of Indebtedness of the Issuer
under the Existing Credit Facility or under a Substitute Credit Facility;
(ii) Existing Indebtedness of any Restricted Domestic Subsidiary and
Refinancing Indebtedness in respect of such
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Existing Indebtedness; (iii) reimbursement or payment obligations incurred
in connection with municipally financed, or municipally assisted financing
of, improvements in the ordinary course of business; (iv) Indebtedness
incurred to finance the acquisition or improvement after October 14, 1997
of real property; (v) Indebtedness to the Issuer or to another Restricted
Domestic Subsidiary; and (vi) Indebtedness existing on the date a Person
(except a Person formed or organized by or on behalf of the Issuer for
purposes other than to act as an acquisition vehicle) first because a
Subsidiary of the Issuer and which was not incurred in connection with, or
in contemplation of, such Person becoming a Subsidiary of the Issuer.
(d) Limitation on Capital Stock of Restricted Domestic
Subsidiaries
The Issuer will not permit any of its Restricted Domestic
Subsidiaries, directly or indirectly, to issue or permit to be outstanding
any Disqualified Capital Stock of such Restricted Domestic Subsidiary or
any options, warrants or other rights to purchase any such Disqualified
Capital Stock (including, without limitation, rights under convertible or
exchangeable debt securities) except any such Disqualified Capital Stock
issued prior to the time a Person (except a Person formed or organized by
or on behalf of the Issuer for purposes other than to act as an
acquisition vehicle) first became a Subsidiary of the Issuer and which was
not issued in connection with, or in contemplation of, such Person
becoming a Subsidiary of the Issuer.
(e) Limitation on Restrictions on Distributions from Restricted
Domestic Subsidiaries
The Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, assume or otherwise cause
or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Domestic Subsidiary to: (i)
pay dividends or make any other distributions on its Capital Stock or on
any other interest or participation in, or measured by, its profits, owned
by the Issuer or any of its other Restricted Subsidiaries, or pay interest
on or principal of any Indebtedness owed to the Issuer or any of its other
Restricted Subsidiaries; (ii) make loans or advances to the Issuer or any
of its other Restricted Subsidiaries; or (iii) transfer any of its
properties or assets to the Issuer or any of its other Restricted
Subsidiaries, except for encumbrances or restrictions existing or created
under or by reason of (a) applicable law, (b) covenants or restrictions
contained in Existing Indebtedness; (c) customary provisions restricting
subletting or assignment of any contract or of any lease governing a
leasehold interest of the Issuer or any Restricted Domestic Subsidiary,
(d) restrictions under any instrument creating or evidencing any Acquired
Indebtedness that was permitted to be incurred pursuant to the Indenture
and the Notes and which (1) only apply to assets that were subject to such
restrictions and encumbrances prior to the acquisition of such assets by
the Issuer or its Restricted Domestic Subsidiaries and (2) were not
created in connection with, or in contemplation of, such acquisition; (e)
restrictions replacing those permitted by clause (b) or (d) which are not
more restrictive than, and do not extend to any Persons or assets other
than the Persons or assets subject to, the restrictions and encumbrances
so replaced; (f) restrictions under any instrument creating or evidencing
any Refinancing Indebtedness which are not more restrictive than those
under, and do not extend to any Persons or assets other than the Persons
or assets subject thereto under, the instrument creating or evidencing the
Indebtedness being refunded, extended or refinanced by such Refinancing
Indebtedness; (g) any Permitted Lien or any agreement restricting the sale
or other disposition of property securing Indebtedness permitted by the
Indenture and the Notes if such Permitted Lien or agreement, as the case
may be, does not by its terms expressly restrict the ability of a
Restricted Domestic Subsidiary of the Issuer to make any of the dividends,
payments, distributions, loans, advances or transfers referred to in
clauses (i), (ii) or (iii) above; (h)
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<PAGE> 11
reasonable and customary borrowing base covenants set forth in credit
agreements evidencing Indebtedness otherwise permitted by the Indenture
and the Notes which covenants restrict or limit the distribution of
revenues or sale proceeds from real estate or a real estate project based
upon the amount of Indebtedness outstanding on such real estate or real
estate project and the value of some or all of the remaining real estate
or the project's remaining assets; (i) customary agreements entered into
in the ordinary course of business restricting the ability of the joint
venture to make distributions or payments of cash or property to
participants in such joint venture; or (j) the Existing Credit Facility or
a Substitute Credit Facility but only so long as no such encumbrance or
restriction under the Existing Credit Facility or a Substitute Credit
Facility by its terms expressly restricts the ability of a Restricted
Domestic Subsidiary of the Issuer to make any of the dividends, payments,
distributions, loans, advances or transfers referred to in clauses (i),
(ii) or (iii) above (it being understood that covenants requiring or
having the effect of requiring the maintenance of a specified level of net
worth which do not by their terms expressly restrict the ability of a
Restricted Domestic Subsidiary of the Issuer to make any such dividends,
payments, distributions, loans, advances or transfers referred to in
clauses (i), (ii) or (iii) above shall be permitted under this clause
(j)).
(f) Limitation on Restricted Payments
The Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any Restricted Payment if,
after giving effect thereto, (i) a Default or an Event of Default shall
have occurred and be continuing; or (ii) the aggregate amount of
Restricted Payments (the amount of any Restricted Payment, if other than
in cash, to be determined by the Board of Directors of the Issuer, whose
reasonable determination shall be conclusive and evidenced by a Board
Resolution certified by an Officers' Certificate and filed with the
Trustee) made by the Issuer and its Restricted Subsidiaries from and after
October 14, 1997 would exceed the sum of (a) 50% of the Consolidated Net
Income of the Issuer accrued on a cumulative basis for the period
commencing on September 1, 1996 (the "Commencement Date") and ending on
the last day (the "Reference Day") of the Issuer's last fiscal quarter
ending prior to the date of such proposed Restricted Payment (or, in the
event such Consolidated Net Income as so determined on a cumulative basis
shall be a deficit, minus 100% of such deficit), (b) 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 Issuer, whose
reasonable determination shall be conclusive and evidenced by a Board
Resolution certified by an Officers' Certificate and filed with the
Trustee), received by the Issuer from any Person (other than a Restricted
Subsidiary) after the Commencement Date and on or prior to the Reference
Date from the issue or sale of Qualified Capital Stock of the Issuer, or
any options, warrants or other rights (other than convertible or
exchangeable debt securities except as provided below) to purchase
Qualified Capital Stock of the Issuer, or from the issuance or sale of
debt securities of the Issuer which are converted into or exchanged for
Qualified Capital Stock of the Issuer, and (c) $75,000,000; or (iii) the
Issuer would be unable to incur an additional $1.00 of Indebtedness
pursuant to the first paragraph of the covenant set forth in Section 16(a)
of this Officers' Certificate; provided, however, that the foregoing
provisions shall not prevent (a) the payment of any dividend or
distribution within 60 days after the date of declaration thereof, if the
payment would have complied with the foregoing provisions on the date of
such declaration or (b) the repurchase or redemption of shares of Capital
Stock from any officer, director or employee of the Issuer or its
Restricted Subsidiaries whose employment has been terminated or who has
died or become disabled in an aggregate amount not to exceed $5,000,000
for any fiscal year of the Issuer; provided that amounts paid pursuant to
this clause (b) shall reduce amounts available for future Restricted
Payments.
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(g) Limitations on Transactions with Officers, Directors and
Employees
The Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, (A) make any loan, advance,
guarantee or capital contribution to, or for the benefit of, or (B) sell,
lease, transfer or otherwise dispose of any of its properties or assets
to, or for the benefit of, or (C) purchase or lease any property or assets
from, or (D) enter into or amend any contract, agreement or understanding
with, or for the benefit of, (i) any officer, director or employee of the
Issuer, (ii) any officer, director or employee of a Subsidiary of the
Issuer (provided that clause (D) above shall not apply with respect to
this clause (ii)) or (iii) any former officer or director of the Issuer or
any of its Subsidiaries who owns, directly or indirectly, 7.5% or more of
the voting power of the Common Stock of the Issuer (each an "Affiliate
Transaction"), except on terms that are no less favorable to the Issuer or
the relevant Restricted Subsidiary, as the case may be, than those that
could have been obtained in a comparable transaction on an arm's length
basis from a Person that is not such an officer, director or employee.
Notwithstanding the foregoing, the term "Affiliate Transaction"
shall not include any transaction with an officer, director or employee of
the Issuer or of any Subsidiary of the Issuer in their capacity as
officer, director or employee entered into in the ordinary course of
business or which is consistent with past practice (including compensation
and employee benefit arrangements with any officer, director or employee
of the Issuer or of any Subsidiary of the Issuer) and shall not include
the acquisition by any officer, director or employee of the Issuer of any
securities of the Issuer in the open market in arm's length transactions.
(h) Limitation on Investments in Restricted Foreign Subsidiaries,
Unrestricted Subsidiaries and Equity Method Persons
The Issuer will not, and will not permit any of its Restricted
Domestic Subsidiaries to, directly or indirectly, make any Investment in
any Restricted Foreign Subsidiary, Unrestricted Subsidiary or Equity
Method Person (each, a "Subject Entity") if, after giving effect thereto,
the aggregate amount of all such Investments made after October 14, 1997
would exceed the sum of (i) $110,000,000, (ii) the aggregate amount of
cash dividends and distributions received by the Issuer after October 14,
1997 from Subject Entities, (iii) in the case of any such Investment made
after October 14, 1997 as a loan or advance to, or purchase (or other
acquisition for consideration) of Indebtedness or other debt securities
of, a Subject Entity, the amount of all cash repayments of principal of
such loans, advances, Indebtedness or debt securities paid to the Issuer
or any of its Restricted Domestic Subsidiaries (or to a Person designated
by the Issuer or any of its Restricted Domestic Subsidiaries, which Person
is not a Subsidiary or Affiliate of the Issuer) by such Subject Entity,
(iv) in the case of any such Investment made after October 14, 1997 as a
capital contribution to, or purchase (or other acquisition for
consideration) of Capital Stock or other equity securities of, a Subject
Entity, the aggregate cash amount paid to the Issuer or any of its
Restricted Domestic Subsidiaries (or to a Person designated by the Issuer
or any of its Restricted Domestic Subsidiaries, which Person is not a
Subsidiary or Affiliate of the Issuer) by such Subject Entity as a return
of such capital or to repurchase such Capital Stock or other equity
securities (not to exceed the respective amount paid to purchase such
Capital Stock or equity securities), and (v) in the case of any other such
Investment made in a Subject Entity after October 14, 1997, the cash
amount paid to the Issuer or any of its Restricted Domestic Subsidiaries
(or to a Person designated by the Issuer or any of its Restricted Domestic
Subsidiaries, which Person is not a Subsidiary or Affiliate of the Issuer)
by such Subject Entity as a repayment or reimbursement of such Investment.
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<PAGE> 13
(i) Corporate Existence
Subject to Article Nine of the Indenture (as modified by Section
24(h) of this Officers' Certificate), the Issuer will do or cause to be
done all things necessary to preserve and keep in full force and effect
its corporate existence and its rights (charter and statutory) and
franchises; provided, however, that the Issuer shall not be required to
preserve any such right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Issuer and its Subsidiaries taken as a
whole.
(j) Payment of Taxes
The Issuer will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all taxes, assessments and
governmental charges levied or imposed upon the Issuer or any Restricted
Significant Subsidiary or upon the income, profits or property of the
Issuer or any Restricted Significant Subsidiary; provided that the Issuer
shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment or charge whose amount, applicability
or validity is being contested in good faith by appropriate proceedings;
provided, further, that the Issuer shall not be required to pay or cause
to be paid (i) any such delinquent taxes, assessments or charges until the
aggregate amount thereof at any time outstanding shall exceed $10,000,000
or (ii) any such tax, assessment or charge levied on any property of the
Issuer or any Restricted Significant Subsidiary that is without recourse
to the Issuer or any Restricted Significant Subsidiary.
(k) Waiver of Stay, Extension or Usury Laws
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or
any usury law or other law which would prohibit or forgive the Issuer from
paying all or any portion of the principal of or interest on the Notes as
contemplated herein and in the Indenture, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the
performance of this Officers' Certificate or the Indenture and (to the
extent that it may lawfully do so) the Issuer hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power granted to the Trustee,
but will suffer and permit the execution of every such power as though no
such law had been enacted.
(17) INITIAL PUBLIC OFFERING PRICE OF NOTES:
The Issuer will sell the Notes to Goldman, Sachs & Co. and NationsBanc
Montgomery Securities, Inc., as underwriters, for 98.39% of the principal amount
thereof. The underwriters propose to offer the Notes from time to time for sale
in one or more negotiated transactions or otherwise, at market prices prevailing
at the time of sale, prices related to such market prices or negotiated prices.
(18) UNDERWRITING DISCOUNT AS A PERCENTAGE OF THE PRINCIPAL AMOUNT OF
NOTES:
See Section 17.
(19) IF OTHER THAN DOLLARS, THE COIN OR CURRENCY IN WHICH PAYMENT OF
PRINCIPAL OF AND INTEREST ON THE NOTES SHALL BE PAYABLE AND IN WHICH THE NOTES
SHALL BE DENOMINATED:
Not applicable.
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<PAGE> 14
(20) TERMS DEFINED FOR PURPOSES OF THIS OFFICERS' CERTIFICATE AND THE
ISSUANCE OF THE NOTES:
"Acquired Indebtedness" means (i) with respect to any Person (except a
Person formed or organized by or on behalf of the Company for purposes other
than to act as an acquisition vehicle) that becomes a Subsidiary of the Company
after October 14, 1997, 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, (ii) with respect to the Company or any of its
Subsidiaries, any Indebtedness incurred by the Company or any of its
Subsidiaries in connection with the acquisition of an asset from another Person
after October 14, 1997 that was not incurred in connection with, or in
contemplation of, such acquisition.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Associate" shall have the meaning ascribed to such term in Rule l2b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on
October 14, 1997.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) in or of the equity
(which includes, but is not limited to, common stock, preferred stock and
partnership and joint venture interests) of such Person.
"Capitalized Lease Obligation" means an obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP and the amount of Indebtedness represented by such obligation shall be the
capitalized amount of such obligation determined in accordance with GAAP.
A "Change of Control" shall be deemed to have occurred at such time as
either of the following events shall occur: (i) there shall be consummated any
consolidation or merger of the Issuer in which the Issuer is not the continuing
or surviving corporation or pursuant to which the Voting Stock would be
converted into cash, securities or other property, other than a merger of the
Issuer in which the holders of Voting Stock immediately prior to the merger have
the same or greater proportionate ownership, directly or indirectly, of the
Voting Stock of the surviving corporation immediately after such merger as they
had of the Voting Stock immediately prior to such merger; or (ii) there is a
report filed by any Person, including its Affiliates and Associates, on Schedule
13D or 14D-1 (or any successor schedule, form or report) pursuant to the
Exchange Act, disclosing that such Person (for the purposes of this definition
only, the term "Person" shall include a "person" within the meaning of Section
13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision to
either of the foregoing) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of 50% or more of the voting
power of the Issuer's Voting Stock then outstanding; provided, however, that a
Person shall not be deemed the beneficial owner of, or to own beneficially, (A)
any securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange thereunder, or
(B) any securities if such beneficial ownership (1) arises solely as a result of
a revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations under
the Exchange Act, and (2) is not also then reportable on Schedule 13D (or any
successor schedule, form or report) under the Exchange Act. Notwithstanding the
foregoing, a Change of Control shall not be deemed to have occurred if at any
time the Issuer, any Subsidiary of the Issuer, any employee stock ownership plan
or any other employee benefit plan
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<PAGE> 15
of the Issuer or any Subsidiary of the Issuer, or any Person holding Voting
Stock for or pursuant to the terms of any such employee benefit plan, files or
becomes obligated to file a report under or in response to Schedule 13D or
Schedule 14D-1 (or any successor schedule, form or report) under the Exchange
Act disclosing beneficial ownership by it of shares of Voting Stock, whether in
excess of 50% or otherwise.
"Change of Control Business Day " means a day on which banking
institutions are not authorized or required by law or regulation to close in The
City of New York. Without limitation of the foregoing, the term "Change of
Control Business Day" shall not include a Saturday or Sunday.
"Common Stock" 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.
"Consolidated Adjusted Net Income" of the Issuer means, for any period,
the Consolidated Net Income of the Issuer and its Restricted Subsidiaries for
such period, provided that (i) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded and (ii) the Net Income of any Person which is not
a Restricted Subsidiary or is an Equity Method Person shall be included only to
the extent of the amount of cash dividends or distributions paid by it to the
Issuer or a Restricted Subsidiary during such period.
"Consolidated Fixed Charge Coverage Ratio " means, for any period, the
ratio of (i) the sum, without duplication, of Consolidated Adjusted Net Income,
Consolidated Interest Expense (but only to the extent that such Consolidated
Interest Expense reduces such Consolidated Adjusted Net Income for such period),
Consolidated Tax Expense, depreciation and amortization (including, without
limitation, previously capitalized interest amortized to cost of sales), in each
case for such period, of the Issuer and its Restricted Subsidiaries (determined
on a consolidated basis in accordance with GAAP) to (ii) Consolidated Interest
Expense of the Issuer and its Restricted Subsidiaries for such period; provided,
however, that in making such computation, the Consolidated Interest Expense
attributable to interest on any Indebtedness computed on a pro forma basis and
bearing a floating interest rate shall be computed as if the rate in effect on
the date of computation had been the applicable rate for the entire period
unless such interest rate has been fixed by hedging or other similar contracts
or agreements, in which case such interest rate shall be deemed to be equal to
such fixed rate of interest.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest which, in conformity with GAAP, would be set forth opposite
the caption "interest expense" or any like caption on a consolidated income
statement of the Issuer and its Restricted Subsidiaries (including, but not
limited to, imputed interest 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 non-cash interest expense (other than previously
capitalized interest amortized to cost of sales)) plus, without duplication, all
capitalized interest of the Issuer and its Restricted Subsidiaries for such
period and all interest incurred or paid by the Issuer or any of its Restricted
Subsidiaries under any guarantee of Indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person for such period,
in each case determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income " of the Issuer means, for any period, the
consolidated Net Income of the Issuer and its Restricted Subsidiaries for such
period, determined in accordance with GAAP.
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<PAGE> 16
"Consolidated Net Worth" means the consolidated shareholders' equity of
the Issuer.
"Consolidated Tax Expense " of the Issuer means, for any period, the
consolidated federal, state, local and foreign tax expense of the Issuer and its
Restricted Subsidiaries for such period, determined in accordance with GAAP.
"Default" means any event or condition which is or, with notice or lapse
of time or both, would be an Event of Default.
"Disqualified Capital 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 other than solely for Qualified Capital Stock, pursuant to a sinking
fund obligation or otherwise, or is redeemable or required to be repurchased or
repaid at the option of the holder thereof for consideration other than solely
for Qualified Capital Stock, in whole or in part, on or prior to the final
maturity date of the Notes; provided that, in the case of any Restricted
Domestic Subsidiary through which the Issuer conducts any real estate joint
venture, the fact that any participant in such joint venture who holds Capital
Stock of such Restricted Domestic Subsidiary may have the right, pursuant to a
"buy-sell" agreement or similar arrangement, to require that the Issuer or any
other Subsidiary of the Issuer purchase such Capital Stock from such joint
venturer, shall not cause such Capital Stock to be deemed Disqualified Capital
Stock.
"Equity Method Person" means, as of any date of determination, any Person
(other than a Subsidiary of the Issuer) which is or is required to be accounted
for by the Issuer by the equity method of accounting in the Issuer's
consolidated financial statements in accordance with GAAP.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Credit Facility" means the 1997 Revolving Loan Agreement, dated
as of April 21, 1997, among the Issuer, the banks party thereto, Bank of America
National Trust and Savings Association, as administrative agent, Credit
Lyonnais, as documentation agent, and the other parties thereto, and any credit
facility which is an extension or renewal thereof (including, in each case, any
increase in the amount of credit available thereunder).
"Existing Indebtedness" means all Indebtedness of the Issuer and its
Restricted Subsidiaries that is outstanding on October 14, 1997.
"GAAP" means generally accepted accounting principles as in effect and
implemented by the Issuer from time to time.
A "guarantee" by any Person means any obligation, contingent or otherwise,
of such Person directly or indirectly guaranteeing any Indebtedness of any other
Person including, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person to
purchase or pay principal of or interest on (or advance or supply funds or
pledge assets for the purchase or payment of or payment of interest on)
Indebtedness of such other Person (whether by agreement to provide additional
capital or to maintain financial condition or other similar agreement).
"incur" has the meaning set forth in Section 16(a) of this Officers'
Certificate.
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<PAGE> 17
"Indebtedness" means (i) any liability of any Person (a) for borrowed
money or for the deferred purchase price of property or services (other than
current liabilities, including Trade Payables, arising in the ordinary course of
business) or which is evidenced by a note, bond, debenture or similar
instrument, and which would appear as a liability upon a balance sheet of such
Person prepared on a consolidated basis in accordance with GAAP, or (b) for the
payment of money relating to a Capitalized Lease Obligation; (ii) any liability
of such Person in respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto), but this clause (ii) does not
include letters of credit provided in the ordinary course of business and
securing performance (and not financial) obligations and performance,
completion, surety or similar bonds or obligations provided in the ordinary
course of business; (iii) any liability or obligation of others described in
clause (i) or (ii) with respect to which such Person has made a guarantee or
similar arrangement, directly or indirectly (to the extent of such guarantee or
arrangement), but this clause (iii) does not include obligations in respect of
banker's acceptances and performance, completion, surety or similar bonds or
obligations provided in the ordinary course of business; and (iv) 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. The
amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations described above and the
maximum liability of such Person for any such contingent obligations at such
date. 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 Indebtedness 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 and (b) the aggregate amount of interest due and payable over the term
of such Indebtedness (or the term of the Notes, 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 were prepaid
prior to the maturity of the Notes.
"Investment" of any Person means (i) all investments by such Person in any
other Person in the form of loans, advances or capital contributions, (ii) all
payments 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, lien, pledge,
charge, security interest or other similar encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including, without limitation, any conditional sale or other
title retention agreement and any lease in the nature thereof, any option or
other agreement to sell, and any filing of, or agreement to give, any financing
statement under the Uniform Commercial Code (or equivalent statute) of any
jurisdiction).
"Mortgage Finance Subsidiary" means Kaufman and Broad Mortgage Company, an
Illinois corporation.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP, excluding, however, (i) any
gain (but not loss) realized upon the sale or other disposition (including,
without limitation, dispositions pursuant to sale and leaseback transactions) of
any real property or equipment of such Person which is not sold or otherwise
disposed of in the ordinary course of business, and (ii) any gain (but not loss)
realized upon the sale or other disposition of any Capital Stock of such Person
or any of its Restricted Subsidiaries owned by such Person.
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"Non-Recourse Indebtedness" means Indebtedness secured by a Lien on
property to the extent that the liability for such Indebtedness (and any
interest thereon) is limited to the security of such property without liability
on the part of the Issuer or any of its Subsidiaries for any deficiency,
including liability by reason of any agreement by the Issuer 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.
"Permitted Liens" means (i) Liens for taxes, assessments or governmental
charges or claims that either (a) are not yet delinquent or (b) are being
contested in good faith by appropriate proceedings and as to which appropriate
reserves have been established or other provisions have been made in accordance
with GAAP; (ii) statutory Liens of landlords and carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other Liens imposed by law
and arising in the ordinary course of business and with respect to amounts that,
to the extent applicable, either (a) are not yet delinquent or (b) are being
contested in good faith by appropriate proceedings and as to which appropriate
reserves have been established or other provisions have been made in accordance
with GAAP; (iii) Liens (other than any Lien imposed by the Employee Retirement
Income Security Act of 1974, as amended) incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (iv) Liens incurred
or deposits made to secure the performance of tenders, bids, leases, statutory
obligations, surety and appeal bonds, progress payments, government contracts
and other obligations of like nature (exclusive of obligations for the payment
of borrowed money), in each case incurred in the ordinary course of business;
(v) judgment and other similar Liens arising in connection with court
proceedings, provided that either (A) the execution or enforcement of each such
Lien is effectively stayed and the claims secured thereby are being contested in
good faith by appropriate proceedings timely commenced and diligently prosecuted
or (B) the aggregate amount of the claims secured thereby does not exceed
$10,000,000 at any time; (vi) easements, rights-of-way, restrictions and other
similar charges or encumbrances not materially interfering with the ordinary
conduct of the business of the Issuer and its Subsidiaries; (vii) leases or
subleases granted to others not materially interfering with the ordinary conduct
of the business of the Issuer and its Subsidiaries; (viii) Liens securing
Refinancing Indebtedness, provided that such Liens only extend to the property
or assets securing the Indebtedness being refinanced, such refinanced
Indebtedness was previously secured by similar Liens on such property or assets
and the Indebtedness and other obligations secured by such Liens are not
increased; (ix) Liens existing on October 14, 1997, provided that the
Indebtedness secured by such Liens is not increased (except pursuant to the
terms of such Indebtedness as in effect on October 14, 1997) and that no such
Lien extends to any property or assets of the Issuer or any Subsidiary other
than the property or assets subject to such Lien on October 14, 1997; (x) any
contract to sell an asset provided such sale is otherwise permitted under the
Indenture and the Notes; (xi) Liens existing on property or assets of any entity
(except an entity formed or organized by or on behalf of the Issuer for purposes
other than to act as an acquisition vehicle) at the time it becomes a Restricted
Domestic Subsidiary, which Liens were not created
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<PAGE> 19
or assumed in contemplation of, or in connection with, such entity becoming a
Restricted Domestic Subsidiary and which extend only to such property or assets,
provided that the Indebtedness secured by such Liens is not increased (except
pursuant to the terms of such Indebtedness as in effect on the date such entity
becomes a Restricted Domestic Subsidiary, so long as such terms are not altered,
in connection with or in contemplation of such transaction, to provide for an
increase in such Indebtedness); (xii) Liens existing on property or assets of
any entity (except an entity formed or organized by or on behalf of the Issuer
for purposes other than to act as an acquisition vehicle) at the time it is
merged or consolidated with or into the Issuer or any of its Restricted Domestic
Subsidiaries, which Liens were not created or assumed in contemplation of, or in
connection with, such transaction and which extend only to such property or
assets, provided that the Indebtedness secured by such Liens is not increased
(except pursuant to the terms of such Indebtedness as in effect on the date of
such transaction, so long as such terms are not altered, in connection with or
in contemplation of such transaction, to provide for an increase in such
Indebtedness); (xiii) Liens existing on property or assets at the time of the
acquisition thereof by the Issuer or any of its Restricted Domestic
Subsidiaries, which Liens were not created or assumed in contemplation of, or in
connection with, such acquisition and which extend only to such property or
assets, provided that the Indebtedness secured by such Liens is not increased
(except pursuant to the terms of such Indebtedness as in effect on the date of
such acquisition, so long as such terms are not altered, in connection with or
in contemplation of such acquisition, to provide for an increase in such
Indebtedness); (xiv) Liens on real property and improvements securing
Indebtedness of the Issuer or any of its Restricted Subsidiaries incurred to
finance the acquisition or improvement after October 14, 1997 of such real
property, which Liens are either existing at the time of such acquisition or at
the time of completion of such improvement or created within six months after
such acquisition or improvement; (xv) Liens securing Indebtedness in an
aggregate amount at any time outstanding not to exceed 10% of the sum of (A) the
Issuer's Consolidated Net Worth at such time plus (B) the consolidated minority
interests of the Issuer (determined in accordance with GAAP) at such time; (xvi)
Liens arising as the result of the rights of a third party to receive, or the
granting, pledging or transferring to a third party of rights to receive,
payments from any Restricted Foreign Subsidiary in return for payments made by
or on behalf of such third party to the Issuer or a Restricted Subsidiary of the
Issuer (or to a Person designated by the Issuer or a Restricted Subsidiary of
the Issuer, which Person is not a Subsidiary or Affiliate of the Issuer) in an
approximately equal amount (after giving effect to adjustments reflecting the
time value of money); (xvii) Liens securing Indebtedness owed to the Issuer or
any Restricted Domestic Subsidiary by another Restricted Domestic Subsidiary;
(xviii) rights of banks arising by operation of law to set off deposits against
debts owed to said banks; and (xix) any interest or title of a lessor in
property subject to any Capitalized Lease Obligation (other than in property
owned by the Issuer or any of its Restricted Domestic Subsidiaries on October
14, 1997 and not, as of such date, subject to any such Capitalized Lease
Obligation), which Capitalized Lease Obligation is entered into within six
months of the acquisition of such property by the Issuer or such Restricted
Domestic Subsidiary.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Qualified Capital Stock" means Capital Stock other than Disqualified
Capital Stock.
"Refinancing Indebtedness" means Indebtedness that solely refunds,
refinances or extends, and is incurred within six months of the scheduled
maturity date or a mandatory repurchase date or optional redemption date of, any
Notes, Existing Indebtedness (excluding any Existing Indebtedness repaid with
the proceeds from the sale of the Notes) or other Indebtedness incurred by the
Issuer or its Restricted Subsidiaries pursuant to the terms of the Indenture and
the Notes, but only to the extent that (i) if the Indebtedness being refunded,
refinanced or extended is subordinated to the Notes, the Refinancing
Indebtedness is also subordinated to the Notes at least to the extent and in the
manner as such Indebtedness, (ii) if the Indebtedness being refunded, refinanced
or extended is subordinated to the Notes, the Refinancing Indebtedness (a) is
scheduled to mature either no earlier than the Indebtedness being refunded,
refinanced or extended or after the scheduled maturity date of the Notes and (b)
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 Indebtedness being refunded, refinanced or extended,
(iii) such Refinancing Indebtedness is in an aggregate principal amount that is
equal to or less than the aggregate principal amount then outstanding under the
Indebtedness being refunded, refinanced or extended and (iv) such Refinancing
Indebtedness is incurred by the same Person that initially incurred the
Indebtedness being refunded, refinanced or extended except that (a) the Issuer
may incur Refinancing Indebtedness to refund, refinance or extend Indebtedness
of any Restricted Subsidiary and (b) any Restricted Subsidiary may incur
Refinancing Indebtedness to refund, refinance or extend Indebtedness of any
other Restricted Subsidiary.
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<PAGE> 20
"Restricted Domestic Subsidiary" means, as of any date of determination, a
Restricted Subsidiary (i) that is organized under the laws of the United States
of America or any state thereof or the District of Columbia and (ii) the
majority of the assets of which (as reflected on a balance sheet of such
Subsidiary prepared in accordance with GAAP) is located in the United States of
America.
"Restricted Foreign Subsidiary" means, as of any date of determination, a
Restricted Subsidiary that is not a Restricted Domestic Subsidiary.
"Restricted Payment" means, with respect to any Person, (i) the
declaration or payment of any dividend or the making of any other payment or
distribution of cash, securities or other property in respect of such Person's
Capital Stock or in respect of any warrants, options or other rights (other than
convertible or exchangeable debt securities of such Person) to purchase or
acquire such Person's Capital Stock (except that a dividend payable solely in
Qualified Capital Stock of the Issuer 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 warrants,
options or other rights (other than convertible or exchangeable debt securities
of such Person) to purchase or acquire such Person's Capital Stock, or any other
payment or distribution made in respect thereof, either directly or indirectly,
or (iii) any principal payment, redemption, repurchase, defeasance or other
acquisition or retirement, prior to scheduled principal payment or scheduled
maturity, of Indebtedness (other than collateralized mortgage obligations issued
by Subsidiaries of the Mortgage Finance Subsidiary) of the Issuer or any of its
Subsidiaries which is subordinated in right of payment to the Notes; provided,
however, that with respect to the Issuer and its Restricted Subsidiaries,
Restricted Payments shall not include (a) any payment described in clause (i) or
(ii) above made to the Issuer or any of its Restricted Subsidiaries by any of
the Issuer's other Restricted Subsidiaries, (b) any exchange offer, but only to
the extent the Issuer exchanges solely Capital Stock of the Issuer (other than
Disqualified Stock) for Indebtedness of the Issuer or a Restricted Subsidiary in
such exchange offer or (c) any redemption, repurchase or retirement of
Indebtedness (the Indebtedness being so redeemed, repurchased or retired being
hereinafter called "Subject Indebtedness") described in clause (iii) above if
made from the proceeds of Indebtedness which (x) is subordinated to the Notes to
the same extent as the Subject Indebtedness, (y) is scheduled to mature either
no earlier than the Subject Indebtedness or after the scheduled maturity date of
the Notes and (z) has a Weighted Average Life to Maturity at the time such
Indebtedness is incurred that is equal to or greater than the Weighted Average
Life to Maturity of the Subject Indebtedness.
"Restricted Significant Subsidiary" means any Restricted Subsidiary which
is a "significant subsidiary" as defined in Rule 1-02 of Regulation S-X under
the Securities Act of 1933, as amended, and the Exchange Act (as such Regulation
S-X was in effect on June 1, 1996).
"Restricted Subsidiary" means a Subsidiary of the Issuer which is not, as
of the determination date, an Unrestricted Subsidiary.
"Subsidiary" of any Person means (i) any corporation of which at least a
majority of the aggregate voting power of the Common Stock of which is owned by
such Person, directly or through one or more other Subsidiaries of such Person,
and (ii) any entity other than a corporation at least a majority of the Common
Stock of which is owned by such Person, directly or through one or more other
Subsidiaries of such Person.
"Substitute Credit Facility" means any credit facility of the Issuer which
is created subsequent to October 14, 1997 and which replaces all or part of the
Existing Credit Facility or a Substitute Credit Facility (and which may provide
for an increase in the amount of credit available thereunder), so long as the
Issuer is the borrower under such Substitute Credit Facility.
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<PAGE> 21
"Trade Payables" means, with respect to any Person, accounts payable or
any other indebtedness or monetary obligations to trade creditors created or
assumed by such Person in the ordinary course of business in connection with the
obtaining of materials or services.
"Unrestricted Subsidiary" means (a) the Mortgage Finance Subsidiary, (b)
any Subsidiary of the Mortgage Finance Subsidiary on October 14, 1997, (c) any
other Subsidiary of the Issuer which is designated as an Unrestricted Subsidiary
by the Issuer's Board of Directors as provided below and (d) any Subsidiary of
an Unrestricted Subsidiary; provided that, in each case referred to in clause
(a), (b), (c) or (d), the creditors of such Subsidiary have no direct or
indirect recourse (including, but not limited to, recourse with respect to the
payment of principal of or interest on Indebtedness of such Subsidiary) to the
Issuer or any of its Restricted Subsidiaries. The Board of Directors of the
Issuer may designate an Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that no such designation shall result in any Restricted Subsidiary
becoming a Subsidiary of any Unrestricted Subsidiary; and provided, further that
(i) any such designation shall be deemed to be an incurrence by the Issuer and
its Restricted Subsidiaries, as of the date of such designation, of the
consolidated Indebtedness (if any) of such designated Subsidiary and its
Subsidiaries (if any) which are or are being designated as Restricted
Subsidiaries, determined in accordance with GAAP, for purposes of the covenant
described above in Section 16(a) of this Officers' Certificate, (ii) immediately
after giving effect to such designation and the deemed incurrence of any such
additional Indebtedness (A) no Default or Event of Default shall have occurred
and shall be continuing, (B) the Issuer could incur $1.00 of additional
Indebtedness pursuant to the first paragraph of the covenant described above in
Section 16(a) of this Officers' Certificate and (C) without limitation to clause
(A) above, such designated Subsidiary and its Subsidiaries (if any) which are or
are being designated as Restricted Subsidiaries are in compliance with the
covenants described above in Sections 16(b), 16(c), 16(d) and 16(e) of this
Officers' Certificate. Subject to the foregoing, the Board of Directors of the
Issuer also may designate any Restricted Subsidiary (together with its
Subsidiaries (if any)) to be an Unrestricted Subsidiary; provided that (i) the
consolidated shareholders' equity (determined in accordance with GAAP) of such
designated Subsidiary and its Subsidiaries (if any) at the time of such
designation shall be deemed to be an Investment by the Issuer in an Unrestricted
Subsidiary at the time of such designation and shall reduce the amount of
Investments which the Issuer and its Restricted Domestic Subsidiaries shall be
permitted to make under the covenant described above in Section 16(h) of this
Officers' Certificate and (ii) immediately after giving effect to such
designation and reduction of amounts available for Investments under such
covenant, (A) no Default or Event of Default shall have occurred and shall be
continuing, (B) the Issuer could incur $1.00 of additional Indebtedness pursuant
to the first paragraph of the covenant described above in Section 16(a) of this
Officers' Certificate and (C) the Issuer could make $1.00 of additional
Investments in Unrestricted Subsidiaries pursuant to the covenant described
above in Section 16(h) of this Officers' Certificate. Any designation by the
Board of Directors described above shall be evidenced to the Trustee by the
filing with the Trustee of a certified copy of the resolution of the Issuer's
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and setting forth the underlying calculations supporting such
certification. As of the date of this Officers' Certificate, the only
Unrestricted Subsidiaries are the Mortgage Finance Subsidiary and its
Subsidiaries.
"Voting Stock" means, with respect to any Person, the capital stock of
such Person having general voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or trustees of such Person
(irrespective of whether or not at the time capital stock of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or portion thereof at any date, the number of years obtained by
dividing (i) the then outstanding principal amount of such Indebtedness or
portion thereof, as the case may be, into (ii) the sum of the products obtained
by multiplying
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<PAGE> 22
(a) the amount of each then remaining installment, sinking fund, serial maturity
or other required payment of principal of such Indebtedness or portion thereof,
as the case may be, 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.
(21) The Notes will be in substantially the form attached hereto as
Exhibit A.
(22) SunTrust Bank, Atlanta, shall be the initial Trustee, paying agent,
transfer agent and registrar for the Notes and shall be empowered so to act
through its agent in the Borough of Manhattan, The City of New York.
(23) Terms (whether or not capitalized) used in this Officers'
Certificate and not defined herein which are defined in the Indenture shall have
the respective meanings given them in the Indenture.
(24) Any deletions from, modifications of or additions to the defined
terms, Events of Default, covenants and other provisions of the Indenture with
respect to the Notes:
(a) Section 5.1 of the Indenture is hereby amended and restated,
but only insofar as it relates to the Notes, to read in full as follows,
and the term "Event of Default", insofar (but only insofar) as such term
relates to the Notes, shall have the meaning set forth below:
SECTION 5.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default. "Event of Default" with respect to the
Notes, wherever used herein, means each one of the following events
which shall have occurred and be continuing (whatever the reason for
such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any installment of
interest upon any of the Notes as and when the same shall
become due and payable, and continuance of such default for a
period of 30 days; or
(b) default in the payment of all or any part of the
principal of any of the Notes as and when the same shall
become due and payable, either at maturity, upon repurchase at
the option of the Holders, by declaration of acceleration or
otherwise; or
(c) failure on the part of the Issuer duly to observe
or perform any of the covenants or agreements on the part of
the Issuer in the Notes or in this Indenture contained (other
than a covenant or agreement in respect of the Notes a default
in the performance or breach of which is elsewhere in this
Section 5.1 specifically dealt with or which has expressly
been included in this Indenture solely for the benefit of one
or more series of Securities other than the Notes) for a
period of 60 days (or for 10 days in the case of any of the
other covenants set forth in Section 7 of the Officers'
Certificate dated October 14, 1997 establishing the form and
terms of the Notes or, insofar as relates to the repurchase of
Notes following a Change of Control, Sections 9, 10, 11 or 12
of such Officers' Certificate) after the date on which written
notice specifying such failure, stating that such notice is a
"Notice of Default" hereunder and demanding that the Issuer
remedy the same, shall have been given by registered
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or certified mail, return receipt requested, or by overnight
courier or by hand delivery with evidence of the receipt of
such overnight courier or hand delivery by the Issuer, to the
Issuer by the Trustee, or to the Issuer and the Trustee by the
Holders of at least 25% in aggregate principal amount of the
Notes then Outstanding; or
(d) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Issuer or
any of its Restricted Significant Subsidiaries in an
involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or appointing
a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Issuer or any of its
Restricted Significant Subsidiaries or for any substantial
part of the property of the Issuer or any of its Restricted
Significant Subsidiaries or ordering the winding up or
liquidation of the affairs of the Issuer or any of its
Restricted Significant Subsidiaries, and such decree or order
shall remain unstayed and in effect for a period of 60
consecutive days; or
(e) the Issuer or any of its Restricted Significant
Subsidiaries shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Issuer or any of its Restricted
Significant Subsidiaries or for any substantial part of the
property of the Issuer or any of its Restricted Significant
Subsidiaries, or make any general assignment for the benefit
of creditors; or
(f) a default under any mortgage, indenture or other
instrument or agreement (including this Indenture with respect
to any other series of Securities) under which there may be
issued or by which there may be secured or evidenced any
Indebtedness (other than Non-Recourse Indebtedness) of the
Issuer or any Restricted Subsidiary, whether such Indebtedness
existed on the date of this Indenture or shall be created
thereafter, if (a) such default results from the failure to
pay any such Indebtedness when due (provided that no such
failure to pay Indebtedness when due shall be deemed to have
occurred so long as the Issuer or such Restricted Subsidiary,
as the case may be, shall be contesting whether such
Indebtedness is due in good faith by appropriate proceedings)
or as a result of such default the maturity of such
Indebtedness has been accelerated prior to its expressed
maturity and (b) the sum of (x) the principal amount of such
Indebtedness plus (y) the aggregate principal amount of all
other such Indebtedness in default for failure to pay any such
Indebtedness when due or the maturity of which has been so
accelerated equals $20,000,000 or more, individually, or
$40,000,000 or more in the aggregate, without such
Indebtedness having been discharged or such acceleration
having been rescinded or annulled within a period of 30 days
after notice thereof shall have been given to the Issuer by
the Trustee, or to the Issuer and the Trustee by the Holders
of at least 25% in aggregate principal amount of the Notes
then Outstanding.
If an Event of Default occurs and is continuing, then, and in
each and every such case, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Notes then
Outstanding hereunder, by notice in writing to the Issuer (and to
the Trustee if given by Holders of the Notes), may declare the
principal of all Notes and interest accrued
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<PAGE> 24
thereon to be due and payable immediately and, upon any such
declaration, the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the
condition that if, at any time after the principal of the Notes
shall have been so declared due and payable, and before any judgment
or decree for the payment of the moneys due shall have been obtained
or entered as hereinafter provided, the Issuer shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Notes and the principal of any
and all of the Notes which shall have become due otherwise than by
acceleration (with interest upon such principal and, to the extent
that payment of such interest is enforceable under applicable law,
on overdue installments of interest, at the same rate as the rate of
interest borne by the Notes to the date of such payment or deposit)
and such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, its
agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith,
and if any and all Events of Default with respect to the Notes,
other than the non-payment of the principal of or interest on Notes
which shall have become due by acceleration, shall have been cured,
waived or otherwise remedied as provided herein, then and in every
such case the Holders of a majority in aggregate principal amount of
all of the Notes then Outstanding, by written notice to the Issuer
and to the Trustee, may waive all defaults with respect to the Notes
and rescind and annul such declaration and its consequences, but no
such waiver or rescission and annulment shall extend to or shall
affect any subsequent default or shall impair any right consequent
thereon.
(b) Section 5.6 of the Indenture is hereby amended and restated, but
only insofar as it relates to the Notes, to read in full as follows:
SECTION 5.6 Limitations on Suits by Securityholders. No Holder
of any Notes shall have any right by virtue or by availing of any
provision of this Indenture to institute any action or proceeding at
law or in equity or in bankruptcy or otherwise upon or under or with
respect to this Indenture, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any
other remedy hereunder, unless such Holder previously shall have
given to the Trustee written notice of default and of the
continuance thereof, and unless also the Holders of not less than
25% in aggregate principal amount of the Notes then Outstanding
shall have made written request upon the Trustee to institute such
action or proceedings in its own name as trustee hereunder and shall
have offered to the Trustee such reasonable indemnity as it may
require against the reasonable costs, expenses and liabilities to be
incurred therein or thereby and the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceeding and no direction
inconsistent with such written request by the Holders of a majority
in principal amount of the Notes then Outstanding shall have been
given to the Trustee pursuant to Section 5.9; it being understood
and intended, and being expressly covenanted by the Holder of every
Note with every other Holder of any Note and the Trustee, that no
one or more Holders of Notes shall have any right in any manner
whatever by virtue or by availing of any provision of this Indenture
to affect, disturb or prejudice the rights of any such Holder of
Notes, or to obtain or seek to obtain priority over or preference to
any other such Holder or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Notes. For the protection and
enforcement of the provisions
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<PAGE> 25
of this Section, each and every Holder of Notes and the Trustee
shall be entitled to such relief as can be given either at law
or in equity.
(c) Section 5.9 of the Indenture is hereby amended and restated,
but only insofar as it relates to the Notes, to read in full as follows:
Section 5.9 Control by Holders of Notes. The Holders of a
majority in aggregate principal amount of the Notes at the time
Outstanding shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee
with respect to the Notes by this Indenture; provided that such
direction shall not be otherwise than in accordance with law and the
provisions of this Indenture and provided further that (subject to
the provisions of Section 6. 1) the Trustee shall have the right to
decline to follow any such direction if the Trustee, being advised
by counsel, shall determine that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good faith
by its board of directors, its executive committee, or a trust
committee of directors or Responsible Officers of the Trustee shall
determine that the action or proceedings so directed would involve
the Trustee in personal liability or if the Trustee in good faith
shall so determine that the actions or forebearances specified in or
pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Notes not joining in the giving of said
direction, it being understood that (subject to Section 6.1) the
Trustee shall have no duty to ascertain whether or not such actions
or forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the
Trustee in its discretion to take any action deemed proper by the
Trustee and which is not inconsistent with such direction or
directions by Holders of the Notes.
(d) Section 5.10 of the Indenture is hereby amended and restated,
but only insofar as it relates to the Notes, to read in full as follows:
SECTION 5.10. Waiver of Past Defaults. Prior to a declaration
of the acceleration of the maturity of the Notes as provided in
Section 5.1, the Holders of not less than a majority in aggregate
principal amount of the Notes at the time Outstanding may on behalf
of the Holders of all the Notes waive any past default or Event of
Default, except a default in respect of a covenant or provision
hereof that cannot be modified or amended without the consent of the
Holder of each Note affected. In the case of any such waiver, the
Issuer, the Trustee and the Holders of all Notes shall be restored
to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured, and
not to have occurred for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other default or Event
of Default or impair any right consequent thereon.
(e) Section 5.12 of the Indenture is hereby amended and restated,
but only insofar as it relates to the Notes, to read in full as follows:
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<PAGE> 26
SECTION 5.12. Right of Court to Require Filing of Undertaking
to Pay Costs. All parties to this Indenture agree, and each Holder
of any Note by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, 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, suffered or
omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to
any suit instituted by any Holder or group of Holders holding in the
aggregate more than 10% in aggregate principal amount of the Notes
then Outstanding, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or interest on any
Note on or after the due date expressed in such Note or any date
fixed for redemption or repurchase.
(f) Section 6.2(f) of the Indenture is hereby amended and
restated, but only insofar as it relates to the Notes, to read in full as
follows:
(f) prior to the occurrence of an Event of Default with
respect to the Notes hereunder and after the curing or waiving of
all Events of Default with respect to the Notes, the Trustee shall
not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security, or other paper
or document unless requested in writing so to do by the Holders of
not less than a majority in aggregate principal amount of the Notes
then Outstanding; provided that, if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee
may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of
every such investigation shall be paid by the Issuer or, if paid by
the Trustee or any predecessor Trustee, shall be repaid by the
Issuer upon demand; and
(g) The first paragraph of Section 8.2 of the Indenture is hereby
amended and restated, but only insofar as it relates to the Notes, to read
in full as follows:
SECTION 8.2. Supplemental Indentures With Consent of
Securityholders. With the consent (evidenced as provided in Article
Seven) of the Holders of not less than a majority in aggregate
principal amount of the Notes at the time Outstanding, the Issuer,
when authorized by a resolution of its Board of Directors (which
resolution may provide general terms or parameters for such action
and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order), and
the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture insofar as relates to the
Notes or of any supplemental indenture insofar as relates to the
Notes or of modifying in any manner the rights of the Holders of
Notes; provided, that no such supplemental indenture shall (a)
extend the final maturity of any Note or any date on which the
Change of Control Repurchase Price or Net Worth Repurchase Price of
any Note is payable, or reduce the principal amount thereof or
premium, if any, thereon,
-26-
<PAGE> 27
or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on redemption or repurchase
thereof, or make the principal thereof, or premium, if any, thereon,
or interest thereon payable in any coin or currency other than that
provided in the Notes or in accordance with the terms thereof, or
modify the percentage of Holders of Notes required pursuant to
Section 5.1 or 5.10 to waive any default or to rescind and annul any
declaration of acceleration, or alter the provisions of Sections
11.11 or 11.12 or impair or affect the right of any Holder of Notes
to institute suit for the payment thereof or any right of repayment,
repurchase or redemption at the option of the Holders of Notes, in
each case without the consent of the Holder of each Note so
affected, or (b) reduce the aforesaid percentage of Notes, the
consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holder of each
Note so affected.
(h) Section 9.1 of the Indenture is hereby amended and restated,
but only insofar as it relates to the Notes, to read in full as follows:
SECTION 9.1. Issuer May Consolidate, etc., on Certain Terms.
The Issuer covenants that it will not merge or consolidate with or
into any other Person or sell, lease or convey all or substantially
all of its assets to any other Person, unless (i) either the Issuer
shall be the continuing corporation, or the successor Person (if
other than the Issuer) or the Person which acquires by sale, lease
or conveyance all or substantially all the assets of the Issuer
shall be a corporation organized and existing under the laws of the
United States of America or any State thereof or the District of
Columbia and shall expressly assume the due and punctual payment of
the principal of and interest on all the Notes, according to their
tenor, and the due and punctual performance and observance of all of
the covenants and conditions in this Indenture and the Notes to be
performed or observed by the Issuer, by supplemental indenture
satisfactory to the Trustee, executed and delivered to the Trustee
by such corporation, (ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and
be continuing, (iii) immediately after giving effect to such
transaction, the Issuer or such corporation, as the case may be,
would be able to incur at least $0.50 of additional Indebtedness
pursuant to the first paragraph of the covenant set forth in Section
16(a) of the Officers' Certificate dated October 14, 1997
establishing the form and terms of the Notes, and (iv) the Issuer
shall have delivered to the Trustee an Officers' Certificate and
Opinion of Counsel, each stating that such transaction and such
supplemental indenture comply with this Indenture and the Notes, and
that all conditions precedent relating to such transaction have been
complied with.
(i) Section 10.1(B)(b) of the Indenture is hereby amended, but
only insofar as it relates to the Notes, by deleting the references
therein to Sections 5.1(e) and (f) of the Indenture and replacing the same
with references to Sections 5.1(d) and (e) of the Indenture, the purpose
of such replacement being to reflect the amendment and restatement of such
Section 5.1 pursuant to Section 24(a) of this Officers' Certificate.
(j) Section 10.1(C)(b) of the Indenture is hereby amended, but
only insofar as it relates to the Notes, by deleting the references
therein to Sections 5.1(e) and (f) of the Indenture and replacing the same
with references to Sections 5.1(d) and (e) of the Indenture, the purpose
of such replacement being to reflect the amendment and restatement of such
Section 5.1 pursuant to Section 24(a) of this Officers' Certificate.
-27-
<PAGE> 28
(k) Pursuant to Sections 2.3 and 10.1(C) of the Indenture, it is
hereby expressly provided that Section 9.1 of the Indenture (as amended
and restated pursuant to Section 24(h) of this Officers' Certificate) and
the covenants set forth in Sections 7, 8, 9, 10, 11, 12, and 16 (other
than Section 16(k) and other than the Issuer's obligation to maintain its
corporate existence pursuant to Section 16(i)) of this Officers'
Certificate shall be subject to covenant defeasance upon the terms and
subject to the conditions set forth in Section 10.1(C) of the Indenture.
(l) To the extent that Section 5.1, 5.9, 5.10, 5.12, 6.2(f), or
8.2 of the Indenture (as set forth in the Indenture and not as amended by
this Officers' Certificate) or any other provisions of the Indenture shall
require the action or vote of two or more series of Securities under the
Indenture acting together as a class, the Notes shall be excluded from
such class for all purposes, it being expressly understood and agreed that
the Notes shall be entitled to act alone in respect of all matters under
the Indenture and that no other series of Securities issued under the
Indenture shall have any right to participate in or vote in connection
with any action, vote or other matter relating to the Notes.
(m) All references in the Notes and in the Indenture to "the
Indenture", "this Indenture" or to terms or provisions contained or set
forth in the Indenture or the Notes (and all references of like import)
shall be deemed to mean and include the terms and provisions of the Notes
set forth in this Officers' Certificate, which shall for all purposes be
deemed to constitute a part of the Indenture and the Notes.
(n) For purposes of the Indenture, as amended hereby, the term
"Notes" shall mean the series of Securities established pursuant to this
Officers' Certificate.
(o) The last sentence of Section 6.6 of the Indenture is amended
and restated, but only insofar as it relates to the Notes, to read in full
as follows:
"Any compensation or expense incurred by the Trustee after a default
specified in Section 5.1(d) or 5.1(e) is intended to constitute an
expense of administration under any then applicable bankruptcy or
insolvency law."
(25) Captions and headings in this Officers' Certificate are for
convenience of reference only and shall not affect the construction hereof.
(26) Each of the undersigned hereby further certifies, pursuant to
Section 2.4(3) of the Indenture, that the form and terms of the Notes have been
established pursuant to Sections 2.1 and 2.3 of the Indenture and comply with
the Indenture.
-28-
<PAGE> 29
IN WITNESS WHEREOF, we have executed this Certificate on behalf of the
Issuer this 14th day of October, 1997.
KAUFMAN AND BROAD HOME CORPORATION
[SEAL]
By: ________________________________________
Name: Michael F. Henn
Title: Senior Vice President and
Chief Financial Officer
By: ________________________________________
Name: Kimberly N. King
Title: Corporate Secretary and Associate Counsel
-29-
<PAGE> 1
EXHIBIT 12
STATEMENT OF COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
(In thousands, except ratios)
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30,
1997 1996 1996 1995 1994 1993 1992
==================== =====================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
Pretax Income (Loss) .......................
$ 23,649 $(147,496) $ (95,744) $ 45,459 $ 73,850 $ 64,321 $ 45,498
-------------------- -----------------------------------------------------
Less undistributed income of
unconsolidated joint ventures . 21 -- -- -- -- -- --
-------------------- -----------------------------------------------------
Pretax income as adjusted .................. $ 23,670 $(147,496) $ (95,744) $ 45,459 $ 73,850 $ 64,321 $ 45,498
Add:
Interest incurred ......................
30,020 38,170 72,074 73,008 54,425 50,963 44,722
Portion of rent expense considered to
be interest ..................... 2,625 1,793 3,830 3,190 2,971 2,665 2,324
Amortization of previously
capitalized interest ............ 10,500 9,461 24,893 18,508 16,156 17,617 19,094
Deduct:
Interest capitalized ................... (10,079) (15,209) (26,937) (37,128) (27,561) (24,432) (23,419)
-------------------- -----------------------------------------------------
$ 56,736 $(113,281) $ (21,884) $ 103,037 $ 119,841 $ 111,134 $ 88,219
==================== =====================================================
Fixed Charges
Interest incurred .......................... $ 30,020 $ 38,170 $ 72,074 $ 73,008 $ 54,425 $ 50,963 $ 44,722
Portion of rent expense considered to be
interest ................................ 2,625 1,793 3,830 3,190 2,971 2,665 2,324
-------------------- -----------------------------------------------------
$ 32,645 $ 39,963 $ 75,904 $ 76,198 $ 57,396 $ 53,628 $ 47,046
==================== =====================================================
Ratio of earnings to fixed charges ............. 1.74x (2.83x) (0.29x) 1.35x 2.09x 2.07x 1.88x
==================== =====================================================
</TABLE>
For the purposes of calculating the ratio of earnings to fixed charges,
earnings are computed by adding fixed charges (except capitalized interest and
the effect of preferred dividends) and amortization of previously capitalized
interest to pretax earnings (excluding undistributed earnings of unconsolidated
joint ventures.) Fixed charges consist of interest expense plus capitalized
interest and the portion of rental expense considered to be interest.
In computing the ratio of earnings to fixed charges, interest expense
excludes interest incurred by the Company's wholly owned limited purpose
financing subsidiaries with respect to their outstanding collateralized
mortgage obligations. If interest on such collateralized mortgage
<PAGE> 2
obligations were included, earnings for the six months ended May 31, 1996 and
the year ended November 30, 1996 would have been inadequate to cover fixed
charges by $153.2 million and $97.8 million, respectively, while the ratio of
earnings to fixed charges for the six months ended May 31, 1997 and the years
ended November 30, 1995, 1994, 1993 and 1992 would have been 1.66x, 1.31x,
1.88x, 1.77x and 1.55x, respectively.
The amount of earnings used in the calculation of the ratio of earnings to
fixed charges for the six months ended May 31, 1996 and the year ended November
30, 1996 includes the $170.8 million pretax non-cash charge for impairment of
long-lived assets recorded by the Company in the second quarter of 1996. If
the non-cash charge for impairment of long-lived assets were excluded, the
ratio of earnings to fixed charges for the six months ended May 31, 1996 would
have been 1.44x and for the year ended November 30, 1996 would have been 1.96x.
Earnings for the six months ended May 31, 1996 and the year ended November
30, 1996 are inadequate to cover fixed charges by $153.2 million and $97.8
million, respectively.
<PAGE> 3
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(In thousands, except ratios)
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30,
==================== ====================================================
1997 1996 1996 1995 1994 1993 1992
-------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
Pretax Income (Loss)
$ 23,649 $(147,496) $ (95,744) $ 45,459 $ 73,850 $ 64,321 $ 45,498
Less undistributed income of
unconsolidated joint ventures ..... 21 -- -- -- -- -- --
-------------------- ----------------------------------------------------
Pretax income as adjusted ...................... $ 23,670 $(147,496) $ (95,744) $ 45,459 $ 73,850 $ 64,321 $ 45,498
Add:
Interest incurred
30,020 38,170 $ 72,074 73,008 54,425 50,963 44,722
Portion of rent expense considered to
be interest ......................... 2,625 1,793 3,830 3,190 2,971 2,665 2,324
Amortization of previously
capitalized interest ............. 10,500 9,461 24,893 18,508 16,156 17,617 19,094
Deduct:
Interest capitalized ....................... (10,079) (15,209) (26,937) (37,128) (27,561) (24,432) (23,419)
-------------------- ----------------------------------------------------
$ 56,736 $(113,281) $ (21,884) $ 103,037 $ 119,841 $ 111,134 $ 88,219
==================== ====================================================
Fixed Charges
Interest incurred .............................. $ 30,020 $ 38,170 $ 72,074 $ 73,008 $ 54,425 $ 50,963 $ 44,722
Portion of rent expense considered to be
interest .................................... 2,625 1,793 3,830 3,190 2,971 2,665 2,324
Preferred dividends ............................ -- 7,719 7,719 15,438 15,683 7,968 --
-------------------- ------------------------------------------------------
$ 32,645 $ 47,682 $ 83,623 $ 91,636 $ 73,078 $ 61,596 $ 47,046
==================== ======================================================
Ratio of earnings to fixed charges and preferred stock
dividends........................................... 1.74x (2.38x) (0.26x) 1.12x 1.64x 1.80x 1.88x
=================== =======================================================
</TABLE>
For the purpose of calculating the ratio of earnings to combined fixed
charges and preferred stock dividends, earnings are computed by adding fixed
charges (except capitalized interest and the effect of preferred dividends) and
amortization of previously capitalized interest to pretax earnings (excluding
undistributed earnings of unconsolidated joint ventures.) Fixed charges
consist of interest expense plus capitalized interest and the portion of rental
expense considered to be interest and, prior to April 1, 1996, include the
effect of preferred stock dividends on the Company's Series B Mandatory
Conversion
<PAGE> 4
Premium Dividend Preferred Stock. On April 1, 1996, all shares of the
Company's only outstanding series of preferred stock, the Series B Mandatory
Conversion Premium Dividend Preferred Stock, were mandatorily converted to
shares of Common Stock and no future preferred stock dividends will be paid or
are payable with respect to such preferred stock.
In computing the ratio of earnings to combined fixed charges and preferred
stock dividends, interest expense excludes interest incurred by the Company's
wholly owned limited purpose financing subsidiaries with respect to their
outstanding collateralized mortgage obligations. If interest on such
collateralized mortgage obligations were included, earnings for the six months
ended May 31, 1996 and the year ended November 30, 1996 would have been
inadequate to cover combined fixed charges and preferred stock dividends by
$161.0 million and $105.5 million, respectively, while the ratio of earnings to
combined fixed charges and preferred stock dividends for the six months ended
May 31, 1997 and the years ended November 30, 1995, 1994, 1993 and 1992 would
have been 1.66x, 1.11x, 1.54x, 1.60x, and 1.54x, respectively.
The amount of earnings used in the calculation of the ratio of earnings to
combined fixed charges and preferred stock dividends for the six months ended
May 31, 1996 and the year ended November 30, 1996 includes the $170.8 million
pretax non-cash charge for impairment of long-lived assets recorded by the
Company in the second quarter of 1996. If the non-cash charge for impairment
of long-lived assets were excluded, the ratio of earnings to combined fixed
charges and preferred stock dividends for the six months ended May 31, 1996
would have been 1.21x and for the year ended November 30, 1996 would have been
1.78x.
Earnings for the six months ended May 31, 1996 and the year ended November
30, 1996 are inadequate to cover combined fixed charges and preferred stock
dividends by $161.0 million and $105.5 million, respectively.
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of a
Trustee Pursuant to Section 305(b)(2) ___
SUNTRUST BANK, ATLANTA
(Exact name of trustee as specified in its charter)
Georgia Banking Corporation 58-0466330
(Jurisdiction of incorporation or organization (I.R.S. employer
if not a U.S. national bank) identification no.)
25 Park Place, N.E.
Atlanta, Georgia 30303
(Address of principal executive offices) (Zip Code)
Sandra W. Thompson
SunTrust Bank, Atlanta
58 Edgewood Ave., N.E.
Suite 400A
Atlanta, Georgia 30303
(404) 724-3762
(Name, address and telephone number of agent for service)
-------------------------
Kaufman and Broad Home Corporation
(Exact name of obligor as specified in its charter)
Delaware 95-3666267
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10990 Wilshire Boulevard
Los Angeles, California 90024
(Address of principal executive offices) (Zip Code)
-------------------------
Senior Debt
(Title of the indenture securities)
<PAGE> 2
GENERAL
Item 1. General Information.
(a) Name and address of each examining or supervising
authority to which it is subject.
Department of Banking and Finance
State of Georgia
Atlanta, Georgia
Federal Reserve Bank of Atlanta
104 Marietta Street, N.W.
Atlanta, Georgia
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
Item 2. Affiliations with Obligor.
None.
Item 3. Voting Securities of the Trustee.
Not applicable.
Item 4. Trusteeships under Other Indentures.
Not applicable.
Item 5. Interlocking Directorates and Similar Relationships with the
Obligor or Underwriters.
Not applicable.
Item 6. Voting Securities of the Trustee Owned by the Obligor or its
Officials.
Not applicable.
<PAGE> 3
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Not applicable.
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Not applicable.
Item 9. Securities of Underwriters Owned or Held by the Trustee.
Not applicable.
Item 10. Ownership or Holdings by the Trustee of Voting Securities of
Certain Affiliates or Security Holders of the Obligor.
Not applicable.
Item 11. Ownership or Holdings by the Trustee of any Securities of a
Person Owning 50 Percent or More of the Voting Securities of the
Obligor.
Not applicable.
Item 12. Indebtedness of the Obligor to the Trustee.
Not applicable.
Item 13. Defaults by the Obligor.
(a) Whether there is or has been a default with respect to the
securities under this indenture.
There is not and has not been any such default.
(b) If the trustee is a trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, or is trustee for more that one outstanding
series of securities under the indenture, state whether
there has been a default under any such indenture or
series.
There has not been any such default.
Item 14. Affiliations with the Underwriters.
Not applicable.
-2-
<PAGE> 4
Item 15. Foreign Trustee.
Not applicable.
Item 16. List of Exhibits.
The additional exhibits listed below are filed herewith; exhibits, if
any, identified in parentheses are on file with the Commission and are
incorporated herein by reference as exhibits hereto pursuant to Rule 7a-29 under
the Trust Indenture Act of 1939, as amended, and Rule 24 of the Commission's
Rules of Practice.
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C>
1 - A copy of the Articles of Amendment and Restated Articles of
Incorporation as now in effect. (Exhibit 1 to Form T-1,
Registration No. 33-63523.)
2 - A copy of the certificate of authority of the Trustee to commence
business. (Included in Exhibit 1.)
3 - A copy of the authorization of the Trustee to exercise trust powers.
(Included in Exhibit 1.)
4 - Bylaws of the Trustee. (Included in Exhibit 4 to Form T-1, Registration No.
33-49283.)
5 - Not applicable.
6 - Consent of the Trustee required by Section 321(b) of the Trust Indenture Act
of 1939, as amended.
7 - Latest report of condition of the Trustee published pursuant to law or the
requirements of its supervising or examining authority as of the close of
business on June 30, 1997. (Exhibit 7 to Form T-1, Registration No.
333-36291.)
8 - Not applicable.
9 - Not applicable.
</TABLE>
-3-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, SunTrust Bank, Atlanta, a Georgia corporation, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Atlanta and the State
of Georgia, on the 10th day of October, 1997.
SUNTRUST BANK, ATLANTA
By: /s/ SANDRA W. THOMPSON
-----------------------------------------
Sandra W. Thompson
Vice President
-4-
<PAGE> 6
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issue of Senior Debt by
Kaufman and Broad Home Corporation, we hereby consent that reports of
examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
SUNTRUST BANK, ATLANTA
By: /s/ SANDRA W. THOMPSON
-----------------------------------------
Sandra W. Thompson
Vice President
Dated: October 10, 1997
-5-
