SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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AMENDMENT NO. 2
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE
TRUST INDENTURE ACT OF 1939
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Walter Industries, Inc.
(Name of applicant)
1500 North Dale Mabry Highway
Tampa, Florida 33607
(Address of Principal Executive Offices)
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SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
- -----------------------------------------------------------
TITLE OF CLASS AMOUNT
Senior Notes Due 2000 $490,000,000
(Series B, Series B-1)
Approximate date of proposed public offering: On or
promptly after the Effective Date (as defined in the Amended
Joint Plan of Reorganization, dated as of December 9, 1994,
of Walter Industries, Inc. and the other debtors named
therein).
Name and address of agent for service:
Kenneth J. Matlock
Executive Vice President and Chief
Financial Officer
Walter Industries, Inc.
1500 North Dale Mabry Highway
Tampa, Florida 33607
The applicant hereby amends this application for qualification on
such date or dates as may be necessary to delay its effectiveness
until (i) the 20th day after the filing of a further amendment
which specifically states that it shall supersede this amendment,
or (ii) such date as the Commission, acting pursuant to Section
307(c) of the Act, may determine upon the written request of the
applicant.
<PAGE>
GENERAL
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS
TO THE APPLICANT:
a. Form of organization: A corporation.
b. State or other sovereign power under the laws of which
organized: Delaware
2. SECURITIES ACT EXEMPTION APPLICABLE. STATE BRIEFLY THE
FACTS RELIED UPON BY THE APPLICANT AS A BASIS FOR THE CLAIM THAT
REGISTRATION OF THE INDENTURE SECURITIES UNDER THE SECURITIES ACT
OF 1933 IS NOT REQUIRED.
The applicant, Walter Industries, Inc. (the "Company"),
formerly known as Hillsborough Holdings Corporation
("Hillsborough"), proposes to issue, as part of its Amended Joint
Plan of Reorganization dated as of December 9, 1994, as modified
on March 1, 1995 (the "Consensual Plan"), pursuant to Section
1121(a) of the United States Bankruptcy Code, up to $490,000,000
of its Series B Senior Notes due 2000 (the "Series B Notes").
The Series B Notes will be issued to discharge in part claims of
existing creditors in the Bankruptcy Proceedings described below.
The Series B Notes may be exchanged pursuant to an offer which
may be made by the Company following effectiveness of the
Consensual Plan, under a
Registration Rights Agreement to be executed as part of the
Consensual Plan, for Series B-1 Senior Notes due 2000 (the
"Series B-1 Notes" and, together with the Series B Notes, the
"Notes").
As further described below, the Series B Notes are
proposed to be issued in reliance upon the exemption from
registration under the Securities Act of 1933, as amended (the
"Securities Act"), set forth in Section 1145(a)(1) of the United
States Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code"), applicable to the offer or sale under a
Chapter 11 reorganization plan by an entity that is not an
underwriter of a security of a debtor in exchange for a claim
against such debtor.
On December 27, 1989 (the "Petition Date"),
Hillsborough and thirty-one of its affiliates (together with the
corporation referred to in the next sentence, the "Debtors")
filed voluntary petitions under Chapter 11 of the Bankruptcy Code
in the United States Bankruptcy Court for the Middle District of
Florida, Tampa Division (the "Court"). On December 3, 1990, one
additional subsidiary filed a voluntary petition for
reorganization under Chapter 11 with the Court. Under provisions
of the Bankruptcy Code and an order of the Court dated December
28, 1989, the Debtors continue to own and manage their respective
properties and assets as debtors in possession.
Pursuant to an order of the Court dated November 5,
1990, certain asset transfers were made among the Debtors and
certain of the Debtors were merged with one another, including
the merger of a subsidiary of Hillsborough into Hillsborough,
which thereafter changed its name to Walter Industries, Inc. and
was the surviving entity.
On December 9, 1994, the Consensual Plan was filed as
a modification of the Creditors' Joint Plan of Reorganization
dated as of August 1, 1994 (the "Creditors' Plan"). The Debtors,
which had filed a competing Fifth Amended Plan of Reorganization
dated as of July 25, 1994 (the "Debtors' Plan"), and Kohlberg
Kravis Roberts & Co. and certain of its affiliates ("KKR"), which
had joined as proponents of the Debtors' Plan, agreed not to
pursue confirmation of the Debtor's Plan and became proponents of
the Consensual Plan. At a hearing before the Court on December
15, 1994, the Court, pursuant to Section 1125 of the Bankruptcy
Code, approved the Supplement to Disclosure Statement for the
Amended Joint Plan dated as of December 9, 1994 (the
"Supplemental Disclosure Statement") as containing adequate
information. On January 24, 1995, the proponents of the
Consensual Plan completed soliciting vote changes in light of the
modifications to the Creditors' Plan contained in the Consensual
Plan. The voting for a class of claims relating to the "Veil
Piercing Settlement Agreement" described in the Plan and
Supplemental Disclosure Statement related thereto was completed
on February 22, 1995. A copy of the Supplemental Disclosure
Statement is attached as Exhibit T3E2 to this Form T-3; the
Consensual Plan is attached as Exhibit 1 to the Disclosure
Statement. On March 1, 1995 the Court held a confirmation
hearing with respect to the Consensual Plan. On March 2, 1995
the Court signed an order confirming the Consensual Plan.
Section 1145 of the Bankruptcy Code exempts the offer
or sale of securities under a plan of reorganization from
registration under the Securities Act and state law. Under
Section 1145, the issuance of securities is exempt from
registration if three principal requirements are satisfied: (1)
the securities are issued by a debtor, its successor, or an
affiliate participating in a joint plan with the debtor (provided
that such entity is not an underwriter as defined in Section
1145(b) of the Bankruptcy Code) under a plan of reorganization;
(2) the recipients of the securities hold a claim against the
debtor or such affiliate, an interest in the debtor or such
affiliate, or a claim for an administrative expense against the
debtor or such affiliate; and (3) the securities are issued
entirely in exchange for the recipients' claim against or
interest in the debtor or such affiliate, or "principally" in
such exchange and "partly" for cash or property.
The applicant believes that the issuance of the Series
B Notes under the Indenture to holders of various creditor
classes under the Consensual Plan will satisfy all three
conditions of Section 1145 of the Bankruptcy Code because (a) the
issuances are expressly contemplated under the Consensual Plan as
part of the reorganization; (b) the recipients are holders of
"Claims" against the Debtors; and (c) the recipients would obtain
such Notes in exchange for their prepetition claims. Under the
terms of the Registration Rights Agreement, the Series B-1 Notes
are to be issued, if at all, pursuant to an exchange offer by the
Company which would be registered in conformity with the
Securities Act and any relevant state law. The applicant does
not hereby claim any exemption from the Securities Act or any
state law for the issuance of the Series B-1 Notes.
AFFILIATIONS
3. AFFILIATES. FURNISH A LIST OR DIAGRAM OF ALL AFFILIATES OF
THE APPLICANT AND INDICATE THE RESPECTIVE PERCENTAGES OF VOTING
SECURITIES OR OTHER BASES OF CONTROL.
AS OF FEBRUARY 9, 1995
WALTER INDUSTRIES, INC. (DE) (formerly named Hillsborough
Holdings Corporation (DE)) - owns all of the stock of the
subsidiary companies numbered 1 through 19.
1. BEST INSURORS, INC. (FL)
Wholly owned subsidiaries of Best Insurors, Inc.:
Best Insurors of Mississippi, Inc. (MS)
Jim Walter Insurance Services, Inc. (FL)
2. CARDEM INSURANCE CO., LTD. (Bermuda)
3. COAST TO COAST ADVERTISING, INC. (FL)
4. COMPUTER HOLDINGS CORPORATION (DE)
Wholly owned subsidiary of Computer Holdings
Corporation:
Jim Walter Computer Services, Inc. (DE)
5. DIXIE BUILDING SUPPLIES, INC. (FL)
6. HAMER HOLDINGS CORPORATION (DE)
Wholly owned subsidiary of Hamer Holdings
Corporation:
Hamer Properties, Inc. (WV)
7. HOMES HOLDINGS CORPORATION (DE)
Wholly owned subsidiary of Homes Holdings
Corporation:
Jim Walter Homes, Inc. (FL)
Wholly owned subsidiaries of Jim Walter Homes,
Inc.:
Jim Walter Homes of Louisiana, Inc. (LA)
Walter Home Improvement, Inc. (FL)
8. JW ALUMINUM COMPANY (DE)
9. JIM WALTER RESOURCES, INC. (AL) (formerly named JW
Resources Inc. (AL))
Jim Walter Resources, Inc. has a 50% stock
ownership interest in Black Warrior Transmission
Corp. and Black Warrior Methane Corp.
10. JW WINDOW COMPONENTS, INC. (DE)
Wholly owned subsidiaries of JW Window
Components, Inc.:
D. J. Dinsmore Co. (SD) (inactive)
Jim Walter Window Components, Inc. (WI)
Warren Industries, Inc. (FL) (inactive)
11. J.W.I. HOLDINGS CORPORATION (DE)
Wholly owned subsidiary of J.W.I. Holdings
Corporation:
J. W. Walter, Inc. (DE)
12. LAND HOLDINGS CORPORATION (DE)
Wholly owned subsidiary of Land Holdings
Corporation:
Walter Land Company (DE)
13. MID-STATE HOLDINGS CORPORATION (DE)
Wholly owned subsidiary of Mid-State Holdings
Corporation:
Mid-State Homes, Inc. (FL)
Wholly owned subsidiaries (business trusts) of
Mid-State Homes, Inc.:
Mid-State Trust II
Mid-State Trust III
Mid-State Trust IV
Mid-State Trust V
14. RAILROAD HOLDINGS CORPORATION
Wholly owned subsidiary of Railroad Holdings
Corporation:
Jefferson Warrior Railroad Company, Inc. (AL)
15. SLOSS INDUSTRIES CORPORATION (DE)
16. SOUTHERN PRECISION CORPORATION (DE)
17. UNITED LAND CORPORATION (DE) (formerly named U.S. Pipe
Realty, Inc. (DE))
18. UNITED STATES PIPE AND FOUNDRY COMPANY (DE) (formerly
named Pipe Holdings Corporation (DE))
19. VESTAL MANUFACTURING COMPANY (DE)
AS OF EFFECTIVE DATE
Same As That Of February 9, 1995
MANAGEMENT AND CONTROL
4. DIRECTORS AND EXECUTIVE OFFICERS. LIST THE NAMES AND
COMPLETE MAILING ADDRESSES OF ALL DIRECTORS AND EXECUTIVE
OFFICERS OF THE APPLICANT AND ALL PERSONS CHOSEN TO BECOME
DIRECTORS OR EXECUTIVE OFFICERS. INDICATE ALL OFFICES WITH THE
APPLICANT HELD OR TO BE HELD BY EACH PERSON NAMED.
AS OF FEBRUARY 9, 1995
Name Address Office
James W. Walter (a) Chairman
Henry R. Kravis (b) Director
Paul E. Raether (b) Director
George R. Roberts (c) Director
G. Robert Durham (a) Director, President
and
Chief Executive Officer
Frank A. Hult (a) Vice President and
Controller
Kenneth J. Matlock (a) Director, Executive
Vice
President and Chief
Financial Officer
Perry Golkin (b) Director and Vice
President
Michael T. Tokarz (b) Director and Vice
President
William H. Weldon (a) Senior Vice President -
Finance and Chief
Accounting Officer
William N. Temple (d) Senior Vice President and
Group Executive;
President
of United States Pipe
and Foundry Company
Robert W. Michael (f) Senior Vice President and
Group Executive;
President of Jim Walter
Homes, Inc.
David L. Townsend (a) Vice President -
Human Resources/Public
Relations
John F. Turbiville (a) Vice President -
Legal and Secretary
Donald M. Kurucz (a) Vice President and
Treasurer
William Carr (g) President of Jim Walter
Resources, Inc.
Sam J. Salario (h) President of Mid-State
Homes, Inc.
AS OF EFFECTIVE DATE1
Name Address Office
James W. Walter (a) Chairman
G. Robert Durham (a) Director, Chief
Executive
Officer and President
Michael T. Tokarz (b) Director
Elliot M. Fried (e) Director
Howard L. Clark, Jr. (e) Director
Kenneth A. Buckfire (e) Director
Kenneth J. Matlock (a) Director, Executive Vice
President and Chief
Financial Officer
William H. Weldon (a) Senior Vice President -
Finance and Chief
Accounting Officer
Frank A. Hult (a) Vice President and
Controller
William N. Temple (d) Senior Vice President and
Group Executive;
President
of United States Pipe
and Foundry Company
Robert W. Michael (f) Senior Vice President and
Group Executive;
President
of Jim Walter Homes,
Inc.
David L. Townsend (a) Vice President -
Human Resources/Public
Relations
John F. Turbiville (a) Vice President -
Legal and Secretary
Donald M. Kurucz (a) Vice President and
Treasurer
William Carr (g) President of Jim Walter
Resources, Inc.
Sam J. Salario (h) President of Mid-State
Homes, Inc.
_________________________
1 In addition to the directors listed above, pursuant to the
Consensual Plan, the current management of
the Company will designate two independent directors at a later
date.
(a)Walter Industries, Inc.
1500 North Dale Mabry Highway
Tampa, FL 33607
(b)Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
(c)Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road (Suite 200)
Menlo Park, CA 94025
(d)United States Pipe and Foundry Company
3300 First Avenue North
Birmingham, AL 35202
(e)Lehman Brothers Inc.
3 World Financial Center
New York, NY 10285
(f)Jim Walter Homes, Inc.
1500 North Dale Mabry Highway
Tampa, Florida 33607
(g)Jim Walter Resources, Inc.
Route 1, Highway 216
Brookwood, AL 35444
(h)Mid-State Homes, Inc.
1500 North Dale Mabry Highway
Tampa, Florida 33607
<PAGE>
5. PRINCIPAL OWNERS OF VOTING SECURITIES. FURNISH THE
FOLLOWING INFORMATION AS TO EACH PERSON OWNING 10% OR MORE OF
THE VOTING SECURITIES OF THE APPLICANT.
AS OF FEBRUARY 9, 1995
<TABLE>
<CAPTION>
Name and Complete Title of Class Amount Percentage of
Mailing Address Owned Owned Voting Securities
Owned
<S> <C> <C> <C>
JWC Associates, L.P. Common Shares 27,646,600 88.84%
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
JWC Associates II, L.P. Common Shares 183,200 .59
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
KKR Partners II, L.P. Common Shares 670,200 2.15
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
Henry R. Kravis Common Shares 28,500,000(1) 91.58
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
George R. Roberts Common Shares 28,500,000(1) 91.58
c/o Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road
Suite 200
Menlo Park, CA 94025
Robert I. MacDonnell Common Shares 28,500,000(1) 91.58
c/o Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road
Suite 200
Menlo Park, CA 94025
Michael W. Michelson Common Shares 28,500,000(1) 91.58
c/o Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road
Suite 200
Menlo Park, CA 94025
Paul E. Raether Common Shares 28,500,000(1) 91.58
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
Michael T. Tokarz Common Shares 28,500,000(1)(2) 91.58
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
James H. Greene, Jr. Common Shares 28,500,000(1) 91.58
c/o Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road
Suite 200
Menlo Park, CA 94025
Perry Golkin Common Shares 28,500,000(1)(2) 91.58
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
Scott M. Stewart Common Shares 28,500,000(1) 91.58
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
Clifton S. Robbins Common Shares 28,500,000(1) 91.58
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
Edward A. Gilhuly Common Shares 28,500,000(1) 91.58
c/o Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road
Suite 200
Menlo Park, CA 94025
Saul A. Fox Common Shares 28,500,000(1) 91.58
c/o Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road
Suite 200
Menlo Park, CA 94025
(1) Messrs. Kravis, Roberts, MacDonnell, Michelson, Fox,
Raether, Tokarz, Greene, Golkin, Stewart, Robbins and Gilhuly are general
partners of KKR Associates, the sole general partner of each of JWC
Associates, L.P., JWC Associates II, L.P. and KKR Partners II, L.P. (the "KKR
Investors").
Such persons may be deemed to be "beneficial owners" of the
shares owned by the KKR Investors within the meaning of Rule 13d-3 under
the Exchange act, although each such person disclaims beneficial
ownership of such shares.
(2) Messrs. Tokarz and Golkin are currently directors and
officers of the Company and certain of its subsidiaries. It is anticipated
that as of the effective date, (i) Messrs. Tokarz and Golkin will no
longer be officers or directors of any subsidiary, (ii) Mr. Golkin
will neither be an officer nor a director of the Company and (iii) Mr.
Tokarz will remain a director, but not an officer of the Company.
</TABLE>
AS OF EFFECTIVE DATE
<TABLE>
<CAPTION>
Name and Complete Title of Class Amount Percentage of
Mailing Address Owned Owned Voting Securities
Owned
<S> <C> <C> <C>
The Celotex Settlement Fund
Recipient Common Shares 10,941,000(3) 21.7%(3)
1 Metro Center
4010 Boy Scout Boulevard
Tampa, Florida 33607
Lehman Brothers Inc. Common Shares 7,773,000(1) 15.4%(1)
3 World Financial Center
New York, NY 10285
The KKR Investors (JWC Associates, Common Shares 5,901,000(2) 11.7%(2)
L.P., JWC Associates II L.P. and
KKR Partners II, L.P.)
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
(1) Approximate amounts based on a March 15, 1995 effective date
for the reorganization and $555 million of "Qualified Securities"
(as defined in the Consensual Plan, consisting of cash and Notes) being
issued under the Consensual Plan. To the extent that less than $555
million of Qualified Securities are issued (minimum amount is $530
million), the number of shares and percentage would increase. If all the
shares of common stock that may be issued to the KKR Investors (see
note (2) below) are issued, the percentage would be reduced to
approximately 14.2%.
(2) Approximate amounts based on a March 15, 1995 effective date
for the reorganization and $555 million of Qualified Securities
being issued under the Consensual Plan. To the extent that less than
$555 million of Qualified Securities are issued (minimum amount is $530
million), the number of shares and percentages would decrease.
Approximately 453,000 additional shares of common stock will be issued to the KKR
Investors six months after the Effective Date. In addition,
approximately 3,553,000 shares of common stock will be issued after six
months into an escrow account. The KKR Investors will have the right to
vote the escrowed shares. To the extent that certain contingencies
regarding Federal income tax claims of the Company are resolved
satisfactorily, the escrowed shares will be distributed to the KKR
Investors. To the extent such matters are not settled satisfactorily, the
escrowed shares will be returned to the Company and canceled. If all such
shares are distributed to the KKR Investors, the KKR Investors would
hold approximately 9,907,000 shares of common stock, or 18.1% of
the then outstanding shares of common stock.
(3) Approximate amounts based on a March 15, 1995 effective date
for the reorganization and $555 million of Qualified Securities
being issued under the Consensual Plan. To the extent that less than
$555 million of Qualified Securities are issued (minimum amount is $530
million) the number of shares and percentage would increase. If all the
shares of common stock that may be issued to the KKR Investors (see
note 2 above) are issued, the percentage would be reduced to approximately
19.9%.
</TABLE>
UNDERWRITERS
6. UNDERWRITERS. GIVE THE NAME AND COMPLETE MAILING ADDRESS OF
(A) EACH PERSON WHO, WITHIN THREE YEARS PRIOR TO THE DATE OF
FILING THE APPLICATION, ACTED AS AN UNDERWRITER OF ANY SECURITIES
OF THE OBLIGOR WHICH WERE OUTSTANDING ON THE DATE OF FILING THE
APPLICATION, AND (B) EACH PROPOSED PRINCIPAL UNDERWRITER OF THE
SECURITIES PROPOSED TO BE OFFERED. AS TO EACH PERSON SPECIFIED
IN (A) GIVE THE TITLE OF EACH CLASS OF SECURITIES UNDERWRITTEN.
a. Merrill Lynch & Co.; World Financial Center, North
Tower, New York, NY 10281
b. The Series B Notes proposed to be offered will be
exchanged with certain holders of claims against the
applicant and the applicant's affiliates, as set
forth in the Consensual Plan, without the assistance
of any underwriter.
CAPITAL SECURITIES
7. CAPITALIZATION. (A) FURNISH THE FOLLOWING INFORMATION AS TO
EACH AUTHORIZED CLASS OF SECURITIES OF THE APPLICANT.
<TABLE>
<CAPTION>
AS OF FEBRUARY 9, 1995
AMOUNT AMOUNT
TITLE OF CLASS AUTHORIZED OUTSTANDING
<S> <C> <C>
Mortgage-Backed Notes $1,450,000,000 $605,750,000
Asset-Backed Notes $ 249,864,000 $179,065,213
Series B Senior
Extendible Reset Notes $ 180,000,000 $176,300,000
Series C Senior
Extendible Reset Notes $ 20,000,000 $ 5,000,000
Senior Subordinated
Extendible Reset Notes $ 350,000,000(1) $443,046,488
Subordinated Notes $ 350,000,000 $350,000,000
13-1/8% Subordinated
Notes $ 50,000,000 $ 50,000,000
13-3/4% Subordinated
Notes $ 100,000,000 $100,000,000
10-7/8% Subordinated
Notes $ 90,000,000 $ 90,000,000
Common Stock,
$.01 par value 50,000,000 shares 31,120,773
shares
(1) Plus the amount of such Notes issued in payment of interest
thereon
</TABLE>
<TABLE>
<CAPTION>
AS OF EFFECTIVE DATE
AMOUNT AMOUNT
TITLE OF CLASS AUTHORIZED OUTSTANDING
<S> <C> <C>
Series B Senior Notes $ 490,000,000 $490,000,000(1)
Due 2000
Mortgage-Backed Notes $1,450,000,000 $605,750,000
Asset-Backed Notes $ 249,864,000 $179,065,213
Asset and Residual
Backed Notes $ 959,450,000(2) $959,450,000(2)
Common Stock,
$.01 par value 200,000,000 shares 50,494,000
shares(3)
(1) This is the maximum amount to be issued under the Indenture.
This amount will be reduced by cash available in excess of $45
million after paying all other claims that have to be paid in cash.
(2) This is an estimate of the amount to be issued to the public
on or prior to the effective date in a public offering being registered
under the Securities Act by Mid-State Trust IV, a business trust owned
by Mid-State Homes, Inc., a subsidiary of the Company. Such
offering is being underwritten by Lehman Brothers, Inc., Merrill Lynch Pierce
Fenner & Smith Incorporated, NatWest Capital Markets Group and Nomura
Securities, Inc.
(3) If all of the shares of common stock that may be issued to
the KKR Investors, described in note (2) to Item 5 above, were
issued as of the effective date, a total of approximately 54,869,000 shares
of common stock would be outstanding. Approximate amounts based on a
March 15, 1995 closing date and $555 million of Qualified Securities.
</TABLE>
(B) GIVE A BRIEF OUTLINE OF THE VOTING RIGHTS OF EACH CLASS OF
VOTING SECURITIES REFERRED TO IN PARAGRAPH (A) ABOVE.
AS OF FEBRUARY 9, 1995
With respect to the voting rights of the common stock of the
Company, each holder of a share of such common stock is entitled
to one vote on all matters on which such shareholders are
entitled to vote.
AS OF EFFECTIVE DATE
With respect to the voting rights of the common stock of the
Company, including the shares to be issued into escrow (as
described in Note 2 to Item 5 above as of the effective date),
each holder of a share of such common stock will be entitled to
one vote on all matters on which such shareholders are entitled
to vote, except that pursuant to a Shareholders' Agreement all
shares of such common stock issued to the Celotex Settlement Fund
Recipient under the Consensual Plan will be voted by the Celotex
Settlement Fund Recipient (or by the beneficiaries of the Celotex
Settlement Fund Recipient or the creditors of The Celotex
Corporation, in their capacities as such), except with respect to
matters that only affect such shares held by the Celotex
Settlement Fund Recipient, in the same proportion as the votes
cast by all other holders of shares of common stock on all
matters and for all purposes. Upon transfer of such shares to a
person not affiliated with a beneficiary of the Celotex
Settlement Fund Recipient or a creditor of The Celotex
Corporation, in their capacities as such, such shares shall
receive normal voting rights.
INDENTURE SECURITIES<F1>
8. ANALYSIS OF INDENTURE PROVISIONS. INSERT AT THIS POINT THE
ANALYSIS OF INDENTURE PROVISIONS REQUIRED UNDER SECTION 305(A)(2)
OF THE ACT.
(a) Definition of Default: Withholding of Notice.
The following events are defined in the Indenture as "Events
of Default":
(i) failure by the Company to pay interest on the
Notes for 5 Business Days after becoming due;
______________________
[FN] Capitalized terms used in this Section 8, "Analysis of
Indenture Provisions," and not otherwise defined herein
shall have the meaning ascribed to them in the Indenture.
(ii) failure by the Company to pay the principal of or
premium (if any) on the Notes, whether at maturity or upon
acceleration, redemption or otherwise (including the failure to
repurchase the Notes tendered pursuant to a Change of Control
Offer or Asset Sale Offer);
(iii) failure by the Company to perform any of its
obligations under the second paragraph of Section 5 or Section 7
of the Pledge Agreement or failure by any Subsidiary to perform
any of its obligations under the second paragraph of Section 5 or
Section 7 of any Subsidiary Pledge Agreement or the Trustee is
entitled to exercise any remedies pursuant to Section 11 of the
Pledge Agreement or any Subsidiary Pledge Agreement;
(iv) failure by the Company or any of its Subsidiaries
to comply with the provisions of Section 4.08, 4.09, or 5.01 of
the Indenture;
(v) failure by the Company or any of its Subsidiaries
to comply with the provisions of Section 4.05(b), 4.10, 4.11,
4.12, 4.13, 4.14, 4.15 or 4.17 of the Indenture for 30 days after
written notice specifying the failure and that the same is a
Default shall have been given to the Company by the Trustee or
Holders of 25% in principal amount of the Notes outstanding;
(vi) failure by the Company or any of its Subsidiaries
to comply with any of its covenants or the breach by the Company
or any of its Subsidiaries of any of its representations or
warranties hereunder or under the Pledge Agreement or any
Subsidiary Pledge Agreement (other than the breach of a covenant,
representation or warranty which is specifically dealt with
elsewhere in Section 6.01) for 60 days after written notice
specifying the failure and that the same is a Default shall have
been given to the Company by the Trustee or Holders of 25% in
principal amount of the Notes outstanding;
(vii) default or defaults (including a payment default)
under one or more agreements, instruments, mortgages, bonds,
debentures or other evidence of Indebtedness under which the
Company or any of its Significant Subsidiaries has an outstanding
principal amount of Indebtedness in excess of $25 million
individually or $50 million in the aggregate for all such issues
of all such Persons and either (x) such Indebtedness is already
due and payable in full or (y) such default or defaults have
resulted in the acceleration of the maturity of such
Indebtedness;
(viii) any final judgment or order (not covered by
insurance) is entered against the Company or any Significant
Subsidiary in excess of $25 million individually or $50 million
in the aggregate for all such final judgments or orders against
all such Persons and remains undischarged or unstayed for 60
days;
(ix) the Company or any of its Significant Subsidiaries
pursuant to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding,
(b) consents to the entry of a judgment, decree
or order for relief against it in an involuntary case
or proceeding,
(c) consents to the appointment of a Custodian of
it or for all or substantially all of its property,
(d) consents to the institution of a bankruptcy
or an insolvency proceeding against it,
(e) makes a general assignment for the benefit of
its creditors, or
(f) takes any corporate action to authorize or
effect any of the foregoing;
(x) a court of competent jurisdiction enters a
judgment, decree or order under any Bankruptcy Law that is for
relief against the Company or any Significant Subsidiary of the
Company, in an involuntary case or proceeding which shall:
(a) approve a petition seeking reorganization,
arrangement, adjustment or composition in respect of
the Company or any Significant Subsidiary of the
Company,
(b) appoint a Custodian for the Company or any
Significant Subsidiary of the Company or for all or
substantially all of the property of any of them, or
(c) order the merger, winding-up or liquidation
of the Company or any Significant Subsidiary of the
Company,
and in each case the judgment, order or decree remains unstayed
and in effect for 60 days; and
(xi) any Lien granted or purported to be granted
pursuant to the Pledge Agreement or any Subsidiary Pledge
Agreement shall be or become unenforceable or invalid, or the
priority thereof shall become diminished, or the Company or any
Subsidiary shall contest or disaffirm any such Lien. (Section
6.01)
If an Event of Default occurs and is continuing, the
Trustee by written notice to the Company, or the Holders of at
least 25% of the aggregate principal amount of the then
outstanding Notes, by written notice to the Company and the
Trustee, may declare all of the Notes to be due and payable
immediately. Upon such declaration, the unpaid principal of,
premium, if any, and accrued interest on the Notes shall be due
and payable. Notwithstanding the foregoing, in the case of an
Event of Default specified in clause (ix) or (x) above with
respect to the Company or any Significant Subsidiary, such an
amount shall ipso facto become immediately due and payable
without any declaration, notice or other act on the part of the
Trustee or any Holder. (Section 6.02)
If a Default or an Event of Default occurs and is
continuing and if it is known to a Responsible Officer of the
Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs.
Except in the case of a Default or Event of Default in payment of
principal, premium, if any, or interest on any Note, the Trustee
may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders. (Section 7.05)
(b) Authentication and Delivery: Application of Proceeds.
Securities may be authenticated and delivered from time
to time pursuant to the Indenture and upon confirmation of the
Consensual Plan to (i) Holders of Subordinated Note Claims that
claim entitlement thereto based upon the making of or the failure
to make the Subordinated Note Claim Election (and the Class U-4
Exchange Election, if applicable) with respect to a portion of
such Holders' Subordinated Note Claim and (ii) the Celotex
Settlement Fund Recipient for the benefit of the holders of Veil
Piercing Claims (Class U-7). The Trustee shall, upon a written
order of the Company signed by two Officers, authenticate Series
B Notes for original issue up to the aggregate principal amount
stated above. The aggregate principal amount of Notes
outstanding at any time may not exceed such amount.
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate the Notes. An
authenticating agent may authenticate the Notes whenever the
Trustee may do so. Each reference in the Indenture to
authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent
to deal with the Company or an Affiliate of the Company.
(Section 2.02)
The Notes will be issued in exchange for claims against
the Company or its affiliates as provided in the Consensual Plan,
and accordingly, the issuance of the Notes will not result in
proceeds to the applicant.
(c) Release and Substitution of Property Subject to the
Lien of the Indenture.
The Company will not, and will not permit any of its
Subsidiaries to, sell, pledge, hypothecate or otherwise convey or
dispose of any Capital Stock of the Company's Subsidiaries (other
than pursuant to the Pledge Agreement or Subsidiary Pledge
Agreement governing the Pledged Shares) except for the sale by
the Company or a Subsidiary of all or part of the Capital Stock
of a Non-Core Subsidiary and except for the sale of 100% of the
Capital Stock of any other Subsidiary owned collectively by the
Company and/or its Subsidiaries; provided that in either case
such sale complies with the requirements of Section 4.09 of the
Indenture. (Section 4.17)
Section 7 of the Pledge Agreement and Section 7 of each
Subsidiary Pledge Agreement provides that the Company and each
Subsidiary, respectively, agrees that it will not (i) sell,
pledge, hypothecate or otherwise convey or dispose of any or all
of the Pledged Collateral, (ii) create or permit to exist any
Lien upon or with respect to any of the Pledged Collateral,
except for the Lien and security interest under such Pledge
Agreement, or (iii) permit any of the Subsidiaries to merge or
consolidate, unless all the outstanding capital stock of the
surviving or resulting corporation is, upon such merger or
consolidation, pledged under such Pledge Agreement and no cash,
securities or other property is distributed in respect of the
outstanding shares of any other constituent corporation;
provided, however, that the Company and its Subsidiaries may
conduct Asset Sales in accordance with Section 4.09 of the
Indenture, and upon the consummation of any such Asset Sale, any
Pledged Collateral subject to such Asset Sale shall be released
from the Lien of the Pledge Agreement or Subsidiary Pledge
Agreement, as the case may be.
(d) Satisfaction and Discharge. The Indenture shall cease
to be of further effect other than with respect to:
(A)(i) the Company's compensation and indemnity
obligations and the Lien granted by the Company to the Trustee to
secure such obligations (Section 7.07), and (ii) the Company's,
the Trustee's and any Paying Agent's obligations with respect to
money remaining unclaimed for two years (Section 8.06);
when all outstanding Notes theretofore authenticated and issued
have been delivered (other than destroyed, lost or stolen Notes
that have been replaced or paid) to the Trustee for cancellation
and the Company has paid all sums payable under the Indenture
(Section 8.01).
(B)(i) the Company's compensation and indemnity
obligations and the Lien granted by the Company to the Trustee to
secure such obligations (Section 7.07), (ii) the rights of
Holders of outstanding Notes to receive solely from the trust
fund described in Section 8.04 of the Indenture, and as more
fully set forth in such Section, payments in respect of the
principal, of, premium, if any, and interest on such Notes when
such payments are due, (Section 8.02(a)), (iii) the Company's,
the Trustee's and the Paying Agent's obligations with respect to
such Notes under Sections 2.03 through 2.07 and Section 4.02 and
the Company's obligations under Section 7.07 of the Indenture
(Section 8.02(b)) and (iv) Article Eight of the Indenture
(Section 8.03(c));
upon the Company's exercise of its option to legally defease the
Notes pursuant to Section 8.02 of the Indenture and when the
Company has complied with all the conditions to such exercise set
forth in Section 8.04 of the Indenture (Section 8.02), including
the condition that the Company irrevocably deposit such amounts
as will be sufficient to pay the principal of, premium, if any,
and interest on the outstanding Notes on the stated date for
payment thereof or on the applicable redemption date, as the case
may be, of such principal, premium, if any, or interest on the
outstanding Notes.
(e) Evidence of Compliance.
(i) The Company shall deliver to the Trustee, within
120 days after the end of each fiscal year, a certificate of the
principal executive officer, the principal financial officer or
the principal accounting officer of the Company stating that to
the best of such officer's knowledge no Default or Event of
Default has occurred (or, if a Default or Event of Default shall
have occurred and is pending, describing all such Defaults or
Events of Default of which he or she may have knowledge and what
action the Company is taking or proposes to take with respect
thereto) and that to the best of his or her knowledge no event
has occurred and remains in existence by reason of which payments
on account of the principal of or interest, if any, on the Notes
is prohibited or, if such event has occurred, a description of
the event and what action the Company is taking or proposes to
take with respect thereto.
(ii) The Company shall deliver to the Trustee within 3
Business Days of any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking
or proposes to take with respect thereto. (Section 4.04)
9. OTHER OBLIGORS. GIVE THE NAME AND COMPLETE MAILING ADDRESS
OF ANY PERSON, OTHER THAN THE APPLICANT, WHO IS AN OBLIGOR UPON
THE INDENTURE SECURITIES.
There are no other obligors with respect to the Notes.<F2>
CONTENTS OF APPLICATION FOR QUALIFICATION. This application
for qualification comprises:
a. Pages numbered 1 to 23, consecutively.
b. The statement of eligibility and qualification of the
trustee under the Indenture to be qualified.
c. The following exhibits in addition to those filed as a
part of the statement of eligibility and qualification
of each trustee.
____________________________
[FN] Certain Subsidiaries will pledge shares of common stock
of Subsidiaries of the Company owned by them as
security for the obligations of the Company under the
Indenture and the Notes issued thereunder.
Exhibit T3A1. Certificate of Incorporation of the Company
filed with Delaware Secretary of State on
August 6, 1987
Exhibit T3A2. Certificate of Amendment to the Certificate
of Incorporation of the Company filed with
Delaware Secretary of State on September 8,
1987
Exhibit T3A3. Certificate of Ownership and Merger merging
Walter Industries, Inc. into Hillsborough
Holdings Corporation filed with the Delaware
Secretary of State on March 29, 1991
Exhibit T3A4. Proposed Restated Certificate of
Incorporation of the Company
Exhibit T3B1. By Laws of the Company
Exhibit T3B2. Proposed Amended and Restated By Laws of the
Company
Exhibit T3C. Form of indenture including exhibits thereto
Exhibit T3E1.* Disclosure Statement for Creditors Plan
dated as of August 1, 1994, including
Creditors Plan of Reorganization as an
exhibit thereto, as filed with the United
States Bankruptcy Court, Middle District of
Florida, Tampa Division
Exhibit T3E2.* Supplement to Disclosure Statement for
Amended Joint Plan of Reorganization dated
as of December 9, 1994, including the
Amended Joint Plan of Reorganization (the
"Consensual Plan") as an exhibit thereto, as
filed with the United States Bankruptcy
Court, Middle District of Florida, Tampa
Division
Exhibit T3E3.* Notice of Order (A) approving Debtors'
disclosure statement and Creditors'
disclosure statement, (B) establishing
procedures and deadlines for voting on and
objecting to the debtors' joint plan of
reorganization, (C) fixing the date of the
initial confirmation hearing and of the
scheduling of related hearings, and (D)
approving related relief
Exhibit T3E4.* Notice of Order (A) approving disclosure
statement supplement respecting Consensual
Plan, (B) establishing procedures and
deadlines regarding acceptances and
rejections of, and objections to, the
Consensual Plan and objections to the veil
piercing settlement, (C) fixing the date of
the hearing on confirmation of the
Consensual Plan and on the veil piercing
settlement and (D) approving related relief
Exhibit T3E5.* Individual Ballot for Class S-6 (for
accepting or rejecting the Creditors' Plan)
Exhibit T3E6.* Master Ballot for Class S-6 (for accepting
or rejecting the Creditors' Plan)
Exhibit T3E7.* Individual Ballot for Class U-4 (for
accepting or rejecting the Creditors' Plan)
Exhibit T3E8.* Master Ballot for Class U-4 (for accepting
or rejecting the Creditors' Plan)
Exhibit T3E9.* Individual Ballot for Class U-5 (for
accepting or rejecting the Creditors' Plan)
Exhibit T3E10.* Master Ballot for Class U-5 (for accepting
or rejecting the Creditors' Plan)
Exhibit T3E11.* Individual Ballot for Class U-6 (for
accepting or rejecting the Creditors' Plan)
Exhibit T3E12.* Master Ballot for Class U-6 (for accepting
or rejecting the Creditors' Plan)
Exhibit T3E13.* Individual Class U-4 Vote Change
Certification for the Consensual Plan
Exhibit T3E14.* Master Class U-4 Vote Change Certification
for the Consensual Plan
Exhibit T3E15.* Individual Class U-5 Vote Change
Certification for the Consensual Plan
Exhibit T3E16.* Master Class U-5 Vote Change Certification
for the Consensual Plan
Exhibit T3E17.* Individual Class U-6 Vote Change
Certification for the Consensual Plan
Exhibit T3E18.* Master Class U-6 Vote Change Certification
for the Consensual Plan
Exhibit T3E19.* Class U-7 Ballot (for accepting or rejecting
the Consensual Plan)
Exhibit T3E20.* Individual Class S-6 Vote Change
Certification for the Consensual Plan
Exhibit T3E21.* Master Class S-6 Vote Change Certification
for the Consensual Plan
Exhibit T3E22.* Individual Class U-4 Exchange Election Form
for the Consensual Plan
Exhibit T3E23.* Master Class U-4 Exchange Election Form for
the Consensual Plan
Exhibit T3E24 Modification dated March 1, 1995, to Amended
Joint Plan of
reorganization dated as of December 9, 1994
Exhibit T3F.* See Cross Reference Sheet showing the
location in the Indenture of the provisions
inserted therein pursuant to Section 310
through 318(a), inclusive, of the Trust
Indenture Act of 1939 (included in Exhibit
T3C hereof)
* Previously filed.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust indenture Act of
1939, the applicant, Walter Industries, Inc., a corporation
organized and existing under the laws of the State of Delaware,
has duly caused this application to be signed on its behalf by
the undersigned, thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of Tampa and State
of Florida, on the _____ day of March, 1995.
WALTER INDUSTRIES, INC.
By:____________________________
G. Robert Durham
Chief Executive Officer
and President
By:_____________________________
Kenneth J. Matlock
Executive Vice President
and Chief Financial
Officer
Attest:
______________________________
Name:
Title:
<PAGE>
FORM T-1
===================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
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) _______
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5459866
(Jurisdiction of incorporation (I.R.S. employer
if not a U.S. national bank) identification No.)
114 West 47th Street 10036-1532
New York, NY (Zip Code)
(Address of principal
executive offices)
__________________
Walter Industries, Inc.
(Exact name of obligor as specified in its charter)
Dellaware 13-3429953
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1500 North Dale Mabry Highway
Tampa, FL 33607
(Address of principal executive offices) (Zip Code)
New Senior Notes Due 2000
(Title of the indenture securities)
GENERAL
1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Federal Reserve Bank of New York (2nd District),
New York, New York (Board of Governors of the Federal Reserve
System) Federal Deposit Insurance Corporation, Washington,
D.C. New York State Banking Department, Albany, New
York
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate
trust powers.
2. Affiliations with the Obligor
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None
3. Voting Securities of the Trustee
2,999,020 shares of Common Stock - par value $5 per share
4. Trusteeships under Other Indentures
Not applicable.
5. Interlocking Directorates and Similar Relationships with the
Obligor or Underwriters
Not applicable.
6. Voting Securities of the Trustee Owned by the Obligor or its
Officials
Not applicable.
7. Voting Securities of the Trustee Owned by Underwriters or
their Officials
Not applicable.
8. Securities of the Obligor Owned or Held by the Trustee
Not applicable.
9. Securities of Underwriters Owned or Held by the Trustee
Not applicable.
10. Ownership or Holdings by the Trustee of Voting Securities of
Certain Affiliates or Securities Holders of the Obligor
Not applicable.
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.
12. Indebtedness of the Obligor to the Trustee
Not applicable.
13. Defaults by the Obligor
Not applicable.
14. Affiliations with the Underwriters
Not applicable.
15. Foreign Trustee
Not applicable.
16. List of Exhibits.
T-1.1 - "Chapter 204, Laws of 1853, An Act to
Incorporate the United States Trust Company of New York, as
Amended", is incorporated by reference to Exhibit T-1.1 to Form
T-1 filed on September 20, 1991 with the Securities and Exchange
Commission (the "Commission") pursuant to the Trust Indenture Act
of 1939 (Registration No. 2221291).
T-1.2 - The trustee was organized by a special act of
the New York Legislature in 1853 prior to the time that the New
York Banking Law was revised to require a Certificate of
authority to commence business. Accordingly, under New York
Banking Law, the Charter (Exhibit T-1.1) constitutes an
equivalent of a certificate of authority to commence business.
T-1.3 - The authorization of the trustee to exercise
corporate trust powers is contained in the Charter (Exhibit
T-1.1).
T-1.4 - The By-laws of the United States Trust
Company of New York, as amended to date, are incorporated by
reference to Exhibit T-1.4 to Form T-1 filed on September 20,
1991 with the Commission pursuant to the Trust Indenture Act of
1939 (Registration No. 2221291).
T-1.6 - The consent of the trustee required by
Section 321(b) of the Trust Indenture Act of 1939.
T-1.7 - A copy of the latest report of condition of
the trustee published pursuant to law or the requirements of its
supervising or examining authority.
NOTE
As of February 3, 1995, the trustee had 2,999,020 shares of
Common Stock outstanding, all of which are owned by its parent
company, U.S. Trust Corporation. The term "trustee" in Item 2,
refers to each of United States Trust Company of New York and its
parent company, U.S. Trust Corporation.
In answering Item 2 in this statement of eligibility as to
matters peculiarly within the knowledge of the obligor or its
directors, the trustee has relied upon information furnished to
it by the obligor and will rely on information to be furnished by
the obligor and the trustee disclaims responsibility for the
accuracy or completeness of such information.
Pursuant to the requirements of the Trust Indenture Act of 1939,
the trustee, United States Trust Company of New York, a
corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of New York, and State
of New York, on the 3rd day of February, 1995.
UNITED STATES TRUST COMPANY OF
NEW YORK, Trustee
By:
William Eising
Assistant Vice President
Exhibit T-1.6
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
March 19, 1992
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust
Indenture Act of 1939, as amended by the Trust Indenture Reform
Act of 1990, and subject to the limitations set forth therein,
United States Trust Company of New York ("U.S. Trust") hereby
consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by
such authorities to the Securities and Exchange Commission upon
request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
By: S/Gerard F. Ganey
Senior Vice President
Exhibit T3A1
CERTIFICATE OF INCORPORATION
of
HILLSBOROUGH HOLDINGS CORPORATION
The undersigned, in order to form a corporation for
the purpose hereinafter stated, under and pursuant to the
provisions of the Delaware General Corporation Law, hereby
certifies that:
1. The name of the Corporation is HILLSBOROUGH
HOLDINGS CORPORATION.
2. The registered office and registered agent of the
Corporation is The Corporation Trust Company, 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801.
3. The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of stock that the
Corporation is authorized to issue is 1,000 shares of Common
Stock, par value $1.00 each.
5. The name and address of the incorporator is
Michael A. Vitiello, One Battery Park Plaza, New York City, New
York 10004.
6. The Board of Directors of the Corporation, acting
by majority vote, may alter, amend or repeal the By-Laws of the
Corporation.
7. Except as otherwise provided by the Delaware
General Corporation Law as the same exists or may hereafter be
amended, no director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. Any repeal
or modification of this Article SEVENTH by the stockholders of
the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the
time of such repeal or modification.
IN WITNESS WHEREOF, the undersigned has signed this
Certificate of Incorporation on August 5, 1987.
Michael A. Vitiello
Sole Incorporator
<PAGE>
Exhibit T3A3
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
WALTER INDUSTRIES, INC.
INTO
HILLSBOROUGH HOLDINGS CORPORATION
HILLSBOROUGH HOLDINGS CORPORATION, a corporation organized
and existing under the laws of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Corporation owns at least ninety percentum
of the outstanding shares of common stock (the only outstanding
class of stock) of Walter Industries, Inc., a Delaware
corporation incorporated on the 8th day of September, 1987,
pursuant to the General Corporation Law of the State of Delaware
(the "DGCL").
SECOND: That the Corporation, by resolutions of its Board
of Directors, duly adopted on the 31st day of December, 1990,
has determined to effect a merger, pursuant to Section 253 of
the DGCL, of Walter Industries, Inc. into itself (the "Merger").
A true copy of said resolutions is annexed hereto as Exhibit A
and incorporated herein by reference. Said resolutions have not
been modified or rescinded and are in full force and effect on
the date hereof.
THIRD: That the Merger shall become effective upon the
filing of this certificate with the Secretary of State of the
State of Delaware.
FOURTH: That the Certificate of Incorporation of the
Corporation remains in effect except that paragraph 1 is amended
by deleting it in its entirety, and by substituting, in lieu
thereof, the following:
"The name of the corporation is Walter Industries, Inc."
IN WITNESS WHEREOF, HILLSBOROUGH HOLDINGS CORPORATION has
caused this certificate to be signed by William H. Weldon, its
Vice President, and attested to by John F. Turbiville, its
Secretary, this 29th day of March, 1991.
HILLSBOROUGH HOLDINGS CORPORATION
By:______________________________
William H. Weldon
Vice President
ATTEST:_________________________
John F. Turbiville
Secretary
Exhibit A
Board Resolutions Adopted on December 31, 1990
_______________________________________________
IT IS RESOLVED, that the Board of Directors of the
Corporation deems it advisable and to the advantage of the
Corporation and its stockholders that Walter Industries, Inc., a
wholly owned subsidiary of the Corporation, be liquidated and
merged with and into the Corporation and that the merger of
Walter Industries, Inc. with and into the Corporation as
hereinafter provided (the "Merger") is approved; and
IT IS FURTHER RESOLVED, that the terms of the Merger are as
set forth in Certificate of Ownership and Merger attached hereto
as Annex I and the Plan and Agreement of Merger attached hereto
as Annex II, each of which is incorporated herein by reference
and each of which the Board of Directors hereby approves and
adopts; and
IT IS FURTHER RESOLVED, that the officers of this
Corporation be, and they hereby are, authorized and directed in
the name and on behalf of the Corporation to execute and deliver
any and all documents and to perform all such acts which may be
deemed necessary or desirable to effectuate the intent of the
foregoing resolutions.
PLAN AND AGREEMENT OF MERGER
This Plan and Agreement of Merger, dated as of March 29,
1991, is to effect a merger (the "Merger") between Walter
Industries, Inc., a Delaware corporation ("Walter"), and
Hillsborough Holdings Corporation, a Delaware corporation
"Holdings").
ARTICLE I
Surviving Corporation
At the Effective Date (as defined in Article II hereof) and
in accordance with the provisions of this Plan and Agreement of
Merger and the General Corporation Law of the State of Delaware
(the "DGCL"), Walter and Holdings shall cause the Merger to be
consummated, pursuant to which Walter shall be merged with and
into Holdings, which shall (i) be the surviving corporation
(hereinafter sometimes called the "Surviving Corporation"), (ii)
continue its corporate existence under the DGCL, including,
without limitation, the provisions of Section 259 of the DGCL,
and (iii) possess all the rights and assets of, and be subject
to and assume all the liabilities and obligations of Walter in
accordance with the provisions of the DGCL.
ARTICLE II
Effective Date
The Merger shall become effective upon the filing of the
Certificate of Merger (as defined in Article III hereof) with
the Secretary of State of the State of Delaware in accordance
with the provisions of Section 253 of the DGCL. The date and
time when the Merger shall become effective are herein referred
to as the "Effective Date."
ARTICLE III
Certificate of Merger
Holdings shall execute a Certificate of Ownership and
Merger (the "Certificate of Merger") and cause the Certificate
of Merger to be filed and recorded in accordance with the
provisions of Sections 103 and 253 of the DGCL.
ARTICLE IV
Certificate of Incorporation and By-Laws
The Certificate of Incorporation of Holdings as amended by
the Certificate of Merger shall be the Certificate of
Incorporation of the Surviving Corporation, until thereafter
amended as provided by law, except that paragraph 1 of the
Certificate of Incorporation of the Surviving Corporation shall
read as follows: "The name of the Corporation is Walter
Industries, Inc." The By-Laws of Holdings as in effect at the
Effective Date shall be the By-Laws of the Surviving
Corporation, until amended as therein provided.
ARTICLE V
Officers and Directors
The officers of Holdings at the Effective Date shall be the
officers of the Surviving Corporation, each to hold office in
accordance with the Certificate of Incorporation and By-Laws of
the Surviving Corporation. The persons who are directors of
Holdings immediately prior to the Effective Date shall, after
the Effective Date, be the directors of the Surviving
Corporation, without change until their successors have been
duly elected and qualified in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation.
ARTICLE VI
Conversion of Shares
6.1 Walter Shares. At the Effective Date, by virtue of
the Merger and without any action on the part of the holders
thereof, each then outstanding share of Common Stock of Walter,
par value $.01 per share (the "Shares"), and each Share held by
Walter as a treasury share shall be cancelled and retired.
6.2 Holdings Shares. Each share of Common Stock of
Holdings, par value $.0l per share, issued and outstanding
immediately prior to the Effective Date shall continue unchanged
as one issued and outstanding share of Common Stock of the
Surviving Corporation.
ARTICLE VII
Closing of Walter Transfer Books
At the Effective Date, the Share transfer books of Walter
shall be closed and no transfer of Shares shall thereafter be
made. If, after the Effective Date, certificates representing
Shares are presented to the Surviving Corporation, they shall be
cancelled.
ARTICLE VIII
Termination or Abandonment of Merger
Anything herein or elsewhere to the contrary
notwithstanding, the Merger may be terminated and abandoned by
either of the Boards of Directors of Holdings or Walter at any
time prior to the filing of a Certificate of Ownership and
Merger with the Secretary of State of the State of Delaware.
ARTICLE IX
Miscellaneous
9.1 Notice. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given
if delivered personally or mailed, certified or registered mail
with postage prepaid, as follows:
(a) if to Holdings, to it at:
1500 North Dale Mabry Highway
Tampa, Florida 33607
Attention: William H. Weldon
(b) if to Walter, to it at:
1500 North Dale Mabry Highway
Tampa, Florida 33607
Attention: William H. Weldon
9.2 Headings. The headings of the several articles and
sections herein are inserted for convenience of reference only
and are not intended to be part of or to affect the meaning or
interpretation of this Plan and Agreement of Merger.
9.3 Governing Law. This Plan and Agreement of Merger shall
be governed in all respects, including validity, interpretation
and effect, by the internal laws of the State of Delaware,
without giving effect to the principles of conflict of laws
thereof.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Plan and Agreement of Merger on the date first
written.
HILLSBOROUGH HOLDINGS CORPORATION
By:
William H. Weldon
Vice President
ATTEST:
John F. Turbiville
Secretary
WALTER INDUSTRIES, INC.
By:
William H. Weldon
Vice President
ATTEST:
John F. Turbiville
Secretary
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
On the 29th day of March, 1991, before me personally came
William H. Weldon, to me known, who, being by me duly sworn, did
depose and say that he resides at 4216 Fairway Circle, Tampa,
Florida; that he is Vice President of HILLSBOROUGH HOLDINGS
CORPORATION, one of the corporations described in and which
executed the above instrument; that he knows the corporate seal
of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation; and
that he signed his name thereto by like authority.
___________________________
Notary Public
STATE OF FLORIDA )
) ss.:
COUNTY OF HILLSBOROUGH )
On the 29th day of March, 1991, before me personally came
William H. Weldon, to me known, who, being by me duly sworn, did
depose and say that he resides at 4216 Fairway Circle, Tampa,
Florida; that he is Vice President of WALTER INDUSTRIES, INC.,
one of the corporations described in and which executed the
above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to the said instrument is
such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his
name thereto by like authority.
___________________________
Notary Public
<PAGE>
Draft 2/22/95
Exhibit T3A4
RESTATED
CERTIFICATE OF INCORPORATION
OF
WALTER INDUSTRIES, INC.
WALTER INDUSTRIES, INC., a corporation organized and
existing under and by virtue of the General Corporation Law of
the State of Delaware (hereinafter called the "Corporation"),
DOES HEREBY CERTIFY THAT:
FIRST: The name of the Corporation is WALTER
INDUSTRIES, INC. The Corporation was originally incorporated
under the name "HILLSBOROUGH HOLDINGS CORPORATION", and the date
of filing of the Corporation's original Certificate of
Incorporation with the Secretary of State of Delaware was
September 8, 1987.
SECOND: A petition for reorganization under
Chapter 11 of the Bankruptcy Code, 11 U.S.C. sections 101 et
seq., having been filed on December 27, 1989 in United States
Bankruptcy Court, Middle
District of Florida, Tampa Division, and under the Amended Joint
Plan of Reorganization dated December 9, 1994, as modified on
March 1, 1995 and inter alia, Sections
1123 and 1129 of the United States Bankruptcy Code, 11 U.S.C.
Sections 1123 and 1129, in accordance with Section 303 of the
General Corporation Law of the State of Delaware and pursuant to
the order of said court dated march 2, 1995, this Restated
Certificate of
Incorporation restates and integrates and further amends the
provisions of the Certificate of Incorporation of the
Corporation.
THIRD: The text of the Restated Certificate of
Incorporation as heretofore amended or supplemented is hereby
restated and further amended to read in its entirety as follows:
1. The name of the Corporation is WALTER INDUSTRIES,INC.
2. The registered office and registered agent of the
Corporation is The Corporation Trust Company, 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801.
3. The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of stock that the
Corporation is authorized to issue is Two Hundred Million
(200,000,000) shares of Common Stock, par value $.01 each.
Voting and transfer of the shares of Common Stock held
by The Celotex Corporation (in its capacity as the Celotex
Settlement Fund Recipient under the Second Amended and Restated
Veil Piercing Settlement Agreement ("Celotex")) and its
successors are restricted by Section 3.22(c) of the Amended
Joint Plan of Reorganization, dated as of December 9, 1994, as
modified on March 1, 1995, as the same may be further amended or
supplemented from time to
time (the "Consensual Plan"), and the Stockholder's Agreement,
dated as of March __, 1995, by and between Celotex and the
Corporation.
5. The following provisions are inserted for the
management of the business and for the conduct of the affairs of
the Corporation and for the purpose of creating, defining,
limiting and regulating powers of the Corporation and its
directors and stockholders.
(a) During the Initial Three Year Term (as
defined in Article 8 hereof), Article 1, Section 2 and Article 2
of the bylaws of the Corporation may be altered amended or
repealed by the Board of Directors of the Corporation acting by
the vote of 67% of the whole Board of Directors; otherwise, the
bylaws of the
Corporation may be altered, amended or repealed by the Board of
Directors of the Corporation acting by the vote of majority of
the whole Board of Directors.
(b) Elections of directors need not be by
written ballot unless the bylaws of the Corporation shall so
provide.
6. Except as otherwise provided by the Delaware
General Corporation Law as the same exists or may hereafter be
amended, no director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. Any repeal
or modification of this Article 6 by the stockholders of the
Corporation shall not adversely affect any right or protection
of a director of the Corporation in respect of any act or
omission occurring prior to the time of such repeal or
modification.
7. To the fullest extent permitted by applicable
law, the Corporation shall indemnify any current or former
director,
officer, employee or agent of the Corporation, and such
director's, officer's, employee's or agent's heirs, executors
and administrators, against all expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by
such indemnified party in connection with any threatened,
pending or completed action, suit or proceeding brought by or in
the right of the Corporation, or otherwise, to which such
indemnified party was or is a party or is threatened to be made
a party by reason of such indemnified party's current or former
position with the Corporation or by reason of the fact that such
indemnified party is or was serving, at the request of the
Corporation, as a director, officer, partner, trustee, employee
or agent of another corporation, partnership, joint venture,
trust or other enterprise. The Corporation shall, from time to
time, reimburse or advance to any current or former director or
officer or other person entitled to indemnification hereunder the
funds necessary for payment of defense expenses as incurred.
8. The number of directors which shall constitute
the whole Board of Directors shall be nine (9); provided, that,
until the two Independent Directors are selected as provided
below, the initial Board of Directors (the "Initial Board of
Directors") designated pursuant to Section 5.2 of the Consensual
Plan shall be composed of seven (7) directors. The initial term
of the directors designated pursuant to
the Consensual Plan shall be three years (the "Initial Three
Year Term"), and the term of successors to the initial directors
shall expire simultaneously with the expiration of the Initial
Trhee Year Term; thereafter, the term of each director shall be
one
(1) year. Two of the members of the whole Board of Directors
shall be Independent Directors, who shall be promptly selected
pursuant to Section 5.2 of the Consensual Plan. Three of the
members of the Initial Board of Directors shall be senior
officers of the Corporation, who shall be initially designated
pursuant to Section 5.2 of the Consensual Plan. One of the
members of the Initial Board of Directors shall be a person
designated by Kohlberg Kravis Roberts & Co. ("KKR"). Three of
the members of the Initial Board of Directors shall be persons
designated by Lehman Brothers Inc. ("Lehman"). Any vacancy
created in the Board of Directors in the Initial Three Year Term
shall be filled for the remainder of the term by the entity (or,
in the case of Independent Directors, by the procedure) that
initially designated the director who created such vacancy,
except that in the case of vacancy in the directorships held by
one of the three senior officers of the Corporation, such
vacancy shall be filled by senior officer(s) of the Corporation
designated by the remaining directors of the Corporation then in
office.
Notwithstanding the foregoing provisions of this
Article 8, during the Initial Three Year Term of the Board of
Directors, (i) if, at any time after six months after the
Effective Date of the Consensual Plan, Lehman notifies KKR that
it has determined to transfer to KKR the right to appoint one of
the three directors initially appointed under the Consensual
Plan by Lehman, KKR shall have the right to (a) compel the
director identified by Lehman (from among those designated by
Lehman) to resign his or her position as a member of the Board
of Directors and (b) appoint the successor to such directorship
pursuant to this Article 8; (ii) in the event that at any time
after the Effective Date, Lehman and its Affiliates fail to have
"beneficial" ownership, as that term is used in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended ("Beneficial
Ownership" and its correlative meaning "Beneficially Owned"), of
8% or more of the outstanding common stock of the Corporation
(or its successor by merger, consolidation or otherwise)
(without including any shares held in escrow pursuant to
Section 3.26(c) of the Consensual Plan) (the "Outstanding Common
Stock"), then if KKR and its Affiliates have, at such time,
Beneficial Ownership of 8% or more of the Outstanding Common
Stock, KKR shall have the right to (a) compel one director
identified by Lehman (from among those designated by Lehman) to
resign his or her position as a member of the Board of Directors
and (b) appoint the successor to such directorship pursuant to
this Article 8; (iii) in the event that at any time after the
Effective Date, two members of the Board of Directors are KKR
designees and KKR and its Affiliates fail to have Beneficial
Ownership of 8% or more of the Outstanding Common Stock, and
Lehman and its Affiliates have, at such time, Beneficial
Ownership of 8% or more of the Outstanding Common Stock, then
Lehman shall have the right to (a) compel one director
identified by KKR (from among those designated by KKR) to resign
his or her position as a member of the Board of Directors and
(b) appoint the successor to such directorship pursuant to this
Article 8; and (iv) in the event that at any time after the
Effective Date either Lehman and its Affiliates, or KKR and its
Affiliates, fail to have Beneficial Ownership of 5% or more of
the Outstanding Common Stock, then the directors appointed under
this Article 8 by Lehman, if Lehman and its Affiliates shall
fail to have Beneficial Ownership of 5% or more of the
Outstanding Common Stock, or by KKR, if KKR and its Affiliates
shall fail to have Beneficial Ownership of 5% or more of the
Outstanding Common Stock, shall resign and the remaining
directors of the Corporation shall appoint their successor(s)
for the remainder of the Initial Three Year Term; provided,
however, that notwithstanding the preceding clauses (i) - (iv),
a KKR designee shall at all times be on the Board of Directors
(until the third anniversary of the Effective Date) if, and so
long as, the shares of New Common Stock Beneficially Owned by
KKR and its Affiliates, together with shares held in escrow
under Section 3.26(c) of the Consensual Plan that would be
distributed to KKR or its Affiliates upon release from escrow,
shall together equal 5% or more of the then outstanding common
stock of the Corporation (or its successor by merger,
consolidation or otherwise) (including as part of the then
outstanding common stock of the Corporation, for purposes of
this calculation only, any shares held in escrow pursuant to
Section 3.26(c) of the Consensual Plan). For purposes of this
Article 8, "Affiliate", "Effective Date", "Independent
Director" and "New Common Stock" shall have the meanings set
forth in the Consensual Plan.
9. At all times during the Initial Three Year Term, each
committee of the Board of Directors shall include such number of
Directors designated by KKR and by Lehman so that each of KKR and
Lehman has representation on each such committee proportionate to
the representation it has on the Board of Directors, but in any
event not less than one Director designated by KKR and one
Director designated by Lehman; provided, however, that,
notwithstanding the foregoing, the Tax Oversight Committee shall
consist of such members as provided in Section 1.229 of the
Consensual Plan.
10. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the Corporation
shall not issue nonvoting equity securities to the extent
prohibited by Section 1123 of the United States Bankruptcy Code,
11 U.S.C. Section 1123; provided, however, that this
provision (i)
will have no further force and effect beyond that required by
such Section, (ii) will have such force and effect, if any, only
for so long as such Section is in effect and applicable to the
Corporation and (iii) in all events may be amended or eliminated
in accordance with applicable law as from time to time in
effect.
IN WITNESS WHEREOF, WALTER INDUSTRIES, INC. has caused
this Restated Certificate of Incorporation to be signed by
____________________, its President, and attested by
____________________, its Secretary, this _____ day of
____________, 19__.
ATTEST: WALTER INDUSTRIES, INC.
By:
Name: Name:
Title: Secretary Title: President
<PAGE>
EXHIBIT T3B1
HILLSBOROUGH HOLDINGS CORPORATION
BY-LAWS
ARTICLE I
MEETING OF STOCKHOLDERS
Section 1. Place of Meeting and Notice. Meetings of
the stockholders of the Corporation shall be held at such place
either within or without the State of Delaware as the Board of
Directors may determine.
Section 2. Annual and Special Meetings. Annual
meetings of stockholders shall be held, at a date, time and
place fixed by the Board of Directors and stated in the notice
of meeting, to elect a Board of Directors and to transact such
other business as may properly come before the meeting.
Special meetings of the stockholders may be called by the
President for any purpose and shall be called by the President
or Secretary if directed by the Board of Directors or requested
in writing by the holders of not less than 25% of the
outstanding shares of the capital stock of the Corporation.
Each such stockholder request shall state the purpose of the
proposed meeting.
Section 3. Notice. Except as otherwise provided by
law, at least 10 and not more than 60 days before each meeting
of stockholders, written notice of the time, date and place of
the meeting, and, in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be given to
each stockholder.
Section 4. Quorum. At any meeting of stockholders,
the holders of record, present in person or by proxy, of a
majority of the Corporation's issued and outstanding shares of
capital stock shall constitute a quorum for the transaction of
business, except as otherwise provided by law. In the absence
of a quorum, any officer entitled to preside at or to act as
secretary of the meeting shall have power to adjourn the
meeting from time to time until a quorum is present.
Section 5. Voting. Except as otherwise provided by
law, all matters submitted to a meeting of stockholders shall
be decided by vote of the holders of record, present in person
or by proxy, of a majority of the Corporation's issued and
outstanding shares of capital stock.
<PAGE>
ARTICLE II
DIRECTORS
Section 1. Number, Election and Removal of
Directors. The number of Directors that shall constitute the
Board of Directors shall be not less than one nor more than
fifteen. The first Board of Directors shall consist of two
Directors. Thereafter, within the limits specified above, the
number of Directors shall be determined by the Board of
Directors or by the stockholders. The Directors shall be
elected by the stockholders at their annual meeting. Vacancies
and newly created directorships resulting from any increase in
the number of Directors may be filled by a majority of the
Directors then in office, although less than a quorum, or by
the sole remaining Director or by the stockholders. A Director
may be removed with or without cause by the stockholders.
Section 2. Meetings. Regular meetings of the Board
of Directors shall be held at such times and places as may from
time to time be fixed by the Board of Directors or as may be
specified in a notice of meeting. Special meetings of the
Board of Directors may be held at any time upon the call of the
President and shall be called by the President or Secretary if
directed by the Board of Directors. Telegraphic or written
notice of each special meeting of the Board of Directors shall
be sent to each Director not less than twenty-four hours before
such meeting. A meeting of the Board of Directors may be held
without notice immediately after the annual meeting of the
stockholder. Notice need not be given of regular meetings of
the Board of Directors.
Section 3. Quorum. One-third of the total number of
Directors shall constitute a quorum for the transaction of
business. If a quorum is not present at any meeting of the
Board of Directors, the Directors present may adjourn the
meeting from time to time, without notice other than
announcement at the meeting, until such a quorum is present.
Except as otherwise provided by law, the Certificate of
Incorporation of the Corporation or these By-Laws, the act of a
majority of the Directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors.
Section 4. Committees of Directors. The Board of
Directors may, by resolution adopted by the affirmative vote of
a majority of the total number of Directors designate one or
more committees, including without limitation an Executive
Committee, to have and exercise such power and authority as the
Board of Directors shall specify. In the absence or
disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified
from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another Director to act at the
meeting in place of any such absent or disqualified member.
ARTICLE III
OFFICERS
The officers of the Corporation shall consist of a
President, a Secretary, a Treasurer and such other additional
officers with such titles as the Board of Directors shall
determine, all of whom shall be chosen by and shall serve at
the pleasure of the Board of Directors. Such officers shall
have the usual powers and shall perform all the usual duties
incident to their respective offices. All officers shall be
subject to the supervision and direction of the Board of
Directors. The authority, duties or responsibilities of any
officer of the Corporation may be suspended by the President
with or without cause. Any officer elected or appointed by the
Board of Directors may be removed by the Board of Directors
with or without cause.
ARTICLE IV
INDEMNIFICATION
To the fullest extent permitted by the Delaware
General Corporation Law, the Corporation shall indemnify
(including the advancement of defense expenses as incurred) any
current or former Director or officer of the Corporation and
may, at the discretion of the Board of Directors, indemnify
(including the advancement of defense expenses as incurred) any
current or former employee or agent of the Corporation against
all expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with any
threatened, pending or completed action, suit or proceeding
brought by or in the right of the Corporation or otherwise, to
which he was or is a party or is threatened to be made a party
by reason of his current or former position with the
Corporation or by reason of the fact that he is or was serving,
at the request of the Corporation, as a director, officer,
partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
ARTICLE V
GENERAL PROVISIONS
Section 1. Notices. Whenever any statute, the
Certificate of Incorporation or these By-Laws require notice to
be given to any Director or stockholder, such notice shall be
deemed to have been given when it is sent by telegram, telex or
telecopy or hand delivered or deposited in the United States
mail, as the case may be. A waiver of such notice in writing
signed by the person or persons entitled thereto, whether
before or after the time stated in such notice, shall be
equivalent to the giving of such notice. Attendance of a
Director at a meeting shall constitute a waiver of notice of
such meeting except where a Director attends a meeting for the
express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
Section 2. Fiscal Year. The fiscal year of the
Corporation shall be fixed by the Board of Directors.
<PAGE>
Exhibit T3B2
Draft 2/27/95
WALTER INDUSTRIES, INC.
AMENDED AND RESTATED
BY-LAWS
ARTICLE I
MEETING OF STOCKHOLDERS
Section 1. Place of Meeting and Notice. Meetings of
the stockholders of the Corporation shall be held at such place
either within or without the State of Delaware as the Board of
Directors may determine.
Section 2. Annual and Special Meetings. Annual
meetings of stockholders shall be held, at a date, time and
place fixed by the Board of Directors and stated in the notice
of meeting, to elect a Board of Directors (except during the
initial three year term (the "Initial Three Year Term") of the
Board of Directors elected pursuant to Section 5.2 of the
Amended Joint Plan of Reorganization, dated as of December 9,
1994 (the "Consensual Plan")) and to transact such other
business as may properly come before the meeting. Special
meetings of the stockholders may be called by the President for
any purpose and shall be called by the President or Secretary if
directed by a majority of Directors or requested in writing by
the holders of not less than 25% of the outstanding shares of
the capital stock of the Corporation. Each such stockholder
request shall state the purpose of the proposed meeting.
Section 3. Notice. Except as otherwise provided by
law, at least 10 and not more than 60 days before each meeting
of stockholders, written notice of the time, date and place of
the meeting, and, in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be given to
each stockholder.
Section 4. Quorum. At any meeting of stockholders,
the holders of record, present in person or by proxy, of a
majority of the Corporation's issued and outstanding shares of
capital stock shall constitute a quorum for the transaction of
business, except as otherwise provided by law. In the absence
of a quorum, any officer entitled to preside at or to act as
secretary of the meeting shall have power to adjourn the meeting
from time to time until a quorum is present.
Effective ____________, 1995
Section 5. Voting. Except as otherwise provided by
law, all matters submitted to a meeting of stockholders shall be
decided by vote of the holders of record, present in person or
by proxy, of a majority of the Corporation's issued and
outstanding shares of capital stock present at such meeting, in
person or by proxy.
ARTICLE II
DIRECTORS
Section 1. Number, Election and Removal of Directors.
The number of Directors that shall constitute the Board of
Directors shall be fixed by the Certificate of Incorporation.
The Directors shall be elected pursuant to the Certificate of
Incorporation for the Initial Three Year Term and thereafter by
the stockholders at the annual meeting of the stockholders.
Vacancies may be filled pursuant to the Certificate of
Incorporation during the Initial Three Year Term and thereafter
vacancies and newly created directorships resulting from any
increase in the number of Directors may be filled by a majority
of the Directors then in office, although less than a quorum, or
by the sole remaining Director or by the stockholders. A
Director may be removed by the stockholders during the Initial
Three Year Term in accordance with applicable law or as expressly
provided for in the Certificate of
Incorporation and thereafter may be removed in accordance with
applicable law.
Section 2. Meetings. Regular meetings of the Board
of Directors shall be held at such times and places as may from
time to time be fixed by the Board of Directors or as may be
specified in a notice of meeting. Special meetings of the Board
of Directors may be held at any time upon the call of the
President and shall be called by the President or Secretary if
directed by the Board of Directors. Telegraphic or written
notice of each special meeting of the Board of Directors shall
be sent to each Director not less than twenty-four hours before
such meeting. A meeting of the Board of Directors may be held
without notice immediately after the annual meeting of the
stockholders. Notice need not be given of regular meetings of
the Board of Directors.
Section 3. Quorum. A majority of the whole Board of
Directors shall constitute a quorum for the transaction of
business. If a quorum is not present at any meeting of the
Board of Directors, the Directors present may adjourn the
meeting from time to time, without notice other than
announcement at the meeting, until such a quorum is present.
Except as otherwise provided by law, the Certificate of
Incorporation of the Corporation or these By-Laws, the act of a
majority of the Directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors.
Section 4. Committees of Directors. The Board of
Directors may, by resolution adopted by the affirmative vote of
a majority of the whole Board of Directors designate one or
more committees, including without limitation an Executive
Committee, to have and exercise such power and authority as the
Board of Directors shall specify. In the absence or
disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from
voting, whether or not such member or members constitute a
quorum, may unanimously appoint another Director to act at the
meeting in place of any such absent or disqualified member. At
all times during the Initial Three Year Term, each committee of
the Board of Directors shall include such number of Directors
designated by Kohlberg Kravis Roberts & Co. ("KKR") and by
Lehman Brothers Inc. ("Lehman") so that each of KKR and Lehman
has representation on each such committee proportionate to the
representation it has on the Board of Directors, but in any
event not less than one Director designated by KKR and one
Director designated by Lehman; provided, however, that,
notwithstanding the foregoing, the Tax Oversight Committee shall
consist of such members as provided in Section 1.229 of the
Consensual Plan.
Section 5. Compensation. Each Director who is not an
employee of the Corporation or any of its subsidiaries, in
consideration of his or her service as such, shall be entitled
to receive from the Corporation such amount per annum or such
fees for attendance at Directors' meetings, or both, as the
Board may from time to time determine, together with
reimbursement for the reasonable out-of-pocket expenses, if any,
incurred by such Director in connection with the performance of
his or her duties. Each Director who is not an employee of the
Corporation or any of its subsidiaries who shall serve as a
member of
any committee of Directors in consideration of serving as such
shall be entitled to such additional amount per annum or such
fees for attendance at committee meetings, or both, as the Board
may from time to time determine, together with reimbursement for
the reasonable out-of-pocket expenses, if any, incurred by such
Director in the performance of his or her duties. Nothing
contained in this Section 5 shall preclude any Director from
serving the Corporation or its subsidiaries in any other
capacity and receiving proper compensation therefor.
ARTICLE III
OFFICERS
The officers of the Corporation shall consist of a
President, a Secretary, a Treasurer and such other additional
officers with such titles as the Board of Directors shall
determine, all of whom shall be chosen by and shall serve at the
pleasure of the Board of Directors. Such officers shall have
the usual powers and shall perform all the usual duties incident
to their respective offices. All officers shall be subject to
the supervision and direction of the Board of Directors. The
authority, duties or responsibilities of any officer of the
Corporation may be suspended by the President with or without
cause. Any officer elected or appointed by the Board of
Directors may be removed by the Board of Directors with or
without cause.
ARTICLE IV
INDEMNIFICATION
To the fullest extent permitted by applicable law, the
Corporation shall indemnify (including the advancement of
defense expenses as incurred) any current or former Director,
officer, employee or agent of the Corporation and such
director's, officer's, employee's or agent's heirs, executors
and administrators against all expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by
such indemnified party in connection with any threatened,
pending or completed action, suit or proceeding brought by or in
the right of the Corporation, or otherwise, to which such
indemnified party was or is a party or is threatened to be made
a party by reason of such indemnified party's current or former
position with the Corporation or by reason of the fact that such
indemnified party is or was serving, at the request of the
Corporation, as a director, officer, partner, trustee, employee
or agent of another corporation, partnership, joint venture,
trust or other enterprise. The Corporation shall, from time to
time, reimburse or advance to any current or former director or
officer or other person entitled to indemnification hereunder the
funds necessary for payment of defense expenses as incurred.
ARTICLE V
GENERAL PROVISIONS
Section 1. Notices. Whenever any statute, the
Certificate of Incorporation or these By-Laws require notice to
be given to any Director, such notice shall be
deemed to have been given when it is sent by telegram, telex or
telecopy or hand delivered or deposited in the United States
mail, as the case may be. A waiver of such notice in writing
signed by the person or persons entitled thereto, whether before
or after the time stated in such notice, shall be equivalent to
the giving of such notice. Attendance of a Director at a
meeting shall constitute a waiver of notice of such meeting
except where a Director attends a meeting for the express
purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened.
Section 2. Fiscal Year. The fiscal year of the
Corporation shall be fixed by the Board of Directors.
<PAGE>
Exhibit T3C
[DRAFT - 03/03/95]
WALTER INDUSTRIES, INC.
____________________
$490,000,000
SENIOR NOTES DUE 2000
Series B and Series B-1
____________________
INDENTURE
Dated as of March __, 1995
____________________
UNITED STATES TRUST COMPANY OF NEW YORK
Trustee
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1). . . . . . . . . . . . . . . . . . . 7.10
(a)(2). . . . . . . . . . . . . . . . . . . 7.10
(a)(3). . . . . . . . . . . . . . . . . . . N.A.
(a)(4). . . . . . . . . . . . . . . . . . . N.A.
(a)(5). . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . 7,08, 7.10
(c) . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . 11.03
313(a) . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1). . . . . . . . . . . . . . . . . . . N.A.
(b)(2). . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . 7.06, 11.02
(d) . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . 4.03, 4.04, 11.02
(b) . . . . . . . . . . . . . . . . . . . . 10.02
(c)(1). . . . . . . . . . . . . . . . . . . 11.04
(c)(2). . . . . . . . . . . . . . . . . . . 11.04
(c)(3). . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . 10.02
(e) . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . 7.05, 11.02
(c) . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence). . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . 6.04
(a)(2). . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . 2.12
317(a)(1). . . . . . . . . . . . . . . . . . . 6.08
(a)(2). . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . 11.01
(b) . . . . . . . . . . . . . . . . . . . . N.A.
(c) . . . . . . . . . . . . . . . . . . . . 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions . . . . . . . . . . . . . . 21
Section 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . . 21
Section 1.04. Rules of Construction . . . . . . . . . . . . 22
ARTICLE TWO
THE NOTES
Section 2.01. Form and Dating . . . . . . . . . . . . . . . 22
Section 2.02. Execution and Authentication. . . . . . . . . 23
Section 2.03. Registrar and Paying Agent. . . . . . . . . . 24
Section 2.04. Paying Agent to Hold Money in Trust . . . . . 24
Section 2.05. Holder Lists. . . . . . . . . . . . . . . . . 24
Section 2.06. Transfer and Exchange . . . . . . . . . . . . 25
Section 2.07. Replacement Notes . . . . . . . . . . . . . . 25
Section 2.08. Outstanding Notes . . . . . . . . . . . . . . 26
Section 2.09. Treasury Notes. . . . . . . . . . . . . . . . 27
Section 2.10. Temporary Notes . . . . . . . . . . . . . . . 26
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . 27
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . 27
Section 2.13. Exchange Offer. . . . . . . . . . . . . . . 28
ARTICLE THREE
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee. . . . . . . . . . . . . . 28
Section 3.02. Selection of Notes to Be Redeemed . . . . . . 29
Section 3.03. Notice of Redemption. . . . . . . . . . . . . 29
Section 3.04. Effect of Notice of Redemption. . . . . . . . 30
Section 3.05. Deposit of Redemption Price . . . . . . . . . 30
Section 3.06. Notes Redeemed in Part. . . . . . . . . . . . 31
Section 3.07. Optional Redemption . . . . . . . . . . . . . 31
Section 3.08. Mandatory Redemption. . . . . . . . . . . . . 31
Section 3.09. Offers to Purchase By Application
of Excess Proceeds. . . . . . . . . . . . . 31
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Notes. . . . . . . . . . . . . . . 33
Section 4.02. Maintenance of Office or Agency . . . . . . . 34
Section 4.03. Reports . . . . . . . . . . . . . . . . . . . 34
Section 4.04. Compliance Certificate. . . . . . . . . . . . 35
Section 4.05. Taxes . . . . . . . . . . . . . . . . . . . . 36
Section 4.06. Stay, Extension and Usury Laws. . . . . . . . 37
Section 4.07. Corporate Existence . . . . . . . . . . . . . 37
Section 4.08. Change of Control . . . . . . . . . . . . . . 37
Section 4.09. Limitation on Asset Sales . . . . . . . . . . 39
Section 4.10. Limitation on Restricted Payments . . . . . . 41
Section 4.11. Limitation on Incurrence of Indebtedness;
Issuance of Capital Stock . . . . . . . . . 43
Section 4.12. Limitation on Liens . . . . . . . . . . . . . 44
Section 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries . . . . 44
Section 4.14. Limitation on Transactions with
Affiliates. . . . . . . . . . . . . . . . . 45
Section 4.15. Limitation on Sale and Leaseback
Transactions. . . . . . . . . . . . . . . . 46
Section 4.16. Compliance with Laws. . . . . . . . . . . . . 46
Section 4.17. Limitation on Sale of Capital Stock of
Subsidiaries. . . . . . . . . . . . . . . . 47
Section 4.18 Payment for Consents. . . . . . . . . . . . 47
ARTICLE FIVE
SUCCESSORS
Section 5.01. Limitation on Mergers, Consolidations
and Sales of Assets . . . . . . . . . . . . 48
Section 5.02. Successor Corporation Substituted . . . . . . 48
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. Events of Default . . . . . . . . . . . . . . 49
Section 6.02. Acceleration. . . . . . . . . . . . . . . . . 51
Section 6.03. Other Remedies. . . . . . . . . . . . . . . . 51
Section 6.04. Waiver of Past Defaults . . . . . . . . . . . 52
Section 6.05. Control by Majority . . . . . . . . . . . . . 52
Section 6.06. Limitation on Suits . . . . . . . . . . . . . 52
Section 6.07. Rights of Holders of Notes to
Receive Payment . . . . . . . . . . . . . . 53
Section 6.08. Collection Suit by Trustee. . . . . . . . . . 53
Section 6.09. Trustee May File Proofs of Claim. . . . . . . 53
Section 6.10. Priorities. . . . . . . . . . . . . . . . . . 54
Section 6.11. Undertaking for Costs . . . . . . . . . . . . 54
Section 6.12. Event of Default from Willful Action. . . . . 55
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee . . . . . . . . . . . . . . 55
Section 7.02. Rights of Trustee . . . . . . . . . . . . . . 57
Section 7.03. Individual Rights of Trustee. . . . . . . . . 57
Section 7.04. Trustee's Disclaimer. . . . . . . . . . . . . 57
Section 7.05. Notice of Defaults. . . . . . . . . . . . . . 58
Section 7.06. Reports by Trustee to Holders of the
Notes . . . . . . . . . . . . . . . . . . . 58
Section 7.07. Compensation and Indemnity. . . . . . . . . . 58
Section 7.08. Replacement of Trustee. . . . . . . . . . . . 59
Section 7.09. Successor Trustee by Merger, etc. . . . . . . 60
Section 7.10. Eligibility; Disqualification . . . . . . . . 61
Section 7.11. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . 61
ARTICLE EIGHT
DISCHARGE OF INDENTURE
Section 8.01. Discharge of Indenture; Option to Effect
Legal Defeasance or Covenant Defeasance . . 61
Section 8.02. Legal Defeasance and Discharge. . . . . . . . 62
Section 8.03. Covenant Defeasance . . . . . . . . . . . . . 62
Section 8.04. Conditions to Legal or Covenant Defeasance. . 63
Section 8.05. Deposited Money and Government Securities
to be Held in Trust; Other Miscellaneous
Provisions. . . . . . . . . . . . . . . . . 65
Section 8.06. Repayment to Company. . . . . . . . . . . . . 66
Section 8.07. Reinstatement . . . . . . . . . . . . . . . . 66
ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes . . . . . 67
Section 9.02. With Consent of Holders of Notes. . . . . . . 68
Section 9.03. Compliance with Trust Indenture Act . . . . . 70
Section 9.04. Revocation and Effect of Consents . . . . . . 70
Section 9.05. Notation on or Exchange of Notes. . . . . . . 70
Section 9.06. Trustee to Sign Amendments, etc.. . . . . . . 70
ARTICLE TEN
SECURITY
Section 10.01. Pledge Agreement . . . . . . . . . . . . . . 71
Section 10.02. Recording, Etc. . . . . . . . . . . . . . . . 71
Section 10.03. Suits to Protect the Pledged Shares. . . . . 73
Section 10.04. Trustee Duties . . . . . . . . . . . . . . . 74
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls. . . . . . . . . 74
Section 11.02. Notices . . . . . . . . . . . . . . . . . . . 74
Section 11.03. Communication by Holders of Notes with
Other Holders of Notes. . . . . . . . . . . 75
Section 11.04. Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . 76
Section 11.05. Statements Required in Certificate or
Opinion . . . . . . . . . . . . . . . . . . 76
Section 11.06. Rules by Trustee and Agents . . . . . . . . . 77
Section 11.07. No Personal Liability of Directors, Officers,
Employees and Stockholders. . . . . . . . . 77
Section 11.08. Governing Law . . . . . . . . . . . . . . . . 77
Section 11.09. No Adverse Interpretation of Other
Agreements. . . . . . . . . . . . . . . . . 77
Section 11.10. Successors. . . . . . . . . . . . . . . . . . 77
Section 11.11. Severability. . . . . . . . . . . . . . . . . 77
Section 11.12. Counterpart Originals . . . . . . . . . . . . 78
Section 11.13. Table of Contents, Headings, etc. . . . . . . 78
Section 11.14. Legal Holiday . . . . . . . . . . . . . . . . 78
EXHIBITS
Exhibit A FORM OF SERIES B AND SERIES B-1 NOTES
Exhibit B FORM OF PLEDGE AGREEMENT
Exhibit C FORM OF SUBSIDIARY PLEDGE AGREEMENT
Exhibit D SUBORDINATION PROVISIONS FOR SUBORDINATED
INDEBTEDNESS
ANNEX A
<PAGE>
INDENTURE dated as of March __, 1995 between WALTER
INDUSTRIES, INC., a Delaware corporation (the "Company"), and
United States Trust Company of New York, a New York corporation,
as trustee (the "Trustee").
The Company and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of
the Holders of the Company's Series B Senior Notes due 2000 (the
"Series B Notes") and the Company's Series B-1 Senior Notes due
2000 (the "Series B-1 Notes" and, together with the Series B
Notes, the "Notes"):
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Accountants' Certificate" means a certificate from
Price Waterhouse or from other independent certified public
accountants of national standing designated by the Company.
"Acquired Indebtedness" means Indebtedness of a Person
existing at the time such Person becomes a Subsidiary of the
Company (or such Person is merged with the Company or one of its
Subsidiaries) or assumed in connection with the acquisition of
assets from any such Person and not incurred in connection with,
or in the contemplation of, such Person becoming a Subsidiary or
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" (including,
with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as used with respect to
any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of
voting securities, by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or
co-registrar of the Notes.
"Asset Sale" means any sale, lease, transfer or other
disposition or series of related sales, leases, transfers or
other dispositions, including, without limitation, by merger or
consolidation, pursuant to any sale and leaseback transaction
(other than to the extent included in clause (vii) of the
definition of Permitted Indebtedness) or by exchange of assets
and whether by operation of law or otherwise (other than sales
in the ordinary course of business consistent with past
practice, including, without limitation, sales of mortgages by
Jim Walter Homes, Inc. to Mid-State Homes, Inc. in the ordinary
course of business consistent with past practice), made by the
Company or any of its Subsidiaries to any Person other than the
Company or one of its Wholly Owned Subsidiaries of any assets of
the Company or any of its Subsidiaries including, without
limitation, assets consisting of any Capital Stock or other
securities held by the Company or any of its Subsidiaries, to
the extent that any such sale, lease, transfer, or other
disposition or series of related sales, leases, transfers or
other dispositions relates to properties or assets having a Fair
Market Value in excess of $5 million or results in net proceeds
in excess of $5 million.
"Attributable Debt" means, in respect of a sale and
leaseback transaction, at the time of determination, the greater
of (a) the Fair Market Value of the property subject to such
transaction and (b) the present value (discounted at the actual
rate of interest implicit in such transaction) of the obligation
of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or
may, at the option of the lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any
similar federal, state or foreign law for the relief of debtors.
"Bank Revolving Credit Facility" means the line of
credit extended to the Company and certain of its Subsidiaries
pursuant to an agreement dated as of February 27, 1995, among
the Company, certain of its Subsidiaries, the "Lenders" and
"Issuing Banks" (each as defined therein) now or hereafter
parties thereof, The First National Bank of Boston, as a
Co-Agent thereunder, Citicorp USA, Inc., Merrill Lynch Capital
Corporation and NationsBank of Florida, N.A., as the Co-
Administrative Agents thereunder, and Citicorp USA, Inc., as the
Facilities Manager and the Collateral Agent thereunder, and any
agreement governing Indebtedness incurred to refinance or refund
the entirety of the borrowings and commitments then outstanding
or permitted to be outstanding under the Bank Revolving Credit
Facility, in each case, together with any notes, guarantees,
collateral documents, hedge agreements, instruments and
agreements executed from time to time in connection therewith.
"Board of Directors" means the Board of Directors of
the Company, or any authorized committee of the Board of
Directors.
"Business Day" means any day other than a Legal
Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability
in respect of a capital lease that would at such time be so
required to be capitalized on the balance sheet in accordance
with GAAP.
"Capital Stock" means, with respect to any Person, any
and all shares, interests, participations or other equivalents
(however designated) of such Person's capital stock whether now
outstanding or issued after the Issue Date, including, without
limitation, all Preferred Stock, and any warrants, options or
rights to purchase any of the foregoing.
"Cash Equivalents" means (i) United States dollars,
(ii) securities issued directly or fully Guaranteed or insured
by the United States government or any agency or instrumentality
thereof having maturities of not more than six months from the
date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits,
in each case with any domestic commercial bank having capital
and surplus in excess of $500 million and a Thomson Watch Rating
of "B" or better, (iv) repurchase obligations with a term of not
more than seven days for underlying securities of the types
described in clauses (ii) and (iii) entered into with any
financial institution meeting the qualifications specified in
clause (iii) above, (v) any security maturing not more than six
months after the date of acquisition, backed by standby or
direct-pay letters of credit issued by a bank meeting the
qualifications described in clause (iii) above, (vi) any
security maturing not more than six months after the date of
acquisition, issued directly or fully Guaranteed or insured by
any state, commonwealth or territory of the United States, or by
any political subdivision thereof, and rated at least "A" by
either Standard & Poor's Corporation or Moody's Investors
Service Inc. or rated in at least an equivalent rating category
of another nationally recognized securities rating agency and
(vii) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Corporation
and in each case maturing within six months after the date of
acquisition.
"Change of Control" means (i) any sale, lease or other
transfer of all or substantially all of the assets of the
Company to any Person (other than a Wholly Owned Subsidiary of
the Company) in one transaction or a series of related
transactions; (ii) the Company consolidates or merges with
another Person pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or
exchanged for cash, securities or other property, other than any
such transaction where (a) no Disqualified Stock is issued and
(b) holders of Voting Stock of the Company immediately prior to
such transaction beneficially own (as defined in Rules 13d-3 and
13d-5 under the Exchange Act as in effect on the date of this
Indenture), directly or indirectly, not less than a majority of
the Voting Stock of the surviving corporation of such merger or
consolidation outstanding immediately after such transaction;
(iii) a Person or group (other than any Permitted Holder)
becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act as in effect on the date of this
Indenture) of Voting Stock of the Company representing more than
50% of the voting power of all Voting Stock of the Company then
outstanding; (iv) Continuing Directors cease to constitute at
least a majority of the Board of Directors of the Company;
provided, however, that this clause (iv) shall not be applicable
if the Continuing Directors do not constitute at least a
majority of the Board of Directors as a result of the election
of directors nominated by any of the Permitted Holders; or (v)
the stockholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company.
"Commodity Agreement" means any commodity purchase
agreement, commodity swap agreement or other similar agreement
of any Person designed to protect such Person or any of its
Subsidiaries against fluctuations in commodity values.
"Company" means the party named as such above, until a
successor replaces such Person in accordance with the terms of
this Indenture, and thereafter means such successor.
"Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board,
President or any of its Vice Presidents, and by its Treasurer,
any of its Assistant Treasurers, its Secretary or any of its
Assistant Secretaries and delivered to the Trustee.
"Consensual Plan" means the Amended Joint Plan of
Reorganization dated as of December 9, 1994, as modified on
March 1, 1995, adopted with respect to the Company.
"Consolidated Depreciation and Amortization Expense"
of the Company and its Subsidiaries means, for any period for
which the determination thereof is to be made, the depreciation
and amortization expense (including, without limitation,
amortization of goodwill, other intangibles, debt discount and
debt issue costs) of the Company and such Subsidiaries for such
period, determined on a consolidated basis in accordance with
GAAP.
"Consolidated EBITDA" means, for any period, on a
consolidated basis for the Company and its Subsidiaries, the sum
(without duplication) for such period of (i) Consolidated Net
Income plus, to the extent deducted in determining Consolidated
Net Income, each of (ii) Consolidated Income Tax Expense, (iii)
Consolidated Depreciation and Amortization Expense, (iv)
Consolidated Fixed Charges and (v) Consolidated Post Retirement
Benefits Other Than Pensions.
"Consolidated Fixed Charges" means, for the Company
and its Subsidiaries, for any period, the sum (without
duplication) of (i) the aggregate amount of interest, whether
expensed or capitalized, paid, accrued or scheduled to be paid
or accrued during such period (including any non-cash interest
payments or accruals, the interest portion of Capital Lease
Obligations, all amortization of original issue discount, net
cash costs pursuant to Interest Rate Agreements, Currency
Agreements and Commodity Agreements (including amortization of
fees) and the interest component of any deferred payment
obligation) of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP and (ii) dividends in
respect of Preferred Stock and Disqualified Stock.
"Consolidated Income Tax Expense" of the Company and
its Subsidiaries means, for any period for which the
determination thereof is to be made, the aggregate of the income
tax expense of the Company and such Subsidiaries for such
period, determined on a consolidated basis in accordance with
GAAP; provided, however, that amounts payable for any period by
Mid-State Homes, Inc. and its Subsidiaries or any other member
of the Company's consolidated group for tax purposes which is
not a Subsidiary of the Company, pursuant to Section 4.05(b),
shall be excluded from the foregoing to the extent excluded in
determining Consolidated Net Income of the Company and its
Subsidiaries.
"Consolidated Net Income" means, with respect to any
Person for any period, the aggregate of the Net Income of such
Person and its Subsidiaries for such period, on a consolidated
basis, determined in accordance with GAAP; provided, that (i)
the Net Income of any Person that is not a Subsidiary or that is
accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or
distributions paid in cash to the Person whose Consolidated Net
Income is being determined or a Wholly Owned Subsidiary thereof,
(ii) the Net Income of any Subsidiary that is subject to any
Payment Restriction shall be excluded to the extent such Payment
Restriction would limit the amount that otherwise could be paid
to, or received by, the Person whose Consolidated Net Income is
being determined or a Wholly Owned Subsidiary of such Person not
subject to any Payment Restriction, (iii) the Net Income of any
Person acquired by the Person whose Consolidated Net Income is
being determined or a Subsidiary thereof in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded and (iv) the cumulative effect of
a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any
Person as of any date, the sum of (i) the consolidated equity of
the common stockholders of such Person and its consolidated
Subsidiaries as of such date plus (ii) the respective amounts
reported on such Person's balance sheet as of such date with
respect to any series of Preferred Stock (other than
Disqualified Stock) that by its terms is not entitled to the
payment of dividends unless such dividends may be declared and
paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such Preferred Stock,
less (x) all write-ups (other than write-ups resulting from
foreign currency translations and write-ups of tangible assets
of a going concern business made within 12 months after the
acquisition of such business) subsequent to the Issue Date in
the book value of any asset owned by such Person or a
consolidated Subsidiary of such Person, (y) all Investments as
of such date in unconsolidated Subsidiaries and in Persons that
are not Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense
and unamortized deferred charges as of such date, all of the
foregoing determined in accordance with GAAP.
"Consolidated Post Retirement Benefits Other Than
Pensions" means the noncash portion of retirement benefits other
than pensions as defined in FASB Statements Numbers 88, 106 and
112, determined in accordance with GAAP.
"Continuing Directors" means, with respect to the
Company, a director who either was a member of the Board of
Directors of the Company on the Issue Date or who became a
director of the Company subsequent to such date and whose
election, or nomination for election by the Company's
stockholders, was duly approved by a majority of the Continuing
Directors then on the Board of Directors of the Company, either
by a specific vote or by approval of the proxy statement issued
by the Company on behalf of the entire Board of Directors of the
Company in which such individual is named as nominee for
director.
"Corporate Trust Office of the Trustee" shall be at
the address of the Trustee specified in Section 11.02 hereof or
such other address as to which the Trustee may give written
notice to the Company.
"Currency Agreement" means any foreign exchange
contract, currency swap agreement or other similar agreement or
arrangement of any Person designed to protect such Person or any
of its Subsidiaries against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any
Bankruptcy Law.
"Default" means any event that is or with the passage
of time or the giving of notice or both would be an Event of
Default.
"Disqualified Stock" means any Capital Stock of the
Company or any Subsidiary of the Company which, by its terms (or
by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event or
with the passage of time, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is
redeemable at the option of the holder thereof, in whole or in
part, on or prior to the maturity date of the Notes, or which is
exchangeable or convertible (whether at the option of the
Company or the holder thereof or upon the happening of any
event) into debt securities of the Company or any Subsidiary of
the Company, except to the extent and only to the extent that
such exchange or conversion rights cannot be exercised prior to
the maturity of the Notes.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Existing Indebtedness" means Indebtedness of the
Company and its Subsidiaries outstanding on the Issue Date,
until such Indebtedness is repaid.
"Exchange Offer" means the offer that may be made by
the Company pursuant to the Registration Rights Agreement to
exchange Series B Notes for Series B-1 Notes.
"Fair Market Value" means with respect to any asset,
property or Capital Stock, the price which could be negotiated
in an arm's length, free market transaction between a willing
seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. "Fair
Market Value" shall be determined by the Board of Directors of
the Company acting in good faith and shall be evidenced by a
duly and properly adopted resolution of the Board of Directors
set forth in an Officers' Certificate delivered to the Trustee.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of
the accounting profession, which are in effect from time to
time.
"Global Note" means the temporary global certificate
initially issued to the Note Custodian representing all the
Series B Notes initially issued pursuant to the Consensual Plan.
"Government Securities" means securities which are (i)
direct obligations of the United States of America for the
payment of which the full faith and credit of the United States
is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the
United States of America the payment of which is unconditionally
Guaranteed as a full faith and credit obligation by the United
States of America which, in either case, are not callable or
redeemable at the option of the issuer thereof.
"Guarantee" means a guarantee (other than by
endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner
(including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part
of any Indebtedness or other liabilities.
"Holder" means the registered owner of the Notes as
reflected on the books of the Company.
"incur" means, with respect to any Indebtedness or
other obligation of any Person, to create, issue, incur (by
conversion, exchange or otherwise), assume, Guarantee (including
the Guarantee of the Indebtedness of a Subsidiary or other
Affiliate) or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required
pursuant to GAAP or otherwise, of any such Indebtedness or other
obligation on the balance sheet of such Person (and "incurrence,
incurred," "incurrable" and "incurring" shall have meanings
correlative to the foregoing), provided that the accrual of
interest (whether such interest is payable in cash or in kind)
and the accretion of original issue discount shall not be deemed
an incurrence of Indebtedness, provided, further that (a) any
Indebtedness or Disqualified Stock of a Person existing at the
time such Person becomes (after the Issue Date) a Subsidiary
(whether by merger, consolidation, acquisition or otherwise) of
the Company shall be deemed to be incurred or issued for
purposes of clause (b) of Section 4.11, as the case may be, by
such Subsidiary at the time it becomes a Subsidiary of the
Company and (b) any amendment, modification or waiver of any
document pursuant to which Indebtedness was previously incurred
shall be deemed to be an incurrence of Indebtedness unless such
amendment, modification or waiver does not (i) increase the
principal or premium thereof or interest rate thereon (including
by way of original issue discount), (ii) change to an earlier
date the stated maturity thereof or the date of any scheduled or
required principal payment thereon or the time or circumstances
under which such Indebtedness may or shall be redeemed or the
Weighted Average Life to Maturity thereof, (iii) if such
Indebtedness is subordinated to the Notes, modify or affect, in
any manner adverse to the holders, such subordination, (iv) if
the Company is the obligor thereon, provide that a Subsidiary of
the Company not already an obligor thereon shall be an obligor
thereon or (v) violate, or cause the Indebtedness to violate,
the provisions of Sections 4.12 or 4.13.
"Indebtedness" means, with respect to any Person,
without duplication, (i) all liabilities, contingent or
otherwise, of such Person (a) for borrowed money (whether or not
the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (b) evidenced by bonds,
notes, debentures, drafts accepted or similar instruments or
letters of credit or representing the balance deferred and
unpaid of the purchase price of any property or (c) for the
payment of money relating to a Capital Lease Obligation; (ii)
obligations under reimbursement agreements of such Person with
respect to letters of credit; (iii) obligations of such Person
with respect to Interest Rate Agreements, Currency Agreements or
Commodity Agreements; (iv) all liabilities of others of the kind
described in the preceding clause (i), (ii) or (iii) that
(a) such Person has Guaranteed, (b) have been incurred by a
partnership in which it is a general partner (to the extent such
Person is liable, contingently or otherwise therefor) or (c) are
otherwise its legal liability (other than endorsements for
collection in the ordinary course of business); and (v) all
obligations of others secured by a Lien to which any of the
properties or assets (including, without limitation, leasehold
interests and any other tangible or intangible property rights)
of such Person are subject, whether or not the obligations
secured thereby shall have been assumed by such Person or shall
otherwise be such Person's legal liability; provided, however,
that notwithstanding anything in the foregoing that may be
deemed to be to the contrary, Indebtedness shall not include (i)
liabilities arising from agreements providing for
indemnification or adjustment of purchase price or from
Guarantees securing any obligations of the Company or any
Subsidiary pursuant to such agreements, incurred or assumed in
connection with the disposition of any business, assets or
Subsidiary of the Company (other than Guarantees or similar
credit support by the Company or any Subsidiary of Indebtedness
incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such
acquisition or Indebtedness relating to any sale and leaseback
transaction), provided that the maximum aggregate liability in
respect of the foregoing permitted pursuant to this clause (i)
shall at no time exceed the net proceeds actually received from
the sale of such business, assets or Subsidiary; (ii) any Trade
Payables and any other accrued current liabilities incurred in
the ordinary course of business as the deferred purchase price
of property acquired in the ordinary course of business; (iii)
liabilities arising from Guarantees to suppliers, lessors,
licensees, contractors, franchisees or customers incurred in the
ordinary course of business (exclusive of obligations for the
payment of money borrowed); (iv) liabilities in respect of
performance bonds provided by the Company or its Subsidiaries in
the ordinary course of business; (v) liabilities from the
honoring by a bank or other financing institution of a check,
draft or similar instrument drawn against insufficient funds in
the ordinary course of business, provided that such liabilities
are extinguished within two Business Days of their incurrence;
(vi) liabilities under workers' compensation laws and similar
legislation; (vii) Tax Claims Indebtedness and (viii) borrowings
under life insurance policies in effect on the Issue Date to pay
premiums under such policies, which borrowings shall not exceed
the cash surrender value thereof. The amount of Indebtedness of
any Person at any date shall be without duplication (i) the
outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any
such contingent obligations at such date and (ii) in the case of
Indebtedness of others secured by a Lien to which the property
or assets owned or held by such Person is subject but which is
otherwise nonrecourse to such Person, the lesser of the Fair
Market Value at such date of any assets subject to a Lien
securing the Indebtedness of others and the amount of the
Indebtedness secured.
"Indenture" means this Indenture, as amended or
supplemented from time to time.
"Interest Rate Agreement" means any swap agreement,
interest rate collar agreement or other similar agreement or
arrangement of any Person designed to protect such Person or any
of its Subsidiaries against fluctuations in interest rates.
"Investment" of any Person means (i) all investments
by such Person in any other Person in the form of loans,
advances (other than advances to customers in the ordinary
course of business which are recorded as accounts receivable on
the balance sheet of the Company or its Subsidiaries not to
exceed $1 million in the aggregate at any one time outstanding)
or capital contributions, (ii) all Guarantees of Indebtedness or
other obligations of any other Person by such Person, (iii) all
purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any
other Person and (iv) all other items that would be classified
as investments (including, without limitation, purchases of
assets outside the ordinary course of business) on a balance
sheet of such Person prepared in accordance with GAAP; provided,
that notwithstanding anything in the foregoing that may be
deemed to be to the contrary, Investment shall not include (i)
sales of goods or services on trade credit terms consistent with
the Company's and its Subsidiaries' past practices or otherwise
consistent with trade credit terms in common use in the industry
and recorded as accounts receivable on the balance sheet of the
Person making such sale; (ii) loans and advances to employees of
the Company in the ordinary course of business and consistent
with past practices, including travel, moving and other like
advances; (iii) loans and advances to vendors or contractors in
the ordinary course of business not to exceed $1 million in the
aggregate at any one time outstanding; (iv) lease, utility and
other similar deposits in the ordinary course of business; (v)
obligations or securities received in the ordinary course of
business in settlement of debts owing to the Company or a
Subsidiary thereof as a result of foreclosure, perfection or
enforcement of any Lien; (vi) Investments in existence on the
Issue Date; (vii) Investments in securities not consisting of
cash or Cash Equivalents and received in connection with an
Asset Sale or other disposition of assets; and (viii) growth in
accumulated earnings of Persons who are not Subsidiaries of the
Company.
"Issue Date" means March __, 1995, the date on which
Notes are first to be issued under this Indenture.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell
(excluding options or agreements for sales of assets not
prohibited by the Indenture) or give a security interest in and
any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Marketable Securities" means securities listed and
trading on any national securities exchange or listed and
trading on the National Market System of the National
Association of Securities Dealers Automated Quotation System;
provided, however, that (a) either any such security is freely
tradable under the Securities Act upon issuance or the holder
thereof has contractual registration rights that will permit the
sale of such Marketable Security pursuant to an effective
registration statement not later than ninety days after issuance
to the Company or one of its Wholly Owned Subsidiaries and (b)
such securities also are so listed for trading privileges.
"Maturity Date" means March 15, 2000.
"Net Cash Proceeds" means, with respect to any Asset
Sale, the proceeds of such Asset Sale in cash or Cash
Equivalents, including payments in respect of deferred payment
obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of
cash or Cash Equivalents (except to the extent such obligations
are financed or sold with recourse to the Company or any
Subsidiary of the Company) and proceeds from the conversion of
other property received when converted to cash or Cash
Equivalents, net of (a) third-party brokerage commissions, sales
commissions and other third-party fees and expenses (including
fees and expenses of counsel and investment bankers) related to
such Asset Sale, (b) provisions for all cash taxes as a result
of such Asset Sale, (c) payments made to repay Indebtedness
(other than Indebtedness under the Bank Revolving Credit
Facility, repayment of which is governed by Section 4.09) or any
other obligation outstanding at the time of such Asset Sale the
incurrence of which was not prohibited by this Indenture and
that is secured by a Lien, the incurrence of which was not
prohibited by this Indenture, on the property or assets sold to
the extent required by the terms of such Lien and actually
repaid in cash or Cash Equivalents, and (d) amounts provided by
the Company or any Subsidiary as a reserve, to the extent
required by GAAP, against any liabilities associated with such
Asset Sale and retained by the Company or any Subsidiary, as the
case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated
with such Asset Sale; provided, however, that the amounts of any
such reserves, to the extent not utilized for the foregoing
purposes or no longer required from time to time to be retained
as reserves, shall be Net Cash Proceeds at such times when any
such amounts cease to be retained as reserves.
"Net Equity Proceeds" means (a) in the case of any
sale by the Company of Qualified Capital Stock of the Company,
the aggregate net cash proceeds received by the Company, after
payment of expenses, commissions and the like incurred in
connection therewith, and (b) in the case of any exchange,
exercise, conversion or surrender of any outstanding
Indebtedness of the Company or any Subsidiary for or into shares
of Qualified Capital Stock of the Company, the amount of such
Indebtedness (or, if such Indebtedness was issued at an amount
less than the stated principal amount thereof, the accrued
amount thereof as determined in accordance with GAAP) as
reflected in the consolidated financial statements of the
Company prepared in accordance with GAAP as of the most recent
date next preceding the date of such exchange, exercise,
conversion or surrender (plus any additional cash amount
required to be paid by the holder of such Indebtedness to the
Company or to any Wholly Owned Subsidiary of the Company upon
such exchange, exercise, conversion or surrender and less any
and all payments made to the holders of such Indebtedness, and
all other expenses incurred by the Company in connection
therewith), in the case of each of clauses (a) and (b) to the
extent consummated after the Issue Date.
"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), together
with any related provisions for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale
(including, without limitation, dispositions pursuant to sale
and leaseback transactions and, for purposes of this definition
only, disregarding limitations in the definition of "Asset Sale"
with respect to Fair Market Value and net proceeds), or (b) the
disposition of any securities or the extinguishment of any
Indebtedness of such Person or any of its Subsidiaries, (ii) any
extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss),
(iii) for purposes of Section 4.10 only, amortization of
existing goodwill of the Company on the Issue Date in the amount
of $450 million and (iv) in the case of the Company and its
Subsidiaries, income tax expense payable pursuant to Section
4.05(b) for any period by Mid-State Homes, Inc. and its
Subsidiaries or any other member of the Company's consolidated
group for tax purposes which is not a Subsidiary of the Company,
so long as the Company is not in default under Section 4.05(b)
(which income tax expense shall be included, if not excluded
pursuant to this clause (iv)), but including any cash payments
with respect to Consolidated Post Retirement Benefits Other Than
Pensions.
"Non-Core Assets" means any assets other than those
used directly or indirectly in the same or a similar line of
business (other than land held by Walter Land Company, Hamer
Properties, Inc. and J.W. Walter, Inc. on the Issue Date) as the
Company and the Persons listed on Annex A hereto
were engaged in on the Issue Date.
"Non-Core Subsidiary" means any Subsidiary
substantially all of whose assets consist of Non-Core Assets.
"Note Custodian" means the Trustee, as custodian of
the Global Note, or any successor entity thereto.
"Notes" means, collectively, the Series B Notes and
the Series B-1 Notes.
"Officer" means, with respect to any Person, the
Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice President of such Person.
"Officers' Certificate" means a certificate signed on
behalf of the Company by two Officers of the Company, one of
whom must be the principal executive officer, the principal
financial officer, the principal accounting officer or the
treasurer of the Company, that meets the requirements of Section
11.05 hereof.
"Opinion of Counsel" means a written opinion from
legal counsel who is acceptable to the Trustee that meets the
requirements of Section 11.05 hereof. The counsel may be an
employee of or counsel to the Company, any Subsidiary of the
Company or the Trustee.
"Other Permitted Liens" means (i) Liens for taxes,
assessments, governmental charges or claims which are not yet
delinquent or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets
subject to such Lien, and for which a reserve or other
appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made; (ii) statutory Liens
of landlords, vendors and laborers and carriers',
warehousemen's, mechanics', suppliers', materialmen's,
repairmen's, or other like Liens arising in the ordinary course
of business and with respect to amounts which are not yet
delinquent or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets
subject to such Lien, and for which a reserve or other
appropriate provision, if any, as shall be required by GAAP
shall have been made; (iii) Liens 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, government contracts, performance and
return-of-money bonds and other obligations of a like nature
incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money); (v) easements,
rights-of-way, restrictions, minor defects or irregularities in
title and other similar charges or encumbrances not interfering
in any material respect with the business of the Company or any
Subsidiary incurred in the ordinary course of business; (vi)
Liens arising in the ordinary course of business upon specific
items of inventory or other goods and proceeds of any Person
securing such Person's obligations in respect of bankers'
acceptances issued or created in accordance with this Indenture
for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods; (vii)
Liens incurred in the ordinary course of business securing
reimbursement obligations with respect to commercial letters of
credit permitted under this Indenture which encumber documents
and other property relating to such letters of credit and
products and proceeds thereof; (viii) Liens incurred in the
ordinary course of business in favor of bona fide lessors of
real or personal property; and (ix) leases or subleases granted
to others in the ordinary course of business and not materially
interfering with the ordinary course of business.
"Payment Restriction" means with respect to a
Subsidiary of any Person, any encumbrance, restriction or
limitation, whether by operation of the terms of its charter or
by reason of any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation, on the ability of (i)
such Subsidiary to (a) pay dividends or make other distributions
on its Capital Stock or make payments on any obligation,
liability or Indebtedness owed to such Person or any other
Subsidiary of such Person, (b) make loans or advances to such
Person or any other Subsidiary of such Person, or (c) transfer
any of its properties or assets to such Person or any other
Subsidiary of such Person, or (ii) such Person or any other
Subsidiary of such Person to receive or retain any such (a)
dividends, distributions or payments, (b) loans or advances, or
(c) transfer of properties or assets.
"Permitted Holders" means Lehman Brothers Inc. and its
Affiliates, Kohlberg Kravis Roberts & Co., KKR Associates, KKR
Partners II, L.P., JWC Associates, L.P., JWC Associates II, L.P.
and their respective Affiliates and any group (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the
date of this Indenture) including any of the foregoing.
"Permitted Indebtedness" means (i) Indebtedness of the
Company and its Subsidiaries in respect of the Bank Revolving
Credit Facility not to exceed $150,000,000 in aggregate
principal amount at any one time outstanding as reduced in
accordance with Section 4.09; (ii) Existing Indebtedness; (iii)
Indebtedness pursuant to the Notes; (iv) unsecured Indebtedness
of the Company to any Wholly Owned Subsidiary of the Company and
unsecured Indebtedness of any Subsidiary of the Company to the
Company or another Wholly Owned Subsidiary of the Company to the
extent permitted by Section 4.10; (v) obligations with respect
to Interest Rate Agreements, Currency Agreements and Commodity
Agreements; (vi) Permitted Refinancing Indebtedness; and (vii)
the incurrence by the Company or any Subsidiary of Indebtedness
represented by Capital Lease Obligations, Attributable Debt,
mortgage financings or Purchase Money Obligations, in each case
incurred for the purpose of financing all or any part of the
purchase price or cost of construction of property (including
additions or replacements to or refurbishments or renovations of
existing property) newly acquired or constructed for use in the
business of the Company or such Subsidiary, in an aggregate
principal amount not to exceed $25 million at any time
outstanding.
"Permitted Investments" means (i) any Investments in
the Company or in a Wholly Owned Subsidiary of the Company that
is engaged primarily in a Related Business; (ii) any Investments
in Cash Equivalents; (iii) Investments by the Company or any
Wholly Owned Subsidiary of the Company in a Person, if as a
result of such Investment (a) such Person becomes a Wholly Owned
Subsidiary of the Company that is engaged primarily in a Related
Business; or (b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a
Wholly Owned Subsidiary of the Company (which remains a Wholly
Owned Subsidiary following consummation of the transaction) and
such Person is engaged primarily in a Related Business; (iv)
Mid-State Advances to the extent permitted by Section 4.05(b);
and (v) other Investments in one or more Persons that do not
exceed $25 million in the aggregate at any time outstanding.
"Permitted Liens" means (i) Liens existing on the
Issue Date; (ii) Liens now or hereafter securing Indebtedness
outstanding under the Bank Revolving Credit Facility; (iii)
Liens now or hereafter securing any obligations with respect to
Interest Rate Agreements, Currency Agreements or Commodity
Agreements; (iv) Liens on property of a Person existing at the
time such Person is merged or consolidated with the Company or
any Subsidiary of the Company or at the time such Person becomes
a Subsidiary of the Company; provided that such Liens were not
created in connection with, or in contemplation of, such merger
or consolidation and do not extend to any assets other than
those of the Person merged or consolidated with the Company or
the Subsidiary of the Company; (v) Liens on property existing at
the time of acquisition thereof by the Company or any Subsidiary
of the Company; provided that such Liens were not created in
connection with, or in contemplation of, such acquisition; (vi)
Purchase Money Liens and Liens to secure Capital Lease
Obligations and mortgage financings included in clause (vii) of
the definition of Permitted Indebtedness covering only the
property acquired with such Indebtedness; (vii) Liens on assets
of Subsidiaries securing Indebtedness of Subsidiaries (other
than Permitted Indebtedness) incurred in compliance with Section
4.11; (viii) Liens securing Permitted Refinancing Indebtedness;
provided that such Liens extend to or cover only the property or
assets then securing the Indebtedness being refinanced; and (ix)
Other Permitted Liens.
"Permitted Refinancing Indebtedness" means any
Indebtedness of the Company or any of its Subsidiaries issued in
exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund other Indebtedness
of the Company or any of its Subsidiaries; provided that, except
in the case of the redemption of all of the outstanding Notes,
in which case none of the following shall be applicable, (l) the
principal amount of such Indebtedness does not exceed the
principal amount of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith), (2) such
Indebtedness has a Weighted Average Life to Maturity equal to or
greater than and a final maturity no earlier than the Weighted
Average Life to Maturity and final maturity of the Indebtedness
being extended, refinanced, renewed, replaced, defeased or
refunded, (3) with respect to Subordinated Indebtedness, such
Indebtedness is subordinated in right of payment pursuant to
terms at least as favorable to the Holders of Notes as those, if
any, contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or
refunded, and (4) no such Indebtedness incurred by the Company
is extended, refinanced, renewed, replaced, defeased or refunded
with Indebtedness incurred by a Subsidiary.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or other agency
or political subdivision thereof.
"Pledge Agreement" means the Pledge Agreement dated as
of the date of this Indenture, as amended, amended and restated
or otherwise modified from time to time, pursuant to which the
Company pledged the Pledged Shares owned by it to the Trustee, a
copy of which is attached hereto as Exhibit B.
"Pledged Shares" means all the outstanding shares of
Common Stock of all direct or indirect Subsidiaries of the
Company, owned by the Company and/or its Subsidiaries, whether
currently owned or hereafter acquired or created.
"Preferred Stock" means, with respect to any Person,
all Capital Stock of such Person which has a preference in
liquidation or a preference with respect to the payment of
dividends to another class of Capital Stock.
"principal" of a Note means the principal of such Note
plus the premium, if any, thereon.
"pro forma" means, with respect to any calculation
made or required to be made pursuant to the terms of this
Indenture, a calculation in accordance with Article 11 of
Regulation S-X under the Securities Act.
"Purchase Money Liens" means Liens to secure or
securing Purchase Money Obligations permitted to be incurred
under this Indenture.
"Purchase Money Obligations" means Indebtedness
representing, or incurred to finance, the cost (a) of acquiring
any assets and (b) of construction or improvement of property,
in each case for use in the business of the Company and its
Subsidiaries (including Purchase Money Obligations of any other
Person at the time such other Person is merged with or is
otherwise acquired by the Company or a Subsidiary), provided
that (i) the principal amount of such Indebtedness does not
exceed 100% of such cost, including construction or improvement
costs, (ii) any Lien securing such Indebtedness does not extend
to or cover any other asset or property other than the asset or
property being so acquired, constructed or improved and (iii)
such Indebtedness is incurred, and any Liens with respect
thereto are granted, within 180 days of the acquisition of such
property or asset.
"Qualified Capital Stock" means, with respect to any
Person, any Capital Stock of such Person that is not
Disqualified Stock.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated as of March __, 1995, relating to the
Notes, for the benefit of certain Holders, as such agreement may
be amended, modified or supplemented from time to time.
"Related Business" means (1) a business engaged in on
the Issue Date by any of the Company, its Subsidiaries, Cardem
Insurance Co., Ltd., Mid-State Homes, Inc., Black Warrior
Methane Corporation and Black Warrior Transmission Corporation
or (2) the business of mining or manufacturing and/or selling
products and/or providing services (other than brokerage,
investment advisory, investment banking, commercial lending or
other similar financial services not related to the primary
business of Mid-State Homes, Inc., Best Insurors, Inc. or Cardem
Insurance Co., Ltd. on the Issue Date) relating to building
products, water and waste water transmission, residential and/or
non-residential construction, coal, coke, methane gas, specialty
chemicals and iron and aluminum industrial and original
equipment manufacture products.
"Responsible Officer," when used with respect to the
Trustee, means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.
"Restricted Investment" means an Investment other than
a Permitted Investment.
"Restricted Payment" means, with respect to any
Person, any of the following: (i) any dividend or other
distribution in respect of such Person's Capital Stock (other
than (a) dividends or distributions payable solely in Capital
Stock (other than Disqualified Stock) and (b) in the case of
Subsidiaries of a Person, dividends or distributions payable to
such Person or to a Wholly Owned Subsidiary of such Person);
(ii) the purchase, redemption or other acquisition or retirement
for value of any Capital Stock of such Person or any of its
Subsidiaries (other than the surrender of Qualified Capital
Stock of the Company in payment of the exercise price of
employee stock options to purchase Qualified Capital Stock of
the Company issued pursuant to plans approved by the stock-
holders of the Company); (iii) the making of any principal
payment on, or the purchase, defeasance, repurchase, redemption
or other acquisition or retirement for value, prior to any
scheduled maturity, scheduled repayment or scheduled sinking
fund payment, of any Indebtedness which is subordinated in right
of payment to the Notes; and (iv) the making of any Restricted
Investment.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Series B Notes" means the Series B Notes issued
pursuant to this Indenture.
"Series B-1 Notes" means the Series B-1 Notes issued
pursuant to this Indenture.
"Significant Subsidiary" means any Subsidiary that
would be a "significant subsidiary" as defined in Article 1,
Rule l-02 of Regulation S-X, promulgated pursuant to the
Securities Act, as such Regulation is in effect on the date
hereof.
"Subordinated Indebtedness" means any Indebtedness of
the Company that (i) has a final maturity date after, and a
Weighted Average Life to Maturity longer than, that of the
Notes, (ii) is subordinated in right of payment to the Notes
pursuant to subordination provisions contained in the agreements
or instruments evidencing such Indebtedness or pursuant to which
such Indebtedness is issued, which subordination provisions are
not less favorable to the Holders than the subordination
provisions set forth in Exhibit D to this Indenture and (iii) is
not Guaranteed by any Subsidiary of the Company.
"Subsidiary" means, with respect to any Person, (i) a
corporation a majority of whose Capital Stock with voting power,
under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person, by one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries
thereof or such Person and one or more Subsidiaries thereof,
directly or indirectly, at the date of determination thereof has
at least a majority ownership interest; provided, however, that
Mid-State Homes, Inc., a Florida corporation, and its
Subsidiaries and Cardem Insurance Co., Ltd. (Bermuda) shall not
be deemed to be Subsidiaries of the Company for purposes of the
Indenture. For purposes of this definition, any directors'
qualifying shares or investments by foreign nationals mandated
by applicable law shall be disregarded in determining the
ownership of a Subsidiary.
"Subsidiary Pledge Agreements" means the Subsidiary
Pledge Agreements to be executed by the Subsidiaries of the
Company with respect to any Pledged Shares owned by them,
substantially in the form of Exhibit C attached hereto, as
amended, amended and restated or otherwise modified from time to
time.
"Tax Claims Indebtedness" means obligations of the
Company and its Subsidiaries to the Internal Revenue Service
arising out of consolidated tax returns filed by the Company and
its Subsidiaries or their predecessors for fiscal years ended
August 31, 1980, 1983, 1984, 1985, 1986, 1987 and May 31, 1988
(nine months), 1989, 1990 and 1991, as agreed to by the Company
and the Internal Revenue Service and approved by a final
nonappealable order of the bankruptcy court to the extent
required by the Bankruptcy Law or, failing agreement, the amount
determined by a final nonappealable order of the bankruptcy
court, in either case in an aggregate amount of principal,
interest and penalties not to exceed $40 million at any time
outstanding.
"TIA" means the Trust Indenture Act of 1939(15 U.S.C.
SECTIONS 77aaa-77bbbb), as amended, as in effect on the date on
which this Indenture is qualified under the TIA.
"Trade Payables" means any accounts payable or any
other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by a Person arising in the
ordinary course of business of such Person in connection with
the acquisition of goods and services.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor
serving hereunder.
"Voting Stock" means, with respect to any Person,
(i) one or more classes of the Capital Stock of such Person
having general voting power 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 have or might have voting power by reason
of the happening of any contingency) and (ii) any Capital Stock
of such Person convertible or exchangeable without restriction
at the option of the holder thereof into Capital Stock of such
Person described in clause (i) above.
"Weighted Average Life to Maturity" means, when
applied to any Indebtedness at any date, the number of years
obtained by dividing (a) the sum of the products obtained by
multiplying (x) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect
thereof, by (y) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making
of such payment, by (b) the then outstanding principal amount of
such Indebtedness.
"Wholly Owned Subsidiary" means, with respect to any
Person, a Subsidiary of such Person all of the outstanding
Capital Stock of which shall at the time be owned by such Person
or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such
Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction. . . . . . . . . 4.14
"Asset Sale Offer". . . . . . . . . . 3.09
"Bankruptcy Code . . . . . . . . . . . 8.04
"Change of Control Offer" . . . . . . . 4.08
"Change of Control Payment" . . . . . . 4.08
"Change of Control Payment Date". . . . 4.08
"Covenant Defeasance" . . . . . . . . . 8.03
"Event of Default". . . . . . . . . . . 6.01
"Excess Proceeds" . . . . . . . . . . . 4.09
"Legal Defeasance". . . . . . . . . . . 8.02
"Legal Holiday" . . . . . . . . . . . . 11.14
"Mid-State Advances" . . . . . . . . . 4.05
"Offer Amount". . . . . . . . . . . . . 3.09
"Offer Period". . . . . . . . . . . . . 3.09
"Paying Agent". . . . . . . . . . . . . 2.03
"Purchase Date" . . . . . . . . . . . . 3.09
"Registrar" . . . . . . . . . . . . . . 2.03
"Released Collateral" . . . . . . . . . 8.04
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT.
Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a
part of this Indenture.
The following TIA terms used in this Indenture have
the following meanings:
"Commission" means SEC;
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means
the Trustee;
"obligor" on the indenture securities means the
Company and any successor obligor.
All other terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule under the TIA have the meanings so
assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in
the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement or successor sections or rules adopted by the
SEC from time to time.
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING.
The Series B Notes and the Series B-1 Notes and the
related Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, which is part of
this Indenture. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage.
Each Note shall be dated the date of its authentication. The
Notes shall be in denominations of $1,000 and integral multiples
thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this
Indenture and the Company and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
On the Issue Date the Global Note representing all the
initially issued Series B Notes shall be issued to the Note
Custodian. The Global Note shall provide that it shall
represent the aggregate amount of outstanding Series B Notes
from time to time endorsed thereon and that the aggregate amount
of outstanding Series B Notes represented thereby may from time
to time be reduced, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the
amount of any decrease in the amount of Series B Notes
represented thereby shall be made by the Note Custodian.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by
manual or facsimile signature. The Company's seal shall be
reproduced on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer
holds that office at the time a Note is authenticated, the Note
shall nevertheless be valid.
A Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be
conclusive evidence that the Note has been authenticated under
this Indenture.
The Trustee shall, upon a written order of the Company
signed by two Officers, authenticate Notes for original issue up
to the aggregate principal amount stated in paragraph 4 of the
respective Notes. The aggregate principal amount of Notes
outstanding at any time may not exceed $490,000,000.
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate the Notes. An
authenticating agent may authenticate the Notes whenever the
Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent
to deal with the Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where
the Notes may be presented for registration of transfer or for
exchange ("Registrar") and an office or agency where the Notes
may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes
any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company
shall notify the Trustee in writing of the name and address of
any Agent not a party to this Indenture. If the Company fails
to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints the Trustee to act as
the Registrar and, together with the Company, a Co-Paying Agent.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than
the Trustee to agree in writing that the Paying Agent will hold
in trust for the benefit of Holders or the Trustee all money
held by the Paying Agent for the payment of principal or
interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent
to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to
the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) shall have no
further liability for the money. If the Company or a Subsidiary
acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it
as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of all Holders, and the Company and the
Trustee shall otherwise comply with TIA section 312(a). If the
Trustee
is not the Registrar, the Company shall furnish to the Trustee,
at least five Business Days before each interest payment date
and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders.
SECTION 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar with a
request to register the transfer or to exchange them for an
equal principal amount of Notes of other authorized
denominations, the Registrar shall register the transfer or make
the exchange as requested if its requirements for such
transactions are met. To permit registrations of transfer and
exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's request. No service
charge to the Holder shall be made for any registration of
transfer or exchange, but the Company or the Trustee may require
from the transferring or exchanging Holder payment of a sum
sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such
transfer taxes or similar governmental charges payable upon
exchanges pursuant to Section 2.13, 3.06, 4.08, 4.09 or 9.05).
The Registrar shall not be required (A) to register
the transfer of or to exchange Notes during a period beginning
at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.07 hereof and
ending at the close of business on the day of selection; or (B)
to register the transfer of or to exchange any Note so selected
for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part; or (C)to register
the transfer of or to exchange a Note between a record date and
the next succeeding interest payment date.
The Note Custodian shall, in accordance with the
instructions and procedures contained in an Agreement dated
February 2, 1995 between the Company and the Note Custodian,
cause
the aggregate principal amount of the Global Note to be reduced
and, following such reduction, the Company shall execute and,
upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate and deliver
to the Holder a definitive Series B Note in the appropriate
principal amount.
SECTION 2.07. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or
if the Holder claims that a Note held by such Holder has been
lost, destroyed or wrongfully taken, the Company shall issue and
the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or
the Company, an indemnity bond must be supplied by the Holder
that is sufficient in the judgment of the Trustee and the
Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company or Trustee may charge for
its expenses in replacing a Note.
Every replacement Note is an additional obligation of
the Company and shall be entitled to all of the benefits of this
Indenture equally and proportionately with all other Notes duly
issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, and those described in
this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof,
it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona fide
purchaser.
If the Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to
accrue.
SECTION 2.09. TREASURY NOTES.
(a) In determining whether the Holders of the
required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company or by
any Subsidiary thereof or by any other Affiliate controlled by
the Company shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or
consent, only Notes that the Trustee knows are so owned shall be
so disregarded.
(b) In determining whether the Holders of the
required principal amount of Notes have (i) directed the time,
method or place of conducting any proceeding for any remedy
available to the Trustee hereunder, or exercising any trust or
power conferred upon the Trustee; (ii) consented to the waiver
of any past Event of Default and its consequences; or (iii)
consented to the postponement of any interest payment, Notes
owned by Affiliates of the Company shall be disregarded and
considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected
in relying on any such direction or consent, only Notes that the
Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary
Notes upon a written order of the Company signed by two Officers
of the Company. Temporary Notes shall be substantially in the
form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of
the benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment. The Trustee and
no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and,
unless otherwise directed by the Company, shall destroy canceled
Notes in accordance with its normal practices. If such notes
are destroyed, certification of the destruction of all canceled
Notes shall be delivered to the Company, at the Company's
request. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on
the Notes, it shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the
defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01 hereof. The Company
shall notify the Trustee in writing of the amount of defaulted
interest proposed to be paid on each Note and the date of the
proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no
such special record date shall be less than 10 days prior to the
related payment date for such defaulted interest. At least 15
days before the special record date, the Company shall mail or
cause to be mailed to Holders a notice that states the special
record date, the related payment date and the amount of such
interest to be paid.
SECTION 2.13. EXCHANGE OFFER.
The Series B Notes may be exchanged for Series B-1
Notes pursuant to the terms of the Exchange Offer. The Trustee
and Registrar shall make the exchange as follows:
(i) The Company shall present the Trustee
with an Officers' Certificate certifying the following:
(A) upon issuance of the Series B-1 Notes,
the transactions contemplated by the
Exchange Offer have been consummated;
and
(B) the principal amount at maturity of
Series B Notes properly tendered in the
Exchange Offer (together with such
Notes), the name of each Holder of such
Notes, the principal amount at maturity
properly tendered in the Exchange Offer
by each such Holder and the name and
address to which Series B-1 Notes shall
be registered and sent for each such
Holder.
(ii) The Trustee, upon receipt of such
Officers' Certificate, an Opinion of Counsel satisfactory
to the Trustee that the Series B-1 Notes have been
registered under Section 5 of the Securities Act and the
Indenture has been qualified under the TIA, and a Company
Order, shall authenticate Series B-1 Notes registered in
the names, and in the principal amounts at maturity,
indicated in such Officers' Certificate.
(iii) The Trustee shall deliver such Series
B-1 Notes to the Holders thereof as indicated in such
Officers' Certificate.
ARTICLE THREE
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the
optional redemption provisions of the Notes and Section 3.07
hereof, it shall furnish to the Trustee, at least 45 days but
not more than 60 days before a redemption date (unless a shorter
notice shall be satisfactory to the Trustee), an Officers'
Certificate setting forth (i) the redemption date, (ii) the
principal amount of Notes to be redeemed and (iii) the
redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed, the
Trustee shall select the Notes to be redeemed among the Holders
of the Notes on a pro rata basis, by lot or in accordance with
any other method the Trustee considers fair and appropriate (and
in such manner as complies with applicable legal and stock
exchange requirements, if any).
The Trustee shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of
any Note selected for partial redemption, the principal amount
thereof to be redeemed. Notes and portions of Notes selected
shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed,
the entire outstanding amount of Notes held by such Holder, even
if not a multiple of $1,000, shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture
that apply to Notes called for redemption also apply to portions
of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed,
by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and
shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the
portion of the principal amount of such Note to be redeemed and
that, after the redemption date upon surrender of such Note, a
new Note or Notes in principal amount equal to the unredeemed
portion shall be issued;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making
such redemption payment, interest on Notes called for redemption
ceases to accrue on and after the redemption date; and
(g) the paragraph of the Notes and/or Section of
this Indenture pursuant to which the Notes called for redemption
are being redeemed.
At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at its expense;
provided, however, that the Company shall have delivered to the
Trustee, at least 45 days prior to the redemption date (unless a
shorter notice shall be satisfactory to the Trustee), an
Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with
Section 3.03 hereof, Notes called for redemption become
irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be
conditional.
Notice of redemption shall be deemed to be given when
mailed, whether or not the Holder receives such notice. In any
event, failure to give such notice, or any defect therein, shall
not affect the validity of the proceedings for the redemption of
the Notes.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest
on all Notes to be redeemed on that date other than Notes or
portions thereof called for redemption which have been delivered
by the Company to the Trustee for cancellation. Whichever of
the Trustee or the Paying Agent receiving the money shall
promptly return to the Company any money deposited with it by
the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be
redeemed.
If the Company complies with the provisions of the
preceding paragraph, on and after the redemption date, interest
shall cease to accrue on the Notes or the portions of Notes
called for redemption. If a Note is redeemed on or after an
interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid
to the Person in whose name such Note was registered at the
close of business on such record date. If any Note called for
redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the
preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such
unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the
Company shall issue and the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
The Notes will be subject to redemption at any time at
the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days' notice, at a redemption price of
101% of the principal amount then outstanding, plus accrued and
unpaid interest thereon to the applicable date of redemption,
provided, however, that if a redemption is made from the Excess
Proceeds of any Asset Sales as described in Section 4.09, the
redemption price will be 100% of the principal amount then
outstanding, plus accrued and unpaid interest thereon to the
applicable date of redemption; and provided further, however,
that if such redemption is in part, not less than $150 million
aggregate principal amount of the Notes shall be outstanding
immediately after giving effect to such redemption.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.08 and 4.09
hereof, the Company shall not be required to make mandatory
redemption or sinking fund payments with respect to the Notes.
SECTION 3.09. OFFERS TO PURCHASE BY APPLICATION
OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.09 hereof,
the Company shall commence an offer to all Holders of Notes to
purchase Notes (an "Asset Sale Offer"), it shall follow the
procedures specified below.
The Asset Sale Offer shall remain open for a period of
20 Business Days following its commencement and no longer,
except to the extent that a longer period is required by
applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal
amount of Notes required to be purchased pursuant to Section
4.09 hereof (the "Offer Amount") or, if less than the Offer
Amount has been tendered, all Notes tendered in response to the
Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record
date and on or before the related interest payment date, any
accrued and unpaid interest shall be paid to the Person in whose
name a Note is registered at the close of business on such
record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Within 10 days of each date on which the aggregate,
amount of Excess Proceeds exceeds $25 million, the Company shall
send, by first class mail, a notice to the Trustee and each of
the Holders of the Notes, which notice shall specify the
Purchase Date, which shall be no earlier than 30 days nor later
than 60 days from the date such notice is mailed. The notice
shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Asset Sale Offer.
The Asset Sale Offer shall be made to all Holders of Notes. The
notice, which shall govern the terms of the Asset Sale Offer,
shall state:
(a) that the Asset Sale Offer is being made
pursuant to this Section 3.09 and Section 4.09 hereof and the
length of time the Asset Sale Offer shall remain open;
(b) the Asset Sale Offer Amount, the purchase
price and the Purchase Date;
(c) that any Note not tendered or accepted for
payment shall continue to accrue interest;
(d) that, unless the Company defaults in making
such payment, any Note accepted for payment pursuant to the
Asset Sale Offer shall cease to accrue interest after the
Purchase Date;
(e) that Holders electing to have a Note
purchased pursuant to an Asset Sale Offer shall be required to
surrender the Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Note completed, to the
Company, a depositary if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three
Business Days before the Purchase Date;
(f) that Holders shall be entitled to withdraw
their election if the Company, the depositary or the Paying
Agent, as the case may be, receives, not later than the
expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to
have such Note purchased;
(g) that, if the aggregate principal amount of
Notes surrendered by Holders exceeds the Offer Amount, the
Company shall select the Notes to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(h) that Holders whose Notes are purchased only
in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered.
Notwithstanding anything to the contrary elsewhere
herein, the Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other laws and regulations
thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes in
connection with an Asset Sale Offer.
On the Purchase Date, the Company shall, to the extent
lawful, accept for payment on a pro rata basis to the extent
necessary, the Offer Amount of Notes or portions thereof
tendered pursuant to the Asset Sale Offer, or if less than the
Offer Amount has been tendered, all Notes (or portions thereof)
tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms
of this Section 3.09. The Company or the Paying Agent, as the
case may be, shall promptly (but in any case not later than five
Business Days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the
Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Note, and
the Trustee shall authenticate and mail or deliver such new Note
to such Holder, in a principal amount equal to any unpurchased
portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the
Asset Sale Offer on the Purchase Date.
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the
principal of, premium, if any, and interest on the Notes on the
dates and in the manner provided in the Notes. Principal,
premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a
Subsidiary thereof, holds at least one Business Day before that
date, money deposited by the Company in immediately available
funds and designated for and sufficient to pay all principal,
premium, if any, and interest then due.
The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy
Law) on overdue principal at the rate equal to 1% per annum in
excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace
period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of
Manhattan, the City of New York, an office or agency (which may
be an office of the Trustee or an affiliate of the Trustee,
Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one
or more other offices or agencies where the Notes may be
presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York for
such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust
Office of the Trustee as one such office or agency of the
Company in accordance with Section 2.03.
SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations
of the SEC, so long as any Notes are outstanding, the Company
will furnish to the Holders (i) all reports that would be
required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such Forms,
including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Company's
certified independent accountants and (ii) all reports that
would be required to be filed with the SEC on Form 8-K if the
Company were required to file such reports. In addition,
whether or not required by the rules and regulations of the SEC,
the Company will file a copy of all such information and reports
with the SEC for public availability (unless the SEC will not
accept such a filing) for so long as any Notes are outstanding.
The Company will also make such information available to
investors who request it in writing. In addition, the Company
agrees that, for so long as any Notes remain outstanding, it
will furnish to the Holders and to beneficial holders of Notes
and to prospective purchasers of Notes designated by the
Holders, upon their request, the information required to be
delivered pursuant to Rule 144(A)(d)(4) under the Securities
Act. The Company shall also comply with TIA section 314(a).
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee,
within 120 days after the end of each fiscal year, a certificate
of the principal executive officer, the principal financial
officer or the principal accounting officer of the Company
stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing officer with a view to
determining whether the Company has kept, observed, performed
and fulfilled its obligations under this Indenture, and further
stating, as to such officer signing such certificate, that to
the best of his or her knowledge the Company has kept, observed,
performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default shall have
occurred and is pending, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action
the Company is taking or proposes to take with respect thereto)
and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on
account of the principal of or interest, if any, on the Notes is
prohibited or, if such event has occurred, a description of the
event and what action the Company is taking or proposes to take
with respect thereto. For purposes of this Section 4.04(a),
such compliance shall be determined without regard to any grace
period or requirement of notice provided pursuant to the terms
of this Indenture.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered
pursuant to Section 4.03 above shall be accompanied by a written
statement of the Company's independent public accountants (who
shall be a firm of established national reputation) that in
making the examination necessary for certification of such
financial statements, nothing has come to their attention that
would lead them to believe that the Company has violated any
provisions of Article Four or Article Five hereof or, if any
such violation has occurred and has come to their attention,
specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of
any such violation.
(c) The Company shall, so long as any of the
Notes are outstanding, deliver to the Trustee, promptly, but in
any case within 3 Business Days of any Officer becoming aware of
any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.
SECTION 4.05. TAXES.
(a) The Company shall pay, and shall cause each
of its Subsidiaries to pay, prior to delinquency, all material
taxes, assessments, and governmental levies except such as are
being contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any
material respect to the Holders.
(b) The Company shall, and shall cause each
Person which is a member of the Company's consolidated group for
tax purposes to, calculate, pay and receive for each taxable
period the tax liability owed by and tax refunds (or credits for
losses utilized) due to each of the Company and each Person
which is a member of the Company's consolidated group for tax
purposes, individually, and not in the aggregate, consistent
with past practice (i.e., each Person computes its tax liability
as if it had always filed a separate return, except that a
Person that incurs a net operating loss or capital loss is
credited with the tax benefit of such loss at the time such loss
is utilized by any member of the consolidated group), provided
that, so long as no Default or Event of Default shall have
occurred and be continuing at the time or immediately after
giving effect to any such Mid-State Advance, the Company shall
be permitted to advance to Mid-State Homes, Inc. and its
Subsidiaries up to $7 million per year solely for purposes of
payment of taxes under this Section 4.05(b) (each, a "Mid-State
Advance") to the extent Mid-State Homes, Inc. and its
Subsidiaries have no other source of payment available;
provided, however, that the aggregate amount of Mid-State
Advances not previously repaid in cash or Cash Equivalents may
not exceed $21 million.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension or usury law wherever enacted,
now or at any time hereafter in force, that may affect the
covenants, or the performance, of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such
power as though no such law has been enacted
SECTION 4.07. CORPORATE EXISTENCE.
Subject to Article Five and Section 4.17 hereof, the
Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of
each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time
to time) of the Company or any such Subsidiary and (ii) the
rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other
existence of any of its Subsidiaries, if the Board of Directors
shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not
adverse in any material respect to the Holders; and provided
further that this Section 4.07 shall not apply to any Subsidiary
after its corporate existence is terminated or it otherwise
ceases to be a Subsidiary of the Company in accordance with the
provisions hereof.
SECTION 4.08. CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each
Holder will have the right to require the Company to repurchase
all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes pursuant to the offer described
below (the "Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following the
date on which the Company has actual knowledge that a Change of
Control has occurred, the Company will mail a notice to each
Holder stating: (1) that the Change of Control Offer is being
made pursuant to this Section 4.08 and that all Notes tendered
will be accepted for payment; (2) the purchase price and the
purchase date, which will be no earlier than 30 days nor later
than 60 days from the date such notice is mailed (the "Change of
Control Payment Date"); (3) that any Note not tendered will
continue to accrue interest; (4) that, unless the Company
defaults in the payment of the Change of Control Payment, all
Notes accepted for payment pursuant to the Change of Control
Offer will cease to accrue interest after the Change of Control
Payment Date; (5) that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer will be required
to surrender the Notes, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Notes completed, to the
Paying Agent at the address specified in the notice prior to the
close of business on the third Business Day preceding the Change
of Control Payment Date; (6) that Holders will be entitled to
withdraw their election if the Paying Agent receives, not later
than the close of business on the third Business Day preceding
the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have
such Notes purchased; and (7) that Holders whose Notes are being
purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000
in principal amount or an integral multiple thereof. Notwith-
standing anything to the contrary elsewhere herein, the Company
will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other laws and regulations thereunder to
the extent such laws and regulations are applicable in
connection with the repurchase of the Notes in connection with a
Change of Control.
If the Change of Control Payment Date is on or after
an interest record date and on or before the related interest
payment date, any accrued and unpaid interest shall be paid to
the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall
be payable to Holders who tender pursuant to the Change of
Control Offer.
On the Change of Control Payment Date, the Company
shall (1) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (2) deposit with the
Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered and (3)
deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the
Notes or portions thereof tendered to the Company. The Paying
Agent shall promptly mail to each Holder of Notes so accepted
the Change of Control payment for such Notes, and the Trustee
shall promptly authenticate and mail to each Holder a new Note
equal in principal amount to any unpurchased portion of the
Notes surrendered, if any; provided, that each such new Note
shall be in a principal amount of $1,000 or an integral multiple
thereof. The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
SECTION 4.09. LIMITATION ON ASSET SALES.
The Company shall not, and shall not permit any of its
Subsidiaries to, consummate any Asset Sale, unless (i) the
Company (or its Subsidiaries, as the case may be) receives
consideration at the time of such sale or other disposition at
least equal to the Fair Market Value thereof; (ii) not less than
75% of the consideration received by the Company (or its
Subsidiaries, as the case may be) is in the form of cash or Cash
Equivalents; provided, however, that the amount of (a) any
liabilities (as shown on the Company's or such Subsidiary's most
recent balance sheet or in the notes thereto) of the Company or
any Subsidiary (other than liabilities that are by their terms
subordinated to the Notes) that are assumed by the transferee of
any such assets, (b) any notes or other obligations received by
the Company or its Subsidiaries from such transferee that are
converted by the Company or such Subsidiary into cash within 90
days following receipt (to the extent of the cash received) and
(c) any Marketable Securities received by the Company or its
Subsidiaries from such transferee that are converted by the
Company or such Subsidiary into cash within 90 days following
receipt (to the extent of the cash received), shall be deemed to
be cash for purposes of this clause (ii); and (iii) the Net Cash
Proceeds received by the Company (or its Subsidiaries, as the
case may be) from such Asset Sale are applied in accordance with
the following paragraphs.
The Company may, (i) within 60 days following the
receipt of Net Cash Proceeds from any Asset Sale, apply such Net
Cash Proceeds to the repayment of Indebtedness of the Company
under the Bank Revolving Credit Facility and to cash
collateralize letters of credit outstanding thereunder, in each
case to the extent required by (A) the terms of the Bank
Revolving Credit Facility as in effect on the Issue Date in
connection with an Asset Sale not prohibited by the Bank
Revolving Credit Facility as in effect on the Issue Date, or (B)
the terms of a consent granted by the Lenders thereunder to an
Asset Sale prohibited by the Bank Revolving Credit Facility as
in effect on the Issue Date, provided that (x) any such
repayment of Indebtedness shall result in a permanent reduction
in the revolving credit or other commitment relating thereto in
an amount equal to the principal amount so repaid, and (y) at
such time as any such letter of credit are no longer required to
be cash collateralized, any
such cash collateralization shall be (1) utilized to repay
Indebtedness under the Bank Revolving Credit Facility which
repayment shall result in a permanent reduction in the revolving
credit or other commitment relating thereto in an amount equal to
the principal amount so repaid or (2) released to the Company and
applied as Excess Proceeds in accordance with the following
paragraph; or (ii) in
the case of the sale of Non-Core Assets or Capital Stock of Non-
Core Subsidiaries to the extent the aggregate proceeds are less
than $25 million in any twelve consecutive months, within 180
days following the receipt of Net Cash Proceeds from any such
Asset Sale, apply such Net Cash Proceeds to make an investment
in a Related Business.
If, upon completion of the applicable period, any
portion of the Net Cash Proceeds of any Asset Sale shall not
have been applied by the Company as described in clause (i) or
(ii) above (the "Excess Proceeds") and such Excess Proceeds,
together with any remaining unapplied Excess Proceeds from any
prior Asset Sale, exceed $25 million, then the Company will be
obligated either to (A) redeem the Notes pursuant to
Sections 3.01 through 3.07 (on a pro rata basis if the amount
available for such redemption is less than the outstanding
principal amount of the Notes plus accrued and unpaid interest,
if any, to the date of redemption) at a redemption price of 100%
of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of redemption or (B) make an offer
to repurchase the Notes pursuant to Section 3.09 (on a pro rata
basis if the amount available for such repurchase is less than
the outstanding principal amount of the Notes plus accrued and
unpaid interest, if any, to the date of repurchase) at a
purchase price of 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of repurchase;
provided, however, that if following such a redemption or an
offer to repurchase, assuming 100% acceptance, the outstanding
principal amount of the Notes would be less than $150 million in
the aggregate, the Company shall be obligated to either redeem
or offer to repurchase Notes to the extent that following such a
redemption or an offer to repurchase, assuming 100% acceptance,
the outstanding principal amount of the Notes would be equal to
$150 million in the aggregate, and the remaining Excess Proceeds
shall be utilized as provided in the following paragraph until
such time as the aggregate of all unapplied Excess Proceeds from
all Asset Sales is sufficient to redeem or repurchase 100% of
the outstanding principal amount of the Notes, at which time the
Company will be obligated to either redeem or offer to
repurchase the Notes as provided above. If the aggregate
principal amount of Notes surrendered by Holders thereof plus
accrued and unpaid interest, if any, exceeds the amount of
Excess Proceeds, the Company shall select the Notes to be
purchased on a pro rata basis. If the aggregate principal
amount of Notes surrendered by Holders thereof in any Asset Sale
Offer plus accrued and unpaid interest, if any, is less than the
amount of Excess Proceeds, the unused portion of such Excess
Proceeds (exclusive of any Excess Proceeds which could not be
utilized in such Asset Sale Offer as a result of the proviso in
the next preceding sentence) may be used by the Company for
general corporate purposes. Upon completion of an Asset Sale
Offer, the amount of Excess Proceeds shall be reset to the
greater of zero or the amount of Excess Proceeds whose
application would result in the aggregate principal amount of
Notes outstanding being greater than zero and less than $150
million. This Section 4.09 does not apply to a transaction
which is governed by Section 4.08 or 5.01 hereof.
Pending application pursuant to the above paragraphs,
including to the extent unapplied Excess Proceeds do not exceed
$25 million or application of Excess Proceeds would result in
the aggregate principal amount of Notes outstanding being
greater than zero and less than $150 million, Net Cash Proceeds
shall be either invested in Cash Equivalents or remitted to the
applicable lender to pay down any Indebtedness outstanding under
the Bank Revolving Credit Facility.
SECTION 4.10. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall cause each of its
Subsidiaries not to, directly or indirectly, make any Restricted
Payment unless:
(i) no Default or Event of Default shall
have occurred and be continuing at the time of or
immediately after giving effect to such Restricted Payment;
(ii) at the time of and immediately after
giving effect to such Restricted Payment, at least $1.00 of
additional Indebtedness could be incurred under the
Consolidated EBITDA to Consolidated Fixed Charges test
applicable to Indebtedness incurred by the Company (other
than Subordinated Indebtedness) or a Subsidiary pursuant to
Section 4.11(a)(i) hereof;
(iii) immediately after giving effect to such
Restricted Payment, the aggregate amount of all Restricted
Payments declared or made after the Issue Date does not
exceed the sum of (a) 50% of the Consolidated Net Income of
the Company (or in the event such Consolidated Net Income
shall be a deficit, minus 100% of such deficit) during the
period (treated as one accounting period) beginning with
June 1, 1995 and ending on the last day of the fiscal
quarter immediately preceding the date of declaration or
making of such Restricted Payment; plus (b) 100% of the
aggregate Net Equity Proceeds received by the Company from
the issue or sale, after the Issue Date, of Capital Stock
of the Company (other than the issue or sale of (1)
Disqualified Stock or (2) Capital Stock of the Company to
any Subsidiary of the Company or (3) Capital Stock issued
pursuant to the Consensual Plan) and any Indebtedness or
other securities of the Company (other than the issue or
sale to any Subsidiary of the Company) convertible into or
exercisable for Qualified Capital Stock of the Company
which has been so converted or exercised, as the case may
be; plus (c) 100% of the aggregate amount of cash and Cash
Equivalents received by the Company or any Subsidiary in
repayment and termination of (i) any Investment (or portion
thereof) made after the Issue Date which was a Restricted
Payment or (ii) any Mid-State Advance (or portion thereof)
made after the Issue Date, net in each case of the payment
of commissions and other costs and expenses incurred by the
Company or such Subsidiary in connection therewith, and not
to exceed the amount of such Restricted Payment or Mid-
State Advance, as the case may be, and less any such
amounts included in Consolidated Net Income of the Company;
minus (d) 100% of the aggregate amount of Mid-State
Advances; plus (e) $25 million.
Notwithstanding the foregoing, the above limitations
will not prevent:
(i) the payment of any dividend within 60
days after the date of declaration thereof, if at such date
of declaration such payment complied with the provisions
hereof;
(ii) the purchase, redemption, acquisition
or retirement of any shares of Capital Stock of the Company
in exchange for, or out of the net proceeds of the
substantially concurrent sale (other than to a Subsidiary
of the Company) of, shares of Qualified Capital Stock of
the Company;
(iii) the redemption or retirement of
Indebtedness of the Company which is subordinate in right
of payment to the Notes, in exchange for, by conversion
into, or out of the net proceeds of the substantially
concurrent issue or sale (other than to a Subsidiary of the
Company) of Qualified Capital Stock of the Company or
Permitted Refinancing Indebtedness; or
(iv) the declaration or payment of a regular
quarterly dividend in respect of the Common Stock of the
Company at a rate not to exceed $.025 per share;
provided that no Default or Event of Default has occurred and is
continuing at the time, or shall occur under any provision of
this Indenture other than this Section 4.10 (subject to the
following proviso) as a result, of any of the actions
contemplated in clauses (i) through (iv) above, and provided
further, in the case of clause (iv) above, at the time of and
immediately after giving effect to such Restricted Payment, at
least $1.00 of additional indebtedness could be incurred under
the Consolidated EBITDA to Consolidated Fixed Charges test
applicable to Indebtedness incurred by the Company (other than
Subordinated Indebtedness) or a Subsidiary pursuant to Section
4.11(a)(i) hereof.
The Company shall cause Mid-State Homes, Inc. and each
of its Subsidiaries not to, directly or indirectly, make any
Restricted Payment except to the Company or Mid-State Homes,
Inc. or to a Wholly Owned Subsidiary of the Company or Mid-State
Homes, Inc.
SECTION 4.11. LIMITATION ON INCURRENCE OF INDEBTEDNESS;
ISSUANCE OF CAPITAL STOCK.
(a) Subject to the last sentence of this Section
4.11(a), the Company will not, and will not permit any
Subsidiary to, directly or indirectly, incur any Indebtedness
(including Acquired Indebtedness); provided the Company or any
Subsidiary may incur Indebtedness, including Acquired
Indebtedness, at any time after September 1, 1995, if (i) at the
time of such incurrence, the ratio of Consolidated EBITDA to
Consolidated Fixed Charges for the period of the four
consecutive fiscal quarters then ended immediately prior to such
incurrence, taken as one period and calculated on a pro forma
basis as if such Indebtedness had been incurred and the proceeds
therefrom applied on the first day of such four-quarter period
and, in the case of Acquired Indebtedness, as if the related
acquisition (whether by means of purchase, merger or otherwise)
also had occurred on such date with the appropriate adjustments
with respect to such acquisition being included in such pro
forma calculation, would have been, in the case of an incurrence
of Subordinated Indebtedness by the Company, greater than 2.25
to 1 and, in the case of an incurrence of any other Indebtedness
by the Company or of any Indebtedness by a Subsidiary, greater
than 3.0 to 1 and (ii) no Default or Event of Default shall have
occurred and be continuing at the time or as a consequence of
the incurrence of such Indebtedness; provided, however, that
prior to June 1, 1996, the ratio of Consolidated EBITDA to
Consolidated Fixed Charges shall be calculated for the period
consisting of the number of complete fiscal quarters commencing
with the quarter beginning June 1, 1995 and ending immediately
prior to such incurrence, taken as one period, and all other
provisions of this Section 4.11 shall remain applicable. For
purposes of making the computation referred to above,
acquisitions and divestitures that have been made by the Company
or any of its Subsidiaries, including all mergers or
consolidations, during such four-quarter (or, if applicable,
shorter) period or subsequent to such four-quarter (or, if
applicable, shorter) period and on or prior to the time of such
incurrence shall be calculated on a pro forma basis assuming
that all such acquisitions, divestitures, mergers and
consolidations had occurred on the first day of such four-
quarter (or, if applicable, shorter) period.
The foregoing limitation will not apply to the
incurrence of Permitted Indebtedness.
(b) The Company will not permit any of its
Subsidiaries to issue any Capital Stock (other than to the
Company or to a Wholly Owned Subsidiary of the Company). The
Company will not issue Disqualified Stock. The Company will not
permit Mid-State Homes, Inc. or any of its Subsidiaries to issue
any Capital Stock to any Person other than the Company or Mid-
State Homes, Inc. or any of their respective Wholly Owned
Subsidiaries.
SECTION 4.12. LIMITATION ON LIENS.
The Company shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind (other
than Permitted Liens) upon any property or assets of the Company
or of any Subsidiary of the Company or any Indebtedness of any
Subsidiary of the Company, which assets are not governed by the
Pledge Agreement or any Subsidiary Pledge Agreement, now owned
or hereafter acquired, unless all payments due under this
Indenture and the Notes are secured on an equal and ratable
basis with the obligations so secured until such time as such
obligations are no longer secured by a Lien.
SECTION 4.13. LIMITATION ON DIVIDEND AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary of
the Company to (i) pay dividends or make any other distributions
on its Capital Stock, or any other interest or participation in
or measured by its profits, owned by the Company or a
Subsidiary; (ii) pay any Indebtedness owed to the Company or a
Subsidiary of the Company; (iii) make loans or advances to the
Company or a Subsidiary of the Company or Guarantee Indebtedness
of the Company or a Subsidiary; or (iv) transfer any of its
properties or assets to the Company or a Subsidiary of the
Company, except for (a) restrictions contained in the Bank
Revolving Credit Facility as of the Issue Date; (b) consensual
encumbrances binding upon any Person at the time such Person
becomes a Subsidiary of the Company (unless the agreement
creating such consensual encumbrance was entered into in
connection with, or in contemplation of, such entity becoming a
Subsidiary); (c) consensual encumbrances or restrictions under
any agreement that refinances or replaces any agreement
described in clauses (a) or (b) above, provided that the terms
and conditions of any such restrictions are no less favorable to
the Holders than those under the agreement so refinanced or
replaced; (d) customary non-assignment provisions in leases,
purchase money financings and any encumbrance or restriction due
to applicable law; (e) restrictions imposed by law;
(f) restrictions imposed on a Subsidiary pursuant to a bona fide
contract for disposition of all or substantially all of the
assets or 100% of the Capital Stock of such Subsidiary by the
Company; and (g) restrictions on the transfer of assets subject
to Liens permitted by this Indenture.
SECTION 4.14. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, enter into any
transaction or series of transactions (including, without
limitation, the sale, purchase or lease of any assets or
properties or the rendering of any services) with any Affiliate
or holder of 5% or more of the Company's or any Subsidiary's
common stock (other than with the Company or a Wholly Owned
Subsidiary of the Company) (an "Affiliate Transaction"), on
terms that are less favorable to the Company or such Subsidiary,
as the case may be, than would be available in a comparable
transaction negotiated on an arm's length basis with an
unrelated Person. In addition, the Company will not, and will
not permit any Subsidiary of the Company to, enter into an
Affiliate Transaction, or any series of related Affiliate
Transactions, unless (i) with respect to such Affiliate
Transaction or Transactions involving or having a value of more
than $1 million, the Company has obtained the approval of a
majority of the Board of Directors of the Company (including a
majority of the Company's disinterested directors) and (ii) with
respect to such Affiliate Transaction or Transactions involving
or having a value of more than $5 million (other than Affiliate
Transactions relating to the rendering of services, including,
without limitation, underwriting, financial advisory and similar
services), the Company has delivered to the Trustee an opinion
of an independent investment banking firm or appraisal firm of
national standing to the effect that such Affiliate Transaction
or Transactions are fair to the Company or such Subsidiary, as
the case may be, from a financial point of view. Notwith-
standing the foregoing, this provision will not apply to Mid-
State Advances to the extent permitted by Section 4.05(b) or to
the sale of mortgages by Jim Walter Homes, Inc. to Mid-State
Homes, Inc. and the servicing of such mortgages by Jim Walter
Homes, Inc., in each case in the ordinary course of business
consistent with past practice.
The Company will not permit Mid-State Homes, Inc. or
any of its Subsidiaries to, directly or indirectly, enter into
any transaction or series of transactions (including, without
limitation, the sale, purchase or lease of any assets or
properties or the rendering of any services) with any Affiliate
or holder of 5% or more of the Company's or any of its
Subsidiaries' common stock or of Mid-State Homes, Inc.'s or any
of its Subsidiaries' common stock (other than the Company or
Mid-State Homes, Inc. or a Wholly Owned Subsidiary of the
Company or of Mid-State Homes, Inc.) (a "Mid-State Affiliate
Transaction") on terms that are less favorable to Mid-State
Homes, Inc. or its Subsidiary, as the case may be, than would be
available in a comparable transaction negotiated on an arm's
length basis with an unrelated Person. In addition, the Company
will not permit Mid-State Homes, Inc. or any of its Subsidiaries
to enter into a Mid-State Affiliate Transaction or any series of
related Mid-State Affiliate Transactions unless (i) with respect
to such Mid-State Affiliate Transaction or Transactions
involving or having a value of more than $1 million, the Company
has obtained the approval of a majority of the Board of
Directors of the Company (including a majority of the Company's
disinterested directors) and (ii) with respect to such Mid-State
Affiliate Transaction or Transactions involving or having a
value of more than $5 million (other than Mid-State Affiliate
Transactions relating to the rendering of services, including,
without limitation, underwriting, financial advisory and similar
services), the Company has delivered to the Trustee an opinion
of an independent investment banking firm of national standing
to the effect that such Mid-State Affiliate Transaction or
Transactions are fair to Mid-State Homes, Inc. or its
Subsidiary, as the case may be, from a financial point of view.
SECTION 4.15. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.
Except to the extent included in clause (vii) of the
definition of Permitted Indebtedness, the Company will not, and
will not permit any of its Subsidiaries to, enter into any sale
and leaseback transaction with respect to any property (whether
now owned or hereafter acquired) unless (i) the sale or transfer
of the property to be leased complies with the requirements of
Section 4.09 hereof and (ii) the Company or such Subsidiary
would be entitled pursuant to Section 4.11(a)(i) hereof to incur
additional Indebtedness under the Consolidated EBITDA to
Consolidated Fixed Charges test applicable to Indebtedness
incurred by the Company (other than Subordinated Indebtedness)
or a Subsidiary in an amount at least equal to the Attributable
Debt in respect of such sale and leaseback transaction.
SECTION 4.16. COMPLIANCE WITH LAWS
The Company shall comply, and shall cause each of its
Subsidiaries to comply, with all applicable statutes, rules,
regulations, orders and restrictions of the United States of
America, all states and municipalities thereof, and of any
governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing,
in respect of the conduct of their respective businesses and the
ownership of their respective properties, except such as are
being contested in good faith and by appropriate proceedings and
except for such noncompliances as would not in the aggregate
have a material adverse effect on the financial condition or
results of operations of the Company and its Subsidiaries taken
as a whole.
SECTION 4.17. LIMITATION ON SALE OF CAPITAL STOCK OF
SUBSIDIARIES
The Company will not, and will not permit any of its
Subsidiaries to, sell, pledge, hypothecate or otherwise convey
or dispose of any Capital Stock of the Company's Subsidiaries
(other than pursuant to the Pledge Agreement or Subsidiary
Pledge Agreement governing the Pledged Shares) except for the
sale by the Company or a Subsidiary of all or part of the
Capital Stock of a Non-Core Subsidiary and except for the sale
of 100% of the Capital Stock of any other Subsidiary owned
collectively by the Company and/or its Subsidiaries; provided
that in either case such sale complies with the requirements of
Section 4.09.
The Company will not permit Mid-State Homes, Inc. or
any of its Subsidiaries to sell, pledge, hypothecate or
otherwise convey or dispose of any Capital Stock of the
Subsidiaries of Mid-State Homes, Inc. to any Person other than
the Company or Mid-State Homes, Inc. or any of their respective
Wholly Owned Subsidiaries.
SECTION 4.18. PAYMENTS FOR CONSENTS.
Neither the Company nor any of its Subsidiaries shall,
directly or indirectly, pay or cause to be paid, any
consideration, whether by way of interest, fee or otherwise, to
any Holder of any Note for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this
Indenture, the Notes, the Pledge Agreement or any Subsidiary
Pledge Agreement unless such consideration is offered to be paid
or agreed to be paid to all Holders of the Notes which so
consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or
agreement.
ARTICLE FIVE
SUCCESSORS
SECTION 5.01. LIMITATION ON MERGERS, CONSOLIDATIONS AND SALES
OF ASSETS
The Company will not consolidate or merge with any
other Person, or permit any other Person to consolidate or merge
with the Company, nor will the Company sell, lease, convey or
otherwise dispose of all or substantially all of its assets
unless (i) the entity formed by or surviving any such
consolidation or merger, or to which such sale, lease,
conveyance or other sale shall have been made (the "Surviving
Entity"), is a corporation organized and existing under the laws
of the United States, any state thereof, or the District of
Columbia; (ii) if the Company is not the Surviving Entity, the
Surviving Entity assumes by supplemental indenture all of the
obligations of the Company under the Notes and this Indenture;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be
continuing; (iv) immediately after giving effect to such
transaction (but prior to any purchase accounting adjustments
resulting from the transaction), the Consolidated Net Worth of
the Surviving Entity would be at least equal to the Consolidated
Net Worth of the Company immediately prior to such transaction;
and (v) immediately after giving effect to such transaction, the
Surviving Entity could incur at least $1.00 of additional
Indebtedness under the Consolidated EBITDA to Consolidated Fixed
Charges test applicable to Indebtedness incurred by the Company
(other than Subordinated Indebtedness) or a Subsidiary pursuant
to Section 4.11(a)(i).
The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers'
Certificate to the foregoing effect, an Opinion of Counsel
stating that the proposed transaction and such supplemental
indenture comply with this Section 5.01 and an Accountants'
Certificate setting forth the computations necessary to confirm
the satisfaction of the conditions set forth in clauses (iv) and
(v) of this Section 5.01 and certifying the accuracy thereof.
The Trustee shall be entitled to rely conclusively upon such
Officers' Certificate, Opinion of Counsel and Accountants'
Certificate.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger involving the
Company, or any sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company, in
accordance with Section 5.01 hereof, the successor corporation
(if not the Company) formed by such consolidation or with which
the Company is merged or to which such sale, lease, conveyance
or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture and the Notes
referring to the "Company" shall refer instead to the successor
corporation and not to the Company), and may exercise every
right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the
Company herein. When a successor corporation assumes all of the
obligations of the Company hereunder and under the Notes and
agrees to be bound hereby and thereby, the predecessor Company
shall be released from such obligations.
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" shall occur upon:
(i) failure by the Company to pay interest
on the Notes for 5 Business Days after becoming due;
(ii) failure by the Company to pay the
principal of or premium (if any) on the Notes, whether at
maturity or upon acceleration, redemption or otherwise
(including the failure to repurchase the Notes tendered
pursuant to a Change of Control Offer or Asset Sale Offer);
(iii) failure by the Company to perform any
of its obligations under the second paragraph of Section 5
or Section 7 of the Pledge Agreement or failure by any
Subsidiary to perform any of its obligations under the
second paragraph of Section 5 or Section 7 of any
Subsidiary Pledge Agreement or the Trustee is entitled to
exercise any remedies pursuant to Section 11 of the Pledge
Agreement or any Subsidiary Pledge Agreement;
(iv) failure by the Company or any of its
Subsidiaries to comply with the provisions of Section 4.08,
4.09 or 5.01 of this Indenture;
(v) failure by the Company or any of its
Subsidiaries to comply with the provisions of Section 4.05
(b), 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17 or 4.18 of
this
Indenture for 30 days after written notice specifying the
failure and that the same is a Default shall have been
given to the Company by the Trustee or Holders of 25% in
principal amount of the Notes outstanding;
(vi) failure by the Company or any of its
Subsidiaries to comply with any of its covenants or the
breach by the Company or any of its Subsidiaries of any of
its representations or warranties hereunder or under the
Pledge Agreement or any Subsidiary Pledge Agreement (other
than a breach of a covenant, representation or warranty
which is specifically dealt with elsewhere in this
Section 6.01) for 60 days after written notice specifying
the failure and that the same is a Default shall have been
given to the Company by the Trustee or Holders of 25% in
principal amount of the Notes outstanding;
(vii) default or defaults (including a
payment default) under one or more agreements, instruments,
mortgages, bonds, debentures or other evidence of
Indebtedness under which the Company or any of its
Significant Subsidiaries has an outstanding principal
amount of Indebtedness in excess of $25 million
individually or $50 million in the aggregate for all such
issues of all such Persons and either (x) such Indebtedness
is already due and payable in full or (y) such default or
defaults have resulted in the acceleration of the maturity
of such Indebtedness;
(viii) any final judgment or order (not
covered by insurance) is entered against the Company or any
Significant Subsidiary in excess of $25 million
individually or $50 million in the aggregate for all such
final judgments or orders against all such Persons and
remains undischarged or unstayed for 60 days;
(ix) the Company or any of its Significant
Subsidiaries pursuant to or within the meaning of any
Bankruptcy Law:
(a) commences a voluntary case or proceeding,
(b) consents to the entry of a judgment, decree
or order for relief against it in an involuntary case or
proceeding,
(c) consents to the appointment of a Custodian
of it or for all or substantially all of its property,
(d) consents to the institution of a bankruptcy
or an insolvency proceeding against it,
(e) makes a general assignment for the benefit
of its creditors, or
(f) takes any corporate action to authorize or
effect any of the foregoing;
(x) a court of competent jurisdiction
enters a judgment, decree or order under any Bankruptcy Law
that is for relief against the Company or any Significant
Subsidiary of the Company, in an involuntary case or
proceeding which shall:
(a) approve a petition seeking reorganization,
arrangement, adjustment or composition in respect of the Company
or any Significant Subsidiary of the Company,
(b) appoint a Custodian for the Company or any
Significant Subsidiary of the Company or for all or
substantially all of the property of any of them, or
(c) order the winding-up or liquidation of the
Company or any Significant Subsidiary of the Company,
and in each case the judgment, order or decree remains unstayed
and in effect for 60 days; or
(xi) any Lien granted or purported to be
granted pursuant to the Pledge Agreement or any Subsidiary
Pledge Agreement shall be or become unenforceable or
invalid, or the priority thereof shall become diminished,
or the Company or any Subsidiary shall contest or disaffirm
any such Lien.
SECTION 6.02. ACCELERATION.
If an Event of Default occurs and is continuing, the
Trustee by written notice to the Company, or the Holders of at
least 25% of the aggregate principal amount of the then
outstanding Notes, by written notice to the Company and the
Trustee, may declare all of the Notes to be due and payable
immediately. Upon such declaration, the unpaid principal of,
premium, if any, and accrued interest on the Notes shall be due
and payable. Notwithstanding the foregoing, in the case of an
Event of Default specified in clause (ix) or (x) of Section 6.01
with respect to the Company or any Significant Subsidiary, such
an amount shall ipso facto become immediately due and payable
without any declaration, notice or other act on the part of the
Trustee or any Holder.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment
of the principal of, premium, if any, and interest on the Notes
and to enforce the performance of any provision of the Notes or
this Indenture.
The Trustee may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in
the proceeding. A delay or omission by the Trustee or any
Holder of a Note in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default.
All remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Subject to Sections 6.07 and 9.02, the Holders of not
less than a majority in aggregate principal amount of the then
outstanding Notes, by written notice to the Trustee, may on
behalf of the Holders of all of the Notes (a) waive any existing
Default or Event of Default and its consequences, except a
continuing Default or Event of Default in the payment of
interest on, premium, if any, or the principal of, the Notes
and/or (b) rescind an acceleration and its consequences,
including any related payment default that resulted from such
acceleration, if the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction. Upon
any such waiver or rescission, such Default shall cease to
exist, and any Event of Default arising therefrom shall be
deemed to have been cured for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in aggregate principal amount of
the then outstanding Notes may direct the time, method and place
of conducting any proceeding for exercising any remedy available
to the Trustee or exercising any trust or power conferred on it
under this Indenture; provided that the Trustee may take any
other actions it deems proper that are not inconsistent with
these directions. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the
Trustee determines may be unduly prejudicial to the rights of
other Holders or that may involve the Trustee in personal
liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder gives to the Trustee written
notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal
amount of the then outstanding Notes make a written request to
the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if
requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer and,
if requested, the provision of indemnity; and
(e) during such 60-day period the Holders of a
majority in principal amount of the then outstanding Notes do
not give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over
another Holder.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture,
the right of any Holder to receive payment of principal,
premium, if any, and interest on the Notes, on or after the
respective due dates expressed in the Notes (including in
connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or
(ii) occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal,
premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim
and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and the Holders
allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Notes), its creditors or its property
and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on
any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof out of the
estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled
to receive in such proceeding whether in liquidation or under
any plan of reorganization or arrangement or otherwise. Nothing
herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or
to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this
Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for
amounts due under Section 7.07 and 6.09 hereof, including
payment of all compensation, expense and liabilities incurred,
and all advances made, by the Trustee and the costs and expenses
of collection;
Second: to Holders for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably,
without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium, if
any and interest, respectively; and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for
any payment to Holders.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the
claim or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
SECTION 6.12. EVENT OF DEFAULT FROM WILLFUL ACTION.
In the case of any Event of Default occurring by
reason of any willful action (or inaction) taken (or not taken)
by or on behalf of the Company with the intention of avoiding
payment of the premium that the Company would have had to pay if
the Company then had elected to redeem any series of Notes
pursuant to Section 3.07 hereof, a one percent premium shall
also become and be immediately due and payable to the extent
permitted by law.
The Trustee will have no responsibility for making, or
obligation to make, any determination that any such Event of
Default has occurred by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company
pursuant to this Section 6.12. If such premium is payable
hereunder, the Company will provide the Trustee with an
Officers' Certificate setting forth the date such premium is
required to be paid at least 45 days prior to such payment date.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of
Default:
(i) the duties of the Trustee shall be
determined solely by the express provisions of this
Indenture and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished
to the Trustee conforming to the requirements of this
Indenture. However, in the case of any such certificates or
opinions which, by any provision hereof, are required to be
furnished to the Trustee, the Trustee shall examine such
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) No provision of this Indenture shall be
construed to relieve the Trustee from liabilities for its own
negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph does not limit the
effect of paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer, unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with
respect to any action it takes or omits to take in good
faith in accordance with a direction received by it
pursuant to Section 6.05 hereof.
(d) No provision of this Indenture shall require
the Trustee to expend or risk its own funds or incur any
liability. The Trustee shall be under no obligation to exercise
any of its rights and powers under this Indenture at the request
of any Holders, unless such Holders shall have offered to the
Trustee security and indemnity satisfactory to the Trustee
against any cost, loss, liability or expense.
(e) The Trustee shall not be liable for interest
on any money received by it except as the Trustee may agree in
writing with the Company. Money held in trust by the Trustee
need not be segregated from other funds except to the extent
required by law.
(f) Whether or not therein expressly so
provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section
7.01.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any
document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from
acting, it may require an Officers' Certificate or an Opinion of
Counsel or both. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or
any Opinion of Counsel shall be full and complete authorization
and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys
and agents and shall not be responsible for the misconduct or
negligence of any attorney or agent appointed with due care.
(d) The Trustee shall not be liable for any
action it takes or omits to take in good faith that it believes
to be authorized or within the rights or powers conferred upon
it by this Indenture.
(e) Unless otherwise specifically provided in
this Indenture, any demand, request, direction or notice from
the Company shall be sufficient if signed by an Officer of the
Company.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may make loans to,
accept deposits from and perform services for, and may otherwise
deal with, the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it
must eliminate such conflict within 90 days, apply to the SEC
for permission to continue as trustee or resign. Any Agent may
do the same with like rights and duties. The Trustee is also
subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture
or the Notes, shall not be accountable for any money paid to the
Company or upon the Company's direction under any provision of
this Indenture, shall not be responsible for the use or
application of any money received by any Paying Agent other than
the Trustee, and shall not be responsible for any statement or
recital herein or any statement in the Notes or any other
document in connection with the sale of the Notes or pursuant to
this Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or an Event of Default occurs and is
continuing and if it is known to a Responsible Officer of the
Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs.
Except in the case of a Default or Event of Default in payment
of principal, premium, if any, or interest on any Note, the
Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each [__________] 15 beginning
with the [__________] 15 following the date of this Indenture,
the Trustee shall mail to the Holders of the Notes a brief
report dated as of such reporting date that complies with TIA section
313(a) (but if no event described in TIA section 313(a) has
occurred within the twelve months preceding the reporting date,
no report need be transmitted). The Trustee also shall comply
with TIA section
313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA section 313(c).
A copy of each report at the time of its mailing to
the Holders shall be mailed to the Company and filed with the
SEC and each stock exchange on which the Notes are listed. The
Company shall promptly notify the Trustee whenever the Notes
become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and
services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon
request for all disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services.
Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any
and all losses, damages, claims, liabilities or expenses
incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture
against the Company (including this Section 7.07) and defending
itself against any claim (whether asserted by any Holder or any
other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to
the extent any such loss, damage, claim, liability or expense
may be attributable to its negligence or bad faith. The Trustee
shall notify the Company promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder
unless such failure prejudices the Company. The Company shall
defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which
consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07
shall survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations under this
Section 7.07, the Trustee shall have a Lien prior to the Notes
on all money or property held or collected by the Trustee,
except that held in trust to pay principal of and interest on
particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(ix) or
Section 6.01(x), the expenses and the compensation for the
services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as
provided in this Section 7.08.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the
Company. The Holders of a majority in principal amount of the
then outstanding Notes may remove the Trustee by so notifying
the Trustee and the Company in writing. The Company may remove
the Trustee if:
(a) the Trustee fails to comply with Section
7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect to the
Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge
of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of the Trustee for any reason, the Company
shall promptly appoint a successor Trustee.
If a successor Trustee does not accept its appointment
within 30 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company, or the Holders of at least
10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee, after written request by any Holder
who has been a Holder for at least six months, fails to comply
with Section 7.10, such Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company.
Thereupon, the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all
the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor
Trustee, provided all sums owing to the Trustee hereunder have
been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into,
or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation
without any further act shall be the successor Trustee; provided
that such successor is eligible and qualified under Section 7.10
hereof.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that
is a corporation organized and doing business under the laws of
the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trust power,
that is subject to supervision or examination by federal or
state authorities and that has a combined capital and surplus of
at least $100 million or, in the event that the Trustee is part
of a bank holding company system, the bank holding company must
have a combined capital and surplus of at least $ 100 million,
in either case as set forth in its most recent published annual
report of condition.
This Indenture shall always have a Trustee who
satisfies the requirements of TIA section 310(a)(1), (2) and (5).
The
Trustee is subject to TIA section 310(b), including the provision
permitted by the second sentence of TIA section 310(b)(9).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY.
The Trustee is subject to TIA section 311(a), excluding
any creditor relationship listed in TIA section 311(b). A
Trustee who has
resigned or been removed shall be subject to TIA section 311(a)
to the extent indicated therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF INDENTURE; OPTION TO EFFECT LEGAL
DEFEASANCE OR COVENANT DEFEASANCE.
(a) This Indenture shall cease to be of further
effect (except that the Company's obligations under Section 7.07
and the Company's, the Trustee's and any Paying Agent's
obligations under Section 8.06 shall survive) when all
outstanding Notes theretofore authenticated and issued have been
delivered (other than destroyed, lost or stolen Notes that have
been replaced or paid) to the Trustee for cancellation and the
Company has paid all sums payable hereunder.
(b) In addition, the Company may, at the option of
its Board of Directors evidenced by a resolution set forth in an
Officers' Certificate, at any time, elect to have either Section
8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article
Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof
of the option applicable to this Section 8.02, the Company
shall, subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, be deemed to have been discharged from
its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes, which
shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes, this
Indenture, the Pledge Agreement and any Subsidiary Pledge
Agreement (and the Trustee, on demand of and at the expense of
the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Notes to receive solely from
the trust fund described in Section 8.04 hereof, and as more
fully set forth in such Section, payments in respect of the
principal, of, premium, if any, and interest on such Notes when
such payments are due, (b) the Company's, the Trustee's and the
Paying Agent's obligations with respect to such Notes under
Sections 2.03 through 2.07 and Section 4.02 and the Company's
obligations under Section 7.07 and (c) this Article Eight.
Subject to compliance with this Article Eight, the Company may
exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof
of the option applicable to this Section 8.03, the Company
shall, subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, be released from its obligations under
the covenants contained in Sections 4.08, 4.09, 4.10, 4.11,
4.12, 4.13, 4.14, 4.15 and 4.17 hereof with respect to the
outstanding Notes on the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes
shall thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all
other purposes hereunder (it being understood that such Notes
shall not be deemed outstanding for accounting purposes). For
this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, the Company may omit to comply with and
shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any
such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of
Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(iv)
through 6.01(viii) hereof shall not constitute Events of
Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the
application of either Section 8.02 or 8.03 hereof to the
outstanding Notes:
In order to exercise either Legal Defeasance or
Covenant Defeasance:
(a) the Company must irrevocably deposit or
cause to be deposited with the Trustee or with a trustee
satisfactory to the Trustee and the Company under the terms of
an irrevocable trust agreement in form and substance
satisfactory to the Trustee, in trust, for the benefit of the
Holders of the Notes, (A) cash in United States dollars or (B)
Government Securities maturing as to principal and interest in
such amounts and at such times, or (C) a combination thereof, in
each case in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and
interest on the outstanding Notes on the stated date for payment
thereof or on the applicable redemption date, as the case may
be, of such principal or installment of principal of, premium,
if any, or interest on the outstanding Notes;
(b) in the case of an election under Section
8.02 hereof, the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States acceptable to the
Trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a
change in the applicable federal income tax law, in either case
to the effect that the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section
8.03 hereof, the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States acceptable to the
Trustee confirming that the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have
occurred and be continuing (1) on the date of such deposit
(other than a Default or Event of Default resulting from the
incurrence of Indebtedness all or a portion of the proceeds of
which will be used to defease the Notes pursuant to this Article
Eight concurrently with such incurrence) or (2) insofar as
Section 6.01(ix) or 6.01(x) hereof is concerned, at any time
during the period ending on the 91st day after the date of
deposit (it being understood that the condition in this clause
(2) is a condition subsequent and shall not be deemed satisfied
until the expiration of such period);
(e) such Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or constitute a
default under, this Indenture or any other material agreement or
instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the
Trustee an Opinion of Counsel in the United States acceptable to
the Trustee to the effect that:
(i) the irrevocable deposit of the trust
funds with the Trustee in accordance with Section 8.04 hereof
will not constitute a transfer of property of the Company or
such other depositor voidable as a fraudulent transfer or
conveyance under Sections 544(b) and 548 of Title 11 of the
United States Code, 11 U.S.C. section 101 et seq. (the
"Bankruptcy
Code"), or any successor to such Sections, or under Sections
273, 274, 275 and 276 of the New York Debtor and Creditor Law or
any successor to such Sections;
(ii) the irrevocable deposit of the trust
funds with the Trustee in accordance with Section 8.04 hereof
will not constitute a transfer of property of the Company or
such other depositor voidable as a preference under Section 547
of the Bankruptcy Code, or any successor to such Section, in the
event that after the passage of a period of 93 days following
such deposit a voluntary or involuntary case under the
Bankruptcy Code is commenced by or against the Company or such
other depositor;
(iii) if, contemporaneously with the
irrevocable deposit of the trust funds with the Trustee in
accordance with Section 8.04 hereof, the Trustee releases, in a
contemporaneous exchange for new value, collateral previously
pledged (in a transaction that is neither void nor voidable
under any applicable law) to secure the Notes, such irrevocable
deposit will not constitute a transfer of property of the
Company or such other depositor voidable under Section 547 of
the Bankruptcy Code, or any successor to such Section, to the
extent of the value of such released collateral, in the event
that following such deposit and release a voluntary or
involuntary case under the Bankruptcy Code is commenced by or
against the Company or such other depositor; and
(iv) for so long as the trust funds are
held in trust by the Trustee pursuant to Section 8.04 hereof for
the benefit of the Holders, the trust funds will not be
considered assets of the Company or such other depositor which
may be used to satisfy claims of creditors of the Company or
such other depositor in the event that a voluntary or
involuntary case under the Bankruptcy Code is commenced by or
against the Company or such other depositor after the passage of
a period of 93 days following the irrevocable deposit by the
Company or such other depositor of the trust funds with the
Trustee;
(g) the Company shall have delivered to the
Trustee an Officers' Certificate stating that the deposit was
not made by the Company with the intent of defeating, hindering,
delaying or defrauding any actual creditors of the Company; and
(h) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to
the Legal Defeasance or the Covenant Defeasance have been
complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and
Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the "Trustee") pursuant to
Section 8.04 hereof in respect of the outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the
Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, and interest,
but such money need not be segregated from other funds except to
the extent required by law.
The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the cash or Government Securities deposited pursuant to
Section 8.04 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company
from time to time upon the request of the Company any money or
Government Securities held by it as provided in Section 8.04
hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.04(a) hereof), are in excess
of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Subject to applicable law, any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after
such principal, and premium, if any, or interest has become due
and payable shall be paid to the Company on its request or (if
then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as a creditor,
look only to the Company for payment thereof (unless an
abandoned property law designates another Person), and all
liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any
such repayment, may at the expense of the Company cause to be
published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any
United States Dollars or Government Securities in accordance
with Section 8.02 or 8.03 hereof, as the case may be, by reason
of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture
and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 hereof
until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the
Company makes any payment of principal of, premium, if any, or
interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of
the Holders of such Notes to receive such payment from the money
held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the
Company and the Trustee may amend or supplement this Indenture,
the Pledge Agreement, any Subsidiary Pledge Agreement or the
Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or
inconsistency;
(b) to provide for uncertificated Notes in
addition to or in place of certificated Notes;
(c) to provide for the assumption of the
Company's obligations to Holders in the case of a merger or
consolidation or sale, assignment, transfer, lease, conveyance
or other disposition of all or substantially all of the
Company's properties or assets pursuant to Article Five hereof;
(d) to make any change that would provide any
additional rights or benefits to the Holders or that does not
adversely affect the rights hereunder of any Holder;
(e) to comply with requirements of the SEC in
order to effect or maintain the qualification of this Indenture
under the TIA; or
(f) to evidence or provide for a replacement
Trustee under Section 7.08.
Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution
of any such amended or supplemental Indenture, and upon receipt
by the Trustee of the documents described in Section 9.06
hereof, the Trustee shall join with the Company in the execution
of any amended or supplemental Indenture authorized or permitted
by the terms of this Indenture and make any further appropriate
agreements and stipulations that may be therein contained, but
the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
The Company and the Trustee may amend or supplement
this Indenture, the Pledge Agreement or any Subsidiary Pledge
Agreement and the Notes may be amended or supplemented, with the
consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for
the Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium, if
any, or interest on the Notes, except a payment default
resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture, the Pledge
Agreement or any Subsidiary Pledge Agreement or the Notes, may
be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including
consents obtained in connection with a tender offer or exchange
offer for the Notes).
Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution
of any such amended or supplemental Indenture, and upon the
filing with the Trustee of evidence satisfactory to the Trustee
of the consent of the Holders as aforesaid, and upon receipt by
the Trustee of the documents described in Section 9.06 hereof,
the Trustee shall join with the Company in the execution of such
amended or supplemental Indenture unless such amended or
supplemental Indenture affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated
to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular form
of any proposed amendment or waiver, but it shall be sufficient
if such consent approves the substance thereof.
After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Company shall mail to the
Holders of the Notes a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and
6.07 hereof, the Holders of a majority in aggregate principal
amount of the Notes then outstanding may waive compliance in a
particular instance by the Company with any provision of this
Indenture, the Pledge Agreement or any Subsidiary Pledge
Agreement or the Notes. Anything herein to the contrary
notwithstanding, without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose
Holders must consent to an amendment, supplement or waiver of
any provision of this Indenture, the Pledge Agreement or any
Subsidiary Pledge Agreement or the Notes;
(b) reduce the principal of or change the fixed
maturity of any Note;
(c) alter any of the provisions permitting or
requiring the redemption of the Notes, except with respect to
permitting or requiring redemption or repurchase of Notes
pursuant to Sections 4.08 and 4.09 hereof, or reduce the
purchase price payable or change the time for payment in
connection with repurchases or redemptions of Notes pursuant to
Sections 4.08 or 4.09 hereof;
(d) reduce the rate of or change the time for
payment of interest, including default interest, on any Note;
(e) waive a Default or Event of Default in the
payment of principal of or premium, if any, or interest on the
Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of
the Notes and a waiver of the payment default that resulted from
such acceleration);
(f) make the principal of, or the interest on,
any Note payable in money other than that stated in the Notes;
(g) make any change in the provisions of this
Indenture relating to waivers of past Defaults or the rights of
Holders to receive payments of principal of, premium, if any, or
interest on the Notes;
(h) waive a redemption payment with respect to
any Note except for a payment required by Section 4.08 or 4.09;
(i) alter the ranking of the Notes relative to
other Indebtedness of the Company;
(j) release any Pledged Shares which are the
Capital Stock of a Significant Subsidiary, except in connection
with a sale, transfer or other disposition permitted by this
Indenture and the Pledge Agreement or any Subsidiary Pledge
Agreement, as the case may be;
(k) waive or amend Section 4.18 hereof; or
(l) make any change in Section 6.04 or 6.07
hereof or in the foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the
Notes shall be set forth in an amended or supplemental Indenture
that complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder is a continuing consent
by the Holder and every subsequent Holder of a Note or portion
of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on
any Note. However, any such Holder of a Note or subsequent
Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date
the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
Upon the direction of the Company, the Trustee may
place an appropriate notation about an amendment, supplement or
waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall
authenticate new Notes that reflect the amendment, supplement or
waiver.
Failure to make the appropriate notation or issue a
new Note shall not affect the validity and effect of such
amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee need not sign any supplemental indenture
adversely affecting its rights. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive
and (subject to Section 7.01) shall be fully protected in
relying upon, an Officer's Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture, and that
it will be valid and binding upon the Company in accordance with
its terms.
ARTICLE TEN
SECURITY
SECTION 10.01. PLEDGE AGREEMENT.
In order to secure the due and punctual payment of the
principal of, premium, if any, and interest on the Notes when
and as the same shall be due and payable, whether on an interest
payment date, at maturity, by acceleration, call for redemption,
or otherwise, and interest on the overdue principal, premium and
interest, if any, of the Notes and performance of all other
obligations of the Company to the Holders or the Trustee under
this Indenture and the Notes, according to the terms hereunder
or thereunder, the Company will, and to the extent applicable
will cause each Subsidiary to, make an assignment of its right,
title and interest in and to the Pledged Shares to the Trustee
pursuant to the Pledge Agreement or a Subsidiary Pledge
Agreement, as the case may be, and to the extent therein
provided, no later than the Issue Date. The Company shall cause
each Subsidiary not a party to a Subsidiary Pledge Agreement to
execute a Subsidiary Pledge Agreement at the time such
Subsidiary acquires any Pledged Shares. Each Holder, by
accepting a Note, agrees to all of the terms and provisions of
the Pledge Agreement and any Subsidiary Pledge Agreement, as the
same may be amended from time to time pursuant to the provisions
of the Pledge Agreement and any Subsidiary Pledge Agreement.
The due and punctual payment of the principal of and interest on
the Notes when and as the same shall be due and payable, whether
at maturity, by acceleration, call for redemption or otherwise,
and interest on the overdue principal of and interest, if any,
on the Notes and payment and performance of all other
obligations of the Company to the Holders or the Trustee under
this Indenture and the Notes, according to the terms hereunder
or thereunder, shall be secured by the Pledged Shares as
provided in the Pledge Agreement and any Subsidiary Pledge
Agreement. The Pledge Agreement and each Subsidiary Pledge
Agreement, as the case may be, will create a direct and
continuing valid Lien on the Pledged Shares, as set forth
therein, free and clear of all Liens whatsoever, except the
Liens created by the Pledge Agreement or any Subsidiary Pledge
Agreement.
SECTION 10.02. RECORDING, ETC.
The Company will cause, at its own expense, the Pledge
Agreement, any Subsidiary Pledge Agreement, this Indenture and
all amendments or supplements thereto to be registered, recorded
and filed or re-recorded, re-filed and renewed in such manner
and in such place or places, if any, as may be required by law
in order fully to preserve and protect the security interest
created under the Pledge Agreement and any Subsidiary Pledge
Agreement in the Pledged Shares and to effectuate and preserve
the security therein of the Holders and all rights of the
Trustee.
The Company shall furnish to the Trustee:
(1) promptly after the execution and delivery of the
Pledge Agreement and any Subsidiary Pledge Agreement covering
the Pledged Shares, an Opinion of Counsel either (a) stating
that, in the opinion of such Counsel, this Indenture and the
assignment of the Pledged Shares intended to be made by the
Pledge Agreement and any Subsidiary Pledge Agreement and all
other instruments of further assurance or amendment have been
properly recorded, registered and filed to the extent necessary
to make effective the security interest in the Pledged Shares
intended to be created by the Pledge Agreement and any
Subsidiary Pledge Agreement, and reciting the details of such
action or referring to prior Opinions of Counsel in which such
details are given, and stating that as to the security interests
in the Pledged Shares created pursuant to the Pledge Agreement
and any Subsidiary Pledge Agreement such recording, registering
and filing are the only recordings, registering and filings
necessary to give notice thereof and that no re-recordings, re-
registering or refilings are necessary to maintain such notice,
and further stating that all financing statements and
continuation statements have been executed and filed that are
necessary to preserve and protect fully the rights of the
Holders and the Trustee with respect to the security interests
in the Pledged Shares hereunder and under the Pledge Agreement
and any Subsidiary Pledge Agreement or (b) stating that, in the
opinion of such counsel, no such recordation, registration or
filing is necessary to make such Lien and assignment effective;
and
(2) within 30 days after __________ 1 in each year
beginning with __________ 1, 1996, an Opinion of Counsel, dated
as of such date, either (a) stating that, in the opinion of such
counsel, such action has been taken with respect to the
recording, registering, filing, re-recording, re-registering and
refiling of all supplemental indentures, financing statements,
continuation statements or other instruments of further
assurance as is necessary to maintain the Lien of the Pledge
Agreement and any Subsidiary Pledge Agreement and reciting with
respect to the security interests in the Pledged Shares the
details of such action or referring to prior Opinions of Counsel
in which such details are given, and stating that all financing
statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the
rights of the Holders and the Trustee hereunder and under the
Pledge Agreement and any Subsidiary Pledge Agreement with
respect to the security interests in the Pledged Shares or
(b) stating that, in the opinion of such counsel, no such
recordation, registration or filing is necessary to maintain
such Lien and assignment.
If at any time the Notes are no longer secured
pursuant to the Pledge Agreement and any Subsidiary Pledge
Agreement, whether due to the payment in full or defeasance of
the Notes, the release of the collateral thereunder or
otherwise, and if all amounts due the Trustee under the Pledge
Agreement, any Subsidiary Pledge Agreement and hereunder have
been paid, the security interest hereunder and under the Pledge
Agreement and any Subsidiary Pledge Agreement for the benefit of
the Notes may be released at the sole option of the Company.
The release of any Pledged Shares from the terms
hereof and the Pledge Agreement and any Subsidiary Pledge
Agreement will not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to
the extent the Pledged Shares are released pursuant to the
Pledge Agreement and any Subsidiary Pledge Agreement. The
Trustee and each of the Holders acknowledge that a release of
Pledged Shares in accordance with the terms of the Pledge
Agreement and any Subsidiary Pledge Agreement will not be deemed
for any purpose to be an impairment of the security under this
Indenture. To the extent applicable, the Company shall cause
TIA section 314(d) relating to the release of property or
securities
from the Lien of the Pledge Agreement and any Subsidiary Pledge
Agreement to be complied with. Any certificate or opinion
required by TIA section 314(d) may be made by an Officer of the
Company, except in cases in which TIA section 314(d) requires
that such certificate or opinion be made by an independent
Person.
SECTION 10.03. SUITS TO PROTECT THE PLEDGED SHARES.
At the expense of the Company, the Trustee shall have
power to institute and to maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Pledged
Shares by any acts which may be unlawful or in violation of the
Pledge Agreement or any Subsidiary Pledge Agreement or this
Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interests and the
interests of the Holders in the Pledged Shares (including power
to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the
security hereunder or be prejudicial to the interest of the
Holders or the Trustee).
SECTION 10.04. TRUSTEE DUTIES.
The powers conferred upon the Trustee by this Article
Ten are solely to protect the pledges provided for herein and
shall not impose any duty upon the Trustee to exercise any such
powers except as expressly provided in this Indenture. The
Trustee shall be under no duty to the Company to make or give
any presentment, demand for performance, notice of
nonperformance, protest, notice of protest, notice of dishonor
or other notice or demand in connection with any Pledged Shares
or to take any steps necessary to preserve any rights against
prior parties except as expressly provided in this Indenture.
To the extent permitted by law, the Trustee shall not be liable
to the Company for failure to collect or realize upon any or all
of the Pledged Shares or for any delay in so doing, nor shall
the Trustee be under any duty to the Company to take any action
whatsoever with regard thereto. The Trustee has no duty to the
Company or to the Holders to comply with any filing or other
legal requirements necessary to establish or maintain the
validity, priority or enforceability of, or the Trustee's rights
in or to, any of the Pledged Shares.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by any of TIA sections
310-317, inclusive, through operation of TIA section 318(c), such
imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the
Trustee to the others is duly given if in writing and delivered
in Person or mailed by first class mail (registered or
certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company:
WALTER INDUSTRIES, INC.
1500 North Mabry Highway
Tampa, Florida 33607
Attention: Chief Financial Officer
Telephone: (813) 871-4811
Telecopier: (813) 871-4430
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Peter J. Gordon, Esq.
Telephone: (212) 455-2605
Telecopier: (212) 455-2502
If to the Trustee:
UNITED STATES TRUST COMPANY OF NEW YORK
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Division
Each of the Company and the Trustee, by notice to the
others may designate additional or different addresses for
subsequent notices or communications.
All notices and communications (other than those sent
to Holders) shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after
timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be
mailed by first class mail, certified or registered, return
receipt requested, or by overnight air courier guaranteeing next
day delivery to its address shown on the register kept by the
Registrar. Any notice or communication shall also be so mailed
to any Person described in TIA section 313(c), to the extent
required
by the TIA. Failure to mail a notice or communication to a
Holder or any defect in it shall not affect its sufficiency with
respect to other Holders.
If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given,
whether or not the addressee receives it.
If the Company mails a notice or communication to
Holders, it shall mail a copy to the Trustee and each Agent at
the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES.
Holders may communicate pursuant to TIA section 312(b)
with other Holders with respect to their rights under this
Indenture or the Notes. The Company, the Trustee, the Registrar
and any other Person shall have the protection of TIA section
312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee:
(a) an Officers' Certificate in form and
substance satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in
the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance
satisfactory to the Trustee (which shall include the statements
set forth in Section 11.05 hereof) stating that, in the opinion
of such counsel, all such conditions precedent and covenants
have been complied with.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture
(other than a certificate provided pursuant to TIA section
314(a)(4)) shall comply with the provisions of TIA section 314(e)
and shall include:
(a) a statement that the Person making such
certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope
of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such
Person, he or she has made such examination or investigation as
is necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been 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;
provided that with respect to matters of fact, Opinions of
Counsel may rely on an Officers' Certificate or certificate of
public officials.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or
at a meeting of Holders. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its
functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS.
No director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes or this
Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of
the Notes. Such waiver may not be effective to waive
liabilities under the federal securities laws and it is the view
of the SEC that such a waiver is against public policy.
SECTION 11.08. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE CONSTRUED,
INTERPRETED AND THE RIGHTS OF THE PARTIES DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CHOICE OF LAW PROVISIONS.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its
Subsidiaries or of any other Person. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and
the Notes shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and
Headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify
or restrict any of the terms or provisions hereof.
SECTION 11.14. LEGAL HOLIDAY.
"Legal Holiday" means a Saturday, a Sunday or a day on
which banking institutions in the City of New York or the city
in which the Trustee has its Corporate Trust Office are not
required to be open. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period.
[Signatures on following page]
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, all as of the date first
written above.
Dated as of March __, 1995 WALTER INDUSTRIES, INC.
Attest:_____________________ By:_______________________
Name:
Title:
(SEAL)
UNITED STATES TRUST COMPANY
OF NEW YORK
Attest:_____________________ By:________________________
Name:
Title:
(SEAL)
<PAGE>
EXHIBIT A
(Face of Series B and Series B-1 Note)
[Series B] [Series B-1] Senior Note due 2000
No.
WALTER INDUSTRIES, INC.
promises to pay to
or registered assigns.
the principal sum of
Dollars on March 15, 2000.
Interest Payment Dates: March 15 and September 15
Record Dates: September 1 and March 1
Dated:___________________
WALTER INDUSTRIES, INC.
By: ________________________
Name:
Title:
By: ________________________
Trustee's Certificate of Name:
Authentication Title:
(SEAL)
This is one of the Notes
referred to in the within-
mentioned Indenture:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:___________________________________
Authorized Signatory
(Back of Note)
[Series B] [Series B-1] Senior Note due 2000
Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless
otherwise indicated.
1. INTEREST. Walter Industries, Inc., a Delaware
corporation (the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to),
promises to pay interest on the principal amount of this Note at
____% per annum from the Issue Date until maturity. The Company
will pay interest semi-annually on September 15 and March 15 of
each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date").
Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid,
from the Issue Date; provided that if there is no existing
Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be
September 15, 1995. The Company shall pay interest (including
post-petition interest in any proceeding under Bankruptcy Law)
on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the interest
rate then in effect on the Notes to the extent lawful; it shall
pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company will pay interest
on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the
September 1 or March 1 preceding the Interest Payment Date, even
if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section
2.12 of the Indenture with respect to defaulted interest. The
Notes will be payable as to principal and interest at the office
or agency of the Company maintained for such purpose within or
without the City and State of New York, or, at the option of the
Company, payment of interest may be made by check mailed to the
Holders at their addresses set forth in the register of Holders.
Such payment will be in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, United
States Trust Company of New York, the Trustee under the
Indenture, will act as Registrar and the Trustee and the Company
will act as Co-Paying Agents. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company or
any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an
Indenture dated as of March __, 1995 (the "Indenture") between
the Company and the Trustee. The terms of the Notes include
those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code SECTIONS 77aaa-77bbbb). The Notes are
subject
to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. The Notes are secured
obligations of the Company limited to $490,000,000 in aggregate
principal amount. The Notes are secured by the outstanding
Capital Stock of each of the Company's direct and indirect
Subsidiaries (which term excludes Mid-State Homes, Inc. and its
Subsidiaries and Cardem Insurance Co., Ltd.), whether currently
owned or hereafter acquired or created, which Capital Stock has
been and will be pledged by the Company and certain of its
Subsidiaries pursuant to the Pledge Agreement and certain
Subsidiary Pledge Agreements.
5. OPTIONAL REDEMPTION. The Notes will be subject
to redemption at any time at the option of the Company, in whole
or in part, upon not less than 30 nor more than 60 days' notice,
at a redemption price of 101% of the principal amount then
outstanding, plus accrued and unpaid interest thereon to the
applicable date of redemption; provided, however, that if a
redemption is made from the Excess Proceeds of any Asset Sales
as described in paragraph 9 below, the redemption price will be
100% of the principal amount then outstanding, plus accrued and
unpaid interest thereon to the applicable date of redemption;
and provided, further, however, that if such redemption is in
part, not less than $150 million aggregate principal amount of
the Notes shall be outstanding immediately after giving affect
to such redemption.
6. MANDATORY REDEMPTION. Except as set forth under
Sections 4.08 or 4.09 of the Indenture, the Company shall not be
required to make mandatory redemption or sinking fund payments
with respect to the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will
be mailed at least 30 days but not more than 60 days before the
redemption date to each Holder whose Notes are to be redeemed at
its registered address. Notes in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to
accrue on Notes or portions thereof called for redemption,
provided that the Company shall have deposited with the Trustee
or Paying Agent funds sufficient to redeem such Notes not later
than the redemption date.
8. CHANGE OF CONTROL. Upon the occurrence of a
Change of Control, the Company will be required to make an offer
to repurchase all or any part (equal to $1,000 principal amount
or an integral multiple thereof) of a Holder's Notes at a
purchase price equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of
purchase. Within 30 days following the date on which the
Company has actual knowledge that a Change of Control has
occurred, the Company shall mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as
required by the Indenture. Holders of Notes may elect to have
such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below.
9. ASSET SALES. If the Company consummates any
Asset Sales, and when the aggregate amount of Excess Proceeds
exceeds $25 million, the Company shall either (A) redeem the
Notes (on a pro rata basis if the amount available for such
redemption is less than the outstanding principal amount of the
Notes plus accrued and unpaid interest, if any, to the date of
redemption) at a redemption price of 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the
date of redemption or (B) make an offer to all Holders of Notes
to purchase the maximum principal amount of Notes that may be
purchased out of such Excess Proceeds, at an offer price in cash
equal to 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of repurchase; provided,
however, that if following such a redemption or an offer to
repurchase, assuming 100% acceptance, the outstanding principal
amount of the Notes would be less than $150 million in the
aggregate, the Excess Proceeds shall be utilized as provided in
the Indenture with the result that Notes in the aggregate
principal amount of $150 million will remain outstanding until
such time as the aggregate of all unapplied Excess Proceeds from
all Asset Sales is sufficient to redeem or repurchase 100% of
the outstanding Notes, at which time the Company will be
obligated to either redeem or offer to purchase the Notes as
provided above. Holders of Notes that are the subject of an
offer to purchase shall receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are
in registered form without coupons in denominations of $1,000
and integral multiples of $1,000. The transfer of Notes may be
registered and Notes may be exchanged as provided in the
Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the
Indenture. The Registrar shall not be required (A) to register
the transfer of or to exchange Notes during a period beginning
at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.07 of the
Indenture and ending at the close of business on the day of
selection; or (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or (C) to
register the transfer of or to exchange a Note between a record
date and the next succeeding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of
a Note may be treated as its owner for all purposes, subject,
with respect to payment of interest, to the provisions of the
Indenture relating to record dates.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to
certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes, and
any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then
outstanding Notes. Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to
cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's
obligations to Holders in case of a merger or consolidation or
sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the Company's
properties or assets, to make any change that would provide any
additional rights or benefits to the Holders or that does not
adversely affect the rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the
Trust Indenture Act or to evidence or provide for a replacement
Trustee pursuant to the Indenture.
13. RESTRICTIVE COVENANTS. The Indenture imposes
certain limitations on the ability of the Company and its
Subsidiaries to, among other things, pay dividends or make
certain other Restricted Payments, incur additional Indebtedness
or Liens, enter into transactions with Affiliates, make payments
in respect of its Capital Stock or issue additional or sell
Capital Stock, merge or consolidate with any other person or
sell, lease, transfer or otherwise dispose of substantially all
of its properties or assets or enter into sale and leaseback
transactions. The limitations are subject to certain
qualifications and exceptions. The Company must annually report
to the Trustee regarding compliance with such limitations.
14. SUCCESSOR CORPORATION. When a successor
corporation assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor corporation will be
released from those obligations.
15. DEFAULTS AND REMEDIES. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least
25% in aggregate principal amount of Notes then outstanding may
declare all the Notes to be due and payable immediately in the
manner and with the effect provided in the Indenture. Holders
of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the
Notes. Subject to certain limitations, Holders of a majority in
aggregate principal amount of the Notes then outstanding may
direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Notes notice of any
continuing Default or Event of Default (except a Default in
payment of principal or interest) if it determines that
withholding notice is in their interest.
16. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in
its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.
17. NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or stockholder, of the Company, as such,
shall not have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration
for the issuance of the Notes. Such waiver may not be effective
to waive liabilities under the federal securities laws and it is
the view of the SEC that such a waiver is against public policy.
18. AUTHENTICATION. This Note shall not be valid
until authenticated by the manual signature of the Trustee or an
authenticating agent.
19. NOTES. The term "Notes" refers to, collectively,
the Series B Notes and the Series B-1 Notes issuable under the
Indenture.
20. ABBREVIATIONS. Customary abbreviations may be
used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
21. CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed
on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is
made as to the accuracy of such numbers either as printed on the
Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture. Requests
for such documents and for additional information may be made
to: Walter Industries, Inc., 1500 North Mabry Highway, Tampa,
Florida 33607, Attention: Secretary.
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we)
assign and transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Note on the books of the Company. The
agent may substitute another to act for him.
Date: _____________
Your Signature:
(Sign exactly as your name appears on
the face of this
Note)
Signature Guarantee: ________________
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by
the Company pursuant to Section 4.08 or 4.09 of the Indenture,
check the box below*:
Section 4.08 Section 4.09
If you want to elect to have only part of the Note
purchased by the Company pursuant to Section 4.08 or 4.09 of the
Indenture, state the amount you elect to have purchased:
$__________
Date:__________________ Your Signature:_________________
(Sign exactly as your name
appears on the Note)
Tax Identification No.:___________
Signature Guarantee: _______________
___________________
* Check applicable box.
<PAGE>
EXHIBIT B
FORM OF PLEDGE AGREEMENT
This PLEDGE AGREEMENT (as amended, amended and
restated or otherwise modified from time to time, herein called
the "Agreement") is dated as of March __, 1995, between Walter
Industries, Inc., a Delaware corporation (the "Pledgor"), and
United States Trust Company of New York, a New York corporation,
as trustee (the "Trustee"), for and representative of the
holders of the Series B Notes and Series B-1 Notes (each as
hereinafter defined) under the Indenture (as hereinafter
defined).
RECITALS
WHEREAS, the Pledgor is the legal and beneficial owner
of the issued and outstanding Capital Stock (the "Pledged
Shares") of the Subsidiaries listed on Schedule I;
WHEREAS, the Pledgor, in order to retire certain debt
obligations as part of its emergence in proceedings under
Chapter 11 of the U.S. Bankruptcy Code, and the Trustee have
entered into an indenture dated as of March __, 1995 (the
"Indenture") pursuant to which the Pledgor has issued up to
$490,000,000 in aggregate principal amount of Series B Senior
Notes due 2000 (the "Series B Notes");
WHEREAS, the Pledgor may offer to issue Series B-1
Senior Notes due 2000 (the "Series B-1 Notes" and, with the
Series B Notes, the "Notes") in exchange for outstanding
Series B Notes;
WHEREAS, in order to induce the Trustee to execute and
deliver the Indenture, the Pledgor has agreed to pledge the
Pledged Shares as collateral security for the performance of the
Secured Obligations (as hereinafter defined); and
WHEREAS, the Pledgor will derive direct and indirect
economic benefit from the issuance of the Notes pursuant to the
Indenture;
NOW THEREFORE, in consideration of the premises herein
set forth the parties hereto agree as follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the
Trustee and grants to the Trustee for the benefit of the holders
of the Notes (the "Noteholders") a first priority security
interest in the following (the "Pledged Collateral") to secure
the Secured Obligations:
(i) the Pledged Shares and the certificates
representing the Pledged Shares and, subject to Section 6,
all dividends, cash, options, warrants, rights, instruments
and other property and proceeds from time to time received,
receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares; and
(ii) all additional shares of Capital Stock of
any Subsidiary now owned or hereafter acquired from time to
time acquired by the Pledgor in any manner (which shares
shall be deemed to be part of the Pledged Shares) and the
certificates representing such additional shares and,
subject to Section 6, all dividends, cash, options,
warrants, rights, instruments and other property and
proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any
or all of such shares.
The foregoing pledge and grant of a security interest
constitutes the pledge and grant of a first priority security
interest in the Pledged Collateral to secure the Secured
Obligations.
SECTION 2. Secured Obligations. This Agreement
secures, and the Pledged Collateral is collateral security for,
the prompt payment or performance in full when due, whether at
stated maturity, by acceleration or otherwise (including the
repurchase of Notes tendered pursuant to a Change of Control
Offer or Asset Sale Offer and the payment of amounts which would
become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. section 362(a)),
of
all obligations of the Pledgor now or hereafter existing under
the Indenture and the Notes issued thereunder, whether for
principal, premium, interest (including, without limitation,
interest which, but for the filing of a petition in a
bankruptcy, or other similar proceeding with respect to the
Pledgor, would accrue on such obligations), fees, expenses,
including, without limitation, all amounts due the Trustee under
the Indenture, or otherwise and all obligations of the Pledgor
now or hereafter existing under this Agreement (all such
obligations being the "Secured Obligations").
SECTION 3. Delivery of Pledged Collateral. (i) All
certificates or instruments representing or evidencing the
Pledged Collateral shall be delivered to and held by or on
behalf of the Trustee pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank and (ii)
each of the certificates, instruments, certifications or other
documents delivered pursuant to (i) shall be in form and
substance satisfactory to the Trustee. At any time upon or
after the occurrence of an Event of Default (as defined in the
Indenture), the Trustee shall have the right, without notice to
the Pledgor, to transfer to or to register in the name of the
Trustee or any of its nominees any or all of the Pledged
Collateral. In addition, the Trustee shall have the right at
any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 4. Representations and Warranties. The
Pledgor represents and warrants as follows:
(i) The Pledgor has full corporate power and
authority to enter into this Agreement. This Agreement has
been duly authorized, executed and delivered by the Pledgor
and constitutes a valid and binding agreement of the
Pledgor and is enforceable against the Pledgor in
accordance with the terms hereof. The performance of this
Agreement and the consummation of the transactions
contemplated hereby do not and will not result in the
creation or imposition of any Lien upon any of the assets
of the Pledgor (other than the Pledged Collateral pursuant
to this Agreement) or any of its Subsidiaries pursuant to
the terms or provisions of, or result in a breach or
violation of or conflict with any of the terms or
provisions of, or constitute a default under, or give any
other party a right to terminate any of its obligations
under, or result in the acceleration of any obligation
under, (i) the certificate of incorporation or by-laws of
the Pledgor or any of its Subsidiaries; or (ii) any
contract or other agreement to which the Pledgor or any of
its Subsidiaries is a party or by which the Pledgor or any
of its Subsidiaries or any of its properties is bound or
affected, or any judgment, ruling, decree, order, law,
statute, rule or regulation of any court or other
governmental agency or body applicable to the business or
properties of the Pledgor or any of its Subsidiaries.
(ii) The Pledgor is, and at the time of delivery
of any Pledged Collateral to the Trustee pursuant to
Section 3 of this Agreement will be, the legal and
beneficial owner of the Pledged Collateral free and clear
of any Lien except for the Lien and security interest
created by this Agreement.
(iii) The Pledgor has full power, authority and
legal right to pledge all the Pledged Collateral pursuant
to this Agreement.
(iv) No consent of any other party (including,
without limitation, stockholders or creditors of the
Pledgor) and no consent, authorization, approval or other
action by, and no notice to or filing with, any
governmental authority or regulatory body is required
either (x) for the pledge by the Pledgor of the Pledged
Collateral pursuant to this Agreement or (y) for the
exercise by the Trustee of the voting or other rights
provided for in this Agreement or the remedies in respect
of the Pledged Collateral pursuant to this Agreement;
except as may be required in connection with a disposition
of Pledged Collateral by laws affecting the offering and
sale of securities generally.
(v) All of the Pledged Shares have been duly
authorized and validly issued and are fully paid and
non-assessable.
( The pledge of the Pledged Collateral
pursuant to this Agreement creates a valid and perfected
first priority security interest in the Pledged Collateral
securing the payment of the Secured Obligations.
(vii) All information set forth herein relating to
the Pledged Collateral is accurate and complete in all
material respects.
SECTION 5. Supplements, Further Assurances. The
Pledgor agrees that at any time and from time to time, at the
expense of the Pledgor, the Pledgor will promptly execute and
deliver all further instruments and documents, and take all
further action, that may be necessary or that the Trustee may
reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable
the Trustee to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
The Pledgor further agrees that it will (a) upon the
creation or acquisition of a Subsidiary, as promptly as
practicable but in no event later than five Business Days there-
after, deliver to the Trustee the shares of Capital Stock of
such Subsidiary owned by it and an amended Schedule I (each, a
"Schedule I Amendment") which shall include such Subsidiary
therein and (b) upon obtaining any shares of Capital Stock of
any company required to be pledged pursuant to Section 1(ii), as
promptly as practicable but in no event later than five Business
Days thereafter, deliver to the Trustee such shares and a pledge
amendment, duly executed by the Pledgor, in substantially the
form of Schedule II hereto (a "Pledged Share Amendment"), in
respect of the additional Pledged Shares which are to be pledged
pursuant to this Agreement. The Pledgor hereby authorizes the
Trustee to attach each Schedule I Amendment and Pledged Share
Amendment to this Agreement and the Pledgor agrees that all
Pledged Shares listed, respectively, on any Pledged Share
Amendment and any Pledged Shares delivered to the Trustee shall
for all purposes hereunder be considered Pledged Collateral.
SECTION 6. Voting Rights; Dividends; Etc. (a) As
long as no Event of Default (as defined in the Indenture) shall
have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise
any and all voting and other consensual rights pertaining
to the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this Agreement
or the Indenture. It is understood, however, that neither
(A) the voting by the Pledgor of any Pledged Shares for, or
the Pledgor's consent to, the election of directors at an
annual or other meeting of stockholders or with respect to
incidental matters at any such meeting nor (B) the
Pledgor's consent to or approval of any action otherwise
permitted under this Agreement and the Indenture shall be
deemed inconsistent with the terms of this Agreement or the
Indenture within the meaning of this Section 6(a)(i), and
no notice of any such voting or consent need be given to
the Trustee.
(ii) Subject to Sections 5 and 7 hereof, the
Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the Lien and security interest
under this Agreement, any and all dividends, distributions,
principal, interest or other amounts paid in respect of the
Pledged Collateral.
(iii) In order to permit the Pledgor to exercise
the voting and other rights which it is entitled to
exercise pursuant to Section 6(a)(i) above and to receive
the dividends, distributions, principal, interest or other
payments which it is authorized to receive and retain
pursuant to Section 6(a)(ii) above, the Trustee shall, if
necessary, upon written request of the Pledgor, from time
to time execute and deliver (or cause to be executed and
delivered) to the Pledgor all such proxies, dividend
payment orders and other instruments as the Pledgor may
reasonably request.
(b) Upon the occurrence and during the
continuance of an Event of Default under the Indenture:
(i) Upon written notice from the Trustee to the
Pledgor, all rights of the Pledgor to exercise the voting
and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 6(a)(i) above
shall cease, and all such rights shall thereupon become
vested in the Trustee which shall thereupon have the sole
right to exercise such voting and other consensual rights
during the continuance of such Event of Default.
(ii) All rights of the Pledgor to receive the
dividends, distributions, principal, interest and other
payments which it would otherwise be authorized to receive
and retain pursuant to Section 6(a)(ii) above shall cease
and all such rights shall thereupon become vested in the
Trustee who shall thereupon have the sole right to receive
and hold as Pledged Collateral such dividends, distribu-
tions, principal, interest and other payments during the
continuance of such Event of Default.
(iii) In order to permit the Trustee to exercise
the voting and other consensual rights which it may be
entitled to exercise pursuant to Section 6(b)(i) above, and
to receive all dividends, distributions, principal,
interest and other payments which it may be entitled to
receive under section 6(b)(ii) above, the Pledgor shall, if
necessary, upon the request of the Trustee, from time to
time execute and deliver to the Trustee appropriate
proxies, dividend payment orders and other instruments as
the Trustee may reasonably request.
(c) All dividends, distributions, principal,
interest and other payments which are received by the Pledgor
contrary to the provisions of Section 6(b)(ii) above shall be
received in trust for the benefit of the Trustee, shall be
segregated from other funds of the Pledgor and shall be
forthwith paid over to the Trustee as Pledged Collateral in the
same form as so received (with any necessary endorsement).
SECTION 7. Transfers and Other Liens; Additional
Shares.
A. Transfers and Other Liens. The Pledgor agrees
that it will not (i) sell, pledge, hypothecate or otherwise
convey or dispose of any of the Pledged Collateral, (ii) create
or permit to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the Lien and security interest
under this Agreement, or (iii) permit any of the Subsidiaries to
merge or consolidate, unless all the outstanding Capital Stock
of the surviving or resulting corporation is, upon such merger
or consolidation, pledged hereunder and no cash, securities or
other property is distributed in respect of the outstanding
shares of any other constituent corporation; provided, however,
that the Pledgor and its Subsidiaries may conduct Asset Sales in
accordance with Section 4.09 of the Indenture, and upon the
consummation of any such Asset Sale, any Pledged Collateral
subject to such Asset Sale shall be released from the Lien of
this Pledge Agreement.
B. Additional Shares. The Pledgor agrees that it will
(i) cause each of the Subsidiaries not to issue any shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock in addition to or in substitution
for the Pledged Shares issued by the Subsidiaries and (ii)
pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional shares of stock or
other equity securities of the Subsidiaries.
SECTION 8. Trustee Appointed Attorney-in-Fact. The
Pledgor hereby appoints the Trustee the Pledgor's attorney-in-
fact, with full authority in the place and stead of the Pledgor
and in the name of the Pledgor or otherwise, from time to time
in the Trustee's discretion to take any action and to execute
any instrument which the Trustee may reasonably deem necessary
or advisable to accomplish the purposes of this Agreement,
including, without limitation, to receive, endorse and collect
all instruments made payable to the Pledgor representing any
dividend, interest payment or other distribution or payment in
respect of the Pledged Collateral or any part thereof and to
give full discharge for the same.
SECTION 9. Trustee May Perform. If the Pledgor fails
to perform any agreement contained herein after receipt of a
written request to do so from the Trustee, the Trustee may,
within thirty days after such notice is effective pursuant to
Section 20, itself perform, or cause performance of, such
agreement and the reasonable expenses of the Trustee, including
the reasonable fees and expenses of its agents and counsel,
incurred in connection therewith shall be payable by the Pledgor
under Section 13 hereof.
SECTION 10. Reasonable Care. The Trustee shall be
deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially
equivalent to that which the Trustee, in its individual
capacity, accords its own property consisting of negotiable
securities, it being understood that the Trustee shall not have
responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not
the Trustee is deemed to have knowledge of such matters or (ii)
taking any necessary steps (other than steps taken in accordance
with the standard of care set forth above to maintain possession
of the Pledged Collateral) to preserve any rights respecting any
of the Pledged Collateral.
SECTION 11. Remedies Upon Default; Decisions Relating
to Exercise of Remedies; Payments Under Notes.
A. Remedies Upon Default. Subject to Section 11B, if
any Event of Default under the Indenture shall have occurred and
be continuing:
(i) The Trustee may exercise in respect of the
Pledged Collateral, in addition to other rights and
remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default
under the Uniform Commercial Code (the "Code") in effect in
the State of New York at that time, and the Trustee may
also in its sole discretion, without notice except as
specified below, sell the Pledged Collateral or any part
thereof in one or more parcels at a public or private sale,
at any exchange, broker's board or at any of the Trustee's
offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other
terms as the Trustee may deem commercially reasonable,
irrespective of the impact of any such sales on the market
price of the Pledged Collateral. The Trustee or any
Noteholder may be the purchaser of any or all of the
Pledged Collateral at any such sale but shall not be
entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of
the Pledged Collateral sold at such sale, to use and apply
any of the Secured Obligations owed to such person as a
credit on account of the purchase price of any Pledged
Collateral payable by such person at such sale. Each
purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of the
Pledgor, and the Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future
have under any rule of law or statute now existing or
hereafter enacted. The Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days'
notice to the Pledgor of the time and place of any public
sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Trustee
shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given.
The Trustee may adjourn any public or private sale from
time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
The Pledgor hereby waives any claim against the Trustee
arising by reason of the fact that the price at which any
Pledged Collateral may have been sold at such a private
sale was less than the price which might have been obtained
at a public sale, even if the Trustee accepts the first
offer received and does not offer such Pledged Collateral
to more than one party.
(ii) The Pledgor recognizes that, by reason of
certain prohibitions contained in the Securities Act of
1933, as amended (the "Securities Act"), and applicable
state securities laws, the Trustee may be compelled, with
respect to any sale of all or any part of the Pledged
Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Pledged Collateral for
their own account, for investment and not with a view to
the distribution or resale thereof. The Pledgor
acknowledges that any such private sales may be at prices
and on terms less favorable to the Trustee than those
obtainable through a public sale without such restrictions
(including, without limitation, a public offering made
pursuant to a registration statement under the Securities
Act), and, notwithstanding such circumstances, agrees that
any private sale shall be deemed to have been made in a
commercially reasonable manner and that the Trustee shall
have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Collateral for
the period of time necessary to permit the issuer thereof
to register it for a form of public sale requiring
registration under the Securities Act or under applicable
state securities laws, even if the Pledgor would agree to
do so.
(iii) If the Trustee determines to exercise its
right to sell any or all of the Pledged Collateral, upon
written request, the Pledgor shall and shall cause each
issuer of any Pledged Collateral to be sold hereunder from
time to time to furnish to the Trustee all such information
as the Trustee may request and to cause any financial
intermediary to furnish any such information, in order to
determine the number of shares, notes and other instruments
included in the Pledged Collateral, which may be sold by
the Trustee as exempt transactions under the Securities Act
and the rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
B. Decisions Relating to Exercise of Remedies.
Notwithstanding anything in this Agreement to the contrary, the
Trustee shall exercise, or shall refrain from exercising, any
remedy provided for in Section 11A as provided in Article Ten of
the Indenture.
SECTION 12. Application of Proceeds. During and
after the continuance of an Event of Default, any cash held by
the Trustee as Pledged Collateral and all cash proceeds received
by the Trustee (all such cash being "Proceeds") in respect of
any sale of, collection from, or other realization upon all or
any part of the Pledged Collateral pursuant to the exercise by
the Trustee of its remedies as a secured creditor as provided in
Section 11 of this Agreement shall be applied promptly from time
to time by the Trustee as follows:
First, to the payment of the costs and expenses
of such sale, collection or other realization,
including reasonable compensation to the Trustee and
its agents and counsel, and all expenses, liabilities
and advances made or incurred by the Trustee in
connection therewith including all amounts due to the
Trustee under Article Seven of the Indenture;
Second, to the payment of the Secured Obligations
as provided pursuant to the Indenture; and
Third, after payment in full of all Secured
Obligations, to the Pledgor.
SECTION 13. Expenses. The Pledgor will, upon demand,
pay to the Trustee the amount of any and all reasonable
expenses, disbursements and advances, including reasonable fees
and expenses of its counsel and of any experts and agents, which
the Trustee may incur in connection with (i) the acceptance and
administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the
exercise or enforcement of any of the rights of the Trustee or
the Noteholders hereunder or (iv) the failure by the Pledgor to
perform or observe any of the provisions hereof.
SECTION 14. No Waiver. No failure on the part of the
Trustee to exercise, and no course of dealing with respect to,
and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or
partial exercise by the Trustee of any right, power or remedy
hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies
herein provided are to the fullest extent permitted by law
cumulative and are not exclusive of any other remedies provided
by law.
SECTION 15. Trustee. The Trustee has been appointed
as Trustee hereunder pursuant to the Indenture. The Trustee
shall be obligated, and shall have the right, hereunder to make
demands, to give notices, to exercise or refrain from exercising
any rights, and to take or refrain from taking action
(including, without limitation, the release or substitution of
Pledged Collateral) solely in accordance with this Agreement and
the Indenture. Without limiting the generality of the
foregoing, the provisions of Sections 7.01 and 7.02 of the
Indenture shall be applicable to actions taken or not taken by
the Trustee hereunder. The Trustee may resign and a successor
Trustee may be appointed in the manner provided in the
Indenture. Upon the acceptance of any appointment as a Trustee
by a successor Trustee, that successor Trustee shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Trustee under this
Agreement, and the retiring Trustee shall thereupon be
discharged from its duties and obligations under this Agreement
and, after payment to it of all amounts due it hereunder, shall
deliver any Pledged Collateral in its possession to the
successor Trustee. After any retiring Trustee's resignation,
the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this
Agreement while it was Trustee. Anything contained in this
Agreement to the contrary notwithstanding, in the event of any
conflict between the express terms and provisions of this
Agreement and the express terms and provisions of the Indenture,
such terms and provisions of the Indenture shall control.
SECTION 16. Indemnification. The Pledgor hereby
agrees to indemnify the Trustee for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted
against the Trustee in any way relating to or arising out of
this Agreement or any instrument relating hereto, or any other
documents contemplated by or referred to herein or the
transactions contemplated hereby or the enforcement of any of
the terms hereof or of any such other documents or otherwise
arising out of or relating in any manner to the pledges,
dispositions of Pledged Collateral or proceeds of Pledged
Collateral, or other actions of any nature with respect to the
Pledged Collateral contemplated hereunder and under the
Indenture to secure the payment of the Secured Obligations;
provided, however, that the Pledgor shall not be liable for any
of the foregoing to the extent they arise from the negligence or
willful misconduct of the Trustee or failure by the Trustee to
exercise reasonable care in the custody and preservation of the
Pledged Collateral as provided in Section 10.
SECTION 17. Lien Created. To secure Pledgor's
obligations under Sections 13 and 16, the Trustee shall have a
Lien against the Pledged Collateral.
SECTION 18. Amendments, Etc. Prior to such time as
all Secured Obligations shall have been paid in full in cash or
defeased pursuant to Section 8.02 of the Indenture, this
Agreement may be amended by a writing duly signed for and on
behalf of the Trustee and with the consent of the Noteholders as
provided in the Indenture.
SECTION 19. Termination. When all Secured
Obligations have been paid in full in cash or defeased pursuant
to Section 8.02 of the Indenture, this Agreement shall
terminate, and the Trustee shall, upon the request and at the
expense of the Pledgor, forthwith assign, transfer and deliver,
against receipt and without recourse to the Trustee, such of the
Pledged Collateral as shall not have been sold or otherwise
applied pursuant to the terms hereof to or on the order of the
Pledgor.
SECTION 20. Addresses for Notices. All notices and
other communications provided for hereunder shall be in writing
(including telegraphic or telecopy communication) and mailed,
telegraphed, telecopied or delivered, if to the Pledgor,
addressed to it at the address set forth on the signature page
of this Agreement, and if to the Trustee, addressed to it at the
address set forth on the signature page of this Agreement. All
such notices and other communications shall, when mailed or
telegraphed, be effective when deposited in the mails or
delivered to the telegraph company, respectively, and shall,
when delivered or telecopied, be effective when received.
SECTION 21. Continuing Security Interest; Transfer of
Notes. Subject to Section 18, this Agreement shall create a
continuing security interest in the Pledged Collateral and shall
(i) remain in full force and effect until indefeasible payment
in full of all Secured Obligations, (ii) be binding upon the
Pledgor, its successors and assigns, and (iii) inure, together
with the rights and remedies of the Trustee hereunder, to the
benefit of the Trustee and the Noteholders and each of their
respective successors, transferees and assigns.
SECTION 22. Governing Law, Terms. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. Unless otherwise defined
herein or in the Indenture, terms defined in Articles 8 and 9 of
the Uniform Commercial Code as in effect in the State of New
York are used herein as therein defined.
SECTION 23. Consent to Jurisdiction and Service of
Process. All judicial proceedings brought against the Pledgor
with respect to this Agreement may be brought in any state or
federal court of competent jurisdiction in the State of New
York, and by execution and delivery of this Agreement the
Pledgor accepts for itself and in connection with its
properties, generally and unconditionally, the nonexclusive
jurisdiction of the aforesaid courts, and irrevocably agrees to
be bound by any judgment rendered thereby in connection with
this Agreement. Nothing herein shall limit the right of the
Trustee to bring proceedings against the Pledgor in the courts
of any other jurisdiction.
SECTION 24. Advances. The Trustee shall not be
obligated or required to expend, advance or risk any of its own
funds in the performance of its obligations hereunder.
SECTION 25. Agents, Attorneys. The Trustee may act
through agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care. The Trustee
may consult with counsel of its selection and the advice of such
counsel or a written opinion rendered by such counsel shall be
full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
SECTION 26. Waiver. Pledgor waives presentment,
demand, protest or notice of any kind.
SECTION 27. Security Interest Absolute. All rights
of the Trustee and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of
any of the Notes, the Indenture or any instrument relating
thereto;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Secured Obligations, or any other amendment or waiver of or
any consent to any departure from any of the Notes or the
Indenture;
(iii) any exchange, release or non-perfection of
any other collateral securing, or any release or amendment
or waiver of or consent to departure from any guaranty of,
all or any of the Secured Obligations; or
(iv) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the
Pledgor.
SECTION 28. Defined Terms. Terms used but not
defined herein shall have the meaning ascribed to them in the
Indenture.
<PAGE>
IN WITNESS WHEREOF, the Pledgor and the Trustee have
caused this Agreement to be duly executed and delivered by their
respective duly authorized officers as of the date first above
written
Pledgor
WALTER INDUSTRIES, INC.
By: _____________________________
Name:
Title:
Notice Address:
1500 North Mabry Highway
Tampa, Florida 33607
Attn: Chief Financial Officer
Trustee
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By: _____________________________
Name:
Title:
Notice Address:
114 West 47th Street
New York, New York 10036
Attn: Corporate Trust Division
<PAGE>
SCHEDULE I
LIST OF SUBSIDIARIES
Percentage of
Class Stock Number All Capital
of Certificate Par of Stock
Issuer Stock No(s). Value Shares Outstanding
<PAGE>
SCHEDULE II
To the Pledge Agreement
PLEDGED SHARE AMENDMENT
This Pledged Share Amendment, dated as of ______, is
delivered pursuant to Section 5 of the Pledge Agreement referred
to below. The undersigned hereby agrees that this Pledged Share
Amendment may be attached to the Pledge Agreement dated as of
March __, 1995, between the undersigned and United States Trust
Company of New York, as Trustee (the "Pledge Agreement";
capitalized terms defined therein being used herein as therein
defined), and that the Pledged Shares listed on this Pledged
Share Amendment shall be deemed to be part of the Pledged Shares
and shall become part of the Pledged Collateral and shall secure
all Secured Obligations as provided in the Pledge Agreement.
WALTER INDUSTRIES, INC.
By: _________________________
Name:
Title:
Percentage of
Class Stock Number All Capital
of Certificate Par of Stock
Issuer Stock No(s). Value Shares Outstanding
<PAGE>
EXHIBIT C
FORM OF SUBSIDIARY PLEDGE AGREEMENT
This SUBSIDIARY PLEDGE AGREEMENT (as amended, amended
and restated or otherwise modified from time to time, herein
called the "Agreement") is dated as of ____ __, 1995, between
_______________________________________________ (the "Pledgor"),
and United States Trust Company of New York, a New York
corporation, as trustee (the "Trustee") for and representative
of the holders of the Series B Notes and Series B-1 Notes (each
as hereinafter defined) under the Indenture (as hereinafter
defined).
RECITALS
WHEREAS, the Pledgor is the legal and beneficial owner
of the issued and outstanding Capital Stock (the "Pledged
Shares") of the Subsidiaries of the Company (as hereinafter
defined) listed on Schedule I;
WHEREAS, the Pledgor is a Subsidiary of Walter
Industries, Inc., a Delaware corporation (the "Company");
WHEREAS, the Company, in order to retire certain debt
obligations as part of its and certain of its Subsidiaries
emergence in proceedings under Chapter 11 of the U.S. Bankruptcy
Code, and the Trustee have entered into an indenture dated as of
________ __, 1995 (the "Indenture") pursuant to which the
Company has issued up to $490,000,000 in aggregate principal
amount of Series B Senior Notes due 2000 (the "Series B Notes");
WHEREAS, the Company may offer to issue its Series B-1
Senior Notes due 2000 (the "Series B-1 Notes" and, with the
Series B Notes, the "Notes") in exchange for outstanding
Series B Notes;
WHEREAS, in order to induce the Trustee to execute and
deliver the Indenture, the Company has agreed to cause the
Pledgor to pledge the Pledged Shares as collateral security for
the performance of the Secured Obligations (as hereinafter
defined); and
WHEREAS, the Pledgor will derive direct and indirect
economic benefit from the issuance of the Notes pursuant to the
Indenture;
NOW THEREFORE, in consideration of the premises herein
set forth the parties hereto agree as follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the
Trustee and grants to the Trustee for the benefit of the holders
of the Notes (the "Noteholders") a first priority security
interest in the following (the "Pledged Collateral") to secure
the Secured Obligations:
(i) the Pledged Shares and the certificates
representing the Pledged Shares and, subject to Section 6, all
dividends, cash, options, warrants, rights, instruments and
other property and proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Shares; and
(ii) all additional shares of Capital Stock of any
Subsidiary of the Company now owned or hereafter acquired from
time to time acquired by the Pledgor in any manner (which shares
shall be deemed to be part of the Pledged Shares) and the
certificates representing such additional shares and, subject to
Section 6, all dividends, cash, options, warrants, rights,
instruments and other property and proceeds from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all of such shares.
The foregoing pledge and grant of a security interest
constitutes the pledge and grant of a first priority security
interest in the Pledged Collateral to secure the Secured
Obligations.
SECTION 2. Secured Obligations. This Agreement
secures, and the Pledged Collateral is collateral security for,
the prompt payment or performance in full when due, whether at
stated maturity, by acceleration or otherwise (including the
repurchase of Notes tendered pursuant to a Change of Control
Offer or Asset Sale Offer and the payment of amounts which would
become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. section 362(a)),
of all obligations of the Company now or hereafter existing under
the Indenture and the Notes issued thereunder, whether for
principal, premium, interest (including, without limitation,
interest which, but for the filing of a petition in a
bankruptcy, or other similar proceeding with respect to the
Company, would accrue on such obligations), fees, expenses,
including, without limitation, all amounts due the Trustee under
the Indenture, or otherwise and all obligations of the Pledgor
now or hereafter existing under this Agreement (all such
obligations being the "Secured Obligations").
SECTION 3. Delivery of Pledged Collateral. (i) All
certificates or instruments representing or evidencing the
Pledged Collateral shall be delivered to and held by or on
behalf of the Trustee pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank and (ii)
each of the certificates, instruments, certifications or other
documents delivered pursuant to (i) shall be in form and
substance satisfactory to the Trustee. At any time upon or
after the occurrence of an Event of Default (as defined in the
Indenture), the Trustee shall have the right, without notice to
the Pledgor, to transfer to or to register in the name of the
Trustee or any of its nominees any or all of the Pledged
Collateral. In addition, the Trustee shall have the right at
any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 4. Representations and Warranties. The
Pledgor represents and warrants as follows:
(i) The Pledgor has full corporate power and
authority to enter into this Agreement. This Agreement has been
duly authorized, executed and delivered by the Pledgor and
constitutes a valid and binding agreement of the Pledgor and is
enforceable against the Pledgor in accordance with the terms
hereof. The performance of this Agreement and the consummation
of the transactions contemplated hereby do not and will not
result in the creation or imposition of any Lien upon any of the
assets of the Pledgor (other than the Pledged Collateral
pursuant to this Agreement) or any of its Subsidiaries pursuant
to the terms or provisions of, or result in a breach or
violation of or conflict with any of the terms or provisions of,
or constitute a default under, or give any other party a right
to terminate any of its obligations under, or result in the
acceleration of any obligation under, (i) the certificate of
incorporation or by-laws of the Pledgor or any of its
Subsidiaries; or (ii) any contract or other agreement to which
the Pledgor or any of its Subsidiaries is a party or by which
the Pledgor or any of its Subsidiaries or any of its properties
is bound or affected, or any judgment, ruling, decree, order,
law, statute, rule or regulation of any court or other
governmental agency or body applicable to the business or
properties of the Pledgor or any of its Subsidiaries.
(ii) The Pledgor is, and at the time of delivery
of any Pledged Collateral to the Trustee pursuant to Section 3
of this Agreement will be, the legal and beneficial owner of the
Pledged Collateral free and clear of any Lien except for the
Lien and security interest created by this Agreement.
(iii) The Pledgor has full power, authority and
legal right to pledge all the Pledged Collateral pursuant to
this Agreement.
(iv) No consent of any other party (including,
without limitation, stockholders or creditors of the Pledgor)
and no consent, authorization, approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body is required either (x) for the pledge by the
Pledgor of the Pledged Collateral pursuant to this Agreement or
(y) for the exercise by the Trustee of the voting or other
rights provided for in this Agreement or the remedies in respect
of the Pledged Collateral pursuant to this Agreement; except as
may be required in connection with a disposition of Pledged
Collateral by laws affecting the offering and sale of securities
generally.
(v) All of the Pledged Shares have been duly
authorized and validly issued and are fully paid and
non-assessable.
(vi) The pledge of the Pledged Collateral pursuant
to this Agreement creates a valid and perfected first priority
security interest in the Pledged Collateral securing the payment
of the Secured Obligations.
(vii) All information set forth herein relating to
the Pledged Collateral is accurate and complete in all material
respects.
SECTION 5. Supplements, Further Assurances. The
Pledgor agrees that at any time and from time to time, at the
expense of the Pledgor, the Pledgor will promptly execute and
deliver all further instruments and documents, and take all
further action, that may be necessary or that the Trustee may
reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable
the Trustee to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral.
The Pledgor further agrees that it will (a) upon the
creation or acquisition of a Subsidiary of the Company as
promptly as practicable but in no event later than five Business
Days thereafter deliver to the Trustee the shares of Capital
Stock of such Subsidiary owned by it and an amended Schedule I
(each, a "Schedule I Amendment") which shall include such
Subsidiary therein and (b) upon obtaining any shares of Capital
Stock of any company required to be pledged pursuant to Section
1(ii), as promptly as practicable but in no event later than
five Business Days thereafter deliver to the Trustee such shares
and a pledge amendment, duly executed by the Pledgor, in
substantially the form of Schedule II hereto (a "Pledged Share
Amendment"), in respect of the additional Pledged Shares which
are to be pledged pursuant to this Agreement. The Pledgor
hereby authorizes the Trustee to attach each Schedule I
Amendment and Pledged Share Amendment to this Agreement and the
Pledgor agrees that all Pledged Shares listed, respectively, on
any Pledged Share Amendment and any Pledged Shares delivered to
the Trustee shall for all purposes hereunder be considered
Pledged Collateral.
SECTION 6. Voting Rights; Dividends; Etc. (a) As
long as no Event of Default (as defined in the Indenture) shall
have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the
Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Indenture.
It is understood, however, that neither (A) the voting by the
Pledgor of any Pledged Shares for, or the Pledgor's consent to,
the election of directors at an annual or other meeting of
stockholders or with respect to incidental matters at any such
meeting nor (B) the Pledgor's consent to or approval of any
action otherwise permitted under this Agreement and the
Indenture shall be deemed inconsistent with the terms of this
Agreement or the Indenture within the meaning of this Section
6(a)(i), and no notice of any such voting or consent need be
given to the Trustee.
(ii) Subject to Sections 5 and 7 hereof, the
Pledgor shall be entitled to receive and retain, and to utilize
free and clear of the Lien and security interest under this
Agreement, any and all dividends, distributions, principal,
interest or other amounts paid in respect of the Pledged
Collateral.
(iii) In order to permit the Pledgor to exercise
the voting and other rights which it is entitled to exercise
pursuant to Section 6(a)(i) above and to receive the dividends,
distributions, principal, interest or other payments which it is
authorized to receive and retain pursuant to Section 6(a)(ii)
above, the Trustee shall, if necessary, upon written request of
the Pledgor, from time to time execute and deliver (or cause to
be executed and delivered) to the Pledgor all such proxies,
dividend payment orders and other instruments as the Pledgor may
reasonably request.
(b) Upon the occurrence and during the
continuance of an Event of Default under the Indenture:
(i) Upon written notice from the Trustee to the
Pledgor, all rights of the Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to Section 6(a)(i) above shall cease, and all
such rights shall thereupon become vested in the Trustee which
shall thereupon have the sole right to exercise such voting and
other consensual rights during the continuance of such Event of
Default.
(ii) All rights of the Pledgor to receive the
dividends, distributions, principal, interest and other payments
which it would otherwise be authorized to receive and retain
pursuant to Section 6(a)(ii) above shall cease and all such
rights shall thereupon become vested in the Trustee who shall
thereupon have the sole right to receive and hold as Pledged
Collateral such dividends, distributions, principal, interest
and other payments during the continuance of such Event of
Default.
(iii) In order to permit the Trustee to exercise
the voting and other consensual rights which it may be entitled
to exercise pursuant to Section 6(b)(i) above, and to receive
all dividends, distributions, principal, interest and other
payments which it may be entitled to receive under section
6(b)(ii) above, the Pledgor shall, if necessary, upon the
request of the Trustee, from time to time execute and deliver to
the Trustee appropriate proxies, dividend payment orders and
other instruments as the Trustee may reasonably request.
(c) All dividends, distributions, principal,
interest and other payments which are received by the Pledgor
contrary to the provisions of Section 6(b)(ii) above shall be
received in trust for the benefit of the Trustee, shall be
segregated from other funds of the Pledgor and shall be
forthwith paid over to the Trustee as Pledged Collateral in the
same form as so received (with any necessary endorsement).
SECTION 7. Transfers and Other Liens; Additional
Shares.
A. Transfers and Other Liens. The Pledgor agrees that
it will not (i) sell, pledge, hypothecate or otherwise convey or
dispose of any of the Pledged Collateral, (ii) create or permit
to exist any Lien upon or with respect to any of the Pledged
Collateral, except for the Lien and security interest under this
Agreement, or (iii) permit any of the Subsidiaries to merge or
consolidate, unless all the outstanding Capital Stock of the
surviving or resulting corporation is, upon such merger or
consolidation, pledged hereunder and no cash, securities or
other property is distributed in respect of the outstanding
shares of any other constituent corporation; provided, however,
that the Pledgor and its Subsidiaries may conduct Asset Sales in
accordance with Section 4.09 of the Indenture, and upon the
consummation of any such Asset Sale, any Pledged Collateral
subject to such Asset Sale shall be released from the Lien of
this Pledge Agreement.
B. Additional Shares. The Pledgor agrees that it will
(i) cause each of its Subsidiaries not to issue any shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock in addition to or in substitution
for the Pledged Shares issued by the Subsidiaries and (ii)
pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional shares of stock or
other equity securities of the Subsidiaries of the Company.
SECTION 8. Trustee Appointed Attorney-in-Fact. The
Pledgor hereby appoints the Trustee the Pledgor's attorney-in-
fact, with full authority in the place and stead of the Pledgor
and in the name of the Pledgor or otherwise, from time to time
in the Trustee's discretion to take any action and to execute
any instrument which the Trustee may reasonably deem necessary
or advisable to accomplish the purposes of this Agreement,
including, without limitation, to receive, endorse and collect
all instruments made payable to the Pledgor representing any
dividend, interest payment or other distribution or payment in
respect of the Pledged Collateral or any part thereof and to
give full discharge for the same.
SECTION 9. Trustee May Perform. If the Pledgor fails
to perform any agreement contained herein after receipt of a
written request to do so from the Trustee, the Trustee may,
within thirty days after such notice is effective pursuant to
Section 20, itself perform, or cause performance of, such
agreement and the reasonable expenses of the Trustee, including
the reasonable fees and expenses of its agents and counsel,
incurred in connection therewith shall be payable by the Pledgor
under Section 13 hereof.
SECTION 10. Reasonable Care. The Trustee shall be
deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially
equivalent to that which the Trustee, in its individual
capacity, accords its own property consisting of negotiable
securities, it being understood that the Trustee shall not have
responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not
the Trustee is deemed to have knowledge of such matters or (ii)
taking any necessary steps (other than steps taken in accordance
with the standard of care set forth above to maintain possession
of the Pledged Collateral) to preserve any rights respecting any
of the Pledged Collateral.
SECTION 11. Remedies Upon Default; Decisions Relating
to Exercise of Remedies; Payments Under Notes.
A. Remedies Upon Default. Subject to Section 11B, if
any Event of Default under the Indenture shall have occurred and
be continuing:
(i) The Trustee may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform
Commercial Code (the "Code") in effect in the State of New York
at that time, and the Trustee may also in its sole discretion,
without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange, broker's board or at any of
the Trustee's offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other
terms as the Trustee may deem commercially reasonable,
irrespective of the impact of any such sales on the market price
of the Pledged Collateral. The Trustee or any Noteholder may be
the purchaser of any or all of the Pledged Collateral at any
such sale but shall not be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all
or any portion of the Pledged Collateral sold at such sale, to
use and apply any of the Secured Obligations owed to such person
as a credit on account of the purchase price of any Pledged
Collateral payable by such person at such sale. Each purchaser
at any such sale shall hold the property sold absolutely free
from any claim or right on the part of the Pledgor, and the
Pledgor hereby waives (to the extent permitted by law) all
rights of redemption, stay and/or appraisal which it now has or
may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. The Pledgor agrees
that, to the extent notice of sale shall be required by law, at
least ten days' notice to the Pledgor of the time and place of
any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Trustee
shall not be obligated to make any sale of Pledged Collateral
regardless of notice of sale having been given. The Trustee may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to
which it was so adjourned. The Pledgor hereby waives any claim
against the Trustee arising by reason of the fact that the price
at which any Pledged Collateral may have been sold at such a
private sale was less than the price which might have been
obtained at a public sale, even if the Trustee accepts the first
offer received and does not offer such Pledged Collateral to
more than one party.
(ii) The Pledgor recognizes that, by reason
of certain prohibitions contained in the Securities Act of
1933, as amended (the "Securities Act"), and applicable state
securities laws, the Trustee may be compelled, with respect to
any sale of all or any part of the Pledged Collateral, to limit
purchasers to those who will agree, among other things, to
acquire the Pledged Collateral for their own account, for
investment and not with a view to the distribution or resale
thereof. The Pledgor acknowledges that any such private sales
may be at prices and on terms less favorable to the Trustee than
those obtainable through a public sale without such restrictions
(including, without limitation, a public offering made pursuant
to a registration statement under the Securities Act), and,
notwithstanding such circumstances, agrees that any private sale
shall be deemed to have been made in a commercially reasonable
manner and that the Trustee shall have no obligation to engage
in public sales and no obligation to delay the sale of any
Pledged Collateral for the period of time necessary to permit
the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under
applicable state securities laws, even if the Pledgor would
agree to do so.
(iii) If the Trustee determines to exercise its
right to sell any or all of the Pledged Collateral, upon written
request, the Pledgor shall and shall cause each issuer of any
Pledged Collateral to be sold hereunder from time to time to
furnish to the Trustee all such information as the Trustee may
request and to cause any financial intermediary to furnish any
such information, in order to determine the number of shares,
notes and other instruments included in the Pledged Collateral,
which may be sold by the Trustee as exempt transactions under
the Securities Act and the rules of the Securities and Exchange
Commission thereunder, as the same are from time to time in
effect.
B. Decisions Relating to Exercise of Remedies.
Notwithstanding anything in this Agreement to the contrary, the
Trustee shall exercise, or shall refrain from exercising, any
remedy provided for in Section 11A as provided in Article Ten of
the Indenture.
SECTION 12. Application of Proceeds. During and
after the continuance of an Event of Default, any cash held by
the Trustee as Pledged Collateral and all cash proceeds received
by the Trustee (all such cash being "Proceeds") in respect of
any sale of, collection from, or other realization upon all or
any part of the Pledged Collateral pursuant to the exercise by
the Trustee of its remedies as a secured creditor as provided in
Section 11 of this Agreement shall be applied promptly from time
to time by the Trustee as follows:
First, to the payment of the costs and expenses of such
sale, collection or other realization, including reasonable
compensation to the Trustee and its agents and counsel, and all
expenses, liabilities and advances made or incurred by the
Trustee in connection therewith including all amounts due to the
Trustee under Article Seven of the Indenture;
Second, to the payment of the Secured Obligations as
provided pursuant to the Indenture; and
Third, after payment in full of all Secured
Obligations, to the Pledgor.
SECTION 13. Expenses. The Pledgor will, upon demand,
pay to the Trustee the amount of any and all reasonable
expenses, disbursements and advances, including reasonable fees
and expenses of its counsel and of any experts and agents, which
the Trustee may incur in connection with (i) the acceptance and
administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the
exercise or enforcement of any of the rights of the Trustee or
the Noteholders hereunder or (iv) the failure by the Pledgor to
perform or observe any of the provisions hereof.
SECTION 14. No Waiver. No failure on the part of the
Trustee to exercise, and no course of dealing with respect to,
and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or
partial exercise by the Trustee of any right, power or remedy
hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies
herein provided are to the fullest extent permitted by law
cumulative and are not exclusive of any other remedies provided
by law.
SECTION 15. Trustee. The Trustee has been appointed
as Trustee hereunder pursuant to the Indenture. The Trustee
shall be obligated, and shall have the right, hereunder to make
demands, to give notices, to exercise or refrain from exercising
any rights, and to take or refrain from taking action
(including, without limitation, the release or substitution of
Pledged Collateral) solely in accordance with this Agreement and
the Indenture. Without limiting the generality of the
foregoing, the provisions of Sections 7.01 and 7.02 of the
Indenture shall be applicable to actions taken or not taken by
the Trustee hereunder. The Trustee may resign and a successor
Trustee may be appointed in the manner provided in the
Indenture. Upon the acceptance of any appointment as a Trustee
by a successor Trustee, that successor Trustee shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Trustee under this
Agreement, and the retiring Trustee shall thereupon be
discharged from its duties and obligations under this Agreement
and, after payment to it of all amounts due it hereunder, shall
deliver any Pledged Collateral in its possession to the
successor Trustee. After any retiring Trustee's resignation,
the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this
Agreement while it was Trustee. Anything contained in this
Agreement to the contrary notwithstanding, in the event of any
conflict between the express terms and provisions of this
Agreement and the express terms and provisions of the Indenture,
such terms and provisions of the Indenture shall control.
SECTION 16. Indemnification. The Pledgor hereby agrees
to indemnify the Trustee for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted
against the Trustee in any way relating to or arising out of
this Agreement or any instrument relating hereto, or any other
documents contemplated by or referred to herein or the
transactions contemplated hereby or the enforcement of any of
the terms hereof or of any such other documents or otherwise
arising out of or relating in any manner to the pledges,
dispositions of Pledged Collateral or proceeds of Pledged
Collateral, or other actions of any nature with respect to the
Pledged Collateral contemplated hereunder and under the
Indenture to secure the payment of the Secured Obligations;
provided, however, that the Pledgor shall not be liable for any
of the foregoing to the extent they arise from the negligence or
willful misconduct of the Trustee or failure by the Trustee to
exercise reasonable care in the custody and preservation of the
Pledged Collateral as provided in Section 10.
SECTION 17. Lien Created. To secure Pledgor's
obligations under Sections 13 and 16, the Trustee shall have a
Lien against the Pledged Collateral.
SECTION 18. Amendments, Etc. Prior to such time as
all Secured Obligations shall have been paid in full in cash or
defeased pursuant to Section 8.02 of the Indenture, this
Agreement may be amended by a writing duly signed for and on
behalf of the Trustee and with the consent of the Noteholders as
provided in the Indenture.
SECTION 19. Termination. When all Secured Obligations
have been paid in full in cash or defeased pursuant to Section
8.02 of the Indenture, this Agreement shall terminate, and the
Trustee shall, upon the request and at the expense of the
Pledgor, forthwith assign, transfer and deliver, against receipt
and without recourse to the Trustee, such of the Pledged
Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof to or on the order of the Pledgor.
SECTION 20. Addresses for Notices. All notices and
other communications provided for hereunder shall be in writing
(including telegraphic or telecopy communication) and mailed,
telegraphed, telecopied or delivered, if to the Pledgor,
addressed to it at the address set forth on the signature page
of this Agreement, and if to the Trustee, addressed to it at the
address set forth on the signature page of this Agreement. All
such notices and other communications shall, when mailed or
telegraphed, be effective when deposited in the mails or
delivered to the telegraph company, respectively, and shall,
when delivered or telecopied, be effective when received.
SECTION 21. Continuing Security Interest; Transfer of
Notes. Subject to Section 18, this Agreement shall create a
continuing security interest in the Pledged Collateral and shall
(i) remain in full force and effect until indefeasible payment
in full of all Secured Obligations, (ii) be binding upon the
Pledgor, its successors and assigns, and (iii) inure, together
with the rights and remedies of the Trustee hereunder, to the
benefit of the Trustee and the Noteholders and each of their
respective successors, transferees and assigns.
SECTION 22. Governing Law, Terms. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. Unless otherwise defined
herein or in the Indenture, terms defined in Articles 8 and 9 of
the Uniform Commercial Code as in effect in the State of New
York are used herein as therein defined.
SECTION 23. Consent to Jurisdiction and Service of
Process. All judicial proceedings brought against the Pledgor
with respect to this Agreement may be brought in any state or
federal court of competent jurisdiction in the State of New
York, and by execution and delivery of this Agreement the
Pledgor accepts for itself and in connection with its
properties, generally and unconditionally, the nonexclusive
jurisdiction of the aforesaid courts, and irrevocably agrees to
be bound by any judgment rendered thereby in connection with
this Agreement. Nothing herein shall limit the right of the
Trustee to bring proceedings against the Pledgor in the courts
of any other jurisdiction.
SECTION 24. Advances. The Trustee shall not be
obligated or required to expend, advance or risk any of its own
funds in the performance of its obligations hereunder.
SECTION 25. Agents, Attorneys. The Trustee may act
through agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care. The Trustee
may consult with counsel of its selection and the advice of such
counsel or a written opinion rendered by such counsel shall be
full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
SECTION 26. Waiver. Pledgor waives presentment,
demand, protest or notice of any kind.
SECTION 27. Security Interest Absolute. All rights of
the Trustee and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of any
of the Notes, the Indenture or any instrument relating thereto;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Secured
Obligations, or any other amendment or waiver of or any consent
to any departure from any of the Notes or the Indenture;
(iii) any exchange, release or non-perfection of
any other collateral securing, or any release or amendment or
waiver of or consent to departure from any guaranty of, all or
any of the Secured Obligations; or
(iv) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the
Pledgor.
SECTION 28. Limitation of Liability. It is the
intention of the parties that in no event shall Pledgor's
obligations hereunder constitute or result in a violation of any
applicable fraudulent conveyance or similar law of any relevant
jurisdiction. Therefore, in the event that this Agreement
would, but for this sentence, constitute or result in such a
violation, then the liability of Pledgor hereunder shall be
reduced to the extent necessary to eliminate such violation
under the applicable fraudulent conveyance or similar law.
SECTION 29. Defined Terms. Terms used but not defined
herein shall have the meaning ascribed to them in the Indenture.
<PAGE>
IN WITNESS WHEREOF, the Pledgor and the Trustee
have caused this Agreement to be duly executed and delivered by
their respective duly authorized officers as of the date first
above written
Pledgor
[NAME]
By: _____________________________
Name:
Title:
Notice Address:
1500 North Mabry Highway
Tampa, Florida 33607
Attn: Chief Financial Officer
Trustee
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By: _____________________________
Name:
Title:
Notice Address:
117 West 47th Street
New York, New York 10036
Attn: Corporate Trust Division
<PAGE>
SCHEDULE I
LIST OF COMPANY SUBSIDIARIES
Percentage of
Class Stock Number All Capital
of Certificate Par of Stock
Issuer Stock No(s). Value Shares Outstanding
<PAGE>
SCHEDULE II
To the Pledge Agreement
PLEDGED SHARE AMENDMENT
This Pledged Share Amendment, dated as of ______, is
delivered pursuant to Section 5 of the Pledge Agreement referred
to below. The undersigned hereby agrees that this Pledged Share
Amendment may be attached to the Pledge Agreement dated as of
____ __, 1995, between the undersigned and United States Trust
Company of New York, as Trustee (the "Pledge Agreement";
capitalized terms defined therein being used herein as therein
defined), and that the Pledged Shares listed on this Pledged
Share Amendment shall be deemed to be part of the Pledged Shares
and shall become part of the Pledged Collateral and shall secure
all Secured Obligations as provided in the Pledge Agreement.
[NAME]
By: _________________________
Name:
Title:
Percentage of
Class Stock Number All Capital
of Certificate Par of Stock
Issuer Stock No(s). Value Shares Outstanding
<PAGE>
EXHIBIT D
SUBORDINATION PROVISIONS FOR
SUBORDINATED INDEBTEDNESS
"Subordinated Notes" means any notes of the Company
subject to the following provisions.
The Subordinated Notes will be Subordinated
Indebtedness of the Company. The payment of the Subordinated
Obligations (as defined below) will, to the extent set forth
herein, be subordinated in right of payment to the prior payment
in full, in cash, of the Notes.
"Subordinated Obligations" is defined to mean any
principal of, premium, if any, and interest on the Subordinated
Notes payable pursuant to the terms of the Subordinated Notes or
upon acceleration, including any amounts received upon the
exercise of rights of rescission or other rights of action
(including claims for damages) or otherwise, to the extent
relating to the purchase price of the Subordinated Notes or
amounts corresponding to such principal, premium, if any, or
interest on the Subordinated Notes.
Upon any payment or distribution of assets or
securities of the Company, of any kind or character, whether in
cash, property or securities, in connection with any dissolution
or winding up or total or partial liquidation or reorganization
of the Company, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all
amounts due or to become due upon the Notes (including any
interest accruing subsequent to an event of bankruptcy, whether
or not such interest is an allowed claim enforceable against the
debtor under the United States Bankruptcy Code) shall first be
paid in full, in cash, before the holders of the Subordinated
Notes or any trustee on their behalf shall be entitled to
receive any payment by the Company on account of Subordinated
Obligations, or any payment to acquire any of the Subordinated
Notes for cash, property or securities, or any distribution with
respect to the Subordinated Notes of any cash, property, or
securities. Before any payment may be made by, or on behalf of,
the Company on any Subordinated Obligations in connection with
any such dissolution, winding up, liquidation or reorganization,
any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or
securities, to which the holders of Subordinated Notes or any
trustee on their behalf would be entitled, but for the
subordination provisions hereof, shall be made by the Company or
by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person making such payment or
distribution or by the holders of Subordinated Notes or any
trustee if received by them or it, directly to the Holders of
the Notes (pro rata to such Holders on the basis of the
respective amounts of Notes held by such Holders) or their
representatives or to the Trustee under the Indenture, as their
respective interests appear, to the extent necessary to pay all
such Notes in full, in cash, after giving effect to any
concurrent payment, distribution or provision therefor to or for
the Holders of the Notes.
No direct or indirect payment by or on behalf of the
Company of Subordinated Obligations, whether pursuant to the
terms of the Subordinated Notes or upon acceleration or
otherwise, shall be made if, at the time of such payment, there
exists a default in the payment of all or any portion of the
obligations on the Notes, and such default shall not have been
cured or waived or the benefits of this sentence waived by or on
behalf of the Holders of the Notes. In addition, during the
continuance of any other Event of Default with respect to the
Notes (a) if such Event of Default under the Notes results from
the acceleration of the Subordinated Notes, from and after the
date of such acceleration, or (b) with respect to any other
Event of Default upon receipt by the trustee of written notice
from the Trustee or other representative for the Holders of the
Notes (or the Holders of at least a majority in principal amount
of the outstanding Notes), no payment of Subordinated
Obligations may be made by or on behalf of the Company upon or
in respect of the Subordinated Notes for a period (a "Payment
Blockage Period") commencing on the earlier of the date of
receipt of such notice or the date of such acceleration and
ending 179 days thereafter (unless such Payment Blockage Period
shall be terminated by written notice to the trustee from the
Trustee or other representative of the Holders or by repayment
in full in cash of the Notes). Not more than one Payment
Blockage Period may be commenced with respect to the
Subordinated Notes during any period of 360 consecutive days.
Notwithstanding anything herein to the contrary, there must be
180 consecutive days in any 360-day period in which no Payment
Blockage Period is in effect. No Event of Default that existed
or was continuing (it being acknowledged that any subsequent
action that would give rise to an Event of Default pursuant to
any provision under which an Event of Default previously existed
or was continuing shall constitute a new Event of Default for
this purpose) on the date of commencement of any Payment
Blockage Period shall be, or shall be made, the basis for the
commencement of a second Payment Blockage Period by the
representative for, or the Holders of, the Notes, whether or not
within a period of 360 consecutive days, unless such Event of
Default shall have been cured or waived for a period of not less
than 90 consecutive days.
To the extent any payment of Notes (whether by or on
behalf of the Company, as proceeds of security or enforcement of
any right of setoff or otherwise) is declared to be fraudulent
or preferential, set aside or required to be paid to any
receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then if such
payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar
Person, the Notes or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred. To the extent the obligation to
repay any Notes is declared to be fraudulent, invalid, or
otherwise set aside (and all other amounts that would come due
with respect thereto had such obligation not been so affected),
the Notes shall be deemed to be reinstated and outstanding as
Notes for all purposes hereof as if such declaration, invalidity
or setting aside had not occurred.
<PAGE>
ANNEX A
Homes Holdings Corporation
Jim Walter Homes, Inc.
Jim Walter Resources, Inc.
Jim Walter Window Components, Inc.
JW Aluminum Company
JW Resources, Inc.
Land Holdings Corporation
Mid-State Homes, Inc.
Mid-State Holdings Corporation
Railroad Holdings Corporation
Sloss Industries Corporation
Southern Precision Corporation
United States Pipe and Foundry Company
United Land Corporation
Vestal Manufacturing Company
Walter Industries, Inc.
<PAGE>
Exhibit T3E24
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
In re ) Chapter 11
) Jointly Administered
HILLSBOROUGH HOLDINGS CORPORATION, ) Case No. 89-9715-8P1
BEST INSURORS, INC., ) Case No. 89-9740-8P1
BEST INSURORS OF MISSISSIPPI, INC., ) Case No. 89-9737-8P1
COAST TO COAST ADVERTISING, INC., ) Case No. 89-9727-8P1
COMPUTER HOLDINGS CORPORATION, ) Case No. 89-9724-8P1
DIXIE BUILDING SUPPLIES, INC., ) Case No. 89-9741-8P1
HAMER HOLDINGS CORPORATION, ) Case No. 89-9735-8P1
HAMER PROPERTIES, INC., ) Case No. 89-9739-8P1
HOMES HOLDINGS CORPORATION, ) Case No. 89-9742-8P1
JIM WALTER COMPUTER SERVICES, INC., ) Case No. 89-9723-8P1
JIM WALTER HOMES, INC., ) Case No. 89-9746-8P1
JIM WALTER INSURANCE SERVICES, INC., ) Case No. 89-9731-8P1
JIM WALTER RESOURCES, INC., ) Case No. 89-9738-8P1
JIM WALTER WINDOW COMPONENTS, INC., ) Case No. 89-9716-8P1
JW ALUMINUM COMPANY, ) Case No. 89-9718-8P1
JW RESOURCES, INC., ) Case No. 90-11997-8P1
JW RESOURCES HOLDINGS CORPORATION, ) Case No. 89-9719-8P1
J.W.I. HOLDINGS CORPORATION, ) Case No. 89-9721-8P1
J.W. WALTER, INC., ) Case No. 89-9717-8P1
JW WINDOW COMPONENTS, INC., ) Case No. 89-9732-8P1
LAND HOLDINGS CORPORATION, ) Case No. 89-9720-8P1
MID-STATE HOMES, INC., ) Case No. 89-9725-8P1
MID-STATE HOLDINGS CORPORATION, ) Case No. 89-9726-8P1
RAILROAD HOLDINGS CORPORATION, ) Case No. 89-9733-8P1
SLOSS INDUSTRIES CORPORATION, ) Case No. 89-9743-8P1
SOUTHERLY PRECISION CORPORATION, ) Case No. 89-9729-8P1
UNITED LAND CORPORATION, ) Case No. 89-9730-8P1
UNITED STATES PIPE AND FOUNDRY COMPANY,) Case No. 89-9744-8P1
U.S. PIPE REALTY, INC., ) Case No. 89-9734-8P1
VESTAL MANUFACTURING COMPANY, ) Case No. 89-9728-8P1
WALTER HOME IMPROVEMENT, INC., ) Case No. 89-9722-8P1
WALTER INDUSTRIES, INC., and ) Case No. 89-9745-8P1
WALTER LAND COMPANY, ) Case No. 89-9736-8P1
Debtors. )
MODIFICATION TO AMENDED JOINT PLAN
OF REORGANIZATION DATED AS OF DECEMBER 9, 1994
A. All capitalized terms used herein and not otherwise
expressly defined shall have the meanings ascribed to them in
the Amended Joint Plan of Reorganization dated as of December 9,
1994 (hereinafter, the "Consensual Plan") proposed by the
Debtors, the KKR Proponents, the Creditors Committee, the
Bondholders Committee, Apollo, Lehman Brothers Inc., and the Ad
Hoc Committee of Pre-LBO Bondholders (collectively, the
"Consensual Plan Proponents") and filed with the Clerk of the
Court on December 9, 1994.
B. Pursuant to Section 1127(a) of the Bankruptcy Code and Rule
3019 of the Federal Rules of Bankruptcy Procedure, the
Consensual Plan Proponents hereby amend and modify the
Consensual Plan as follows;
1. Article I; Section 1.219; Stock Acquisition Rights.
Article I, Section 1.219 of the Consensual Plan is hereby
amended and modified by deleting the phrase "or Subsidiary
Common Stock or any other equity or similar ownership interest
in any Debtor" from the text therein.
2. Article II; Section 2.28; Class SE-2 Interests:
Subsidiary Stock Acquisition Rights in Debtors other than
Hillsborough.
Article II of the Consensual Plan is hereby amended and
modified by deleting the heading and the text appearing at
Section 2.28 in their entirety and replacing the heading and the
text with the following text:
"2.28 [INTENTIONALLY OMITTED]."
3. Article III; Section 3.2; Administrative Claims.
Article III, Section 3.2 of the Consensual Plan is hereby
amended and modified by deleting the text appearing therein in
its entirety and replacing said text with the following text:
"3.2 Administrative Claims. Each Holder of an Allowed
Administrative Claim, other than the Internal Revenue
Service, shall receive, in full satisfaction thereof,
(1) Cash in an amount equal to the Allowed Amount of
such Claim, without interest, on or promptly after the
Effective Date, or (2) such amount, at such other date
and upon such other terms as shall have been agreed
upon between the Holder of such Allowed Claim and the
applicable Debtor and approved by a Final Order of the
Court; provided, however, that Allowed Administrative
Claims representing obligations incurred in the
ordinary course of business of a Debtor or assumed by
any Debtor subsequent to the Filing Date shall be paid
or performed by such Debtor in accordance with the
terms and conditions of such agreement relating thereto
in the ordinary course of such Debtor's business.
On account of its Allowed Administrative Claim, if any,
the Internal Revenue Service shall receive, in full
satisfaction thereof, (1) on or promptly after the
Effective Date, Cash in an amount equal to the Allowed
Amount of such Claim with post-Filing Date interest on
such Allowed Claim at the rate and to the extent
provided for in Section 6621 of the Internal Revenue
Code, 26 U.S.C. Section 6621, in effect from time to time, or
(2) such amount, at such other date and upon such other
terms as shall have been agreed upon between the
Internal Revenue Service and the Debtors and approved
by a Final Order of the Court."
4. Article III; Section 3.3; Federal Income Tax Claims.
Article III, Section 3.3 of the Consensual Plan is hereby
amended and modified by deleting the text appearing therein in
its entirety and replacing said text with the following text:
"3.3 Federal Income Tax Claims. The Holder of the
Allowed Federal Income Tax Claims shall receive, in
full satisfaction thereof, Cash payments in an
aggregate amount equal to the Allowed Amount of such
Allowed Federal Income Tax Claim. The Allowed Amount
shall be payable in equal quarterly installments over a
six-year period from the date of the assessment by the
Internal Revenue Service of such Claim, with interest
on unpaid amounts from the later of the Effective Date
or the date of assessment, at an annual rate equal to
11%, in accordance with the provisions of Section
1129(a) of the Code and, if applicable, a Final Order
of the Court; provided that if the date of any
assessment shall have occurred prior to the Effective
Date, then the Holder of the Allowed Federal Income Tax
Claims shall receive Cash in an amount equal to the
aggregate amount of all deferred Cash payments which
were due and payable in accordance with the foregoing
on or prior to the Effective Date, on or promptly after
the Effective Date, unless such Holder and the Debtors
(subject to Section 4.20 of the Consensual Plan) shall
have agreed to a less favorable treatment of such
Claim."
5. Article III; Section 3.18; Class U-3 Claims:
Other Unsecured Claims.
Article III, Section 3.18 of the Consensual Plan is hereby
amended and modified by deleting the text appearing therein in
its entirety and replacing said text with the following text:
"a. Class U-3 Claims other than Class U-3K Claims and Class
U-3DD Claims are impaired. Each Holder of a
Class U-3 Allowed Claim other than a Holder of a Class
U-3K Allowed Claim or a Holder of a Class U-3DD Allowed
Claim shall receive, in full satisfaction thereof, Cash
in an amount equal to the Allowed Amount of such Claim
payable as follows:
(1) with respect to a Class U-3 Claim which
constitutes an Allowed Claim as of the Effective
Date:
(i) 75% of the Allowed Amount of such Claim, on
or promptly after the Effective Date, unless such
Holder and the applicable Debtor shall have agreed
to a less favorable treatment of such Claim; and
(ii) the balance of such Allowed Amount,
together with interest accrued at the General
Unsecured Interest Rate from the Effective Date to
the date of actual payment of the 25% portion of
the Pre-Filing Date Unsecured Allowed Amount not
paid pursuant to clause (1)(i) above, within six
(6) months following the payment pursuant to
clause (1)(i) above unless such Holder and the
applicable Debtor shall have agreed to a less
favorable treatment of such Claim.
(2) notwithstanding clause (1) above, with
respect to a Class U-3 Claim which constitutes a
Disputed Claim as of the Effective Date or becomes a
Disputed Claim subsequent thereto:
(i) 75% of the Allowed Amount of such Claim
on or promptly after such Disputed Claim becomes
an Allowed Claim, unless such Holder and the
applicable Debtor shall have agreed to a less
favorable treatment of such Claim; and
(ii) the balance of such Allowed Amount,
together with interest accrued at the General
Unsecured Interest Rate from the Effective Date
to the date of actual payment of the 25% portion
of the Pre-Filing Date Unsecured Allowed Amount
not paid pursuant to clause (2)(i) above, at the
later of (x) six months after the Effective Date
or (y) the date such Disputed Claim becomes an
Allowed Claim, unless such Holder and the
applicable Debtor shall have agreed to a less
favorable treatment of such Claim.
b. Class U-3K Claims are not impaired. Each Holder
of a Class U-3K Allowed Claim shall receive, in full
satisfaction thereof, Cash in an amount equal to the
Allowed Amount of such Claim, on or promptly after the
later of (1) the Effective Date or (2) the date such
Class U-3K Claim becomes an Allowed Claim, unless such
Holder and Jim Walter Homes shall have agreed to less
favorable treatment of such Claim.
c. Class U-3DD Claims are not impaired. Each Holder
of a Class U-3DD Allowed Claim shall receive, in full
satisfaction thereof, Cash in an amount equal to the
Allowed Amount of such Claim, on or promptly after the
later of (1) the Effective Date or (2) the date such
Class U-3DD Claim becomes an Allowed Claim, unless
such Holder and Home Improvement shall have agreed to
a less favorable treatment of such Claim."
6. ARTICLE III; SECTION 3.29; CLASS SE-2 INTERESTS:
STOCK ACQUISITION RIGHTS IN DEBTORS OTHER THAN
HILLSBOROUGH
Article III, Section 3.29 of the Consensual Plan is hereby
amended and modified by deleting the heading and the text
appearing therein in their entirety and replacing the heading
and said text with the following text:
"3.29 [INTENTIONALLY OMITTED]".
7. ARTICLE IV; SECTION 4.5; DISTRIBUTIONS TO HOLDERS OF
ALLOWED CLAIMS AND INTERESTS
Article IV, Section 4.5 of the Consensual Plan is hereby
amended and modified as follows:
a. The text appearing in paragraph (b) shall be
deleted in its entirety and replaced with the
following text:
"(b) to the Holders of Allowed Claims in Class
S-6 as to which Claims the Series B & C Senior
Note Claim Election was made, New Senior Notes in
accordance with Section 3.11 hereof (unless no
New Senior Notes are issued on account of Series
B & C Senior Note Claims); provided, however,
that Walter Industries shall be entitled to
require, as a condition to issuance of New Senior
Notes (or Cash in an amount based on having made
the Series B & C Senior Note Claim Election if no
New Senior Notes are issued on account of Series
B & C Senior Note Claims) to any Holder of a
Series B & C Senior Note Claim that claims
entitlement thereto based upon the making of the
Series B & C Senior Note Claim Election with
respect to such Holder's Series B & C Senior Note
Claim, that such Holder make such representations
and provide such documentary proof as Walter
Industries may reasonably request demonstrating
whether such Holder (or a predecessor Holder, as
the case may be) timely made the Series B & C
Senior Note Claim Election with respect to such
Series B & C Senior Note Claim; and in connection
therewith, Walter Industries shall use
commercially reasonable efforts, which include
consulting in good faith with the Series B & C
Senior Note Trustee, and which may include the
sending of notices and the review and updating of
record holder lists and Depository Trust Company
participants security position listings, to keep
a current list of record holders of Series B & C
Senior Note Claims as to which the Series B & C
Senior Note Claim Election was timely made, in
order to identify such record holders as of the
Effective Date. Subject to Section 4.14 hereof,
Walter Industries shall finally identify in good
faith all Holders of Series B & C Senior Note
Claims as to which the Series B & C Senior Note
Claim Election were timely made, and shall
distribute all funds provided for hereunder for
Holders of Series B & C Senior Note Claims as to
which the Series B & C Senior Note Claim Election
were timely made. Prior to disbursing funds to
Holders of Series B & C Senior Note Claims Walter
Industries shall consult with the Series B & C
Senior Note Trustee regarding the status of its
charging lien pursuant to Section 6.07 of the
Series B & C Senior Note Indenture;"
b. The text appearing in paragraph (c) shall be
amended and modified by eliminating "." at the
end of paragraph (c) and by adding the following
new text at the conclusion of 4.5(c) as follows:
"; provided further, that Lehman Brothers
Inc. will exchange in respect of the Class
U-4 Exchange Election only that portion of
New Common Stock for Qualified Securities as
properly elected by those who do not have
Non-Conforming Claims;"
c. The text appearing in paragraph (d) shall be
deleted in its entirety and replaced with the
following text:
"(d) to the Holders of Allowed Claims in Class
S-6, Cash and certificates representing New
Common Stock in accordance with Section 3.11
hereof (it being understood that nothing in the
Consensual Plan shall in any way modify or
prejudice the right of the Series B & C Senior
Note Trustee to assert its rights under the
Series B & C Senior Note Indenture, including but
not limited to Section 6.07 thereof, against the
Holders of Class S-6 Claims);"
8. ARTICLE VI; SECTION 6.2; RELEASE BY DEBTORS
Article VI, Section 6.2 of the Consensual Plan is hereby
amended and modified by deleting "." at the end thereof and
adding the following new text at the end thereof:
"and to professional malpractice, negligence or
similar claims or rights by any and all Debtors
against any non-bankruptcy professional retained by
any and all Debtors and/or any claim or right by any
and all Debtors that is covered by a directors or
officers indemnity or insurance policy of any and all
Debtors."
9. ARTICLE XIII; SECTION 13.8; OFFICIAL COMMITTEES
Article XIII, Section 13.8 of the Consensual Plan is hereby
amended and modified by deleting the text appearing therein in
its entirety and replacing said text with the following text:
"13.8 Official Committees. The Official Committees
shall continue in existence until the commencement of
distributions to Holders of Subordinated Note Claims
under the consensual Plan, for the principal purpose of
overseeing the implementation of the Consensual Plan,
provided, however, that after the commencement of
distributions to Holders of Subordinated Note Claims
under the Consensual Plan, the Official Committees may
continue in existence solely for the purpose of
supporting and/or objecting to Fee Claims, including
requests for allowance of Administrative Claims
pursuant to Section 503(b) of the Code filed on behalf
of insiders (as defined in Section 101(31) of the Code)
of the Debtors. The members of the Official Committees
shall serve without compensation, but shall be
reimbursed for all expenses incurred in their capacity
as members of the Official Committees."
Dated: New York, New York
March 1, 1995
OFFICIAL BONDHOLDERS COMMITTEE OF
HILLSBOROUGH HOLDINGS CORPORATION, ET AL.
BY:
Daniel H. Golden, Esq.
OFFICIAL COMMITTEE OF GENERAL UNSECURED
CREDITORS OF HILLSBOROUGH HOLDINGS
CORPORATION, ET AL.
BY:
Marc S. Kirschner, Esq.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
BY:
Robert Drain
1285 Avenue of the Americas
New York, New York 10019-6064
(212) 373-3236
For Lehman Brothers Inc.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
BY:
Steven M. Pesner, P.C.
Ellen R. Werther
65 East 55th Street, 33rd Floor
New York, New York 10022
(212) 872-1010
For Apollo
MARCUS MONTGOMERY WOLFSON P.C.
BY:
Peter Wolfson
Sara Chenetz
53 Wall Street
New York, New York 10005
(212) 858-5200
For Ad Hoc Committee of Pre-LBO Bondholders
KAY, SCHOLER, FIERMAN, HAYS & HANDLER
BY:
Andrew A. Kress, Esq.
425 Park Avenue
New York, New York 10022
(212) 836-8000
For: HILLSBOROUGH HOLDINGS CORPORATION,
BEST INSURORS, INC.,
BEST INSURORS OF MISSISSIPPI, INC.,
COAST TO COAST ADVERTISING, INC.,
COMPUTER HOLDINGS CORPORATION,
DIXIE BUILDING SUPPLIES, INC.,
HAMER HOLDINGS CORPORATION,
HAMER PROPERTIES, INC.,
HOMES HOLDINGS CORPORATION,
JIM WALTER COMPUTER SERVICES, INC.,
JIM WALTER HOMES, INC.,
JIM WALTER INSURANCE SERVICES, INC.,
JIM WALTER RESOURCES, INC.,
JIM WALTER WINDOW COMPONENTS, INC.,
JW RESOURCES, INC.,
JW RESOURCES HOLDINGS CORPORATION,
LAND HOLDINGS CORPORATION,
MID-STATE HOMES, INC.,
MID-STATE HOLDINGS CORPORATION,
RAILROAD HOLDINGS CORPORATION,
SLOSS INDUSTRIES CORPORATION,
SOUTHERN PRECISION CORPORATION,
UNITED LAND CORPORATION,
UNITED STATES PIPE AND FOUNDRY
COMPANY,
U.S. PIPE REALTY, INC.,
VESTAL MANUFACTURING COMPANY,
WALTER HOME IMPROVEMENT, INC.,
WALTER INDUSTRIES, INC., and
WALTER LAND COMPANY
JWC ASSOCIATES, L.P.
JWC ASSOCIATES II, L.P.
KKR PARTNERS II, L.P.
BY:
KKR ASSOCIATES
BY:
Name: Henry R. Kravis
Title: General Partner
