Exhibit 4.1
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XXXXXXX-XXXXXX COMMUNITIES, LLC,
as Issuer,
XXXXXXX-XXXXXX FINANCING CORP.,
as Co-Issuer,
the GUARANTORS named herein,
as Guarantors,
and
THE BANK OF NEW YORK,
as Trustee
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INDENTURE
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Dated as of August 10, 2005
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9-3/4% Senior Subordinated Notes due 2015
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CROSS-REFERENCE TABLE
TIA Section Indenture Section
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310(a)(1).................................................. 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A.
(a)(5).................................................. 7.08; 7.10
(b)..................................................... 7.08; 7.10; 12.02
(c)..................................................... N.A.
311(a) .................................................... 7.11
(b)..................................................... 7.11
(c)..................................................... N.A.
312(a) .................................................... 2.05
(b)..................................................... 12.03
(c)..................................................... 12.03
313(a) .................................................... 7.06
(b)(1).................................................. 7.06
(b)(2).................................................. 7.06
(c)..................................................... 7.06; 12.02
(d)..................................................... 7.06
314(a) .................................................... 4.06; 4.05; 12.02
(b)..................................................... N.A.
(c)(1).................................................. 7.02; 12.04; 12.05
(c)(2).................................................. 7.02; 12.04; 12.05
(c)(3).................................................. N.A.
(d)..................................................... N.A.
(e)..................................................... 12.05
(f)..................................................... N.A.
315(a) .................................................... 7.01(b)
(b)..................................................... 7.05
(c)..................................................... 7.01
(d)..................................................... 6.05; 7.01(c)
(e)..................................................... 6.11
316(a)(last sentence)...................................... 2.09
(a)(1)(A)............................................... 6.05
(a)(1)(B)............................................... 6.04
(a)(2).................................................. 9.02
(b)..................................................... 6.07
(c)..................................................... 9.04
317(a)(1).................................................. 6.08
(a)(2).................................................. 6.09
(b)..................................................... 2.04
318(a) .................................................... 12.01
(c)..................................................... 12.01
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N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions............................................... 1
SECTION 1.02. Other Definitions......................................... 33
SECTION 1.03. Incorporation by Reference of TIA......................... 35
SECTION 1.04. Rules of Construction..................................... 35
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating........................................... 36
SECTION 2.02. Execution and Authentication.............................. 36
SECTION 2.03. Registrar and Paying Agent................................ 37
SECTION 2.04. Paying Agent To Hold Assets in Trust...................... 38
SECTION 2.05. Holder Lists.............................................. 38
SECTION 2.06. Transfer and Exchange..................................... 38
SECTION 2.07. Replacement Notes......................................... 39
SECTION 2.08. Outstanding Notes......................................... 39
SECTION 2.09. Treasury Notes............................................ 39
SECTION 2.10. Temporary Notes........................................... 40
SECTION 2.11. Cancellation.............................................. 40
SECTION 2.12. Defaulted Interest........................................ 40
SECTION 2.13. CUSIP Number.............................................. 40
SECTION 2.14. Deposit of Moneys......................................... 41
SECTION 2.15. Book-Entry Provisions for Global Notes.................... 41
SECTION 2.16. Special Transfer Provisions............................... 42
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee........................................ 45
SECTION 3.02. Selection of Notes To Be Redeemed......................... 45
SECTION 3.03. Notice of Redemption...................................... 46
SECTION 3.04. Effect of Notice of Redemption............................ 47
SECTION 3.05. Deposit of Redemption Price............................... 47
SECTION 3.06. Notes Redeemed in Part.................................... 47
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.......................................... 47
SECTION 4.02. Maintenance of Office or Agency........................... 48
SECTION 4.03. Corporate Existence....................................... 48
SECTION 4.04. Payment of Taxes and Other Claims......................... 49
SECTION 4.05. Reports................................................... 49
SECTION 4.06. Compliance Certificate; Notice of Default................. 51
SECTION 4.07. Waiver of Stay, Extension or Usury Laws................... 51
SECTION 4.08. Conduct of Business....................................... 51
SECTION 4.09. Change of Control......................................... 51
SECTION 4.10. Limitations on Additional Indebtedness.................... 53
SECTION 4.11. Limitations on Layering Indebtedness...................... 56
SECTION 4.12. Limitations on Restricted Payments........................ 56
SECTION 4.13. Maintenance of Consolidated Tangible Net Worth............ 60
SECTION 4.14. Limitations on Dividend and Other Restrictions Affecting
Restricted Subsidiaries................................ 62
SECTION 4.15. Limitations on Transactions with Affiliates............... 63
SECTION 4.16. Limitations on Liens...................................... 65
SECTION 4.17. Limitations on Asset Sales................................ 66
SECTION 4.18. Limitations on Designation of Unrestricted Subsidiaries... 69
SECTION 4.19. Additional Note Guarantees................................ 71
SECTION 4.20. Limitation on Activities of the Co-Issuer................. 71
ARTICLE FIVE
MERGER AND CONSOLIDATION
SECTION 5.01. Limitations on Mergers, Consolidations, Etc............... 72
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default......................................... 74
SECTION 6.02. Acceleration.............................................. 76
SECTION 6.03. Other Remedies............................................ 77
SECTION 6.04. Waiver of Past Defaults................................... 77
SECTION 6.05. Control by Majority....................................... 77
SECTION 6.06. Limitation on Suits....................................... 78
SECTION 6.07. Rights of Holders To Receive Payment...................... 78
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SECTION 6.08. Collection Suit by Trustee................................ 78
SECTION 6.09. Trustee May File Proofs of Claim.......................... 79
SECTION 6.10. Priorities................................................ 79
SECTION 6.11. Undertaking for Costs..................................... 79
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee......................................... 80
SECTION 7.02. Rights of Trustee......................................... 81
SECTION 7.03. Individual Rights of Trustee.............................. 82
SECTION 7.04. Trustee's Disclaimer...................................... 82
SECTION 7.05. Notice of Default......................................... 83
SECTION 7.06. Reports by Trustee to Holders............................. 83
SECTION 7.07. Compensation and Indemnity................................ 83
SECTION 7.08. Replacement of Trustee.................................... 84
SECTION 7.09. Successor Trustee by Merger, Etc.......................... 85
SECTION 7.10. Eligibility; Disqualification............................. 85
SECTION 7.11. Preferential Collection of Claims Against the Issuers..... 86
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Indenture.................................... 86
SECTION 8.02. Legal Defeasance.......................................... 87
SECTION 8.03. Covenant Defeasance....................................... 87
SECTION 8.04. Conditions to Defeasance or Covenant Defeasance........... 88
SECTION 8.05. Deposited Money and U.S. Government Obligations
To Be Held in Trust; Other Miscellaneous Provisions... 89
SECTION 8.06. Reinstatement............................................. 90
SECTION 8.07. Moneys Held by Paying Agent............................... 90
SECTION 8.08. Moneys Held by Trustee.................................... 90
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders................................ 91
SECTION 9.02. With Consent of Holders................................... 92
SECTION 9.03. Compliance with TIA....................................... 93
SECTION 9.04. Revocation and Effect of Consents......................... 93
SECTION 9.05. Notation on or Exchange of Notes.......................... 94
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SECTION 9.06. Trustee To Sign Amendments, Etc........................... 94
ARTICLE TEN
SUBORDINATION OF NOTES
SECTION 10.01. Notes Subordinated to Senior Debt......................... 95
SECTION 10.02. Suspension of Payment When Senior Debt Is in Default...... 95
SECTION 10.03. Notes Subordinated to Prior Payment of All Senior Debt
on Dissolution, Liquidation or Reorganization of the
Issuer or Co-Issuer.................................... 97
SECTION 10.04. Payments May Be Made Prior to Dissolution................. 98
SECTION 10.05. Holders To Be Subrogated to Rights of Holders of Senior
Debt................................................... 99
SECTION 10.06. Obligations of the Issuers Unconditional.................. 99
SECTION 10.07. Notice to Trustee......................................... 99
SECTION 10.08. Reliance on Judicial Order or Certificate of Liquidating
Agent.................................................. 100
SECTION 10.09. Trustee's Relation to Senior Debt......................... 100
SECTION 10.10. Subordination Rights Not Impaired by Acts or Omissions of
the Issuers or Holders of Senior Debt.................. 100
SECTION 10.11. Noteholders Authorize Trustee To Effectuate Subordination
of Notes............................................... 101
SECTION 10.12. This Article Ten Not To Prevent Events of Default......... 101
SECTION 10.13. Trustee's Compensation Not Prejudiced..................... 102
ARTICLE ELEVEN
NOTE GUARANTEE
SECTION 11.01. Unconditional Guarantee................................... 102
SECTION 11.02. Subordination of Note Guarantee........................... 103
SECTION 11.03. Limitation on Guarantor Liability......................... 103
SECTION 11.04. Execution and Delivery of Note Guarantee.................. 104
SECTION 11.05. Release of a Guarantor.................................... 104
SECTION 11.06. Waiver of Subrogation..................................... 105
SECTION 11.07. Immediate Payment......................................... 105
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. TIA Controls.............................................. 106
SECTION 12.02. Notices................................................... 106
SECTION 12.03. Communications by Holders with Other Holders.............. 107
SECTION 12.04. Certificate and Opinion as to Conditions Precedent........ 107
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SECTION 12.05. Statements Required in Certificate or Opinion............. 108
SECTION 12.06. Rules by Trustee, Paying Agent, Registrar................. 108
SECTION 12.07. Legal Holidays............................................ 108
SECTION 12.08. Governing Law; Waiver of Jury Trial....................... 108
SECTION 12.09. No Adverse Interpretation of Other Agreements............. 108
SECTION 12.10. No Recourse Against Others................................ 109
SECTION 12.11. Successors................................................ 109
SECTION 12.12. Duplicate Originals....................................... 109
SECTION 12.13. Severability.............................................. 109
SECTION 12.14. Force Majeure............................................. 109
Signatures............................................................... S-1
Exhibit A - Form of Note
Exhibit B - Form of Legends
Exhibit C - Form of Certificate To Be Delivered in Connection with Transfers
to Non-QIB Accredited Investors
Exhibit D - Form of Certificate To Be Delivered in Connection with Transfers
Pursuant to Regulation S
Exhibit E - Form of Notation of Note Guarantee
Exhibit F - Form of Incumbency Certificate
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
this Indenture.
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INDENTURE dated as of August 10, 2005 among XXXXXXX-XXXXXX
COMMUNITIES, LLC, a Delaware limited liability company (the "ISSUER"), as
issuer, XXXXXXX-XXXXXX FINANCING CORP., a Delaware corporation (the
"CO-ISSUER"), as co-issuer, and each of the Guarantors named herein, as
Guarantors, and THE BANK OF NEW YORK, a New York banking corporation, as Trustee
(the "TRUSTEE").
The Issuer and the Co-Issuer have duly authorized the creation of an
issue of 9-3/4% Senior Subordinated Notes due 2015 and, to provide therefor, the
Issuer and the Co-Issuer have duly authorized the execution and delivery of this
Indenture. All things necessary to make the Notes, when duly issued and executed
by the Issuer and the Co-Issuer and authenticated and delivered hereunder, the
valid and binding obligations of the Issuer and the Co-Issuer and to make this
Indenture a valid and binding agreement of the Issuer and the Co-Issuer have
been done.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Notes:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
Set forth below are certain defined terms used in this Indenture.
"ACQUIRED INDEBTEDNESS" means (1) with respect to any Person that
becomes a Restricted Subsidiary after the Issue Date, Indebtedness of such
Person and its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary, whether or not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary and (2) with
respect to the Issuer or any Restricted Subsidiary, any Indebtedness of a Person
(other than the Issuer or a Restricted Subsidiary) existing at the time such
Person is merged with or into the Issuer or a Restricted Subsidiary, or
Indebtedness expressly assumed by the Issuer or any Restricted Subsidiary in
connection with the acquisition of an asset or assets from another Person,
whether or not incurred by such other Person in connection with, or in
contemplation of, such merger or acquisition.
"ADDITIONAL INTEREST" means additional interest owing under any
Registration Rights Agreement.
"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"
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; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms
"CONTROLLING," "CONTROLLED BY" and "UNDER COMMON CONTROL WITH" shall have
correlative meanings. Notwithstanding the foregoing, the term "Affiliate" shall
not include, with respect to the Issuer or any Restricted Subsidiary, any
Restricted Subsidiary. "AFFILIATED" shall have a correlative meaning.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"AMEND" means to amend, supplement, restate or amend and restate or
otherwise modify, including successively; and "AMENDMENT" shall have a
correlative meaning.
"ASSET" means any asset or property.
"ASSET ACQUISITION" means:
(1) an Investment by the Issuer or any Restricted Subsidiary in any
other Person if, as a result of such Investment, such Person shall become a
Restricted Subsidiary, or shall be merged with or into the Issuer or any
Restricted Subsidiary; or
(2) the acquisition by the Issuer or any Restricted Subsidiary of all
or substantially all of the assets of any other Person or any division or
line of business of any other Person.
"ASSET SALE" means any sale, issuance, conveyance, transfer, lease,
assignment or other disposition by the Issuer or any Restricted Subsidiary to
any Person (including by means of a Sale and Leaseback Transaction or a merger
or consolidation) (collectively, for purposes of this definition, a "TRANSFER"),
in one transaction or a series of related transactions, of any assets (including
Equity Interests) of the Issuer or any Restricted Subsidiaries other than in the
ordinary course of business. For purposes of this definition, the term "Asset
Sale" shall not include:
(1) transfers of cash or Cash Equivalents;
(2) transfers of assets (including Equity Interests) that are governed
by, and made in accordance with, Section 5.01;
(3) Permitted Investments and Restricted Payments permitted under
Section 4.12;
(4) the creation of or realization on any Permitted Lien;
(5) transactions in the ordinary course of business, including,
without limitation, sales (directly or indirectly) leases and sales and
leasebacks of (A) homes, improved land and unimproved land, (B) real estate
(including related amenities and improvements and (C) dispositions of
mortgage loans and related assets in the ordinary course of a mortgage
lending business);
(6) a disposition by a Restricted Subsidiary to the Issuer or by the
Issuer or a Restricted Subsidiary to a Guarantor or by a non-Guarantor
Restricted Subsidiary to a Restricted Subsidiary;
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(7) a disposition of obsolete or worn out equipment or equipment that
is no longer useful in the conduct of the business of the Issuer and its
Restricted Subsidiaries and that is disposed of in each case in the
ordinary course of business;
(8) dispositions of receivables in connection with the compromise,
settlement or collection thereof in the ordinary course of business or in
bankruptcy or similar proceedings and exclusive of factoring or similar
arrangements;
(9) sales of assets received by the Issuer upon the foreclosure on a
Lien against a third party;
(10) any sale of Equity Interests in, or Indebtedness or other
securities of, an Unrestricted Subsidiary;
(11) dispositions of mortgage loans and related assets in the ordinary
course of the Issuer's and/or its Restricted Subsidiaries' mortgage
originating business; and/or
(12) any transfer or series of related transfers that, but for this
clause, would be Asset Sales, if after giving effect to such transfers, the
aggregate Fair Market Value of the assets transferred in such transaction
or any such series of related transactions does not exceed $2.5 million.
"ASSUMED TAX RATE" means, with respect to each Owner, the highest
effective marginal combined federal, state, provincial and local income tax rate
prescribed for such Owner in its jurisdiction of residence, taking into account
the deductibility of state and local taxes.
"ATTRIBUTABLE INDEBTEDNESS," when used with respect to any Sale and
Leaseback Transaction, means, as at the time of determination, the present value
(discounted at a rate equivalent to the Issuer's then-current weighted average
cost of funds for borrowed money as at the time of determination, compounded on
a semi-annual basis) of the total obligations of the lessee for rental payments
during the remaining term of any lease included in any such Sale and Leaseback
Transaction.
"BANKRUPTCY LAW" means Title 11 of the United States Code, as amended,
or any similar federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to any Person, (i) in the
case of any corporation, the board of directors of such Person, (ii) in the case
of any limited liability company, the members, the managers or the board of
directors of such Person, as the case may be, (iii) in the case of any
partnership, the board of directors of the general partner or the general
partner of such Person, as the case may be, and (iv) in any other case, the
functional equivalent of the foregoing or, in each case, other than for purposes
of the definition of "Change of Control," any duly authorized committee of such
body or Persons.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by
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the Board of Directors of such Person and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"BORROWING BASE" means, at any time of determination, the sum of the
following without duplication:
(1) 100% of all cash and Cash Equivalents held by the Issuer or any
Restricted Subsidiary, including cash and Cash Equivalents held for the
account of the Issuer or any of its Restricted Subsidiaries by a title
insurance company;
(2) 75% of the book value of Developed Land for which no material
vertical construction has occurred;
(3) 85% of the cost of the land and construction costs including
capitalized interest (as reasonably allocated by the Issuer) for all Units
for which there is an executed purchase contract with a buyer not
Affiliated with the Issuer, less any deposits, down payments or xxxxxxx
money;
(4) 80% of the cost of the land and construction costs including
capitalized interest (as reasonably allocated by the Issuer) for all Units
for which construction has begun and for which there is not an executed
purchase agreement with a buyer not Affiliated with the Issuer; and
(5) 60% of the costs of Entitled Land (other than Developed Land) and
60% of the costs of Raw Land, in each case, on which material improvements
have not commenced, less mortgage Indebtedness (other than under the Credit
Facilities) applicable to such land.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day
on which banking institutions in New York are authorized or required by law to
close.
"CAPITALIZED LEASE" means a lease required to be capitalized for
financial reporting purposes in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under a Capitalized Lease, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"CASH EQUIVALENTS" means:
(1) marketable obligations with a maturity of 360 days or less issued
or directly and fully guaranteed or insured by the United States of America
or any agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof);
(2) demand and time deposits and certificates of deposit or
acceptances with a maturity of 180 days or less of any financial
institution that is a member of the Federal
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Reserve System having combined capital and surplus and undivided profits of
not less than $250 million and is assigned at least a "B" rating by Thomson
Financial BankWatch;
(3) commercial paper maturing no more than 180 days from the date of
creation thereof issued by a corporation that is not the Issuer or an
Affiliate of the Issuer, and is organized under the laws of any State of
the United States of America or the District of Columbia and rated at least
A-1 by S&P or at least P-1 by Xxxxx'x;
(4) repurchase obligations with a term of not more than ten days for
underlying securities of the types described in clause (1) above entered
into with any commercial bank meeting the specifications of clause (2)
above; and
(5) investments in money market or other mutual funds substantially
all of whose assets comprise securities of the types described in clauses
(1) through (4) above.
"CHANGE OF CONTROL" means the occurrence of any of the following
events:
(1) prior to a Public Equity Offering after the Issue Date, the
Permitted Holders cease to directly or indirectly own, or to have the
direct or indirect power to vote or direct the voting of, Voting Stock
representing more than 50% of the voting power of the total outstanding
Voting Stock of the Issuer;
(2) following a Public Equity Offering after the Issue Date, any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more Permitted Holders, is or becomes
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause that person or group
shall be deemed to have "beneficial ownership" of all securities that any
such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of Voting Stock representing more than 35% of the voting power
of the total outstanding Voting Stock of the Issuer; provided, however,
that such event shall not be deemed to be a Change of Control so long as
the Permitted Holders own Voting Stock representing in the aggregate a
greater percentage of the total voting power of the Voting Stock of the
Issuer than such other person or group;
(3) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new directors whose election to such Board of Directors or whose
nomination for election by the members of the Issuer was approved by a vote
of the majority of the directors of the Issuer then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Issuer;
(4) (a) all or substantially all of the assets of the Issuer and the
Restricted Subsidiaries taken as a whole are sold or otherwise transferred
to any Person other than a Wholly Owned Restricted Subsidiary or one or
more Permitted Holders or (b) the Issuer
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consolidates or merges with or into another Person or any Person
consolidates or merges with or into the Issuer, in either case under this
clause (4), in one transaction or a series of related transactions in which
immediately after the consummation thereof Persons beneficially owing (as
defined in Rule 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, Voting Stock representing in the aggregate 100% of the total
voting power of the Voting Stock of the Issuer immediately prior to such
consummation do not beneficially own (as defined in Rule 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, Voting Stock representing
a majority of the total voting power of the Voting Stock of the Issuer or
the surviving or transferee Person; or
(5) the Issuer shall adopt a plan of liquidation or dissolution or any
such plan shall be approved by the stockholders of the Issuer.
"CO-ISSUER" means the Person identified as such in the Preamble
hereto, until a successor Person shall have replaced the Co-Issuer as co-obligor
on the Notes pursuant to the applicable provisions of this Indenture, and
thereafter means such successor Person.
"CONSOLIDATED AMORTIZATION EXPENSE" for any period means the
amortization expense of the Issuer and the Restricted Subsidiaries for such
period, determined on a consolidated or combined basis in accordance with GAAP.
"CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES" for any period
means the sum, without duplication, of the amounts for such period of:
(1) Consolidated Net Income; plus
(2) in each case only to the extent (and in the same proportion)
deducted in determining Consolidated Net Income and with respect to the
portion of Consolidated Net Income attributable to any Restricted
Subsidiary only if a corresponding amount would be permitted at the date of
determination to be distributed to the Issuer by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms
of its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Restricted
Subsidiary or its stockholders,
(a) Consolidated Income Tax Expense,
(b) Consolidated Amortization Expense (but only to the extent not
included in Consolidated Interest Expense),
(c) Consolidated Depreciation Expense,
(d) Consolidated Interest Expense and interest and other charges
amortized to cost of sales,
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(e) all other non-cash items reducing the Consolidated Net Income
(excluding any non-cash charge that results in an accrual of a reserve
for cash charges in any future period) for such period, and
(f) any cash charges associated with the Reorganization reducing
Consolidated Net Income for any period prior to the end of the fiscal
quarter which includes the Issue Date,
in each case determined on a consolidated basis in accordance with GAAP;
minus
(3) the aggregate amount of all non-cash items, determined on a
consolidated or combined basis, to the extent such items increased
Consolidated Net Income for such period.
"CONSOLIDATED DEPRECIATION EXPENSE" for any period means the
depreciation expense of the Issuer and the Restricted Subsidiaries for such
period, determined on a consolidated or combined basis in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means the ratio of
Consolidated Cash Flow Available for Fixed Charges during the most recent four
consecutive full fiscal quarters for which financial statements are available
(the "FOUR-QUARTER PERIOD") ending on or prior to the date of the transaction
giving rise to the need to calculate the Consolidated Fixed Charge Coverage
Ratio (the "TRANSACTION DATE") to Consolidated Interest Incurred for the
Four-Quarter Period. For purposes of this definition, Consolidated Cash Flow
Available for Fixed Charges and Consolidated Interest Incurred shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to:
(1) the incurrence of any Indebtedness or the issuance of any
Preferred Stock of the Issuer or any Restricted Subsidiary (and the
application of the proceeds thereof) and any repayment of other
Indebtedness or redemption of other Preferred Stock (and the application of
the proceeds therefrom) (other than the incurrence or repayment of
Indebtedness in the ordinary course of business for working capital
purposes pursuant to any revolving credit arrangement) occurring during the
Four-Quarter Period or at any time subsequent to the last day of the
Four-Quarter Period and on or prior to the Transaction Date, as if such
incurrence, repayment, issuance or redemption, as the case may be (and the
application of the proceeds thereof), occurred on the first day of the
Four-Quarter Period; and
(2) any asset sale or disposition or Asset Acquisition (including,
without limitation, any Asset Acquisition giving rise to the need to make
such calculation as a result of the Issuer or any Restricted Subsidiary
(including any Person who becomes a Restricted Subsidiary as a result of
such Asset Acquisition) incurring Acquired Indebtedness and also including
any Consolidated Cash Flow Available for Fixed Charges (including any pro
forma expense and cost reductions calculated on a basis consistent with
GAAP and Regulation S-X under the Exchange Act) associated with any such
Asset Acquisition) occurring during the Four-Quarter Period or at any time
subsequent to the last day of the Four-Quarter Period and on or prior to
the Transaction
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Date, as if such asset sale or disposition or Asset Acquisition (including
the incurrence of, or assumption or liability for, any such Indebtedness or
Acquired Indebtedness) occurred on the first day of the Four-Quarter
Period.
If the Issuer or any Restricted Subsidiary directly or indirectly
guarantees Indebtedness of a third Person, the preceding sentence shall give
effect to the incurrence of such guaranteed Indebtedness as if the Issuer or
such Restricted Subsidiary had directly incurred or otherwise assumed such
guaranteed Indebtedness.
In calculating Consolidated Interest Incurred for purposes of
determining the denominator (but not the numerator) of this Consolidated Fixed
Charge Coverage Ratio:
(1) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date;
(2) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Transaction
Date will be deemed to have been in effect during the Four-Quarter Period;
and
(3) notwithstanding clause (1) or (2) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered
by agreements with a term of at least one year after the Transaction Date
relating to Hedging Obligations, shall be deemed to accrue at the rate per
annum resulting after giving effect to the operation of these agreements.
"CONSOLIDATED INCOME TAX EXPENSE" for any period means the provision
for taxes of the Issuer and the Restricted Subsidiaries, determined on a
consolidated or combined basis in accordance with GAAP.
"CONSOLIDATED INDEBTEDNESS" means, as of any date, the total
Indebtedness of the Issuer and the Restricted Subsidiaries as of such date,
determined on a consolidated or combined basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" for any period means the sum, without
duplication, of the total interest expense (other than interest and other
charges amortized to cost of sales) of the Issuer and the Restricted
Subsidiaries for such period, determined on a consolidated or combined basis in
accordance with GAAP and including without duplication:
(1) imputed interest on Capitalized Lease Obligations and Attributable
Indebtedness;
-8-
(2) commissions, discounts and other fees and charges owed with
respect to letters of credit securing financial obligations, bankers'
acceptance financing and receivables financings;
(3) the net costs associated with Hedging Obligations; provided,
however, that if Hedging Obligations of the type described in clause (4) of
Permitted Indebtedness result in net benefits rather than costs, such
benefits shall be credited to reduce Consolidated Interest Expense unless,
pursuant to GAAP, such net benefits are otherwise reflected in Consolidated
Net Income;
(4) amortization of debt issuance costs, debt discount or premium and
other financing fees and expenses;
(5) the interest portion of any deferred payment obligations;
(6) all other non-cash interest expense;
(7) the product of (a) all dividend payments on any series of
Disqualified Equity Interests of the Issuer or any Preferred Stock of any
Restricted Subsidiary (other than any such Disqualified Equity Interests or
any Preferred Stock held by the Issuer or a Wholly Owned Restricted
Subsidiary), multiplied by (b) a fraction, the numerator of which is one
and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of the Issuer and the
Restricted Subsidiaries, expressed as a decimal;
(8) all interest payable with respect to discontinued operations; and
(9) all interest on any Indebtedness described in clause (7) or (8) of
the definition of Indebtedness.
"CONSOLIDATED INTEREST INCURRED" for any period means the sum, without
duplication, of (1) Consolidated Interest Expense and (2) interest capitalized
for such period (including interest capitalized with respect to discontinued
operations but not including interest or other charges amortized to cost of
sales).
"CONSOLIDATED NET INCOME" for any period means the net income (or
loss) of the Issuer and the Restricted Subsidiaries for such period determined
on a consolidated or combined basis in accordance with GAAP; provided, however,
that there shall be excluded from such net income (to the extent otherwise
included therein), without duplication:
(1) the net income (or loss) of any Person (other than a Restricted
Subsidiary) in which any Person other than the Issuer and the Restricted
Subsidiaries has an ownership interest, except to the extent that cash in
an amount equal to any such income has actually been received by the Issuer
or any of its Restricted Subsidiaries during such period or such loss has
been funded with cash or assets of the Issuer or any Restricted Subsidiary;
-9-
(2) except to the extent includible in the consolidated or combined
net income of the Issuer pursuant to the foregoing clause (1), the net
income (or loss) of any Person that accrued prior to the date that (a) such
Person becomes a Restricted Subsidiary or is merged into or consolidated
with the Issuer or any Restricted Subsidiary or (b) the assets of such
Person are acquired by the Issuer or any Restricted Subsidiary;
(3) the net income of any Restricted Subsidiary of such Person during
such period to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary of that income is not permitted by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary during such period, except that the Issuer's
equity in a net loss of any such Restricted Subsidiary for such period
shall be included in determining Consolidated Net Income;
(4) for the purposes of calculating the Restricted Payments Basket
only, in the case of a successor to the Issuer by consolidation, merger or
transfer of its assets, any income (or loss) of the successor prior to such
merger, consolidation or transfer of assets;
(5) other than for purposes of calculating the Restricted Payments
Basket, any gain (or loss), together with any related provisions for taxes
on any such gain (or the tax effect of any such loss), realized during such
period by the Issuer or any Restricted Subsidiary upon (a) the acquisition
of any securities, or the extinguishment of any Indebtedness, of the Issuer
or any Restricted Subsidiary or (b) any asset sale or asset disposition by
the Issuer or any Restricted Subsidiary (other than in the ordinary course
of business);
(6) unrealized gains and losses with respect to Hedging Obligations;
(7) the cumulative effect of any change in accounting principle;
(8) the amount of any Permitted Tax Dividends paid by the Issuer in
reliance on clause (4) of the second paragraph of Section 4.12; and
(9) other than for purposes of calculating the Restricted Payments
Basket, any extraordinary gain (or extraordinary loss), together with any
related provision for taxes on any such extraordinary gain (or the tax
effect of any such extraordinary loss), realized by the Issuer or any
Restricted Subsidiary during such period.
In addition, any return of capital with respect to an Investment that
increased the Restricted Payments Basket pursuant to clause (3)(d) of the first
paragraph of Section 4.12 or decreased the amount of Investments outstanding
pursuant to clause (14) of the definition of "Permitted Investments" shall be
excluded from Consolidated Net Income for purposes of calculating the Restricted
Payments Basket. Any payment of any Permitted Tax Dividends by the Issuer
pursuant to clause (4) of the second paragraph of Section 4.12 shall only be
deducted for purposes of calculating Consolidated Net Income for purposes of
calculating the Restricted Payments Basket.
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"CONSOLIDATED NET WORTH" means, with respect to any Person as of any
date, the consolidated or combined stockholders' equity of such Person,
determined on a consolidated or combined basis at the end of the fiscal quarter
immediately preceding such date, as determined in accordance with GAAP, less
(without duplication) (1) any amounts thereof attributable to Disqualified
Equity Interests of such Person or its Subsidiaries or any amount attributable
to Unrestricted Subsidiaries and (2) 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 twelve 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 Subsidiary of such Person except to the extent the write-up is
a reversal of a write-down or a previously recorded reserve.
"CONSOLIDATED TANGIBLE NET WORTH" means, with respect to any Person as
of any date, the Consolidated Net Worth of such Person determined on a
consolidated or combined basis at the end of the fiscal quarter immediately
preceding such date less (without duplication) all Intangible Assets of such
Person as of such date.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at 000 Xxxxxxx Xxxxxx, Xxxxx 8 West, New
York, New York 10286, Attention: Corporate Trust Administration, or such other
address as the Trustee may designate from time to time by notice to the Holders
and the Issuer, or the principal corporate trust office of any successor Trustee
(or such other address as such successor Trustee may designate from time to time
by notice to the Holders and the Issuer).
"CREDIT FACILITIES" means (a) the First Modified and Restated Loan
Agreement dated as of November 15, 2004 (as may be amended from time to time,
including by the First Modification Agreement thereto dated as of July 11,
2005), by and among Neighborhoods Capital, LLC and certain of its subsidiaries
named therein, as borrowers and/or guarantors, the lenders party thereto and
Wachovia Bank, National Association, as a lender and as agent for the lenders,
including any notes, guarantees, collateral and security documents, instruments
and agreements executed in connection therewith (including Hedging Obligations
related to the Indebtedness incurred thereunder), and/or (b) the Mortgage
Warehouse Facility, and in each case as amended, amended and restated,
supplemented, refinanced or otherwise modified from time to time, including any
agreement or instrument extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of borrowings or other
Indebtedness outstanding or available to be borrowed thereunder and/or
refinancing such bank facility with secured or unsecured debt securities and/or
other forms of Indebtedness and/or adding, substituting or deleting parties
thereto (including borrowers, obligors, guarantors, lenders, creditors and/or
agents)) all or any portion of the Indebtedness under such agreements, and any
successor or replacement agreement or agreements (including one or more
indentures) with the same or any other agents, creditor, lender or group of
creditors or lenders.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"DEFAULT" means (1) any Event of Default or (2) any event, act or
condition that, after notice or the passage of time or both, would be an Event
of Default.
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"DEFINITIVE NOTE LEGEND" shall mean the legend identified as such in
Exhibit B.
"DEPOSITORY" shall mean The Depository Trust Company, New York, New
York, or a successor thereto registered under the Exchange Act or other
applicable statute or regulation.
"DESIGNATED SENIOR DEBT" means (1) Senior Debt and Guarantor Senior
Debt under or in respect of the Credit Facilities and (2) any other Indebtedness
constituting Senior Debt or Guarantor Senior Debt which, at the time of
determination, has an aggregate principal amount of at least $25.0 million and
is specifically designated in the instrument evidencing such Senior Debt as
"Designated Senior Debt."
"DEVELOPED LAND" means all Entitled Land of the Issuer and its
Restricted Subsidiaries which is undergoing active development or is ready for
vertical construction.
"DISQUALIFIED EQUITY INTERESTS" of any Person means any class of
Equity Interests of such Person that, by its terms, or by the terms of any
related agreement or of any security into which it is convertible, puttable or
exchangeable, is, or upon the happening of any event or the passage of time
would be, required to be redeemed by such Person, whether or not at the option
of the holder thereof, or matures or are mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, in whole or in part, on or prior to the
date which is 91 days after the final maturity date of the Notes; provided,
however, that any class of Equity Interests of such Person that, by its terms,
authorizes such Person to satisfy in full its obligations with respect to the
payment of dividends or upon maturity, redemption (pursuant to a sinking fund or
otherwise) or repurchase thereof or otherwise by the delivery of Equity
Interests that are not Disqualified Equity Interests, and that is not
convertible, puttable or exchangeable for Disqualified Equity Interests or
Indebtedness, will not be deemed to be Disqualified Equity Interests so long as
such Person satisfies its obligations with respect thereto solely by the
delivery of Equity Interests that are not Disqualified Equity Interests;
provided, further, however, that any Equity Interests that would not constitute
Disqualified Equity Interests but for provisions thereof giving holders thereof
(or the holders of any security into or for which such Equity Interests are
convertible, exchangeable or exercisable) the right to require the Issuer to
redeem such Equity Interests upon the occurrence of a change in control or an
asset sale or the failure to maintain a minimum consolidated or combined net
worth test, in each case occurring prior to the final maturity date of the
Notes, shall not constitute Disqualified Equity Interests if the change in
control, asset sale or minimum consolidated or combined net worth provisions
applicable to such Equity Interests are no more favorable to such holders than
the provisions of Sections 4.09, 4.13 and 4.17, and such Equity Interests
specifically provide that the Issuer will not redeem any such Equity Interests
pursuant to such provisions prior to the Issuer's purchase of the Notes as
required pursuant to the provisions of Sections 4.09, 4.13 and 4.17.
"ENTITLED LAND" means all land of the Issuer and the Restricted
Subsidiaries (a) on which Units may be constructed or which may be utilized for
commercial, retail or industrial uses, in each case, under applicable laws and
regulations and (b) the intended use by the Issuer for which is permissible
under the applicable regional plan, development agreement or applicable zoning
ordinance.
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"EQUITY INTERESTS" of any Person means (1) any and all shares or other
equity interests (including common stock, Preferred Stock, limited liability
company interests and partnership interests) in such Person and (2) all rights
to purchase, warrants or options (whether or not currently exercisable),
participations or other equivalents of or interests in (however designated) such
shares or other interests in such Person.
"EQUITY OFFERING" means a Public Equity Offering or a Private Equity
Offering by the Issuer or Holdings of Qualified Equity Interests generating
gross proceeds of not less than $25.0 million (exclusive of any proceeds amounts
offered on behalf of selling shareholders), other than public offerings
registered on Form S-4 or S-8 (or an equivalent replacement form).
"EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTES" means the notes issued in an exchange offer pursuant
to a Registration Rights Agreement.
"EXCLUDED CONTRIBUTIONS" means the net cash proceeds received by the
Issuer after the Issue Date from (a) contributions to its equity capital other
than contributions from the issuance of Disqualified Equity Interests or (b) the
sale (other than to a Restricted Subsidiary or to any Issuer or Restricted
Subsidiary management equity plan or stock option plan or any other management
or employee benefit plan or agreement) of Equity Interests (other than
Disqualified Equity Interests) of the Issuer, in each case designated as
Excluded Contributions pursuant to an Officers' Certificate executed by the
principal executive officer and the principal financial officer of the Issuer
and delivered to the Trustee on or prior to the date financial statements with
respect to such period are required to be delivered to the Trustee, as the case
may be, the cash proceeds of which are excluded from the calculation set forth
in clause (3) of the first paragraph of Section 4.12.
"FAIR MARKET VALUE" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) that would be
negotiated in an arm's-length transaction for cash between a willing seller and
a willing and able buyer, neither of which is under any compulsion to complete
the transaction, as such price is determined in good faith by the Board of
Directors of the Issuer or a duly authorized committee thereof, as evidenced by
a resolution of such Board or committee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the Issue Date.
"GLOBAL NOTE" shall mean one or more IAI Global Notes, Regulation S
Global Notes and 144A Global Notes.
"GLOBAL NOTE LEGEND" means the legends identified as such in Exhibit
B.
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"GUARANTEE" means a direct or indirect guarantee by any Person of any
Indebtedness of any other Person and includes any obligation, direct or
indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or
advance or supply funds for the purchase or payment of) Indebtedness of such
other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise); or (2) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part). The term "guarantee" will not include endorsements for collection or
deposit. "GUARANTEE," when used as a verb, and "GUARANTEED" have correlative
meanings.
"GUARANTOR" means each Restricted Subsidiary of the Issuer that is
required to become a Guarantor by the terms of this Indenture on or after the
Issue Date, in each case, until such Person is released from its Note Guarantee.
"GUARANTOR SENIOR DEBT" means, with respect to any Guarantor, the
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of such Guarantor,
whether outstanding on the Issue Date or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Notes.
Without limiting the generality of the foregoing, "Guarantor Senior
Debt" shall also include the principal of, premium, if any, interest (including
any interest accruing subsequent to the filing of a petition of bankruptcy at
the rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) on, and all other
amounts owing in respect of:
(1) all monetary obligations of every nature of such Guarantor under,
or with respect to, the Credit Facilities, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities (and guarantees thereof);
and
(2) all Hedging Obligations in respect of the Credit Facilities;
in each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Guarantor Senior Debt" shall not
include:
(1) any Indebtedness of such Guarantor to the Issuer or any of its
Subsidiaries;
(2) Indebtedness to, or guaranteed on behalf of, any director, officer
or employee of the Issuer or any of its other Subsidiaries (including,
without limitation, amounts owed for compensation);
-14-
(3) obligations to trade creditors and other amounts incurred (but not
under the Credit Facilities) in connection with obtaining goods, materials
or services;
(4) Indebtedness represented by Disqualified Equity Interests;
(5) any liability for taxes owed or owing by such Guarantor;
(6) that portion of any Indebtedness incurred in violation of Section
4.10 (but, as to any such obligation, no such violation shall be deemed to
exist for purposes of this clause (6) if the holder(s) of such obligation
or their representative shall have received an Officers' Certificate of
such Guarantor to the effect that the incurrence of such Indebtedness does
not (or, in the case of revolving credit indebtedness, that the incurrence
of the entire committed amount thereof at the date on which the initial
borrowing thereunder is made would not) violate such provisions of this
Indenture);
(7) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without
recourse to such Guarantor;
(8) any Indebtedness which is, by its express terms, subordinated in
right of payment to any other Indebtedness of such Guarantor; and
(9) any Equity Interests.
"HEDGING OBLIGATIONS" of any Person means the obligations of such
Person pursuant to (1) any interest rate swap agreement, interest rate collar
agreement or other similar agreement or arrangement designed to protect such
Person against fluctuations in interest rates, (2) agreements or arrangements
designed to protect such Person against fluctuations in foreign currency
exchange rates in the conduct of its operations or (3) any forward contract,
commodity swap agreement, commodity option agreement, commodity future agreement
or other similar agreement or other similar arrangement.
"HOLDER" or "NOTEHOLDER" means the registered holder, from time to
time, of any Note.
"HOLDINGS" means Neighborhood Holdings, LLC, a Virginia limited
liability company, or any other direct or indirect parent of the Issuer that
owns directly or indirectly 100% of the Equity Interests of the Issuer.
"IAI GLOBAL NOTE" means a permanent global security in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depository
or its nominee.
"INCUR" means, with respect to any Indebtedness or Obligation, incur,
create, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to such Indebtedness or
Obligation; provided, however, that (1) the Indebtedness of a Person existing at
the time such Person became a Restricted Subsidiary or at
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the time such Person merged with or into the Issuer or a Restricted Subsidiary
shall be deemed to have been incurred at such time and (2) neither the accrual
of interest nor the accretion of original issue discount shall be deemed to be
an incurrence of Indebtedness.
"INDEBTEDNESS" of any Person at any date means, without duplication:
(1) all liabilities, contingent or otherwise, of such Person for
borrowed money (whether or not the recourse of the lender is to the whole
of the assets of such Person or only to a portion thereof);
(2) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(3) all obligations of such Person in respect of letters of credit,
letters of guarantee, bankers' acceptances or other similar instruments (or
reimbursement obligations with respect thereto);
(4) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services which purchase price is due more
than nine months after the date of placing such property in service or
taking delivery and title thereto, except trade payables and accrued
expenses incurred by such Person in the ordinary course of business in
connection with obtaining goods, materials or services;
(5) the maximum fixed redemption or repurchase price of all
Disqualified Equity Interests of such Person;
(6) all Capitalized Lease Obligations of such Person;
(7) all Indebtedness of others secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person;
(8) all Indebtedness of others guaranteed by such Person to the extent
of such guarantee; provided, however, that Indebtedness of the Issuer or
its Subsidiaries that is guaranteed by the Issuer or the Issuer's
Subsidiaries shall be counted only once in the calculation of the amount of
Indebtedness of the Issuer and its Subsidiaries on a consolidated or
combined basis;
(9) all Attributable Indebtedness;
(10) to the extent not otherwise included in this definition, Hedging
Obligations of such Person; and
(11) the liquidation value of Preferred Stock of a Subsidiary of such
Person issued and outstanding and held by any Person other than such Person
(or one of its Wholly Owned Restricted Subsidiaries).
Notwithstanding the foregoing, the following shall not be considered
Indebtedness: (a) earn-outs or similar profit sharing arrangements provided for
in acquisition
-16-
agreements which are determined on the basis of future operating earnings or
other similar performance criteria (which are not determinable at the time of
acquisition) of the acquired assets or entities; and (b) accrued expenses, trade
payables, customer deposits or deferred income taxes arising in the ordinary
course of business. Any Indebtedness which is incurred at a discount to the
principal amount at maturity thereof shall be equal to the amount of liability
in respect thereof as determined in accordance with GAAP. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above, the maximum liability
of such Person for any such contingent obligations at such date and, in the case
of clause (7), the lesser of (a) the Fair Market Value of any asset subject to a
Lien securing the Indebtedness of others on the date that the Lien attaches and
(b) the amount of the Indebtedness secured. For purposes of clause (5), the
"maximum fixed redemption or repurchase price" of any Disqualified Equity
Interests that do not have a fixed redemption or repurchase price shall be
calculated in accordance with the terms of such Disqualified Equity Interests as
if such Disqualified Equity Interests were redeemed or repurchased, as the case
may be, on any date on which an amount of Indebtedness outstanding shall be
required to be determined pursuant to this Indenture.
This Indenture does not restrict any Unrestricted Subsidiary from
incurring Indebtedness nor shall Indebtedness of any Unrestricted Subsidiaries
be included in the Consolidated Fixed Charge Coverage Ratio or the ratio of
Consolidated Indebtedness to Consolidated Tangible Net Worth hereunder, as long
as the Unrestricted Subsidiary incurring such Indebtedness remains an
Unrestricted Subsidiary.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"INDEPENDENT DIRECTOR" means, with respect to any board of directors
of a company, a member who is not an officer or employee of such company and is
otherwise "independent" as defined by the New York Stock Exchange's listing
requirements and, in connection with any transaction, a member of such board of
directors who is disinterested with respect to such transaction.
"INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable judgment of the Issuer's Board of Directors, qualified to perform the
task for which it has been engaged and disinterested and independent with
respect to the Issuer and its Affiliates.
"INITIAL PURCHASER" means Wachovia Capital Markets, LLC.
"INSTITUTIONAL ACCREDITED INVESTOR" means an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"INTANGIBLE ASSETS" means, with respect to any Person, all unamortized
debt discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, write-ups of assets over
their carrying value (other than write-ups which occurred prior to the Issue
Date and other than, in connection with the acquisition of an asset, the
write-up of the value of such asset to its Fair Market Value in accordance with
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GAAP on the date of acquisition) and all other items which would be treated as
intangibles on the consolidated or combined balance sheet of such Person
prepared in accordance with GAAP.
"INTEREST" means, with respect to the Notes, interest and Additional
Interest, if any, on the Notes.
"INTEREST PAYMENT DATE" shall have the meaning ascribed to such term
in Exhibit A.
"INVESTMENTS" of any Person means:
(1) all direct or indirect investments by such Person in any other
Person in the form of loans, advances or capital contributions or other
credit extensions constituting Indebtedness of such other Person, and any
guarantee of Indebtedness of any other Person;
(2) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Equity Interests or other securities of any other
Person;
(3) all other items that would be classified as investments on a
balance sheet of such Person prepared in accordance with GAAP; and
(4) the Designation of any Subsidiary as an Unrestricted Subsidiary.
Except as otherwise expressly specified in this definition, the amount
of any Investment (other than an Investment made in cash) shall be the Fair
Market Value thereof on the date such Investment is made. The amount of
Investment pursuant to clause (4) shall be the Designation Amount determined in
accordance with Section 4.18. If the Issuer or any Subsidiary sells or otherwise
disposes of any Equity Interests of any Subsidiary, or any Subsidiary issues any
Equity Interests, in either case such that, after giving effect to any such
sale, disposition or other issuance, such Person is no longer a Subsidiary, the
Issuer shall be deemed to have made an Investment on the date of any such sale,
other disposition or other issuance equal to the Fair Market Value of the Equity
Interests of and all other Investments in such Subsidiary not sold, disposed of
or issued, which amount shall be determined by the Board of Directors of the
Issuer. Notwithstanding the foregoing, redemptions of Equity Interests of the
Issuer shall be deemed not to be Investments.
"ISSUE DATE" means August 10, 2005.
"ISSUER" means the Person identified as such in the Preamble hereto,
until a successor Person shall have replaced the Issuer as obligor on the Notes
pursuant to the applicable provisions of this Indenture, and thereafter means
such successor Person.
"ISSUERS" means the Issuer and the Co-Issuer, collectively. The terms
"each Issuer," "any Issuer," "such Issuer" and other similar terms shall mean
the Issuers individually.
-18-
"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 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;
provided that in no event shall any operating lease be deemed a Lien).
"LIQUIDATION" with respect to any Person means the effectuation of
(whether or not substantially contemporaneously, in phases or otherwise): (1) a
sale, lease, conveyance or other disposition of all or substantially all of the
assets of such Person otherwise than as an entirety or substantially as an
entirety; and (2) a distribution of all or substantially all of the proceeds of
such sale, lease, conveyance or other disposition of all or substantially all of
the remaining assets of such Person to creditors and holders of Equity Interests
of such Person. "LIQUIDATE" shall have a correlative meaning.
"MATURITY DATE" means August 15, 2015.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and its successors.
"MORTGAGE WAREHOUSE FACILITY" means the Mortgage Warehousing Loan and
Security Agreement dated as of July 6, 2004, as amended by the First Amendment
thereto dated as of July 6, 2004, among First Heritage Mortgage, LLC, Xxxxxx
Xxxxx Mortgage, LLC and Cardinal Bank, N.A., including any notes, guarantees,
collateral and security documents, instruments and agreements executed in
connection therewith.
"NET AVAILABLE PROCEEDS" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents, net of
(1) reasonable brokerage commissions and other fees and expenses
(including fees and expenses of legal counsel, accountants and investment
banks) of such Asset Sale;
(2) provisions for taxes payable as a result of such Asset Sale (after
taking into account any available tax credits or deductions and any tax
sharing arrangements);
(3) amounts required to be paid to any Person (other than the Issuer
or any Restricted Subsidiary and other than under the Credit Facilities)
owning a beneficial interest in the assets subject to the Asset Sale or
having a Lien thereon;
(4) other reasonable direct costs relating to such Asset Sale;
(5) payments of unassumed liabilities (not constituting Indebtedness)
relating to the assets sold at the time of, or within 30 days after the
date of, such Asset Sale; and
(6) appropriate amounts to be provided by the Issuer or any Restricted
Subsidiary, as the case may be, as a reserve required in accordance with
GAAP against
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any adjustment in the sale price of such asset or assets or any liabilities
associated with such Asset Sale and retained by the Issuer or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including
pensions and other postemployment benefit liabilities, liabilities related
to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as reflected in an
Officers' Certificate delivered to the Trustee; provided, however, that any
amounts remaining after adjustments, revaluations or liquidations of such
reserves shall constitute Net Available Proceeds.
"NET CASH PROCEEDS," with respect to any issuance or sale of Qualified
Equity Interests, means the cash proceeds of such issuance or sale net of
reasonable attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, listing fees, discounts or commissions and brokerage, consultant
and other fees and charges actually incurred in connection with such issuance or
sale and net of taxes paid or payable as a result of such issuance or sale
(after taking into account any available tax credit or deductions and any tax
sharing arrangements).
"NON-RECOURSE INDEBTEDNESS" means Indebtedness incurred in connection
with the purchase, development or construction of personal or real property and
any infrastructure related thereto useful in the Permitted Business as to which
the lender upon default (1) may seek recourse or payment against the Issuer or
any Restricted Subsidiary only through the return or sale of the property and
related infrastructure so purchased and (2) may not otherwise assert a valid
claim for payment on such Indebtedness against the Issuer or any Restricted
Subsidiary or any other property of the Issuer or any Restricted Subsidiary.
"NON-U.S. PERSON" has the meaning assigned to such term in Regulation
S.
"NOTE GUARANTEE" means, individually, any guarantee of payment of the
Notes and Exchange Notes issued in a registered exchange offer pursuant to any
Registration Rights Agreement by any Person pursuant to the terms of this
Indenture and any supplemental indentures hereto, and, collectively, all such
guarantees. Each such Note Guarantee shall be in the form prescribed by this
Indenture.
"NOTES" means the 9-3/4% Senior Subordinated Notes due 2015 (including
for the avoidance of doubt, Additional Notes) of the Issuer and the Co-Issuer
and any Exchange Notes thereof, treated as a single class of securities for all
purposes (including voting), as amended from time to time in accordance with the
terms hereof, that are issued pursuant to this Indenture.
"OBLIGATION" means any principal, interest, penalties, fees,
indemnification, reimbursements, costs, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFERING MEMORANDUM" means the offering memorandum of the Issuers
dated August 3, 2005 relating to the Notes.
"OFFICER" of any Person means any of the following of such Person: the
Chairman of the Board of Directors, the Chief Executive Officer, the Chief
Financial Officer, the President, any Vice President, the Treasurer or the
Secretary.
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"OFFICERS' CERTIFICATE" of any Person means a certificate signed by
two Officers of such Person.
"144A GLOBAL NOTE" means a permanent global security in registered
form representing the aggregate principal amount of Notes sold in reliance on
Rule 144A under the Securities Act.
"OPERATING AGREEMENT" means the Limited Liability Company Operating
Agreement of Holdings dated as of April 8, 2002, by and among Xxxxxx X. Alloy
and Xxxxxx X. Alloy as the Class B Members and the Class A Members named
therein, as amended by the First Amendment to Operating Agreement of Holdings
dated December 26, 2002 and by the Second Amendment to Operating Agreement of
Holdings dated February 15, 2005, by and among Holdings, Xxxxxx X. Alloy and
Xxxxxx X. Alloy, in their capacity as managing members of Holdings, and each of
the Class A Members and Class B Members party thereto, as amended, restated or
modified from time to time.
"OPINION OF COUNSEL" means a written opinion from legal counsel. The
counsel may be an employee of or counsel to any Issuer.
"PARI PASSU INDEBTEDNESS" means any Indebtedness of the Issuer or any
Guarantor that ranks pari passu in right of payment with the Notes or the Note
Guarantees, as applicable.
"PERMITTED BUSINESS" means the business engaged in by the Issuer and
its Subsidiaries on the Issue Date as described in the Offering Memorandum and
businesses that are reasonably related thereto or reasonable extensions thereof.
"PERMITTED HOLDERS" means, collectively, Xxxxxx X. Alloy, Xxxxxx X.
Alloy, their respective Affiliates, the members of their immediate families, the
respective estates, spouses, heirs, ancestors, lineal descendants and legal
representatives of any of the foregoing and the trustee of any bona fide trust
of which one or more of the foregoing are the sole beneficiaries or the grantors
thereof, or any entity of which any of the foregoing, individually or
collectively, beneficially own more than 50% of the voting and economic rights
of the Equity Interests thereof.
"PERMITTED INVESTMENT" means:
(1) Investments by the Issuer, the Co-Issuer or any Restricted
Subsidiary in (a) any Restricted Subsidiary or (b) in any Person that is or
will become immediately after such Investment a Restricted Subsidiary or
that will merge or consolidate into the Issuer or a Restricted Subsidiary;
(2) Investments in the Issuer by any Restricted Subsidiary;
(3) to the extent permitted by law, loans and advances not in excess
of $2.5 million at any one time outstanding to directors, employees and
officers of the Issuer and the Restricted Subsidiaries for bona fide
business purposes and to purchase from the
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Issuer Equity Interests of the Issuer and/or from Holdings Equity Interests
of Holdings; provided that (a) the net proceeds of the issuance of the
Equity Interests of Holdings are contributed to the Issuer as common equity
and (b) such common equity contribution is not applied toward the
Restricted Payments Basket;
(4) Hedging Obligations incurred pursuant to clause (4) of the
definition of "Permitted Indebtedness";
(5) cash and Cash Equivalents;
(6) any Investment in securities or other assets not constituting Cash
Equivalents received, or made with proceeds received, in connection with an
Asset Sale in accordance with Section 4.17 or any other disposition of
assets not constituting an Asset Sale;
(7) receivables owing to the Issuer or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Issuer or any such Restricted Subsidiary deems reasonable under the
circumstances;
(8) Investments in securities of trade creditors or customers received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers;
(9) Investments made by the Issuer or any Restricted Subsidiary as a
result of consideration received in connection with an Asset Sale made in
compliance with Section 4.17;
(10) lease, utility and other similar deposits in the ordinary course
of business;
(11) Investments made by the Issuer or a Restricted Subsidiary for
consideration consisting only of Qualified Equity Interests of the Issuer;
(12) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Issuer or any
Restricted Subsidiary or in satisfaction of judgments;
(13) Investments in existence on the Issue Date; and
(14) other Investments in an aggregate amount not to exceed 5.0% of
Total Tangible Assets at any one time outstanding under this clause (14)
(with each Investment being valued as of the date made and without regard
to subsequent changes in value).
The amount of Investments outstanding at any time pursuant to clause
(14) above shall be deemed to be reduced:
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(a) upon the disposition or repayment of or return on any Investment
made pursuant to clause (14) above, by an amount equal to the return of
capital with respect to such Investment to the Issuer or any Restricted
Subsidiary (to the extent not included in the computation of Consolidated
Net Income), less the cost of the disposition of such Investment and net of
taxes; and
(b) upon a Redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary, by an amount equal to the Fair Market Value of the Issuer's
proportionate interest in such Subsidiary immediately following such
Redesignation.
"PERMITTED JUNIOR SECURITIES" means:
(1) Equity Interests in the Issuer, the Co-Issuer or any Guarantor; or
(2) debt securities issued pursuant to a confirmed plan of
reorganization that are subordinated in right of payment to (a) all Senior
Debt and Guarantor Senior Debt and (b) any debt securities issued in
exchange for Senior Debt to substantially the same extent as, or to a
greater extent than, the Notes and the Note Guarantees are subordinated to
Senior Debt and Guarantor Senior Debt under this Indenture.
"PERMITTED LIENS" means the following types of Liens:
(1) (a) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business and (b) Liens
for taxes, assessments or governmental charges or claims, in either case,
not yet subject to penalties or being contested in good faith by
appropriate proceedings, if such reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made in respect thereof;
(2) Liens incurred or pledges or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the performance
of tenders, public or statutory obligations, surety, performance and appeal
bonds, bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(3) Liens 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 for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or other goods;
(4) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other assets
relating to such letters of credit and products and proceeds thereof;
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(5) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Issuer
or any Restricted Subsidiary, including rights of offset and setoff;
(6) bankers' Liens, rights of setoff and other similar Liens existing
solely with respect to cash and Cash Equivalents on deposit in one or more
accounts maintained by the Issuer or any Restricted Subsidiary, in each
case granted in the ordinary course of business in favor of the bank or
banks with which such accounts are maintained, securing amounts owing to
such bank with respect to cash management and operating account
arrangements, including those involving pooled accounts and netting
arrangements; provided, however, that in no case shall any such Liens
secure (either directly or indirectly) the repayment of any Indebtedness;
(7) leases or subleases (or any Liens related thereto) granted to
others that do not materially interfere with the ordinary course of
business of the Issuer or any Restricted Subsidiary;
(8) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(9) Liens securing all of the Notes and Liens securing any Note
Guarantee;
(10) Liens existing on the Issue Date;
(11) Liens in favor of the Issuer or a Guarantor;
(12) Liens securing Senior Debt or Guarantor Senior Debt, including
Indebtedness under the Credit Facilities;
(13) Liens securing Non-Recourse Indebtedness of the Issuer or any
Restricted Subsidiary permitted to be incurred under this Indenture;
provided, however, that such Liens apply only to the property financed out
of the net proceeds of such Non-Recourse Indebtedness within 90 days after
the incurrence of such Non-Recourse Indebtedness;
(14) Liens securing Purchase Money Indebtedness permitted to be
incurred under this Indenture; provided, however, that such Liens apply
only to the property acquired, constructed or improved with the proceeds of
such Purchase Money Indebtedness within 90 days after the incurrence of
such Purchase Money Indebtedness;
(15) Liens securing Acquired Indebtedness permitted to be incurred
under this Indenture; provided, however, that the Liens do not extend to
assets not subject to such Lien at the time of acquisition (other than
improvements thereon) and are no more favorable to the lienholders than
those securing such Acquired Indebtedness prior to the incurrence of such
Acquired Indebtedness by the Issuer or a Restricted Subsidiary; and
provided, further that such Liens where not incurred in connection with or
in contemplation or anticipation of the acquisition of such Person by the
Issuer or any of its Restricted Subsidiaries;
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(16) Liens on assets of a Person existing at the time such Person is
acquired or merged with or into or consolidated with the Issuer or any such
Restricted Subsidiary (and not created in anticipation or contemplation
thereof); provided, however, that the Liens do not extend to assets of a
Person not subject to such Lien at the time of acquisition, merger or
consolidation (other than improvements thereon) and are no more favorable
to the lienholders than those securing such assets prior to the acquisition
or merger with or into or consolidation with the Issuer or a Restricted
Subsidiary;
(17) Liens to secure Attributable Indebtedness permitted to be
incurred under this Indenture; provided, however, that any such Lien shall
not extend to or cover any assets of the Issuer or any Restricted
Subsidiary other than the assets which are the subject of the Sale and
Leaseback Transaction in which the Attributable Indebtedness is incurred;
(18) Liens to secure Refinancing Indebtedness which is incurred to
refinance, refund, replace, amend, extend or modify any Indebtedness which
has been secured by a Lien permitted under this Indenture and which has
been incurred in accordance with the provisions of this Indenture;
(19) attachment or judgment Liens not giving rise to an Event of
Default and which are being contested in good faith by appropriate
proceedings or the period within which such proceedings may be initiated
has not yet expired;
(20) easements, rights-of-way, restrictions, ground leases and other
similar charges or encumbrances and rights of others for sewers, electric
lines, telegraph and telephone lines and other similar purposes not
materially interfering with the ordinary course of business of the Issuer
and its Subsidiaries;
(21) zoning restrictions, licenses, restrictions on the use of real
property or minor irregularities in title thereto, which do not materially
impair the use of such real property in the ordinary course of business of
the Issuer and its Subsidiaries or the value of such real property for the
purpose of such business;
(22) any right of first refusal, right of first offer, option,
contract or other agreement to sell an asset; provided, however, such sale
is not otherwise prohibited under this Indenture;
(23) Liens securing Hedging Obligations of the type set forth in
clause (4) of Permitted Indebtedness;
(24) Liens or leases of model home units;
(25) Liens for homeowner and property owner association developments
and assessments;
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(26) Liens incurred in the ordinary course of business as security for
the obligations of the Issuer and its Restricted Subsidiaries with respect
to indemnification in respect of title insurance providers; and
(27) Liens of a lessor under any Capitalized Lease Obligation
permitted to be incurred under this Indenture; provided that such Liens do
not extend to any property or assets which is not leased property subject
to such Capitalized Lease Obligation.
"PERMITTED UNRESTRICTED SUBSIDIARY DEBT" means Indebtedness of an
Unrestricted Subsidiary:
(1) as to which neither the Issuer nor any Restricted Subsidiary (a)
provides credit support of any kind (including any undertaking, agreement
or instrument that would constitute Indebtedness), (b) is directly or
indirectly liable as a guarantor or otherwise or (c) constitutes the
lender; and
(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness (other than the Notes) of the Issuer or any
Restricted Subsidiary to declare a default on the other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its Stated
Maturity.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint-stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
"PREFERRED STOCK" means, with respect to any Person, any and all
preferred or preference stock or other equity interests (however designated) of
such Person whether now outstanding or issued after the Issue Date.
"PRINCIPAL" means, with respect to the Notes, the principal of, and
premium, if any, on the Notes.
"PRIVATE EQUITY OFFERING" means an unregistered offering of Equity
Interests of the Issuer or Holdings to any Person or Persons, other than
Permitted Holders.
"PRIVATE PLACEMENT LEGEND" means the legend identified as such in
Exhibit B.
"PUBLIC EQUITY OFFERING" means an underwritten public offering of
Equity Interests of the Issuer or Holdings pursuant to an effective registration
statement filed under the Securities Act.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness, including
Capitalized Lease Obligations, of the Issuer or any Restricted Subsidiary
incurred for the purpose of financing all or any part of the purchase price of
property, plant or equipment (including with
-26-
respect to the acquisition, development or improvement of such property or any
infrastructure related thereto) used in the business of the Issuer or any
Restricted Subsidiary or the cost of installation, construction or improvement
thereof; provided, however, that (1) the amount of such Indebtedness shall not
exceed such purchase price or cost, (2) such Indebtedness shall not be secured
by any asset other than the specified asset being financed or, in the case of
real property or fixtures, including additions and improvements, the real
property to which such asset is attached and (3) such Indebtedness shall be
incurred within 90 days after such acquisition of such asset by the Issuer or
such Restricted Subsidiary or such installation, construction or improvement.
"QUALIFIED EQUITY INTERESTS" means Equity Interests of such Person
other than Disqualified Equity Interests; provided, however, that such Equity
Interests shall not be deemed Qualified Equity Interests to the extent sold or
owed to a Subsidiary of any Person or financed, directly or indirectly, using
funds (1) borrowed from such Person or any Subsidiary of such Person until and
to the extent such borrowing is repaid or (2) contributed, extended, guaranteed
or advanced by such Person or any Subsidiary of such Person (including, without
limitation, in respect of any employee stock ownership or benefit plan). Unless
otherwise specified, Qualified Equity Interests refer to Qualified Equity
Interests of the Issuer.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"RAW LAND" means all land of the Issuer and the Restricted
Subsidiaries which does not qualify as Entitled Land.
"RECORD DATE" means the applicable Record Date specified in the Notes;
provided that if any such date is not a Business Day, the Record Date shall be
the first day immediately preceding such specified day that is a Business Day.
"REDEEM" means to redeem, repurchase, purchase, defease, retire,
discharge or otherwise acquire or retire for value; and "REDEMPTION" shall have
a correlative meaning.
"REDEMPTION DATE," when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"REDEMPTION PRICE," when used with respect to any Note to be redeemed,
means the price fixed for such redemption, payable in immediately available
funds, pursuant to this Indenture and the Notes.
"REFINANCE" means to refinance, repay, prepay, replace, renew or
refund.
"REFINANCED INDEBTEDNESS" has the meaning set forth in the definition
of "Refinancing Indebtedness."
"REFINANCING INDEBTEDNESS" means Indebtedness or Disqualified Equity
Interests of the Issuer or a Restricted Subsidiary incurred in exchange for, or
the proceeds of which are used to extend, redeem, refinance, renew, replace,
defease or refund in whole or in
-27-
part, any Indebtedness of the Issuer or any Restricted Subsidiary (the
"REFINANCED INDEBTEDNESS"); provided, however, that:
(1) the principal amount (and accreted value, in the case of
Indebtedness issued at a discount) of the Refinancing Indebtedness does not
exceed the principal amount (and accreted value, as the case may be) of the
Refinanced Indebtedness plus the amount of accrued and unpaid interest on
the Refinanced Indebtedness, any reasonable premium paid (or any other
premium required to be paid pursuant to the instruments governing such
Refinanced Indebtedness) to the holders of the Refinanced Indebtedness and
reasonable expenses incurred in connection with the incurrence of the
Refinancing Indebtedness, unless such excess would otherwise be permitted
by Section 4.10;
(2) the obligor of Refinancing Indebtedness does not include any
Person (other than the Issuer or any Restricted Subsidiary) that is not an
obligor of the Refinanced Indebtedness;
(3) if the Refinanced Indebtedness was subordinated in right of
payment to the Notes or the Note Guarantees, as the case may be, then such
Refinancing Indebtedness, by its terms, is subordinate in right of payment
to the Notes or the Note Guarantees, as the case may be, at least to the
same extent as the Refinanced Indebtedness, and if the Refinanced
Indebtedness was pari passu with the Notes or the Note Guarantees, as the
case may be, then the Refinancing Indebtedness ranks pari passu with, or is
subordinated in right of payment to, the Notes or the Note Guarantees, as
the case may be;
(4) (a) the Refinancing Indebtedness has a final stated maturity no
earlier than the Refinanced Indebtedness being repaid or amended and (b) if
the final stated maturity of Refinanced Indebtedness is later than the
final stated maturity of the Notes, the Refinancing Indebtedness shall have
a final stated maturity of not earlier than 91 days before the maturity
date of the Notes;
(5) the portion, if any, of the Refinancing Indebtedness that is
scheduled to mature on or prior to the maturity date of the Notes has a
Weighted Average Life to Maturity at the time such Refinancing Indebtedness
is incurred that is equal to or greater than the Weighted Average Life to
Maturity of the portion of the Refinanced Indebtedness being repaid that is
scheduled to mature on or prior to the maturity date of the Notes;
(6) the Refinancing Indebtedness is secured only to the extent, if at
all, and by the assets, that the Refinanced Indebtedness being repaid,
extended or amended is secured or such security is otherwise permitted to
exist pursuant to the terms of this Indenture; and
(7) the proceeds of the Refinancing Indebtedness shall be used
substantially concurrently with the incurrence thereof to redeem or
refinance the Refinanced Indebtedness, unless the Refinanced Indebtedness
is not then due and is not redeemable or prepayable at the option of the
obligor thereof or is redeemable or prepayable only
-28-
with notice or lapse of time, in which case such proceeds shall be held in
a segregated account until the Refinanced Indebtedness becomes due or
redeemable or prepayable or such notice or time period lapses and then
shall be used to refinance the Refinanced Indebtedness; provided that in
any event the Refinanced Indebtedness shall be redeemed or refinanced
within one year of the incurrence of the Refinancing Indebtedness.
"REGISTRATION RIGHTS AGREEMENT" means (i) the Registration Rights
Agreement dated as of the Issue Date among the Issuer, the Co-Issuer, the
Guarantors and the initial purchasers of the Notes issued on the Issue Date and
(ii) any other registration rights agreement entered into in connection with an
issuance of Additional Notes in a private offering after the Issue Date.
"REGULATION S" means Regulation S under the Securities Act.
"REGULATION S GLOBAL NOTE" means a global security in registered form
representing the aggregate principal amount of Notes sold in reliance on
Regulation S under the Securities Act.
"REORGANIZATION" means the transactions described in the Offering
Memorandum under "Offering Memorandum Summary--Reorganization."
"REPRESENTATIVE" means any agent or representative in respect of any
Designated Senior Debt; provided, however, that if, and for so long as, any
Designated Senior Debt lacks such representative, then the Representative for
such Designated Senior Debt shall at all times constitute the holders of a
majority in outstanding principal amount of such Designated Senior Debt.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee,
any officer in the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee to whom any corporate trust
matter is referred because of such officer's knowledge of and familiarity with
the particular subject and shall also mean any officer who shall have direct
responsibility for the administration of this Indenture.
"RESTRICTED PAYMENT" means any of the following:
(1) the declaration or payment of any dividend or any other
distribution on Equity Interests of the Issuer or any Restricted Subsidiary
or any payment made to the direct or indirect holders (in their capacities
as such) of Equity Interests of the Issuer or any Restricted Subsidiary,
including, without limitation, any payment in connection with any merger or
consolidation involving the Issuer, but excluding (a) dividends or
distributions payable solely in Qualified Equity Interests or through
accretion or accumulation of such dividends on such Equity Interests and
(b) in the case of Restricted Subsidiaries, dividends or distributions
payable to the Issuer or to a Restricted Subsidiary and pro rata dividends
or distributions payable to minority equityholders of any Restricted
Subsidiary;
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(2) the redemption of any Equity Interests of the Issuer or any
Restricted Subsidiary, including, without limitation, any payment in
connection with any merger or consolidation involving the Issuer, but
excluding any such Equity Interests held by the Issuer or any Restricted
Subsidiary;
(3) any Investment other than a Permitted Investment; or
(4) any payment of principal of or redemption prior to the scheduled
maturity or prior to any scheduled repayment of principal or sinking fund
payment, as the case may be, in respect of Subordinated Indebtedness (other
than Subordinated Indebtedness owed to and held by the Issuer or any
Restricted Subsidiary and other than the purchase, repurchase, redemption,
defeasance or other acquisition or retirement of Subordinated Indebtedness
purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, due within one year of the date of
purchase, repurchase, redemption, defeasance or other acquisition or
retirement), due within one year of the date of payment or redemption.
"RESTRICTED SECURITY" means a Note that constitutes a "Restricted
Security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Note
constitutes a Restricted Security.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Issuer other than
an Unrestricted Subsidiary.
"RULE 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services, a division of the
XxXxxx-Xxxx Companies, Inc., and its successors.
"SALE AND LEASEBACK TRANSACTION" means, with respect to any Person, an
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a party, providing for the leasing by such
Person of any asset of such Person which has been or is being sold or
transferred by such Person to such lender or investor or to any Person to whom
funds have been or are to be advanced by such lender or investor on the security
of such asset.
"SEC" means the U.S. Securities and Exchange Commission.
"SECRETARY'S CERTIFICATE" means a certificate signed by the Secretary
or an Assistant Secretary of the Issuer.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as amended.
"SENIOR DEBT" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under
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applicable law) on any Indebtedness of the Issuer or the Co-Issuer, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Notes.
Without limiting the generality of the foregoing, "Senior Debt" shall
include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of:
(1) all monetary obligations of every nature under, or with respect
to, the Credit Facilities, including, without limitation, obligations to
pay principal and interest, reimbursement obligations under letters of
credit, fees, expenses and indemnities (and guarantees thereof); and
(2) all Hedging Obligations in respect of the Credit Facilities;
in each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Senior Debt" shall not include:
(1) any Indebtedness of the Issuer or the Co-Issuer to any of their
respective Subsidiaries;
(2) Indebtedness to, or guaranteed on behalf of, any director, officer
or employee of the Issuer or any of its Subsidiaries (including, without
limitation, amounts owed for compensation);
(3) obligations to trade creditors and other amounts incurred (but not
under the Credit Facilities) in connection with obtaining goods, materials
or services;
(4) Indebtedness represented by Disqualified Equity Interests;
(5) any liability for taxes owed or owing by the Issuer or the
Co-Issuer;
(6) that portion of any Indebtedness incurred in violation of Section
4.10 (but, as to any such obligation, no such violation shall be deemed to
exist for purposes of this clause (6) if the holder(s) of such obligation
or their representative shall have received an Officers' Certificate of the
Issuer to the effect that the incurrence of such Indebtedness does not (or,
in the case of revolving credit indebtedness, that the incurrence of the
entire committed amount thereof at the date on which the initial borrowing
thereunder is made would not) violate such provisions of this Indenture);
(7) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without
recourse to the Issuer;
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(8) any Indebtedness which is, by its express terms, subordinated in
right of payment to any other Indebtedness of the Issuer or the Co-Issuer,
as the case may be; and
(9) any Equity Interests.
"SERIES A INTERESTS" means the Class A membership interests of
Holdings.
"SIGNIFICANT SUBSIDIARY" means (1) any Restricted Subsidiary that
would be a "significant subsidiary" as defined in Regulation S-X promulgated
pursuant to the Securities Act as such Regulation is in effect on the Issue Date
and (2) any Restricted Subsidiary that, when aggregated with all other
Restricted Subsidiaries that are not otherwise Significant Subsidiaries and as
to which any event described in clause (8) or (9) of Section 6.01 has occurred
and is continuing, would constitute a Significant Subsidiary under clause (1) of
this definition.
"STATED MATURITY" means, with respect to any Indebtedness, the date
specified in the agreements governing such Indebtedness as the fixed date on
which the payment of principal of such Indebtedness is due and payable,
including pursuant to any mandatory redemption provision, but shall not include
any contingent obligations to repay, redeem or repurchase any such principal
prior to the date originally scheduled for the payment thereof.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Issuer or any
Restricted Subsidiary that is subordinated in right of payment to the Notes or
the Note Guarantees, respectively.
"SUBSIDIARY" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity (a)
of which more than 50% of the total voting power of the Equity Interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of the Board of Directors thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of such Person (or a combination thereof) or (b) that is or is required to be
included in the consolidated or combined financial statements of such Person in
accordance with GAAP (other than consolidation or combination required under the
Financial Accounting Standards Board ("FASB") Interpretation No. 46
("Consolidation of Variable Interest Entities"), as revised in December 2003, or
any successor interpretation thereto). Unless otherwise specified, "Subsidiary"
refers to a Subsidiary of the Issuer.
"TAX" means any tax, duty, levy, impost, assessment or other
governmental charge (including penalties, interest and any other liabilities
related thereto).
"TEMPORARY REGULATION S GLOBAL NOTE LEGEND" shall mean the legend
identified as such in Exhibit B.
"TOTAL TANGIBLE ASSETS" means, as of any date, the total consolidated
or combined tangible assets of the Issuer and its Restricted Subsidiaries, as
set forth on the Issuer's most recently available internal consolidated or
combined balance sheet as of such date.
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"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939,
as amended.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"UNIT" means a residence, whether single or part of a multifamily
building, whether completed or under construction, held by the Issuer or any
Restricted Subsidiary for sale in the ordinary course of business;
"UNRESTRICTED SECURITIES" means one or more Notes that do not and are
not required to bear the Private Placement Legend in the form set forth in
Exhibit B, including, without limitation, the Exchange Notes.
"UNRESTRICTED SUBSIDIARY" means (1) any Subsidiary that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors of the Issuer in accordance with Section 4.18 and (2) any Subsidiary
of an Unrestricted Subsidiary.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations
of, or obligations guaranteed by, the United States of America for the payment
of which guarantee or obligations the full faith and credit of the United States
is pledged.
"U.S. LEGAL TENDER" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"VOTING STOCK" with respect to any Person, means securities of any
class of Equity Interests of such Person entitling the holders thereof (whether
at all times or only so long as no senior class of stock or other relevant
equity interest has voting power by reason of any contingency) to vote in the
election of members of the Board of Directors or managers, or other governing
body, as applicable, of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" when applied to any Indebtedness
at any date, means the number of years obtained by dividing (1) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment by (2) the then outstanding principal
amount of such Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" means a Restricted Subsidiary of
which 100% of the Equity Interests (except for directors' qualifying shares or
certain minority interests owned by other Persons solely due to local law
requirements that there be more than one stockholder, but which interest is not
in excess of what is required for such purpose) are owned directly by the Issuer
or through one or more Wholly Owned Restricted Subsidiaries.
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SECTION 1.02. Other Definitions.
Term Defined in Section
---- ------------------
"ADDITIONAL NOTES"......................................... 2.02
"AFFILIATE TRANSACTION".................................... 4.15
"CHANGE OF CONTROL DATE"................................... 4.09
"CHANGE OF CONTROL OFFER".................................. 4.09
"CHANGE OF CONTROL PAYMENT DATE"........................... 4.09
"CHANGE OF CONTROL PURCHASE PRICE"......................... 4.09
"CO-ISSUER SUCCESSOR"...................................... 5.01
"COVENANT DEFEASANCE"...................................... 8.03
"DEFICIENCY DATE".......................................... 4.13
"DESIGNATION".............................................. 4.18
"DESIGNATION AMOUNT"....................................... 4.18
"XXXXX".................................................... 4.05
"EVENT OF DEFAULT"......................................... 6.01
"EXCESS PROCEEDS".......................................... 4.17
"GUARANTEE OBLIGATIONS".................................... 11.01
"LEGAL DEFEASANCE"......................................... 8.02
"MINIMUM TANGIBLE NET WORTH"............................... 4.13
"NET PROCEEDS DEFICIENCY".................................. 4.17
"NET PROCEEDS OFFER"....................................... 4.17
"NET PROCEEDS OFFER AMOUNT"................................ 4.17
"NET PROCEEDS OFFER PERIOD"................................ 4.17
"NET PROCEEDS PURCHASE DATE"............................... 4.17
"NET WORTH OFFER".......................................... 4.13
"NET WORTH OFFER AMOUNT"................................... 4.13
"NET WORTH PAYMENT DATE"................................... 4.13
"NON-PAYMENT DEFAULT"...................................... 10.02
"OFFERED PRICE"............................................ 4.17
"OWNER".................................................... 4.12
"PARI PASSU INDEBTEDNESS PRICE"............................ 4.17
"PARTICIPANTS"............................................. 2.15
"PAYING AGENT"............................................. 2.03
"PAYMENT AMOUNT"........................................... 4.17
"PAYMENT BLOCKAGE NOTICE".................................. 10.02
"PAYMENT BLOCKAGE PERIOD".................................. 10.02
"PAYMENT DEFAULT".......................................... 10.02
"PERMITTED INDEBTEDNESS"................................... 4.10
"PERMITTED TAX DIVIDEND"................................... 4.12
"PHYSICAL NOTES"........................................... 2.01
"RATIO EXCEPTION".......................................... 4.10
"REDESIGNATION" AND "REDESIGNATE".......................... 4.18
"REGISTRAR"................................................ 2.03
"RESTRICTED PAYMENTS BASKET"............................... 4.12
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Term Defined in Section
---- ------------------
"RESTRICTED PERIOD"........................................ 2.15
"RESTRICTION".............................................. 4.14
"SUCCESSOR"................................................ 5.01
SECTION 1.03. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"INDENTURE SECURITIES" means the Notes.
"INDENTURE SECURITY HOLDER" means a Holder or a Noteholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Issuer, the Co-Issuer,
any Guarantor or any other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
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 words in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) "HEREIN," "HEREOF" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(7) the words "INCLUDING," "INCLUDES" and similar words shall be
deemed to be followed by "without limitation."
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ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Issuers shall approve the form of the Notes and any notation, legend or
endorsement on them. Each Note shall be dated the date of its issuance and show
the date of its authentication. Each Note shall have an executed Note Guarantee
from each of the Guarantors endorsed thereon substantially in the form of
Exhibit E.
The terms and provisions contained in the Notes and the Note
Guarantees shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Issuers, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144 under the Securities
Act and Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of one or more Global Notes, substantially in the form set
forth in Exhibit A, deposited with the Trustee, as custodian for the Depository,
duly executed by the Issuers (and having an executed Note Guarantee from each of
the Guarantors endorsed thereon) and authenticated by the Trustee as hereinafter
provided and shall bear (a) in the case of the 144A Global Note, the Private
Placement Legend and the Global Note Legend and (b) in the case of the
Regulation S Global Note, the Temporary Regulation S Global Note Legend and the
Global Note Legend. After the expiration of the Restricted Period, if so
requested by a Person with a beneficial interest in a Regulation S Global Note,
the Issuers shall issue (and the Trustee shall authenticate in accordance with
the provisions of this Indenture), in exchange for such Regulation S Global
Note, a permanent Global Note in the form set forth in Exhibit A, deposited with
the Trustee, as custodian for the Depositary, and bearing the Global Note Legend
or the Definitive Note Legend, as applicable. The aggregate principal amount of
the Global Notes may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depository, as
hereinafter provided.
Notes issued in exchange for interests in a Global Note pursuant to
Section 2.16 may be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "PHYSICAL
NOTES").
SECTION 2.02. Execution and Authentication.
Two Officers of each Issuer (who shall have been duly authorized by
all requisite corporate actions) shall sign the Notes for such Issuer by manual
or facsimile signature.
If an Officer whose signature is on a Note or Note Guarantee, as the
case may be, was an Officer at the time of such execution but no longer holds
that office at the time the
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Trustee authenticates the Note, the Note or Note Guarantee, as the case may be,
shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate Notes for original issue on the Issue
Date in the aggregate principal amount of $150,000,000 upon a written order of
the Issuers in the form of an Officers' Certificate. In addition, the Trustee
shall authenticate Notes ("ADDITIONAL NOTES") thereafter in unlimited amount (so
long as not otherwise prohibited by the terms of this Indenture, including,
without limitation, Section 4.10) for original issue upon a written order of the
Issuers in the form of an Officers' Certificate. Each such Officers' Certificate
shall specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Issuer to authenticate Notes. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with the Issuers and Affiliates of the Issuers.
The Notes shall be issuable only in registered form without coupons in
denominations of $2,000 and integral multiples thereof.
SECTION 2.03. Registrar and Paying Agent.
The Issuer and the Co-Issuer shall maintain an office or agency in the
Borough of Manhattan, The City of New York, where (a) Notes may be presented or
surrendered for registration of transfer or for exchange ("REGISTRAR"), (b)
Notes may be presented or surrendered for payment ("PAYING AGENT") and (c)
notices and demands to or upon the Issuers in respect of the Notes and this
Indenture may be served. The Issuer and the Co-Issuer 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 any Issuer of its obligation to maintain an office
or agency in the Borough of Manhattan, The City of New York, for such purposes.
The Issuer or any of its Restricted Subsidiaries may act as its own Registrar or
Paying Agent, provided there is compliance with the proviso of the previous
sentence. The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Issuers, upon notice to the Trustee, may have one or more
co-Registrars and one or more additional paying agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional paying agent. The
Issuers initially appoint the Trustee as Registrar and Paying Agent until such
time as the Trustee has resigned or a successor has been appointed.
The Issuers shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Issuer shall notify
the Trustee, in advance, of the name and address of
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any such Agent. If the Issuers fail to maintain a Registrar or Paying Agent, the
Trustee shall act as such.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that, subject to Article Ten and Section 11.02, each Paying
Agent shall hold in trust for the benefit of Holders or the Trustee all assets
held by the Paying Agent for the payment of principal of, or interest on, the
Notes (whether such assets have been distributed to it by the Issuer, the
Co-Issuer or any other obligor on the Notes), and shall notify the Trustee of
any Default by the Issuer, the Co-Issuer or any other obligor on the Notes in
making any such payment. The Issuers at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default, upon written request to a Paying Agent, require such Paying Agent to
distribute all assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that shall have been
delivered by the Issuers to the Paying Agent, the Paying Agent shall have no
further liability for such assets.
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
Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the
Trustee at least two (2) Business Days prior to 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 Holders, which list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to Sections 2.15 and 2.16, when Notes are presented to the
Registrar or a co-Registrar with a request to register the transfer of such
Notes or to exchange such Notes for an equal principal amount of Notes of other
authorized denominations, the Registrar or co-Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transaction are met; provided, however, that the Notes surrendered for transfer
or exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Registrar or co-Registrar,
duly executed by the Holder thereof or his or her attorney duly authorized in
writing. To permit registrations of transfers and exchanges, the Issuers shall
execute and the Trustee shall authenticate Notes at the Registrar's or
co-Registrar's request. No service charge shall be imposed upon the Issuers, the
Trustee or any Agent for any registration of transfer or exchange, but the
Issuers may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith.
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing, (ii) selected for
redemption in whole or in part pursuant to Article Three, except the unredeemed
portion of any Note being redeemed in part, and (iii) during a Change of Control
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Offer, Net Worth Offer or Net Proceeds Offer if such Note is validly tendered
pursuant to such Change of Control Offer, Net Worth Offer or Net Proceeds Offer,
as applicable, and not validly withdrawn.
Any Holder of a beneficial interest in a Global Note shall, by
acceptance of such beneficial interest, agree that transfers of beneficial
interests in such Global Notes may be effected only through a book-entry system
maintained by the Holder of such Global Note (or its agent), and that ownership
of a beneficial interest in the Note shall be required to be reflected in a
book-entry system.
SECTION 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of
a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Issuers shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. Such Holder must provide an indemnity bond or
other indemnity, sufficient in the judgment of both the Issuer and the Trustee,
to protect the Issuers, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. The Issuers may charge such Holder for their
reasonable out-of-pocket expenses in replacing a Note pursuant to this Section
2.07, including reasonable fees and expenses of counsel and of the Trustee.
Every replacement Note is an additional obligation of the Issuers and
every replacement Note Guarantee shall constitute an additional obligation of
the Guarantor thereof.
SECTION 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Subject
to Section 2.09, a Note does not cease to be outstanding because the Issuer, the
Co-Issuer, the Guarantors or any of their respective Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless a
Responsible Officer of the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07. If the principal amount of any Note is considered paid under
Section 4.01, it ceases to be outstanding and interest ceases to accrue. If on a
Redemption Date or the Maturity Date the Trustee or Paying Agent (other than the
Issuer, the Co-Issuer or any of their respective Affiliates) holds U.S. Legal
Tender or U.S. Government Obligations sufficient to pay all of the principal and
interest due on the Notes payable on that date, then on and after that date such
Notes cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Issuer, the Co-Issuer or
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any of their respective Affiliates shall be disregarded, except that, for the
purposes of determining whether the Trustee shall be protected in conclusively
relying on any such direction, waiver or consent, only Notes that a Responsible
Officer of the Trustee actually knows are so owned shall be disregarded.
SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Issuers may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Issuer considers appropriate for temporary Notes. Without unreasonable delay,
the Issuers shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes. Until such exchange, temporary Notes shall be
entitled to the same rights, benefits and privileges as definitive Notes.
Notwithstanding the foregoing, so long as the Notes are represented by a Global
Note, such Global Note may be in typewritten form.
SECTION 2.11. Cancellation.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee, or
at the direction of the Trustee, the Registrar or the Paying Agent (other than
the Issuer, the Co-Issuer or a Subsidiary), and no one else, shall cancel and,
at the written direction of the Issuers, shall dispose of all Notes surrendered
for transfer, exchange, payment or cancellation in accordance with its customary
procedures. Subject to Section 2.07, the Issuers may not issue new Notes to
replace Notes that have been paid or delivered to the Trustee for cancellation.
If the Issuer, the Co-Issuer or any Guarantor shall acquire any of the Notes,
such acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are surrendered
to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
If the Issuers default in a payment of interest on the Notes, the
Issuers shall, unless the Trustee fixes another record date pursuant to Section
6.10, pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, in any lawful manner. The Issuers may pay the
defaulted interest to the persons who are Holders on a subsequent special record
date, which date shall be the fifteenth day next preceding the date fixed by the
Issuers for the payment of defaulted interest or the next succeeding Business
Day if such date is not a Business Day. At least 15 days before any such
subsequent special record date, the Issuers shall mail to each Holder, with a
copy to the Trustee, a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest, and interest payable on
such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
The Issuers in issuing the Notes may use a "CUSIP" number, and if so,
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to
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Holders; provided, however, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes. The Issuers shall
promptly notify the Trustee in writing of any change in the CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment Date,
Maturity Date, Redemption Date, Change of Control Payment Date, Net Worth
Payment Date and Net Proceeds Purchase Date, the Issuers shall have deposited
with the Paying Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Interest Payment Date, Maturity Date,
Redemption Date, Change of Control Payment Date, Net Worth Payment Date and Net
Proceeds Purchase Date, as the case may be, in a timely manner which permits the
Paying Agent to remit payment to the Holders on such Interest Payment Date,
Maturity Date, Redemption Date, Change of Control Payment Date, Net Worth
Payment Date and Net Proceeds Purchase Date, as the case may be.
SECTION 2.15. Book-Entry Provisions for Global Notes.
(a) The Global Notes initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit B.
Members of, or participants in, the Depository ("PARTICIPANTS") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Issuer, the Co-Issuer, the
Trustee and any agent of the Issuer, the Co-Issuer or the Trustee as the
absolute owner of the Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Issuer, the Co-Issuer, the
Trustee or any agent of the Issuer, the Co-Issuer or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and Participants, the
operation of customary practices governing the exercise of the rights of a
Holder of any Note.
(b) Transfers of Global Notes shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for Physical Notes in accordance with the rules and procedures of the
Depository and the provisions of Section 2.16. In addition, Physical Notes shall
be transferred to all beneficial owners in exchange for their beneficial
interests in Global Notes if (i) the Depository notifies the Issuer that it is
unwilling or unable to continue as Depository for any Global Note and a
successor Depository is not appointed by the Issuer, with a copy to the Trustee,
within 90 days of such notice, (ii) a Default or Event of Default has occurred
and is continuing or (iii) the Issuer, at its option, notifies the Trustee in
writing that it elects to cause the issuance of the Physical Notes (provided
that the Issuer understands that under current industry practices, the
Depository would notify Participants of the Issuer's determination in this
clause (iii), but would only withdraw beneficial interests from a Global Note at
the request of Participants).
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(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Note to beneficial owners pursuant to paragraph
(b) of this Section 2.15, the Registrar shall (if one or more Physical Notes are
to be issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Issuers
shall execute, and the Trustee shall authenticate and deliver, one or more
Physical Notes of authorized denominations in an aggregate principal amount
equal to the principal amount of the beneficial interest in the Global Note so
transferred.
(d) In connection with the transfer of a Global Note as an entirety to
beneficial owners pursuant to paragraph (b) of this Section 2.15, such Global
Note shall be deemed to be surrendered to the Trustee for cancellation, and (i)
the Issuers shall execute, (ii) the Guarantors shall execute notations of Note
Guarantees on and (iii) the Trustee shall upon written instructions from the
Issuers authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in such Global Note, an equal
aggregate principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in a Global Note pursuant to paragraph (b) or (c) of
this Section 2.15 shall, except as otherwise provided by Section 2.16, bear the
Private Placement Legend.
(f) On or prior to the 40th day after the later of the commencement of
the offering of the Notes represented by the Regulation S Global Note and the
issue date of such Notes (such period through and including such 40th day, the
"RESTRICTED PERIOD"), a beneficial interest in a Regulation S Global Note may be
transferred to a Person who takes delivery in the form of an interest in the
corresponding Restricted Global Note only upon receipt by the Trustee of a
written certification from the transferor to the effect that such transfer is
being made (i)(a) to a Person that the transferor reasonably believes is a
Qualified Institutional Buyer in a transaction meeting the requirements of Rule
144A or (b) pursuant to another exemption from the registration requirements
under the Securities Act which is accompanied by an opinion of counsel regarding
the availability of such exemption and (ii) in accordance with all applicable
securities laws of any state of the United States or any other jurisdiction.
(g) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through Participants, to take any action which a Holder is entitled to take
under this Indenture or the Notes.
SECTION 2.16. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Restricted
Security, whether or not such Note bears the Private Placement Legend, if
(x) the requested transfer is after the second anniversary of the Issue
Date; provided, however, that neither the Issuers nor
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any Affiliate of any Issuer has held any beneficial interest in such Note,
or portion thereof, at any time on or prior to the second anniversary of
the Issue Date or (y) (1) in the case of a transfer to an Institutional
Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the
proposed transferee has delivered to the Registrar a certificate
substantially in the form of Exhibit C hereto and any legal opinions and
certifications required thereby and (2) in the case of a transfer to a
Non-U.S. Person, the proposed transferor has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto;
(ii) if the proposed transferee is a Participant and the Notes to be
transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the IAI Global Note or Regulation S Global
Note, as the case may be, upon receipt by the Registrar of the Physical
Note and (x) written instructions given in accordance with the Depository's
and the Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, the Registrar shall register
the transfer and reflect on its books and records the date and an increase
in the principal amount of the IAI Global Note or Regulation S Global Note,
as the case may be, in an amount equal to the principal amount of Physical
Notes to be transferred, and the Registrar shall cancel the Physical Notes
so transferred; and
(iii) if the proposed transferor is a Participant seeking to transfer
an interest in a Global Note, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the Registrar's
procedures and (y) the appropriate certificate, if any, required by clause
(y) of paragraph (i) above, the Registrar shall register the transfer and
reflect on its books and records the date and (A) a decrease in the
principal amount of the Global Note from which such interests are to be
transferred in an amount equal to the principal amount of the Notes to be
transferred and (B) an increase in the principal amount of the IAI Global
Note or the Regulation S Global Note, as the case may be, in an amount
equal to the principal amount of the Notes to be transferred.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Security to
a QIB:
(i) the Registrar shall register the transfer of any Restricted
Security, whether or not such Note bears the Private Placement Legend, if
(x) the requested transfer is after the second anniversary of the Issue
Date; provided, however, that neither the Issuers nor any Affiliate of any
Issuer has held any beneficial interest in such Note, or portion thereof,
at any time on or prior to the second anniversary of the Issue Date or (y)
such transfer is being made by a proposed transferor who has checked the
box provided for on the form of Note stating, or has otherwise advised the
Issuers and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Note stating, or has
otherwise advised the Issuers and the Registrar in writing, that it is
purchasing the Note for its own account or an account with respect to which
it exercises sole investment discretion and that it and any such account is
a QIB within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges
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that it has received such information regarding the Issuers as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A;
(ii) if the proposed transferee is a Participant and the Notes to be
transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the 144A Global Note, upon receipt by the
Registrar of the Physical Note and written instructions given in accordance
with the Depository's and the Registrar's procedures, the Registrar shall
register the transfer and reflect on its books and records the date and an
increase in the principal amount of the 144A Global Note in an amount equal
to the principal amount of Physical Notes to be transferred, and the
Registrar shall cancel the Physical Notes so transferred; and
(iii) if the proposed transferor is a Participant seeking to transfer
an interest in the IAI Global Note or the Regulation S Global Note, upon
receipt by the Registrar of written instructions given in accordance with
the Depository's and the Registrar's procedures, the Registrar shall
register the transfer and reflect on its books and records the date and (A)
a decrease in the principal amount of the IAI Global Note or the Regulation
S Global Note, as the case may be, in an amount equal to the principal
amount of the Notes to be transferred and (B) an increase in the principal
amount of the 144A Global Note in an amount equal to the principal amount
of the Notes to be transferred.
(c) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(d) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar or co-Registrar shall deliver only Notes that
bear the Private Placement Legend unless (i) there is delivered to the Trustee,
upon its request, an Opinion of Counsel reasonably satisfactory to the Issuers
and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act, (ii) such Note has been offered pursuant to an
effective registration statement under the Securities Act or (iii) the
provisions of Section 2.16(a)(i)(x) have been satisfied.
(e) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Issuers shall have
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the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Registrar.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Participants or beneficial
owners of interests in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Indenture, and
to examine the same to determine substantial compliance as to form with the
express requirements hereof.
The Trustee shall have no responsibility for the actions or omissions
of the Depository, or the accuracy of the books and records of the Depository.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Issuers elect to redeem Notes pursuant to Section 5 or Section
6 of the Notes, they shall notify the Trustee in writing of the Redemption Date,
the Redemption Price and the principal amount of Notes to be redeemed. The
Issuers shall give notice of redemption to the Paying Agent and Trustee at least
45 days but not more than 60 days before the Redemption Date (unless a shorter
notice shall be agreed to by the Trustee in writing and except that such
redemption notice may be delivered more than 60 days prior to the Redemption
Date if it is in connection with a satisfaction and discharge of this
Indenture), together with an Officers' Certificate stating that such redemption
will comply with the conditions contained herein.
SECTION 3.02. Selection of Notes To Be Redeemed.
If less than all of the Notes are to be redeemed at any time, the
Trustee will select Notes for redemption as follows:
(a) if the Notes are listed on a national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the Notes are listed; or
(b) if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate;
provided that, in the case of such partial redemption pursuant to Section 5 or
Section 6 of the Notes or a Net Proceeds Offer or a Net Worth Offer, the Trustee
will select the Notes on a pro rata basis or on as nearly a pro rata basis as
practicable (subject to the procedures of the Depository), unless that method is
otherwise prohibited.
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No Notes of $2,000 or less shall be redeemed in part.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date
(except that such redemption notice may be mailed more than 60 days prior to a
Redemption Date if such notice is issued in connection with a satisfaction and
discharge of this Indenture), the Issuers shall mail a notice of redemption by
first class mail, postage prepaid, to each Holder whose Notes are to be redeemed
at its registered address. At the Issuers' request, the Trustee shall forward
the notice of redemption in the Issuers' name and at the Issuers' expense. Each
notice for redemption shall identify the Notes (including the CUSIP number) to
be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;
(5) that, unless the Issuers default in making the redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date, and the only remaining right of the Holders of such Notes
is to receive payment of the Redemption Price upon surrender to the Paying
Agent of the Notes redeemed;
(6) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, and upon surrender of such Note, a new Note or Notes in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(7) if fewer than all the Notes are to be redeemed, the identification
of the particular Notes (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such partial redemption;
and
(8) the Section of the Notes pursuant to which the Notes are to be
redeemed.
The notice, if mailed in a manner herein provided, shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Note designated for redemption in whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Note. Notices of redemption may not be conditional.
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SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued and unpaid interest, if any. Upon surrender to
the Trustee or Paying Agent, such Notes called for redemption shall be paid at
the Redemption Price (which shall include accrued interest thereon to the
Redemption Date), but installments of interest, the maturity of which is on or
prior to the Redemption Date, shall be payable to Holders of record at the close
of business on the relevant Record Dates. On and after the Redemption Date
interest shall cease to accrue on Notes or portions thereof called for
redemption.
SECTION 3.05. Deposit of Redemption Price.
On or before 10:00 a.m. New York time on the Redemption Date, the
Issuers shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price plus accrued interest, if any, of all Notes to be redeemed
on that date.
If the Issuers comply with the preceding paragraph, then, unless the
Issuers default in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
SECTION 3.06. Notes Redeemed in Part.
If any Note is to be redeemed in part only, the notice of redemption
that relates to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note or Notes in principal amount equal to the
unredeemed portion of the original Note or Notes shall be issued in the name of
the Holder thereof upon cancellation of the original Note or Notes.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
The Issuers shall duly and punctually pay the principal of (and
premium, if any) and interest on the Notes in the manner provided in the Notes,
the Registration Rights Agreement and this Indenture. An installment of
principal of or interest on the Notes shall be considered paid on the date it is
due if the Trustee or Paying Agent (other than the Issuers or an Affiliate
thereof) holds on that date U.S. Legal Tender designated for and sufficient to
pay the installment. Interest on the Notes will be computed on the basis of a
360-day year comprised of twelve 30-day months.
The Issuers shall pay principal of, premium, if any, and interest on
Notes in global form registered in the name of or held by the Depository or its
nominee in immediately available
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funds to the Depository or its nominee, as the case may be, as the registered
Holder of such global Note.
The Issuers shall pay interest (including, without limitation,
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and, to the extent such payments are lawful, interest on overdue
installments of interest, without regard to any applicable grace periods, at the
rate of 1.0% per annum in excess of the interest rate of the Notes from time to
time, to the extent permissible by law.
SECTION 4.02. Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. The Issuers 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 Issuers shall fail to
maintain any such required office or agency or the Issuers shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the address of the Trustee set forth in
Section 12.02.
The Issuers 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. The
Issuer 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. If a Holder has given wire transfer instructions to the Issuer at least
ten Business Days prior to the applicable payment date, the Issuer and the
Co-Issuer shall make all payments on such Holder's Notes in accordance with
those instructions. Otherwise, payments on the Notes will be made at the office
or agency of the Paying Agent and Registrar for the Notes within the City and
State of New York unless the Issuer and the Co-Issuer elect to make interest
payments by check mailed to the Holders at their addresses set forth in the
register of Holders.
The Issuers hereby initially designate The Bank of New York, located
at 000 Xxxxxxx Xxxxxx, Xxxxx 0X, Xxx Xxxx, Xxx Xxxx 00000, as such office of the
Issuers in accordance with Section 2.03.
SECTION 4.03. Corporate Existence.
Except as otherwise permitted by Article Five, each of the Issuer and
the Co-Issuer shall do or cause to be done all things necessary to preserve and
keep in full force and effect its limited liability company or corporate
existence, as applicable, and the corporate, partnership, limited liability
company or other existence of each of its Restricted Subsidiaries in accordance
with the respective organizational documents of each such Restricted Subsidiary
and the rights (charter and statutory) and material franchises of the Issuer,
the Co-Issuer and each of the Issuer's Restricted Subsidiaries; provided,
however, that the Issuers shall not be required to preserve any such right,
franchise or corporate existence with respect to each such Restricted Subsidiary
if the loss thereof is not, individually or in the aggregate, adverse in any
material respect to the Holders of the Notes; and provided further that this
Section 4.03 shall not prohibit or restrict any sale, transfer or other
disposition in compliance with Section 4.17.
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SECTION 4.04. Payment of Taxes and Other Claims.
The Issuer, the Co-Issuer and each Guarantor that is individually a
Significant Subsidiary shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, all material taxes, assessments and
governmental charges levied or imposed upon it or upon its income, profits or
property that, in each case, if unpaid, might by law become a material liability
or Lien upon its property; provided, however, that no Issuer and no Guarantor
that is individually a Significant Subsidiary shall be required to pay or
discharge or cause to be paid or discharged any such tax, assessment or charge
whose amount or the applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate provision has been made or
where the failure to effect such payment is not individually or in the aggregate
adverse in any material respect to the Holders of the Notes.
SECTION 4.05. Reports.
Whether or not required by the SEC, so long as any Notes are
outstanding, the Issuer shall (a) furnish to the Trustee and the registered
Holders, (b) disseminate via a press release on any national business press
release wire service, (c) post on the Issuer's website or on a website
maintained on its behalf (provided that, in the case of clause (c), the Issuer
shall use reasonable efforts to inform Holders of the availability of such
reports, which may be satisfied by, among other things, a press release on any
national business press release wire service) or (d) or file electronically with
the SEC through the SEC's Electronic Data Gathering, Analysis and Retrieval
System (or any successor system) ("XXXXX"), within the time periods that would
be applicable to the Issuer if it were subject to Section 13(a) or 15(d) of the
Exchange Act, beginning with the report due for the fiscal year ending December
31, 2005:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Issuer were required to file these 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 on the annual
financial statements by the Issuer's certified independent accountants; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Issuer were required to file these reports.
Within forty five (45) days after the end of the fiscal quarter ending
September 30, 2005, the Issuer shall furnish to the Holders the consolidated or
combined financial statements of the Issuer and its subsidiaries for the fiscal
quarter then ended, in form and substance substantially equivalent to the
financial statements that would have been included in a Form 10-Q for such
period if the Issuer had been subject to the requirements of Section 13 or 15(d)
of the Exchange Act. The Issuer shall also provide a narrative description of
the consolidated or combined results of operations of the Issuer and its
subsidiaries addressing consolidated or combined revenues, EBITDA and earnings
for such fiscal quarter, with comparative analysis to the same period in the
previous fiscal year. The (a) dissemination of the foregoing financial
statements and narrative report via a press release on any national business
press release wire service, (b) filing thereof on XXXXX or (c) posting thereof
on the Issuer's
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website or on a website maintained on its behalf for such purpose shall be
deemed to satisfy the Issuer's obligation to furnish such information to the
Noteholders; provided that, in the case of clause (c), the Issuer shall use
reasonable efforts to inform Holders of the availability of such reports, which
may be satisfied by, among other things, a press release on any national press
release wire service.
Notwithstanding the foregoing, prior to the filing of the registration
statement pursuant to the Registration Rights Agreement executed and delivered
on the Issue Date, the Issuer shall not be required to provide in any report or
financial statements consolidating footnotes as required by Rule 3-10 of
Regulation S-X with respect to non-guarantor subsidiaries, if the Issuer
provides in such financial statements or report information with respect to the
non-guarantor Subsidiaries substantially consistent with the information
provided with respect thereto in the Offering Memorandum in the section entitled
"Description of Notes" under the heading "Note Guarantees."
Copies of all such reports shall be delivered to the Trustee prior to
or concurrently with distribution to Noteholders. Delivery of such reports,
information and documents to the Trustee, whether electronically or by physical
delivery, is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuers'
compliance with any of their covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
In addition, whether or not required by the SEC, after the
consummation of the exchange offer contemplated by the Registration Rights
Agreement executed and delivered on the Issue Date (or the effectiveness of the
shelf registration statement contemplated thereunder, if applicable), the Issuer
shall file a copy of all of the information and reports referred to in clauses
(1) and (2) in the first paragraph of this Section 4.05 with the SEC for public
availability within the time periods that would be applicable to the Issuer if
it were subject to Section 13(a) or 15(d) of the Exchange Act (unless the SEC
will not accept the filing) and make the information available to securities
analysts and prospective investors upon request. The Issuer, the Co-Issuer and
the Guarantors have agreed that, for so long as any Notes remain outstanding,
the Issuer shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
So long as Holdings guarantees the Notes (there being no obligation of
Holdings to do so) and complies with the requirements of Rule 3-10 of Regulation
S-X promulgated by the SEC (or any successor provision), the reports,
information and other documents required to be filed and furnished to the
Trustee or to Holders pursuant to this Section 4.05 may, at the option of the
Issuer, be filed by and be those of Holdings rather than the Issuer.
Notwithstanding the foregoing, the requirements set forth above shall
be deemed satisfied prior to the commencement of the exchange offer contemplated
by the Registration Rights Agreement executed and delivered on the Issue Date or
the effectiveness of the shelf registration statement contemplated thereunder by
the filing with the SEC of the exchange offer registration statement
contemplated by the Registration Rights Agreement executed and
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delivered on the Issue Date and/or the shelf registration statement contemplated
thereunder, and any amendments thereto, with such financial information that
satisfies Regulation S-X of the Securities Act; provided that at such time the
Issuer is not required to pay any Additional Interest pursuant to the
Registration Rights Agreement.
SECTION 4.06. Compliance Certificate; Notice of Default.
(a) The Issuers shall deliver to the Trustee, within 90 days after the
close of each fiscal year of the Issuer, an Officers' Certificate signed by the
principal executive officer, the principal financial officer or the principal
accounting officer of each Issuer stating that a review of the activities of the
Issuer, the Co-Issuer and their respective Subsidiaries has been made under the
supervision of the signing Officers with a view to determining whether the
Issuer, the Co-Issuer and each Guarantor has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to the best of such Officer's
knowledge, the Issuer, the Co-Issuer and each Guarantor have, during such
preceding fiscal year, kept, observed, performed and fulfilled each and every
such covenant and no Default occurred during such year and at the date of such
certificate there is no Default that has occurred and is continuing or, if such
signers do know of such Default, the certificate shall describe its status with
particularity. The Issuer's fiscal year currently ends on December 31. The
Officers' Certificate shall also notify the Trustee should the Issuer elect to
change the manner in which it fixes its fiscal year end.
(b) The Issuer shall deliver to the Trustee as soon as possible and in
any event within five Business Days after the Issuer becomes aware of the
occurrence of any Default an Officers' Certificate specifying the Default and
describing its status with particularity and the action proposed to be taken
thereto.
SECTION 4.07. Waiver of Stay, Extension or Usury Laws.
Each Issuer and each Guarantor covenant (to the extent that it may
lawfully do so) that they will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive such
Issuer or such Guarantor from paying all or any portion of the principal of
and/or interest on the Notes or the Note Guarantee of any such Guarantor as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture, and (to the
extent that it may lawfully do so) each hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 4.08. Conduct of Business.
The Issuer shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than the Permitted Business.
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SECTION 4.09. Change of Control.
Upon the occurrence of a Change of Control, the Issuers shall be
obligated to make an offer to purchase (the "CHANGE OF CONTROL OFFER"), and
shall purchase, on a Business Day (the "CHANGE OF CONTROL PAYMENT DATE") not
more than 60 nor less than 30 days following the date the notice of the Change
of Control is required to be mailed pursuant to the next paragraph, all of the
then outstanding Notes tendered for purchase in accordance with this Section
4.09 at a purchase price (the "CHANGE OF CONTROL PURCHASE PRICE") equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the Change of Control Payment Date. The Change of Control Offer shall
remain open for at least 20 Business Days or such longer period as is required
by law.
Within 30 days following the date upon which a Change of Control
occurs (the "CHANGE OF CONTROL DATE"), the Issuer and the Co-Issuer shall send
(or cause to be sent), by first class mail, a notice to each Holder, with a copy
to the Trustee, which notice shall govern the terms of the Change of Control
Offer. The notice to the Holders shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Change of
Control Offer and shall state the following:
(1) the Change of Control Payment Date;
(2) that any Note not tendered will continue to accrue interest;
(3) that, unless the Issuers default in making payment therefor, any
Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(4) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with the
form entitled "Option of Holder To Elect Purchase" on the reverse of the
Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day prior to the
Change of Control Payment Date;
(5) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the second Business Day prior to the
Change of Control Payment Date, a telegram, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Notes the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(6) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the
Notes surrendered;
(7) the circumstances and relevant facts regarding such Change of
Control; and
(8) all other procedures, if any, determined by the Issuer, consistent
with this Indenture, that a Holder must follow in order to have its Notes
repurchased.
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On the Change of Control Payment Date, the Issuers shall, to the
extent lawful:
(1) accept for payment all Notes or portions of Notes (in integral
multiples of $2,000) properly tendered pursuant to the Change of Control
Offer;
(2) deposit with the Paying Agent U.S. Legal Tender equal to the
Change of Control Purchase Price in respect of all Notes or portions of
Notes so tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the
Issuers.
The Issuer shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Purchase Price with respect to such Notes, and
the Trustee shall promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note will be in a principal amount of $2,000 or an integral multiple
thereof.
The obligation of the Issuer and the Co-Issuer to make a Change of
Control Offer will be satisfied if a third party makes the Change of Control
Offer in the manner and at the times and otherwise in compliance with the
requirements applicable to a Change of Control Offer made by the Issuer and the
Co-Issuer and purchases all Notes properly tendered and not withdrawn under the
Change of Control Offer.
The Issuer and the Co-Issuer shall comply with applicable tender offer
rules, including the requirements of Rule 14e-1 under the Exchange Act, and any
other applicable laws and regulations in connection with the purchase of Notes
pursuant to a Change of Control Offer. To the extent the provisions of any
securities laws or regulations conflict with the provisions under this Section
4.09, the Issuer and the Co-Issuer shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached their obligations
under this Section 4.09 by virtue thereof.
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, if any, 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.
SECTION 4.10. Limitations on Additional Indebtedness.
The Issuer shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, incur any Indebtedness; provided, however, that the
Issuer or any Guarantor may incur additional Indebtedness (including Acquired
Indebtedness) if, after giving effect thereto, either (a) the Consolidated Fixed
Charge Coverage Ratio would be at least 2.00 to 1.00 or (b) the ratio
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of Consolidated Indebtedness to Consolidated Tangible Net Worth would be less
than 3.00 to 1.00 (either (a) or (b), the "RATIO EXCEPTION").
Notwithstanding the above, each of the following shall be permitted
(the "PERMITTED INDEBTEDNESS"):
(1) Indebtedness of the Issuer, the Co-Issuer and any Restricted
Subsidiary under the Credit Facilities incurred pursuant to this clause (1)
in an aggregate principal amount at any time outstanding not to exceed the
greater of (x) $185.0 million or (y) the amount of the Borrowing Base as of
the date of such incurrence;
(2) the Notes issued on the Issue Date and the Note Guarantees and the
Exchange Notes and the Note Guarantees in respect thereof to be issued
pursuant to the Registration Rights Agreement;
(3) Indebtedness of the Issuer and the Restricted Subsidiaries to the
extent outstanding on the Issue Date (other than Indebtedness referred to
in clauses (1), (2) or (5), and after giving effect to the intended use of
proceeds of the Notes);
(4) Indebtedness of the Issuer and the Restricted Subsidiaries under
Hedging Obligations entered into for bona fide hedging purposes of the
Issuer or any Restricted Subsidiary and not for the purpose of speculation;
provided, however, that in the case of Hedging Obligations relating to
interest rates, (a) such Hedging Obligations relate to payment obligations
on Indebtedness otherwise permitted to be incurred by this Section 4.10 and
(b) the notional principal amount of such Hedging Obligations at the time
incurred does not exceed the principal amount of the Indebtedness to which
such Hedging Obligations relate;
(5) Indebtedness of the Issuer owed to a Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary owed to the Issuer or any other
Restricted Subsidiary; provided, however, that (a) any Indebtedness of the
Issuer owed to a Restricted Subsidiary is unsecured and subordinated,
pursuant to a written agreement, to the Issuer's Obligations, under the
Notes and this Indenture and (b) upon any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or such Indebtedness being owed to
any Person other than the Issuer or a Restricted Subsidiary, the Issuer or
such Restricted Subsidiary, as applicable, shall be deemed to have incurred
Indebtedness not permitted by this clause (5);
(6) Indebtedness incurred by the Issuer or any Restricted Subsidiary
in connection with letters of credit (including, without limitation,
letters of credit in respect of workers' compensation claims or self
insurance or supporting bid, performance or surety obligations),
Indebtedness with respect to reimbursement type obligations regarding
workers compensation claims, escrow agreements, bankers' acceptances and
bid, surety and performance bonds (in each case other than for an
obligation for borrowed money), in each case in the ordinary course of
business;
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(7) Purchase Money Indebtedness incurred by the Issuer or any
Restricted Subsidiary, in an aggregate amount not to exceed at any time
outstanding the greater of (a) $10.0 million or (b) 5.0% of Total Tangible
Assets;
(8) Non-Recourse Indebtedness of the Issuer or any Restricted
Subsidiary incurred for the acquisition, development and/or improvement of
real property or any infrastructure related thereto and secured by Liens
only on such real property or related infrastructure;
(9) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
Indebtedness is extinguished within five Business Days of incurrence;
(10) Indebtedness arising in connection with endorsement of
instruments for deposit in the ordinary course of business;
(11) Indebtedness arising from agreements of the Issuer or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in
connection with the acquisition or disposition of any business, assets or a
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or a Subsidiary for
the purpose of financing such acquisition; provided, however, that such
Indebtedness is not reflected on the balance sheet of the Issuer or any
Restricted Subsidiary (contingent obligations referred to in a footnote to
financial statements and not otherwise reflected on the balance sheet will
not be deemed to be reflected on such balance sheet for purposes of this
clause (11));
(12) Refinancing Indebtedness with respect to Indebtedness incurred
pursuant to the Ratio Exception, clause (2) or (3) above or this clause
(12);
(13) Indebtedness of the Issuer or any Restricted Subsidiary in an
aggregate amount not to exceed $15.0 million at any time outstanding; and
(14) the guarantee by the Issuer or any Guarantor of Indebtedness of
the Issuer or a Restricted Subsidiary that was permitted to be incurred by
another provision of this Section 4.10.
For purposes of determining compliance with this Section 4.10, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (1) through (14) above
or is entitled to be incurred pursuant to the Ratio Exception, the Issuer shall,
in its sole discretion, classify or later reclassify, in whole or in part, such
item of Indebtedness and may divide and classify such Indebtedness in more than
one of the types of Indebtedness described, except that Indebtedness outstanding
or incurred under the Credit Facilities on the Issue Date shall be deemed to
have been incurred under clause (1) above. The accrual of interest, the
accretion or amortization of original issue discount, the
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payment of interest on any Indebtedness in the form of additional Indebtedness
with the same terms and the reclassification of preferred equity as Indebtedness
due to a change in accounting principles will not be deemed to be an incurrence
of Indebtedness for purposes of this Section 4.10. In addition, for purposes of
determining any particular amount of Indebtedness under this Section 4.10,
guarantees, Liens or letter of credit obligations supporting Indebtedness
otherwise included in the determination of such particular amount shall not be
included so long as incurred by a Person that could have incurred such
Indebtedness.
SECTION 4.11. Limitations on Layering Indebtedness.
The Issuer and the Co-Issuer shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, incur or suffer to exist any
Indebtedness that is or purports to be by its terms (or by the terms of any
agreement governing such Indebtedness) senior in right of payment to the Notes
or the Note Guarantee of such Restricted Subsidiary and subordinated in right of
payment to any other Indebtedness of the Issuer, the Co-Issuer or of such
Restricted Subsidiary, as the case may be.
For purposes of the foregoing, no Indebtedness will be deemed to be
subordinated in right of payment to any other Indebtedness of the Issuer, the
Co-Issuer or any Restricted Subsidiary solely by virtue of being unsecured or
secured by a junior priority lien or by virtue of the fact that the holders of
such Indebtedness have entered into intercreditor agreements or other
arrangements giving one or more of such holders priority over the other holders
in the collateral held by them.
SECTION 4.12. Limitations on Restricted Payments.
The Issuer shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, make any Restricted Payment if at the time of such
Restricted Payment:
(1) a Default shall have occurred and be continuing or shall occur as
a consequence thereof;
(2) the Issuer cannot incur $1.00 of additional Indebtedness pursuant
to the Ratio Exception; or
(3) the amount of such Restricted Payment, when added to the aggregate
amount of all other Restricted Payments made after the Issue Date (other
than Restricted Payments made pursuant to clause (2), (3), (4), (5), (6),
(8), (9), (10), (11), (12), (13) or (14) of the next paragraph), exceeds
the sum (the "RESTRICTED PAYMENTS BASKET") of (without duplication):
(a) 50% of Consolidated Net Income for the period (taken as one
accounting period) commencing at the beginning of the fiscal quarter
in which the Issue Date occurs to and including the last day of the
fiscal quarter ended immediately prior to the date of such calculation
for which consolidated or combined financial statements are available
(or, if such Consolidated Net Income shall be a deficit, minus 100% of
such aggregate deficit), plus
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(b) 100% of the aggregate net cash proceeds or the Fair Market
Value of any assets to be used in a Permitted Business received by the
Issuer either (x) as contributions to the common equity of the Issuer
after the Issue Date or (y) from the issuance and sale of Qualified
Equity Interests after the Issue Date, other than any such proceeds or
assets received from a Subsidiary of the Issuer, plus
(c) the aggregate amount by which Indebtedness (other than any
Subordinated Indebtedness) or Disqualified Equity Interests incurred
by the Issuer or any Restricted Subsidiary subsequent to the Issue
Date is reduced on the Issuer's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Issuer) into Qualified
Equity Interests (less the amount of any cash, or the fair value of
assets, distributed by the Issuer or any Restricted Subsidiary upon
such conversion or exchange), plus
(d) in the case of the disposition or repayment of or return on
any Investment that was treated as a Restricted Payment made after the
Issue Date, an amount (to the extent not included in the computation
of Consolidated Net Income) equal to 100% of the aggregate amount
received by the Issuer or any Restricted Subsidiary in cash or other
property (valued at the Fair Market Value thereof) as the return of
capital with respect to such Investment, less the cost of the
disposition of such Investment and net of taxes, plus
(e) upon a Redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary, the Fair Market Value of the Issuer's
proportionate interest in such Subsidiary immediately following such
Redesignation.
The foregoing provisions will not prohibit:
(1) the payment by the Issuer or any Restricted Subsidiary of any
dividend or distribution within 60 days after the date of declaration or
notice to equity holders thereof, if on the date of declaration or notice
the payment would have complied with the provisions of this Indenture;
(2) the purchase, repurchase, redemption or other acquisition of any
Equity Interests of the Issuer or any Restricted Subsidiary in exchange
for, or out of the proceeds of the substantially concurrent (a) issuance
and sale of Qualified Equity Interests or (b) capital contribution from
Holdings to the Issuer;
(3) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Subordinated Indebtedness or Disqualified
Equity Interests of the Issuer or any Restricted Subsidiary (a) in exchange
for, or out of the proceeds of the substantially concurrent (x) issuance
and sale of Qualified Equity Interests or (y) capital contribution from
Holdings to the Issuer, (b) in exchange for, or out of the proceeds of the
substantially concurrent incurrence of, Refinancing Indebtedness permitted
to be incurred under Section 4.10 and the other terms of this Indenture, or
(c) upon a Change of Control or in connection with an Asset Sale to the
extent required by the agreement governing such Subordinated Indebtedness
but only if the Issuer shall have complied with Section
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4.09 and 4.17 and purchased all Notes validly tendered pursuant to the
relevant offer prior to redeeming such Subordinated Indebtedness;
(4) the payment of dividends, or distributions or amounts (each, a
"PERMITTED TAX DIVIDEND") by the Issuer to permit the direct and indirect
beneficial owners of its Equity Interests (each, an "OWNER") to receive tax
distributions in an amount not to exceed (i) the Assumed Tax Rate for such
Owner multiplied by (ii) the difference between (A) the taxable income and
gain solely attributable to the Issuer and (B) the cumulative losses solely
attributable to the Issuer to the extent such losses have not previously
been taken into account pursuant to this provision (for the avoidance of
doubt, such income, gain or losses shall be determined as though the Issuer
were a partnership for Federal income tax purposes and shall include any
income, gain or loss attributable to the Issuer's ownership interest in an
entity which is a pass-through entity for Federal income tax purposes) and
at such times so as to permit such Owners to meet their estimated income
tax obligations as well as actual income tax obligations;
(5) cash dividends or loans to Holdings in amounts equal to:
(a) the amounts required for Holdings to pay franchise taxes and
other fees required to maintain its legal existence; and
(b) an amount not to exceed $500,000 in any fiscal year to permit
Holdings to pay its corporate overhead expenses incurred in the
ordinary course of business and/or to pay salaries or other
compensation of employees who perform services for both Holdings and
the Issuer;
(6) repurchases of Equity Interests deemed to occur upon the exercise
of stock options if the Equity Interests represents a portion of the
exercise price thereof;
(7) so long as no Default or Event of Default has occurred and is
continuing, the declaration or payment of dividends on the Issuer's
Qualified Equity Interests (or dividends, distributions or advances to
Holdings to allow Holdings to pay dividends on Holdings' Qualified Equity
Interests) following the first public offering of Qualified Equity
Interests of the Issuer (or of Holdings, as the case may be) after the
Issue Date of, whichever is earlier, (i) in the case of the first public
offering of Qualified Equity Interests of the Issuer, up to 6% per annum of
the Net Cash Proceeds received by the Issuer in such public offering or
(ii) in the case of the first public offering of Qualified Equity Interests
of Holdings, up to 6% per annum of the amount contributed by Holdings to
the Issuer from the Net Cash Proceeds received by Holdings in such public
offering, in each case, other than public offerings of the Issuer's or
Holdings' Equity Interests registered on Form S-4 or Form S-8;
(8) so long as no Default or Event of Default has occurred and is
continuing, the purchase, redemption or other acquisition, cancellation or
retirement for value of Equity Interests, or options, warrants, equity
appreciation rights or other rights to purchase or acquire Equity Interests
of the Issuer or any Restricted Subsidiary of the Issuer or any parent of
the Issuer held by any existing or former employees or
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management of the Issuer or Holdings or any Subsidiary of the Issuer or
their assigns, estates or heirs, in each case in connection with the
repurchase provisions under employee stock option or stock purchase
agreements or other agreements to compensate employees; provided that such
redemptions or repurchases pursuant to this clause (8) will not exceed
$500,000 in the aggregate during any calendar year, provided that (x) any
portion of such $500,000 not used in such calendar year may be carried
forward to any subsequent calendar year and (y) the redemptions and
repurchases made pursuant to this clause (8) will not exceed $2.0 million
in the aggregate during any calendar year after giving effect to such carry
forward;
(9) Investments that are made with Excluded Contributions;
(10) non-cash Investments in Unrestricted Subsidiaries in the form of
administrative, financial, accounting, management, or other similar
services (together with a non-cash allocation of corporate overhead), in
each case in the ordinary course of business;
(11) so long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, the payment of dividends on
Disqualified Equity Interests of the Issuer or its Restricted Subsidiaries
which are issued in accordance with Section 4.10;
(12) so long as no Default or Event of Default shall have occurred and
be continuing, cash dividends or distributions to Holdings in an amount
sufficient to enable Holdings to make payments of cash interest required to
be made in respect of Indebtedness of Holdings that has been guaranteed by
the Issuer in accordance with the terms of this Indenture, provided that
(a) such Indebtedness is considered Indebtedness of the Issuer for all
purposes of this Indenture, including for purposes of calculating
Consolidated Interest Expense and Consolidated Indebtedness, (b) such
dividends are applied directly to the payment of such interest and (c) the
proceeds of the issuance of such Indebtedness (net of reasonable costs of
issuance incurred) have been contributed to the common equity of the
Issuer;
(13) the payment of dividends or distributions or amounts by the
Issuer to Holdings in an amount equal to the payments that Holdings is
required to make on the Series A Interests pursuant to its Operating
Agreement in an amount not to exceed $4.0 million in any calendar year; or
(14) additional Restricted Payments not to exceed $5.0 million in the
aggregate since the Issue Date;
provided, however, that no issuance and sale of Equity Interests that are used
to make a payment pursuant to clause (2), (3) or (9) above shall increase the
Restricted Payments Basket, except to the extent the proceeds thereof exceed the
amounts used to effect the transactions described therein.
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SECTION 4.13. Maintenance of Consolidated Tangible Net Worth.
If the Issuer's Consolidated Tangible Net Worth declines below $35.0
million (the "MINIMUM TANGIBLE NET WORTH") at the end of any fiscal quarter, the
Issuer must deliver an Officers' Certificate to the Trustee within 55 days after
the end of such fiscal quarter (110 days after the end of any fiscal year) to
notify the Trustee of such decline. If, on the last day of each of any two
consecutive fiscal quarters (the last day of the second fiscal quarter being
referred to as a "DEFICIENCY DATE"), the Issuer's Consolidated Tangible Net
Worth is less than the Minimum Tangible Net Worth, then the Issuer and the
Co-Issuer must make an offer (a "NET WORTH OFFER") to all Holders to purchase
10% of the aggregate principal amount of outstanding Notes issued under this
Indenture (including Additional Notes, if any), (the "NET WORTH OFFER AMOUNT")
at a purchase price equal to 100% of the principal amount of the Notes, plus
accrued and unpaid interest thereon, if any, to the date of purchase; provided,
however, that no such Net Worth Offer shall be required if, after the Deficiency
Date but prior to the date the Issuer and the Co-Issuer are required to make the
Net Worth Offer, capital in cash or Cash Equivalents is contributed for
Qualified Equity Interests of the Issuer sufficient to increase the Issuer's
Consolidated Tangible Net Worth after giving effect to such contribution to an
amount equal to or above the Minimum Tangible Net Worth.
The Issuer and the Co-Issuer must make the Net Worth Offer no later
than 65 days after each Deficiency Date (120 days if such Deficiency Date is the
last day of the Issuer's fiscal year). The Net Worth Offer is required to remain
open for a period of 20 Business Days following its commencement or for such
longer period as required by law. The Issuer and the Co-Issuer are required to
purchase the Net Worth Offer Amount of the Notes on a designated date (the "NET
WORTH PAYMENT DATE") no later than five Business Days after the termination of
the Net Worth Offer, or if less than the Net Worth Offer Amount of Notes shall
have been tendered, all Notes then tendered. The Issuers shall not be obligated
to purchase any Notes unless Holders of at least 10% of the Net Worth Offer
Amount shall have tendered and not subsequently withdrawn their Notes for
repurchase.
Upon the commencement of a Net Worth Offer, the Issuer shall send (or
cause to be sent), by first class mail, a notice to the Trustee and to each
Holder at its registered address. The notice shall contain all instructions and
materials necessary to enable such Holder to tender Notes pursuant to the Net
Worth Offer. Any Net Proceeds Offer shall be made to all Holders. The notice,
which shall govern the terms of the Net Proceeds Offer, shall state:
(1) that the Net Worth Offer is being made pursuant to this Section
4.13;
(2) the Net Worth Offer Amount and the Net Worth Payment Date;
(3) that any Notes not tendered or accepted for payment shall continue
to accrue interest;
(4) that, unless the Issuer and the Co-Issuer default in making such
payment, any Notes accepted for payment pursuant to the Net Worth Offer
shall cease to accrue interest after the Net Worth Payment Date;
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(5) that Holders electing to have a Note purchased pursuant to a Net
Worth Offer shall be required to surrender the Note, with the form entitled
"Option of Holder To Elect Purchase" on the reverse of the Notes completed,
or transfer by book-entry transfer, to the Issuer, a depository, if
appointed by the Issuer, or the Paying Agent at the address specified in
the notice at least three days before the Net Worth Payment Date;
(6) that Holders shall be entitled to withdraw their election if the
Issuer, the Depository or the Paying Agent, as the case may be, receives,
not later than the second Business Day prior to the Net Worth Payment Date,
a notice 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;
(7) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Net Worth Offer Amount, the Issuers shall select the
Notes to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Issuer so that only Notes in denominations of
$2,000, or integral multiples thereof, shall be purchased);
(8) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer); and
(9) all other procedures, if any, determined by the Issuer, consistent
with this Indenture, that a Holder must follow in order to have its Notes
purchased in the Net Worth Offer.
If the purchase date of Notes pursuant to a Net Worth Offer 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
Net Worth Offer.
If the aggregate principal amount of Notes tendered exceeds the Net
Worth Offer Amount, the Issuer and the Co-Issuer are required to purchase the
Notes tendered pro rata among the Notes tendered (with such adjustments as may
be appropriate so that only Notes in denominations of $2,000 and integral
multiples thereof shall be purchased).
In no event shall the failure of the Issuer's Consolidated Tangible
Net Worth to equal or exceed the Minimum Tangible Net Worth at the end of any
fiscal quarter be counted toward the requirement to make more than one Net Worth
Offer. The Issuer may reduce the principal amount of Notes to be purchased
pursuant to the Net Worth Offer by subtracting 100% of the aggregate principal
amount (excluding premium) of the Notes optionally redeemed or otherwise
purchased by the Issuer prior to the purchase (otherwise than under this
provision). The Issuer, however, may not credit Notes that have been previously
used as a credit against any obligation to repurchase Notes pursuant to this
provision.
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The Issuer and the Co-Issuer shall comply with applicable tender offer
rules, including the requirements of Rule 14e-1 under the Exchange Act, and any
other applicable laws and regulations in connection with the purchase of Notes
pursuant to a Net Worth Offer. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.13, the Issuer shall
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.13 by virtue of
this compliance.
SECTION 4.14. Limitations on Dividend and Other Restrictions Affecting
Restricted Subsidiaries.
The Issuer shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to (each, a "RESTRICTION"):
(a) pay dividends or make any other distributions on or in respect of
its Equity Interests to the Issuer or any Restricted Subsidiary;
(b) make loans or advances or pay any Indebtedness or other obligation
owed to the Issuer or any other Restricted Subsidiary; or
(c) transfer any of its assets to the Issuer or any other Restricted
Subsidiary;
except for:
(1) encumbrances or restrictions existing under or by reason of
applicable law, statute, rule, regulation or governmental or court order;
(2) encumbrances or restrictions existing under this Indenture, the
Notes, the Note Guarantees and the Exchange Notes and the Note Guarantees
in respect thereof;
(3) non-assignment provisions of any contract or any lease entered
into in the ordinary course of business;
(4) encumbrances or restrictions existing under agreements existing on
the Issue Date (including, without limitation, the Credit Facilities) as in
effect on that date;
(5) restrictions on the transfer of assets subject to any Lien
permitted under this Indenture imposed by the holder of such Lien;
(6) restrictions on the transfer of assets imposed under any agreement
to sell or dispose of such assets permitted under this Indenture to any
Person pending the closing of such sale or disposition;
(7) any instrument governing Acquired Indebtedness permitted to be
incurred by the terms of this Indenture (except to the extent such
Indebtedness was incurred or such encumbrance or restriction was imposed or
created in connection with or in contemplation or anticipation of the
acquisition of such Person by the Issuer or any of its
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Restricted Subsidiaries), which encumbrance or restriction is not
applicable to any Person, or the assets of any Person, other than the
Person or the assets of the Person so acquired;
(8) any other agreement governing Indebtedness entered into after the
Issue Date that contains encumbrances and restrictions that are not
materially more restrictive with respect to any Restricted Subsidiary than
those in effect on the Issue Date with respect to that Restricted
Subsidiary pursuant to agreements in effect on the Issue Date;
(9) customary provisions in partnership agreements, limited liability
company organizational governance documents, joint venture agreements and
other similar agreements entered into in the ordinary course of business
that restrict the transfer of ownership interests in, or the assets of,
such partnership, limited liability company, joint venture or similar
Person;
(10) Purchase Money Indebtedness or Capitalized Lease Obligations
incurred in compliance with Section 4.10 that impose restrictions of the
nature described in clause (c) above on the assets acquired;
(11) any encumbrances or restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in clauses (2), (4), (7) or (10) above; provided, however, that
such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are, in the good
faith judgment of the Issuer's Board of Directors, not materially more
restrictive with respect to such encumbrances and restrictions than those
contained in agreements referred to in such clauses (2), (4), (7) or (10);
(12) customary non-assignment provisions in leases, licenses or
contracts entered into in the ordinary course of business and consistent
with past practices;
(13) Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Refinancing Indebtedness are no
more restrictive, taken as a whole, than those contained in the agreements
governing the Refinancing Indebtedness; and
(14) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
SECTION 4.15. Limitations on Transactions with Affiliates.
The Issuer shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, in one transaction or a series of related
transactions, sell, lease, transfer or otherwise dispose of any of its assets
to, or purchase any assets from, or enter into any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (an "AFFILIATE TRANSACTION"), unless:
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(1) such Affiliate Transaction is on terms that are no less favorable
to the Issuer or the relevant Restricted Subsidiary than those that may
have been obtained in a comparable transaction at such time on an
arm's-length basis by the Issuer or such Restricted Subsidiary from a
Person that is not an Affiliate of the Issuer or such Restricted
Subsidiary; and
(2) the Issuer delivers to the Trustee:
(a) with respect to any Affiliate Transaction involving aggregate
value in excess of $2.5 million, an Officers' Certificate certifying
that such Affiliate Transaction complies with clause (1) above and a
Secretary's Certificate which sets forth and authenticates a
resolution that has been adopted by the Board of Directors of the
Issuer approving such Affiliate Transaction;
(b) with respect to any Affiliate Transaction involving aggregate
value in excess of $5.0 million, an Officers' Certificate certifying
that such Affiliate Transaction complies with clause (1) above and
either (i) if there are members of the Board of Directors of the
Issuer who qualify as Independent Directors, a Secretary's Certificate
which sets forth and authenticates a resolution that has been adopted
by the Board of Directors of the Issuer and a majority of the
Independent Directors of the Issuer approving such Affiliate
Transaction or (ii) a written opinion or appraisal of the types
described in clause (c) below; and
(c) with respect to any Affiliate Transaction involving aggregate
value of $10.0 million or more, the certificates described in the preceding
clause (a) above and either (x) a written opinion as to the fairness of
such Affiliate Transaction to the Issuer or such Restricted Subsidiary from
a financial point of view or (y) a written appraisal supporting the value
of such Affiliate Transaction, in either case, issued by an Independent
Financial Advisor.
The foregoing restrictions shall not apply to:
(1) transactions exclusively between or among (a) the Issuer and one
or more Restricted Subsidiaries or (b) Restricted Subsidiaries;
(2) reasonable director, officer, employee and consultant compensation
arrangements (including bonuses) and other benefits (including retirement,
health, stock and other benefit plans) and indemnification arrangements;
(3) loans and advances permitted by clause (3) of the definition of
"Permitted Investments";
(4) Restricted Payments which are made in accordance with Section
4.12;
(5) any agreement as in effect as of the Issue Date or any amendment
or modification thereto (so long as any such amendments and modifications,
when taken
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together as a whole, are not disadvantageous to the Holders of the Notes in
any material respect) or any transaction contemplated thereby;
(6) any transaction with a joint venture or similar entity which would
constitute an Affiliate Transaction solely because the Issuer or a
Restricted Subsidiary owns an equity interest in or otherwise controls such
joint venture or similar entity; provided such transaction is in compliance
with clause (1) of the preceding paragraph;
(7) sales of Qualified Equity Interests by the Issuer to an Affiliate;
(8) agreements between the Issuer or any Restricted Subsidiary on the
one hand and officers, employees, directors or managers of the Issuer or
any Restricted Subsidiary on the other hand in connection with (a) the sale
of a home pursuant to a home purchase or mortgage discount program
generally available to officers, employees, directors or managers of the
Issuer or any Restricted Subsidiary or (b) the sale, or sale and leaseback,
of a model home on terms not materially less favorable to the Issuer and
its Restricted Subsidiaries than those that may have been obtained in a
comparable transaction at such time on an arm's-length basis with a
non-affiliated Person;
(9) subcontracting and vendor agreements between the Issuer or any
Restricted Subsidiary and Heritage Contracting, LLC entered into in the
ordinary course of business and consistent with past practices; provided
such transaction is in compliance with clause (1) of the preceding
paragraph;
(10) agreements providing for administrative, financial, accounting,
management, or other similar services by the Issuer or any Restricted
Subsidiary to an Affiliate, in each case in the ordinary course of
business; or
(11) surety bonds, letters of credit or performance bonds or similar
arrangements issued by an Affiliate and guaranteed by the Issuer or any of
its Restricted Subsidiaries or issued by the Issuer or any of its
Restricted Subsidiaries for the benefit of an Affiliate, in each case to
the extent that a substantial majority of the land or lots that are the
subject of such bonds or letters of credit will be sold to the Issuer or a
Restricted Subsidiary.
SECTION 4.16. Limitations on Liens.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or permit or
suffer to exist any Lien (other than Permitted Liens) of any nature whatsoever
against any assets of the Issuer or any Restricted Subsidiary (including Equity
Interests of a Restricted Subsidiary), whether owned at the Issue Date or
thereafter acquired, which Lien secures Indebtedness or trade payables or any
proceeds therefrom, or assign or otherwise convey any right to receive income or
profits therefrom, unless contemporaneously therewith:
(1) in the case of any Lien securing an obligation that ranks pari
passu with the Notes or a Note Guarantee, effective provision is made to
secure the Notes or such
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Note Guarantee, as the case may be, at least equally and ratably with or
prior to such obligation with a Lien on the same collateral; and
(2) in the case of any Lien securing an obligation that is
subordinated in right of payment to the Notes or a Note Guarantee,
effective provision is made to secure the Notes or such Note Guarantee, as
the case may be, with a Lien on the same collateral that is prior to the
Lien securing such subordinated obligation,
in each case, for so long as such obligation is secured by such Lien.
SECTION 4.17. Limitations on Asset Sales.
The Issuer shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Sale unless:
(1) the Issuer or such Restricted Subsidiary receives consideration at
least equal to the Fair Market Value (such Fair Market Value to be
determined on the date of contractually agreeing to such Asset Sale) of the
assets included in such Asset Sale; and
(2) at least 75% of the total consideration received in such Asset
Sale or series of related Asset Sales consists of cash or Cash Equivalents.
For purposes of clause (2) of the preceding paragraph, the following
shall be deemed to be cash:
(a) the amount (without duplication) of any Indebtedness shown on the
face of the Issuer's or such Restricted Subsidiary's most recent
consolidated or combined balance sheet (other than contingent liabilities
and Subordinated Indebtedness) of the Issuer or such Restricted Subsidiary
that is expressly assumed by the transferee in such Asset Sale and with
respect to which the Issuer or such Restricted Subsidiary, as the case may
be, is unconditionally released by the holder of such Indebtedness,
(b) the amount of any securities, notes or other obligations received
from such transferee that are converted by the Issuer or such Restricted
Subsidiary to cash or Cash Equivalents (to the extent of the cash or Cash
Equivalents actually so received within 90 days after receipt thereof), and
(c) the Fair Market Value of any assets (other than securities, unless
such securities represent Equity Interests in an entity engaged primarily
in a Permitted Business, such entity becomes a Restricted Subsidiary and
the Issuer or a Restricted Subsidiary acquires voting and management
control of such entity) received by the Issuer or any Restricted Subsidiary
to be used by it in a Permitted Business.
If the Issuer or any Restricted Subsidiary engages in an Asset Sale,
the Issuer or such Restricted Subsidiary shall, no later than 365 days following
the consummation thereof, apply all or any of the Net Available Proceeds
therefrom to:
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(1) repay any Senior Debt; and/or
(2) invest all or any part of the Net Available Proceeds thereof in
the purchase of assets (other than securities, unless such securities
represent Equity Interests in an entity engaged primarily in a Permitted
Business, such entity becomes a Restricted Subsidiary and the Issuer or a
Restricted Subsidiary acquires voting and management control of such
entity) to be used by the Issuer or any Restricted Subsidiary in a
Permitted Business;
provided that pending the final application of any such Net Available Proceeds
in accordance with clause (1) and/or (2) above, the Issuer and the Restricted
Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net
Available Proceeds in Cash Equivalents. The amount of Net Available Proceeds not
applied or invested as provided in this paragraph will constitute "EXCESS
PROCEEDS."
On or before the 366th day after an Asset Sale, if the aggregate
amount of Excess Proceeds equals or exceeds $7.5 million, the Issuer and the
Co-Issuer will be required to make an offer to purchase from all Holders and, if
applicable, redeem (or make an offer to do so) any Pari Passu Indebtedness of
the Issuer or the Co-Issuer the provisions of which require the Issuer or the
Co-Issuer to redeem such Indebtedness with the proceeds from any Asset Sales (or
offer to do so), in an aggregate principal amount of Notes and such Pari Passu
Indebtedness equal to the amount of such Excess Proceeds as follows:
(1) the Issuer and the Co-Issuer shall (a) make an offer to purchase
(a "NET PROCEEDS OFFER") to all Holders in accordance with the procedures
set forth in this Indenture, and (b) redeem (or make an offer to do so) any
such other Pari Passu Indebtedness, pro rata in proportion to the
respective principal amounts of the Notes and such other Indebtedness
required to be redeemed, the maximum principal amount of Notes and Pari
Passu Indebtedness that may be redeemed out of the amount (the "PAYMENT
AMOUNT") of such Excess Proceeds;
(2) the offer price for the Notes shall be payable in cash in an
amount equal to 100% of the principal amount of the Notes tendered pursuant
to a Net Proceeds Offer, plus accrued and unpaid interest thereon, if any,
to the date such Net Proceeds Offer is consummated (the "OFFERED PRICE"),
in accordance with the procedures set forth in this Indenture and the
redemption price for such Pari Passu Indebtedness (the "PARI PASSU
INDEBTEDNESS PRICE") shall be as set forth in the related documentation
governing such Indebtedness;
(3) if the aggregate Offered Price of Notes validly tendered and not
withdrawn by Holders thereof exceeds the pro rata portion of the Payment
Amount allocable to the Notes, Notes to be purchased shall be selected on a
pro rata basis; and
(4) upon completion of such Net Proceeds Offer in accordance with the
foregoing provisions, the amount of Excess Proceeds with respect to which
such Net Proceeds Offer was made shall be deemed to be zero.
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To the extent that the sum of the aggregate Offered Price of Notes
tendered pursuant to a Net Proceeds Offer and the aggregate Pari Passu
Indebtedness Price paid to the holders of such Pari Passu Indebtedness is less
than the Payment Amount relating thereto (such shortfall constituting a "NET
PROCEEDS DEFICIENCY"), the Issuer may use the Net Proceeds Deficiency, or a
portion thereof, for general corporate purposes, subject to the provisions of
this Indenture.
Each Net Proceeds Offer shall remain open for a period of 20 Business
Days following its commencement, except to the extent that a longer period is
required by applicable law (the "NET PROCEEDS OFFER PERIOD"). No later than five
Business Days after the termination of the Net Proceeds Offer Period (the "NET
PROCEEDS PURCHASE DATE"), the Issuer shall purchase the principal amount of
Notes and Pari Passu Indebtedness required to be purchased pursuant to this
Section 4.17 (the "NET PROCEEDS OFFER AMOUNT") or, if less than the Net Proceeds
Offer Amount has been so validly tendered, all Notes and Pari Passu Indebtedness
validly tendered in response to the Net Proceeds Offer.
Upon the commencement of a Net Proceeds Offer, the Issuer shall send
(or cause to be sent), by first class mail, a notice to the Trustee and to each
Holder at its registered address. The notice shall contain all instructions and
materials necessary to enable such Holder to tender Notes pursuant to the Net
Proceeds Offer. Any Net Proceeds Offer shall be made to all Holders. The notice,
which shall govern the terms of the Net Proceeds Offer, shall state:
(1) that the Net Proceeds Offer is being made pursuant to this Section
4.17;
(2) the Net Proceeds Offer Amount and the Net Proceeds Purchase Date;
(3) that any Notes not tendered or accepted for payment shall continue
to accrue interest;
(4) that, unless the Issuer and the Co-Issuer default in making such
payment, any Notes accepted for payment pursuant to the Net Proceeds Offer
shall cease to accrue interest after the Net Proceeds Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to a Net
Proceeds Offer shall be required to surrender the Note, with the form
entitled "Option of Holder To Elect Purchase" on the reverse of the Notes
completed, or transfer by book-entry transfer, to the Issuer, a depository,
if appointed by the Issuer, or the Paying Agent at the address specified in
the notice at least three days before the Net Proceeds Purchase Date;
(6) that Holders shall be entitled to withdraw their election if the
Issuer, the Depository or the Paying Agent, as the case may be, receives,
not later than the second Business Day prior to the Net Proceeds Purchase
Date, a notice 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;
(7) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Net Proceeds Offer Amount, the Issuers shall select the
Notes to be
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purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Issuer so that only Notes in denominations of $2,000, or
integral multiples thereof, shall be purchased);
(8) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer); and
(9) all other procedures, if any, determined by the Issuer, consistent
with this Indenture, that a Holder must follow in order to have its Notes
purchased in the Net Proceeds Offer.
If the purchase date of Notes pursuant to a Net Proceeds Offer 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
Net Proceeds Offer.
In the event of the transfer of substantially all (but not all) of the
assets of the Issuer and the Restricted Subsidiaries as an entirety to a Person
in a transaction covered by and effected in accordance with Section 5.01, the
successor shall be deemed to have sold for cash at Fair Market Value the assets
of the Issuer and the Restricted Subsidiaries not so transferred for purposes of
this Section 4.17, and the successor shall comply with the provisions of this
Section 4.17 with respect to such deemed sale as if it were an Asset Sale (with
such Fair Market Value being deemed to be Net Available Proceeds for such
purpose).
The Issuer and the Co-Issuer shall comply with applicable tender offer
rules, including the requirements of Rule 14e-1 under the Exchange Act, and any
other applicable laws and regulations in connection with the purchase of Notes
pursuant to a Net Proceeds Offer. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.17, the Issuer and
the Co-Issuer shall comply with the applicable securities laws and regulations
and will not be deemed to have breached its obligations under this Section 4.17
by virtue of this compliance.
SECTION 4.18. Limitations on Designation of Unrestricted Subsidiaries.
The Issuer may designate any Subsidiary (including any newly formed or
newly acquired Subsidiary) of the Issuer (other than the Co-Issuer) as an
"Unrestricted Subsidiary" under this Indenture (a "DESIGNATION"), provided that:
(1) no Default shall have occurred and be continuing at the time of or
after giving effect to such Designation; and
(2) the Issuer would be permitted to make, at the time of such
Designation, (a) a Permitted Investment or (b) an Investment pursuant to
Section 4.12, in either case, in an amount (the "DESIGNATION AMOUNT") equal
to the Fair Market Value of the Issuer's proportionate interest in such
Subsidiary on such date.
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No Subsidiary shall be Designated as an "Unrestricted Subsidiary"
unless such Subsidiary:
(1) has no Indebtedness other than Permitted Unrestricted Subsidiary
Debt, except to the extent that credit support of, or guarantee by, the
Issuer or any Restricted Subsidiary may be incurred as Indebtedness and as
an Investment under this Indenture;
(2) is not party to any agreement, contract, arrangement or
understanding with the Issuer or any Restricted Subsidiary unless the terms
of the agreement, contract, arrangement or understanding are no less
favorable in any material respect to the Issuer or the Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Issuer or such Restricted Subsidiary; and
(3) is a Person with respect to which neither the Issuer nor any
Restricted Subsidiary has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
the Person's financial condition or to cause the Person to achieve any
specified levels of operating results, unless the maximum amount of such
obligation is treated as an Investment and such Investment is not
prohibited under this Indenture at the time of the giving of such
obligation.
If, at any time, any Unrestricted Subsidiary fails to meet the
preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of the Subsidiary, Liens on assets, agreements containing
Restrictions, Affiliate Transactions and Investments of such Subsidiary shall be
deemed to be incurred or made by a Restricted Subsidiary as of such date and, if
the Indebtedness is not permitted to be incurred or made under Section 4.10 or
the Lien is not permitted under Section 4.16 or the Investment is not permitted
to be made under Section 4.12 or the agreement containing such Restrictions is
not permitted under Section 4.14 or the Affiliate Transaction is not permitted
under Section 4.15 or such Subsidiary is otherwise not in compliance with this
Indenture, the Issuer shall be in default of the applicable covenant. The Issuer
may not designate the Co-Issuer as an Unrestricted Subsidiary.
The Issuer may redesignate an Unrestricted Subsidiary as a Restricted
Subsidiary (a "REDESIGNATION"; and "REDESIGNATE" shall have the correlative
meaning) only if:
(1) no Default shall have occurred and be continuing at the time of
and after giving effect to such Redesignation; and
(2) all Liens, Indebtedness and Investments of such Unrestricted
Subsidiary outstanding immediately following such Redesignation would, if
incurred or made at such time, have been permitted to be incurred or made
for all purposes of this Indenture.
All Designations and Redesignations must be evidenced by resolutions
of the Board of Directors of the Issuer, delivered to the Trustee certifying
compliance with the foregoing provisions.
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SECTION 4.19. Additional Note Guarantees.
If, after the Issue Date, (a) any Restricted Subsidiary (including any
newly formed, newly acquired or newly Redesignated Restricted Subsidiary)
guarantees any Indebtedness of the Issuer or (b) the Issuer otherwise elects to
have any Restricted Subsidiary become a Guarantor, then, in each such case, the
Issuer shall cause such Restricted Subsidiary to promptly:
(1) execute and deliver to the Trustee (a) a supplemental indenture in
form and substance satisfactory to the Trustee pursuant to which such
Restricted Subsidiary shall unconditionally guarantee all of the Issuers'
obligations under the Notes and this Indenture and (b) a notation of
guarantee in respect of its Note Guarantee; and
(2) deliver to the Trustee one or more Opinions of Counsel that such
supplemental indenture (a) has been duly authorized, executed and delivered
by such Restricted Subsidiary and (b) constitutes a valid and legally
binding obligation of such Restricted Subsidiary in accordance with its
terms.
The obligations of a Guarantor under its Note Guarantee shall be
limited as necessary to prevent its Note Guarantee from constituting a
fraudulent conveyance or fraudulent transfer under applicable law.
Thereafter, such Restricted Subsidiary shall be a Guarantor for all
purposes of this Indenture.
Notwithstanding the preceding paragraph, any Note Guarantee of a
Guarantor will provide by its terms that it will be automatically and
unconditionally released and discharged under the circumstances set forth in
Section 11.05. The form of the Note Guarantee is attached hereto as Exhibit E.
SECTION 4.20. Limitation on Activities of the Co-Issuer.
The Co-Issuer may not hold any material assets, become liable for any
material obligations, engage in any trade or business, or conduct any business
activity, other than (1) the issuance of its Equity Interests to the Issuer or
any Wholly Owned Restricted Subsidiary of the Issuer, (2) the incurrence of
Indebtedness as a co-obligor or guarantor, as the case may be, of the Notes, the
Credit Facilities and any other Indebtedness that is permitted to be incurred by
the Issuer under Section 4.10; provided, however, that the net proceeds of such
Indebtedness are not retained by the Co-Issuer, and (3) activities incidental
thereto. Neither the Issuer nor any Restricted Subsidiary shall engage in any
transactions with the Co-Issuer in violation of the immediately preceding
sentence.
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ARTICLE FIVE
MERGER AND CONSOLIDATION
SECTION 5.01. Limitations on Mergers, Consolidations, Etc.
The Issuer shall not, directly or indirectly, in a single transaction
or a series of related transactions, (a) consolidate or merge with or into
another Person (other than a merger that satisfies the requirements of clause
(1) below with a Wholly Owned Restricted Subsidiary solely for the purpose of
changing the Issuer's jurisdiction of formation to another state of the United
States or to change its status to a corporation), or sell, lease, transfer,
convey or otherwise dispose of or assign all or substantially all of the assets
of the Issuer or the Issuer and the Restricted Subsidiaries (taken as a whole)
or (b) Liquidate unless, in either case:
(1) either:
(a) the Issuer will be the surviving or continuing Person; or
(b) the Person formed by or surviving such consolidation or
merger or to which such sale, lease, conveyance or other disposition
shall be made (or, in the case of a Liquidation, any Person to which
assets are transferred) (collectively, the "SUCCESSOR") is a
corporation, limited liability company or limited partnership
organized and existing under the laws of any State of the United
States of America or the District of Columbia, and the Successor
expressly assumes, by supplemental indenture in form and substance
satisfactory to the Trustee, all of the obligations of the Issuer
under the Notes, this Indenture and the Registration Rights Agreement;
provided, however, that at any time the Successor is a limited
liability company or a limited partnership, there shall be a co-issuer
of the Notes that is a corporation;
(2) immediately prior to and immediately after giving effect to such
transaction and the assumption of the obligations as set forth in clause
(1)(b) above and the incurrence of any Indebtedness to be incurred in
connection therewith, and the use of any net proceeds therefrom on a pro
forma basis, no Default shall have occurred and be continuing; and
(3) immediately after giving effect to such transaction and the
assumption of the obligations set forth in clause (1)(b) above and the
incurrence of any Indebtedness to be incurred in connection therewith, and
the use of any net proceeds therefrom on a pro forma basis, the Issuer or
the Successor, as the case may be, could incur $1.00 of additional
Indebtedness pursuant to the Ratio Exception.
For purposes of this Section 5.01, any Indebtedness of the Successor
which was not Indebtedness of the Issuer immediately prior to the transaction
shall be deemed to have been incurred in connection with such transaction.
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The Co-Issuer shall not, directly or indirectly, in a single
transaction or a series of related transactions, (a) consolidate or merge with
or into another Person, or sell, lease, transfer, convey or otherwise dispose of
or assign all or substantially all of the assets of the Co-Issuer or (b)
Liquidate unless, in either case:
(1) either:
(a) the Co-Issuer will be the surviving or continuing Person; or
(b) the Person formed by or surviving such consolidation or
merger or to which such sale, lease, conveyance or other disposition
shall be made (or, in the case of a Liquidation, any Person to which
assets are transferred) (collectively, the "CO-ISSUER SUCCESSOR") is a
corporation organized and existing under the laws of any State of the
United States of America or the District of Columbia, and the
Co-Issuer Successor expressly assumes, by supplemental indenture in
form and substance satisfactory to the Trustee, all of the obligations
of the Co-Issuer under the Notes, this Indenture and the Registration
Rights Agreement; and
(2) immediately prior to and immediately after giving effect to such
transaction and the assumption of the obligations as set forth in clause
(1)(b) above, no Default shall have occurred and be continuing.
Except as provided in Section 11.05, no Guarantor may consolidate with
or merge with or into (whether or not such Guarantor is the surviving Person)
another Person, whether or not affiliated with such Guarantor, unless:
(1) either:
(a) such Guarantor will be the surviving or continuing Person; or
(b) the Person formed by or surviving any such consolidation or
merger is another Guarantor or assumes, by supplemental indenture in
form and substance satisfactory to the Trustee, all of the obligations
of such Guarantor under the Note Guarantee of such Guarantor, this
Indenture and the Registration Rights Agreement; and
(2) immediately after giving effect to such transaction and the
assumption of the obligations as set forth in clause (1)(b) above, no
Default shall have occurred and be continuing.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the assets of one or more Restricted Subsidiaries, the
Equity Interests of which constitute all or substantially all of the assets of
the Issuer, will be deemed to be the transfer of all or substantially all of the
assets of the Issuer.
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Upon any consolidation, combination or merger of the Issuer, the
Co-Issuer or a Guarantor, or any sale, lease, transfer, conveyance or other
disposition of all or substantially all of the assets of the Issuer or the
Co-Issuer in accordance with the foregoing, in which the Issuer, the Co-Issuer
or such Guarantor is not the continuing obligor under the Notes or its Note
Guarantee, as the case may be, the surviving entity formed by such consolidation
or into which the Issuer, the Co-Issuer or such Guarantor is merged or the
Person to which the sale, lease, transfer, conveyance or other disposition is
made will succeed to, and be substituted for, and may exercise every right and
power of, the Issuer, the Co-Issuer or such Guarantor, as the case may be, under
this Indenture, the Registration Rights Agreement, the Notes and the Note
Guarantees with the same effect as if such surviving entity had been named
therein as the Issuer, the Co-Issuer or such Guarantor and, except in the case
of a sale, lease, transfer, conveyance or other disposition, the Issuer, the
Co-Issuer or such Guarantor, as the case may be, will be released from the
obligation to pay the principal of and interest on the Notes or in respect of
its Note Guarantee, as the case may be, and all of the Issuer's, the Co-Issuer's
or such Guarantor's other obligations and covenants under the Notes, this
Indenture and its Note Guarantee, if applicable.
Notwithstanding the foregoing, any Restricted Subsidiary (other than
the Co-Issuer) may merge into, or sell, lease, transfer, convey or otherwise
dispose of all or substantially all of its assets to, the Issuer (with the
Issuer being the surviving or continuing Person, in the case of a merger) or
another Restricted Subsidiary, except that (X) a Guarantor and a non-Guarantor
Restricted Subsidiary may not merge or consolidate without complying with clause
(1) of the fourth paragraph of this Section 5.01 and (y) a Guarantor may not
sell, lease, transfer, convey or otherwise dispose of all or substantially all
of its assets to a non-Guarantor Restricted Subsidiary unless such non-Guarantor
Restricted Subsidiary assumes, by supplemental indenture in form and substance
satisfactory to the Trustee, all of the obligations of such Guarantor under the
Note Guarantee of such Guarantor, this Indenture and the Registration Rights
Agreement.
The Issuer and the Co-Issuer will deliver to the Trustee prior to the
consummation of each proposed transaction referred to in this Section 5.01 an
Officers' Certificate that the conditions set forth above are satisfied and an
Opinion of Counsel that the proposed transaction and the supplemental indenture,
if any, comply with this Indenture.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following is an Event of Default (each an "EVENT OF
DEFAULT"):
(1) failure by the Issuer and the Co-Issuer to pay interest on any of
the Notes when it becomes due and payable and the continuance of any such
failure for 30 days (whether or not such payment is prohibited by the
subordination provisions of this Indenture);
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(2) failure by the Issuer and the Co-Issuer to pay the principal on
any of the Notes when it becomes due and payable, whether at Stated
Maturity, upon redemption, upon purchase, upon acceleration or otherwise
(whether or not such payment is prohibited by the subordination provisions
of this Indenture);
(3) failure by the Issuer to comply with any of its agreements or
covenants of Section 5.01;
(4) failure by the Issuer to comply with any of its obligations under
Sections 4.05 or 4.08 through 4.20, inclusive (in each case, other than a
failure to purchase Notes which will constitute an Event of Default under
clause (2) above), for 30 days after notice of the failure has been given
to the Issuer by the Trustee or by the Holders of at least 25% of the
aggregate principal amount of the Notes then outstanding;
(5) failure by the Issuer to comply with any other agreement or
covenant in this Indenture and continuance of this failure for 60 days
after notice of the failure has been given to the Issuer by the Trustee or
by the Holders of at least 25% of the aggregate principal amount of the
Notes then outstanding;
(6) default under any mortgage, indenture or other instrument or
agreement under which there may be issued or by which there may be secured
or evidenced Indebtedness of the Issuer or any Restricted Subsidiary (other
than Indebtedness owed to the Issuer or any of its Restricted Subsidiaries
or Non-Recourse Indebtedness to the extent such default is not due to the
default by the Issuer or any Guarantor) whether such Indebtedness now
exists or is incurred after the Issue Date, which default:
(a) is caused by a failure to pay when due principal on such
Indebtedness within the applicable express grace period,
(b) results in the acceleration of such Indebtedness prior to its
express final maturity, or
(c) results in the commencement of judicial proceedings to
foreclose upon, or to exercise remedies under applicable law or
applicable security documents to take ownership of, the assets
securing such Indebtedness, and
in each case, the principal amount of such Indebtedness, together with any
other Indebtedness with respect to which an event described in clause (a),
(b) or (c) has occurred and is continuing, aggregates $5.0 million or more;
(7) one or more judgments or orders (except to the extent such
judgments or orders are in respect of Non-Recourse Indebtedness) that
exceed $5.0 million in the aggregate (net of amounts covered by insurance
or bonded) for the payment of money have been entered by a court or courts
of competent jurisdiction against the Issuer or any Restricted Subsidiary
and such judgment or judgments have not been satisfied, stayed, annulled or
rescinded within 90 days of being entered;
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(8) the Issuer, the Co-Issuer or any Significant Subsidiary pursuant
to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an
involuntary case,
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its assets, or
(d) makes a general assignment for the benefit of its creditors;
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against the Issuer, the Co-Issuer or any
Significant Subsidiary as debtor in an involuntary case,
(b) appoints a Custodian of the Issuer, the Co-Issuer or any
Significant Subsidiary or a Custodian for all or substantially all of
the assets of the Issuer, the Co-Issuer or any Significant Subsidiary,
or
(c) orders the liquidation of the Issuer, the Co-Issuer or any
Significant Subsidiary,
and the order or decree remains unstayed and in effect for 90 days; or
(10) any Note Guarantee of any Significant Subsidiary ceases to be in
full force and effect (other than in accordance with the terms of such Note
Guarantee and this Indenture) or is declared null and void and
unenforceable or found to be invalid or any Guarantor denies its liability
under its Note Guarantee (other than by reason of release of a Guarantor
from its Note Guarantee in accordance with the terms of this Indenture and
the Note Guarantee).
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
clause (8) or (9) of Section 6.01 with respect to the Issuer) shall have
occurred and be continuing under this Indenture, the Trustee, by written notice
to the Issuer, or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding by written notice to the Issuer and the Trustee, may
declare all amounts owing under the Notes to be due and payable immediately.
Upon such declaration of acceleration, the aggregate principal of and accrued
and unpaid interest on the
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outstanding Notes shall immediately become due and payable; provided, however,
that after such acceleration, but before a judgment or decree based on
acceleration, the Holders of a majority in aggregate principal amount of such
outstanding Notes may rescind and annul such acceleration if all Events of
Default, other than the nonpayment of accelerated principal and interest, have
been cured or waived as provided in this Indenture; provided the Trustee has
been paid its reasonable compensation due under this Indenture and reimbursed
for its reasonable expenses and disbursements in accordance with this Indenture.
If an Event of Default specified in clause (8) or (9) of Section 6.01 with
respect to the Issuer occurs, all outstanding Notes shall become due and payable
without any further action or notice.
SECTION 6.03. Other Remedies.
If a Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon a Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
The Holders of a majority in principal amount of the outstanding Notes
by notice to the Trustee may (a) waive, by their consent (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes), an existing Default or Event of Default and its
consequences, except a Default or Event of Default in the payment of the
principal of, or premium, if any, or interest on a Note, and (b) rescind any
such acceleration with respect to the Notes and its consequences if (1)
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (2) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and interest on the Notes that
have become due solely by such declaration of acceleration, have been cured or
waived. When a Default or Event of Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any consequent right.
SECTION 6.05. Control by Majority.
The Holders of not less than a majority in principal amount of the
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. Subject to Section 7.01, however, the Trustee may refuse
to follow any direction that conflicts with any law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another
Noteholder, or that may involve the Trustee in personal liability; provided that
the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
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In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
against any loss or expense caused by taking such action or following such
direction.
SECTION 6.06. Limitation on Suits.
Except to enforce the right to receive payment of principal, premium,
if any, or interest when due, no Holder may pursue any remedy with respect to
this Indenture or the Notes unless:
(1) such Holder has previously given the Trustee notice that an Event
of Default is continuing;
(2) Holders of at least 25% in principal amount of outstanding Notes
have requested the Trustee to pursue the remedy;
(3) such Holders have offered the Trustee security or indemnity
satisfactory to it against any loss, liability or expense;
(4) the Trustee has not complied with such request within 30 days
after the receipt of the request and the offer of security or indemnity;
and
(5) the Holders of a majority in principal amount of the outstanding
Notes have not given the Trustee a direction that, in the opinion of the
Trustee, is inconsistent with such request within such 30-day period.
A Noteholder may not use this Indenture to affect, disturb or
prejudice the rights of another Noteholder or to obtain a preference or priority
over such other Noteholder (it being understood that the Trustee does not have
an affirmative duty to ascertain whether or not such actions or forbearances are
unduly prejudicial to such Noteholders).
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Note, on or
after the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If a Default in payment of principal or interest specified in Section
6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Issuers or any other
obligor on the Notes for the whole amount of principal and accrued interest and
fees remaining unpaid, together with interest on overdue principal and, to the
extent that payment of such interest is lawful, interest on overdue installments
of interest, in each case at the rate per annum borne by the Notes and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the
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reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and the Noteholders allowed in
any judicial proceedings relating to the Issuers, their respective creditors or
their respective property and shall be entitled and empowered to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same, and any Custodian in any such judicial proceedings
is hereby authorized by each Noteholder 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 Noteholders, to pay to the Trustee any amount due to it for the
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such proceeding. The Trustee shall be
entitled to participate as a member of any official committee of creditors in
the matters as it deems necessary or advisable.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for interest accrued on the Notes, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for interest;
Third: to Holders for principal amounts due and unpaid on the Notes,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal; and
Fourth: to the Issuers or, if applicable, the Guarantors, as their
respective interests may appear.
The Trustee, upon prior notice to the Issuer, may fix a record date
and payment date for any payment to Noteholders pursuant to this Section 6.10.
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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 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 and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than
10% in principal amount of the outstanding Notes.
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 person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth herein or in the TIA and no duties, covenants, responsibilities or
obligations shall be implied in this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates (including Officers'
Certificates) or opinions (including Opinions of Counsel) furnished to the
Trustee and conforming to the requirements of this Indenture. However, in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).
(c) Notwithstanding anything to the contrary herein, the Trustee may
not be relieved from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
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(2) 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.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any liability in the performance of any
of its duties hereunder or to take or omit to take any action under this
Indenture or take any action at the request or direction of Holders if it shall
have reasonable grounds for believing that repayment of such funds is not
assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to this Section
7.01.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely conclusively on any document believed by it
to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both, which shall
conform to the provisions of Section 12.05. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent or attorney
(other than an agent who is an employee of the Trustee) appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel of its selection and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
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(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security
or indemnity reasonably satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate (including any
Officers' Certificate), statement, instrument, opinion (including any
Opinion of Counsel), notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit.
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as duties.
(j) The Trustee shall not be deemed to have notice of any Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and
such notice references the Notes and this Indenture.
(k) The rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
(l) In no event shall the Trustee be responsible or liable for
special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(m) The Trustee may request that the Issuer and/or the Co-Issuer
deliver an Incumbency Certificate, substantially in the form of Exhibit F
hereto, or such other form as is reasonably acceptable to the Trustee,
setting forth the names of individuals and/or titles of Officers authorized
at such time to take specified actions pursuant to this Indenture.
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 otherwise deal with the Issuers, their
respective Subsidiaries or their respective Affiliates with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
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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, it shall not be
accountable for the Issuers' use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuers in this Indenture or any
document issued in connection with the sale of Notes or any statement in the
Notes other than the Trustee's certificate of authentication. The Trustee makes
no representations with respect to the effectiveness or adequacy of this
Indenture.
SECTION 7.05. Notice of Default.
The Trustee shall, within 60 days after the occurrence of any Default
with respect to the Notes, give the Holders notice of all uncured Defaults
thereunder known to it; provided, however, that, except in the case of an Event
of Default in payment with respect to the Notes or a Default in complying with
Section 5.01, the Trustee shall be protected in withholding such notice if and
so long as a committee of its Responsible Officers in good faith determines that
the withholding of such notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with May 15, 2006, the
Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Noteholder a brief report dated as of such date that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Sections 313(b), 313(c)
and 313(d).
A copy of each report at the time of its mailing to Noteholders shall
be mailed to the Issuer and filed with the SEC and each securities exchange, if
any, on which the Notes are listed.
The Issuer shall notify the Trustee if the Notes become listed on any
securities exchange or of any delisting thereof and the Trustee shall comply
with TIA Section 313(d).
SECTION 7.07. Compensation and Indemnity.
The Issuers and the Guarantors agree jointly and severally to pay to
the Trustee from time to time such compensation as the Issuer and the Trustee
shall from time to time agree in writing for its services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuers and the Guarantors shall reimburse the
Trustee and Agents upon request for all reasonable disbursements, expenses and
advances (including reasonable fees and expenses of counsel) incurred or made by
any of them in addition to the compensation for their services, except any such
disbursements, expenses and advances as may be attributable to the Trustee's
negligence, bad faith or willful misconduct. Such expenses shall include the
reasonable fees and expenses of the Trustee's agents and counsel.
The Issuers and the Guarantors agree jointly and severally to
indemnify each of the Trustee or any predecessor Trustee and its agents,
employees, officers, stockholders and
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directors for, and hold them harmless against, any and all loss, damage, claims
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee), liability or expense incurred by them except for such
actions to the extent caused by any negligence, bad faith or willful misconduct
on their part, arising out of or in connection with the acceptance or
administration of this trust including the reasonable costs and expenses of
defending themselves against or investigating any claim or liability in
connection with the exercise or performance of any of the Trustee's rights,
powers or duties hereunder. The Trustee shall notify the Issuer promptly of any
claim asserted against the Trustee or any of its agents, employees, officers,
stockholders and directors for which it may seek indemnity. The Issuer may,
subject to the approval of the Trustee (which approval shall not be unreasonably
withheld), defend the claim and the Trustee shall cooperate in the defense. The
Trustee and its agents, employees, officers, stockholders and directors subject
to the claim may have one firm of separate counsel and the Issuers and the
Guarantors shall pay the reasonable fees and expenses of such counsel; provided,
however, that the Issuers and the Guarantors will not be required to pay fees
and expenses of such separate counsel if, subject to the approval of the Trustee
(which approval shall not be unreasonably withheld), they assume the Trustee's
defense and there is no conflict of interest between the Issuers and the
Guarantors, on the one hand, and the Trustee and its agents, employees,
officers, stockholders and directors subject to the claim, on the other hand, in
connection with such defense as reasonably determined by the Trustee and there
is no legal defense available to the Trustee that is different from or in
addition to those available to the Issuers and/or the Guarantors. The Issuers
and the Guarantors need not pay for any settlement made without their written
consent. The Issuer and the Guarantors need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the payment obligations of the Issuers and the Guarantors in
this Section 7.07, the Trustee shall have a senior claim prior to the Notes
against all money or property held or collected by the Trustee, in its capacity
as Trustee. The obligations of the Issuers and the Guarantors under this Section
shall not be subordinated to the payment of Senior Debt pursuant to Article Ten
or Section 11.02 except assets or money held in trust to pay principal of or
interest on particular Notes.
When the Trustee incurs expenses or renders services after a Default
specified in Section 6.01(8) or (9) occurs, such expenses and the compensation
for such services shall be paid to the extent allowed under any Bankruptcy Law.
Notwithstanding any other provision in this Indenture, the foregoing
provisions of this Section 7.07 shall survive the satisfaction and discharge of
this Indenture or the appointment of a successor Trustee.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Issuer in
writing. The Holders of a majority in principal amount of the outstanding Notes
may remove the Trustee by so notifying the Issuer and the Trustee and may
appoint a successor Trustee. The Issuer may remove the Trustee if:
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(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuer shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Issuer.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.07, 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. A successor Trustee shall mail notice of its succession to each
Noteholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee at the expense of the Issuer.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuers' obligations under Section 7.07 shall continue for the benefit
of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or national association, the resulting, surviving or transferee
corporation without any further act shall, if such resulting, surviving or
transferee corporation or national association is otherwise eligible hereunder,
be the successor Trustee; provided that such corporation or national association
shall be otherwise qualified and eligible under this Article Seven.
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SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee
shall have a combined capital and surplus of at least $100,000,000 as set forth
in its most recent published annual report of condition. In addition, if the
Trustee is a corporation included in a bank holding company system, the Trustee,
independently of the bank holding company, shall meet the capital requirements
of TIA Section 310(a)(2). The Trustee shall comply with TIA Section 310(b);
provided, however, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Issuers
are outstanding, if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met. The provisions of TIA Section 310 shall apply to the Issuers
and any other obligor of the Notes.
SECTION 7.11. Preferential Collection of Claims Against the Issuers.
The Trustee, in its capacity as Trustee hereunder, shall comply with
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.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Indenture.
The Issuers may terminate their obligations and the obligations of the
Guarantors under the Notes, the Note Guarantees and this Indenture, except the
obligations referred to in the last paragraph of this Section 8.01, if:
(1) all the Notes that have been authenticated and delivered (except
lost, stolen or destroyed Notes which have been replaced or paid and Notes
for whose payment money has been deposited in trust or segregated and held
in trust by the Issuer and thereafter repaid to the Issuer or discharged
from this trust) have been delivered to the Trustee for cancellation, or
(2) (a) all Notes not delivered to the Trustee for cancellation
otherwise (i) have become due and payable or will become due and payable
within one year or (ii) will be called for redemption within one year under
arrangements satisfactory to the Trustee or have been called for redemption
in accordance with Article Three hereof, and, in any case, the Issuers have
irrevocably deposited or caused to be deposited with the Trustee trust
funds in trust, solely for the benefit of the Holders, U.S. Legal Tender,
U.S. Government Obligations or a combination thereof, in such amounts as
will be sufficient (without consideration of any reinvestment of interest)
to pay and discharge the entire Indebtedness (including all principal and
accrued interest) on the Notes not theretofore delivered to the Trustee for
cancellation,
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(b) the Issuer and the Co-Issuer have paid all sums payable by them
under this Indenture, and
(c) the Issuer and the Co-Issuer have delivered irrevocable
instructions to the Trustee to apply the deposited money toward the payment
of the Notes at maturity or on the date of redemption, as the case may be.
In addition, in the case of clause (2), the Issuer must deliver an
Officers' Certificate and an Opinion of Counsel (as to legal matters) stating
that all conditions precedent to satisfaction and discharge have been complied
with. After such delivery or irrevocable deposit, the Trustee shall acknowledge
in writing the discharge of the Issuers' and the Guarantors' obligations under
the Notes, the Note Guarantees and this Indenture except for those surviving
obligations specified below.
Subject to the next sentence and notwithstanding the foregoing
paragraph, in the case of clause (2), the Issuers' respective obligations in
Sections 2.05 (with respect to the Issuer only), 2.06, 2.07, 4.01, 4.02, 4.03
(with respect to the Issuers only), 7.07, 8.05 and 8.06 shall survive until the
Notes are no longer outstanding pursuant to the last paragraph of Section 2.08.
After the Notes are no longer outstanding, the Issuers' respective obligations
in Sections 7.07, 8.05 and 8.06 shall survive.
SECTION 8.02. Legal Defeasance.
The Issuers may, at their option and at any time, by Board Resolutions
of the Boards of Directors of the Issuer and the Co-Issuer, be discharged from
their obligations with respect to the Notes and have the Guarantors be
discharged from their obligations under the Note Guarantees on the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, such Legal Defeasance means that the Issuers
shall be deemed to have paid and discharged the entire indebtedness represented
by the Notes and to have satisfied all their other obligations under such Notes
and this Indenture insofar as such Notes are concerned and all obligations of
the Guarantors under the Note Guarantees and this Indenture shall be deemed
satisfied and discharged (and the Trustee, at the expense of the Issuers, shall,
subject to Section 8.06, execute instruments in form and substance reasonably
satisfactory to the Trustee and Issuers acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of outstanding Notes to receive solely from
the trust funds described in Section 8.05 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 Issuers' obligations with
respect to such Notes under Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08,
2.09, 2.10, 2.11, 4.02 and 4.03 (with respect to the Issuers only), (C) the
rights, powers, trusts, duties, and immunities of the Trustee hereunder
(including claims of, or payments to, the Trustee under or pursuant to Section
7.07) and (D) the provisions of this Article Eight applicable to Legal
Defeasance. Subject to compliance with this Article Eight, the Issuers may
exercise their option under this Section 8.02 with respect to the Notes
notwithstanding the prior exercise of their option under Section 8.03 with
respect to the Notes.
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SECTION 8.03. Covenant Defeasance.
At the option of the Issuers at any time, pursuant to Board
Resolutions of the Boards of Directors of the Issuer and the Co-Issuer, (x) the
Issuers and the Guarantors shall be released from their respective obligations
under Sections 4.03 (other than with respect to the legal existence of the
Issuers), 4.04, 4.05, 4.08 through 4.20, inclusive, clause (3) of the first
paragraph of Section 5.01 and Article Eleven hereof and (y) Sections 6.01(6),
(7), (8) and (9) (provided that notwithstanding anything contained herein to the
contrary, Sections 6.01(8) and (9) shall in no event cease to apply prior to the
date that is 91 days following the deposit referred to in Section 8.04(1)) shall
no longer apply with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, "COVENANT
DEFEASANCE"). For this purpose, such Covenant Defeasance means that the Issuers
and the Guarantors may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section or portion thereof, whether directly or indirectly, by reason of any
reference elsewhere herein to any such specified Section or portion thereof or
by reason of any reference in any such specified Section or portion thereof to
any other provision herein or in any other document (and such omission to comply
shall not constitute an Event of Default under Section 6.01), but the remainder
of this Indenture and the Notes shall be unaffected thereby.
SECTION 8.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of Section 8.02
or Section 8.03 to the outstanding Notes:
(1) the Issuers must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender, U.S. Government
Obligations or a combination thereof, in such amounts as will be sufficient
(without reinvestment) in the opinion of a nationally recognized firm of
independent public accountants selected by the Issuer, to pay the principal
of and interest on the Notes on the stated date for payment or on the
Redemption Date of the principal or installment of principal of or interest
on the Notes,
(2) in the case of Legal Defeasance, the Issuers shall have delivered
to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that:
(a) the Issuers have received from, or there has been published
by the Internal Revenue Service, a ruling, or
(b) since the Issue Date, there has been a change in the
applicable U.S. federal income tax law,
in either case to the effect that the Holders will not recognize income,
gain or loss for U.S. federal income tax purposes as a result of the Legal
Defeasance and will be subject to U.S. 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,
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(3) in the case of Covenant Defeasance, the Issuers shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for U.S. federal income tax purposes as a
result of such Covenant Defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if the Covenant Defeasance had not occurred,
(4) no Default shall have occurred and be continuing on the date of
such deposit (other than a Default resulting from the borrowing of funds to
be applied to such deposit and the grant of any Lien securing such
borrowing),
(5) the Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a Default under, this Indenture or a
default under any other material agreement or instrument to which the
Issuer, the Co-Issuer or any of their respective Subsidiaries is a party or
by which the Issuer, the Co-Issuer or any of their respective Subsidiaries
is bound (other than any such Default or default resulting solely from the
borrowing of funds to be applied to such deposit),
(6) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by them with the intent
of preferring the Holders over any other of their creditors or with the
intent of defeating, hindering, delaying or defrauding any other of their
creditors or others, and
(7) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that the conditions
provided for in, in the case of the Officers' Certificate, clauses (1)
through (6) and, in the case of the Opinion of Counsel, clauses (2) and/or
(3) and (5) of this paragraph have been complied with.
If the funds deposited with the Trustee to effect Covenant Defeasance
are insufficient to pay the principal of and interest on the Notes when due,
then the Issuers' obligations and the obligations of Guarantors under this
Indenture will be revived and no such defeasance will be deemed to have
occurred.
SECTION 8.05. Deposited Money and U.S. Government Obligations To Be Held in
Trust; Other Miscellaneous Provisions.
All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 8.04 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, to the Holders of such Notes, of
all sums due and to become due thereon in respect of principal, premium, if any,
and accrued interest, but such money need not be segregated from other funds
except to the extent required by law.
The Issuers shall (on a joint and several basis) pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the
U.S. Government Obligations deposited pursuant to Section 8.04 or the principal,
premium, if any, and interest
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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 Issuer from time to time any money, U.S.
Legal Tender or U.S. Government Obligations held by it as provided in Section
8.04 which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money, U.S.
Legal Tender or U.S. Government Obligations in accordance with this Article
Eight by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuers' and each Guarantor's respective
obligations under this Indenture, the Notes and the Note Guarantees shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article Eight until such time as the Trustee or Paying Agent is permitted to
apply all such money, U.S. Legal Tender or U.S. Government Obligations in
accordance with this Article Eight; provided that if the Issuers or the
Guarantors have made any payment of principal of, premium, if any, or accrued
interest on any Notes because of the reinstatement of their obligations, the
Issuers or the Guarantors, as the case may be, shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money, U.S. Legal
Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
SECTION 8.07. Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon written demand of the Issuer, be paid to the Trustee, or if
sufficient moneys have been deposited pursuant to Section 8.04, to the Issuer
(or, if such moneys had been deposited by the Co-Issuer or the Guarantors, to
such Co-Issuer or Guarantors), and thereupon such Paying Agent shall be released
from all further liability with respect to such moneys.
SECTION 8.08. Moneys Held by Trustee.
Subject to applicable law, any moneys deposited with the Trustee or
any Paying Agent or then held by the Issuers or the Guarantors in trust for the
payment of the principal of, or premium, if any, or interest on any Note that
are not applied but remain unclaimed by the Holder of such Note for two years
after the date upon which the principal of, or premium, if any, or interest on
such Note shall have respectively become due and payable shall, upon request, be
repaid to the Issuer (or, if appropriate, the Co-Issuer or the Guarantors), or
if such moneys are then held by the Issuer, the Co-Issuer or the Guarantors in
trust, such moneys shall be released from such trust; and the Holder of such
Note entitled to receive such payment shall thereafter, as an unsecured general
creditor, look only to the Issuer, the Co-Issuer and the Guarantors for the
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust
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money shall thereupon cease; provided, that the Trustee or any such Paying
Agent, before being required to make any such repayment, may, at the expense of
the Issuer, the Co-Issuer and the Guarantors, either mail to each Holder
affected, at the address shown in the register of the Notes maintained by the
Registrar pursuant to Section 2.03, or cause to be published once a week for two
successive weeks, in a newspaper published in the English language, customarily
published each Business Day and of general circulation in the City of New York,
New York, a 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
mailing or publication, any unclaimed balance of such moneys then remaining will
be repaid to the Issuers. After payment to the Issuer, the Co-Issuer or the
Guarantors or the release of any money held in trust by the Issuer, the
Co-Issuer or any Guarantors, as the case may be, Holders entitled to the money
must look only to the Issuer, the Co-Issuer and the Guarantors for payment as
general creditors unless applicable abandoned property law designates another
Person.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Issuer, the Co-Issuer, the Guarantors and the Trustee may amend,
waive or supplement this Indenture, the Note Guarantees or the Notes without
consent of any Holder:
(1) to provide for the assumption of the Issuer's, the Co-Issuer's or
a Guarantor's obligations to the Holders pursuant to Section 5.01;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) cure any ambiguity, omission, defect or inconsistency;
(4) to add guarantees with respect to the Notes or release any
Guarantor from any of its obligations under its Note Guarantee or this
Indenture (to the extent permitted by this Indenture);
(5) to secure the Notes;
(6) to add covenants of the Issuer or the Co-Issuer for the benefit of
the Holders or surrender any right or power conferred upon the Issuer or
the Co-Issuer;
(7) to provide for the issuance of Exchange Notes and Note Guarantees
in respect thereof;
(8) to maintain the qualification of this Indenture under the TIA; or
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(9) to make any other change that does not materially adversely affect
the rights of any Holder hereunder.
The Trustee is hereby authorized to join with the Issuer, the
Co-Issuer and the Guarantors in the execution of any supplemental indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which adversely affects its own rights, duties or immunities under this
Indenture.
SECTION 9.02. With Consent of Holders.
This Indenture or the Notes may be amended with the consent (which may
include consents obtained in connection with a tender offer or exchange offer
for Notes) of the Holders of at least a majority in aggregate principal amount
of the Notes then outstanding, and any existing Default under, or compliance
with any provision of, this Indenture may be waived (other than any continuing
Default in the payment of the principal or interest on the Notes) with the
consent (which may include consents obtained in connection with a tender offer
or exchange offer for Notes) of the Holders of a majority in aggregate principal
amount of the Notes then outstanding; provided, however, that:
(a) no such amendment may, without the consent of the Holders of
two-thirds in aggregate principal amount of Notes then outstanding, amend
the obligations of the Issuer and the Co-Issuer under Section 4.09 or the
related definitions that could adversely affect the rights of any Holder;
and
(b) without the consent of each Holder affected, the Issuer and the
Trustee may not (with respect to Notes held by a non-consenting Holder):
(1) change the maturity of the Notes;
(2) reduce the amount, extend the due date or otherwise affect
the terms of any scheduled payment of interest on or principal of the
Notes;
(3) reduce any premium payable upon redemption of the Notes,
change the date on which any Notes are subject to redemption or
otherwise alter the provisions with respect to the redemption of the
Notes;
(4) make any Note payable in money or currency other than that
stated in the Notes;
(5) modify or change any provision of this Indenture or the Notes
or the related definitions affecting the subordination or ranking of
the Notes or any Note Guarantee in a manner that adversely affects the
Holders;
(6) reduce the principal amount of Notes whose Holders must
consent to an amendment or waiver to this Indenture or the Notes;
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(7) waive a Default in the payment of principal of or premium or
interest on any Notes (except a rescission of acceleration of the
Notes by Holders thereof as provided in this Indenture and a waiver of
the payment default that resulted from such acceleration);
(8) impair the rights of Holders to receive payments of principal
of or interest on the Notes on or after the due date thereof or to
institute suit for the enforcement of any payment on the Notes;
(9) release any Guarantor from any of its obligations under its
Note Guarantee or this Indenture, except as permitted by this
Indenture; or
(10) make any change in this Section 9.02.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Issuer shall mail to the Holders a notice briefly
describing the amendment, supplement or waiver.
Upon the written request of the Issuers, accompanied by Board
Resolutions of each Issuer authorizing the execution of any such supplemental
indenture, and upon the receipt by the Trustee of evidence reasonably
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, the Trustee
shall join with the Issuer, the Co-Issuer and the Guarantors in the execution of
such supplemental indenture unless such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture, in which case
the Trustee may, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
SECTION 9.03. Compliance with TIA.
From the date on which this Indenture is qualified under the TIA,
every amendment, waiver or supplement of this Indenture, the Notes or the Note
Guarantees shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder may revoke the consent as to
his Note or portion of his Note by notice to the Trustee or the Issuer received
before the date on which such amendment, supplement or waiver becomes effective.
An amendment, supplement or waiver becomes effective in accordance with the
terms thereof (or if silent as to effectiveness, on the date on which the
Trustee receives an Officers' Certificate
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certifying that the Holders of the requisite principal amount of Notes have
consented (and not theretofore revoked such consent) to such amendment,
supplement or waiver) and thereafter binds every Holder.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date. The Issuer shall inform the Trustee in writing of the fixed
record date if applicable.
After an amendment, supplement or waiver becomes effective, it shall
bind every Noteholder, unless it makes a change described in any of clauses (1)
through (10) of Section 9.02(b), in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal of and interest
on a Note, on or after the respective due dates therefor, or to bring suit for
the enforcement of any such payment on or after such respective dates without
the consent of such Holder.
SECTION 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Issuer and/or Co-Issuer may require the Holder of the Note to deliver it to the
Trustee. The Issuer and the Co-Issuer shall provide the Trustee with an
appropriate notation on the Note about the changed terms and cause the Trustee
to return it to the Holder at the Issuers' expense. Alternatively, if the
Issuers or the Trustee so determines, the Issuers in exchange for the Note shall
issue and the Trustee shall authenticate a new Note that reflects the changed
terms. 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 shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in conclusively relying upon, an Opinion of Counsel and an Officers'
Certificate, each stating that the execution of any amendment, supplement or
waiver is authorized or permitted by this Indenture and constitutes the legal,
valid and binding obligation of the Issuer and the Co-Issuer, enforceable in
accordance with its terms, and that all conditions precedent to the execution of
such amendment, supplement or waiver have been complied with. Such Opinion of
Counsel shall be at the expense of the Issuers.
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ARTICLE TEN
SUBORDINATION OF NOTES
SECTION 10.01. Notes Subordinated to Senior Debt.
Anything herein to the contrary notwithstanding, each Issuer, for
itself and its successors, and each Holder, by his or her acceptance of Notes,
agrees that the payment of all Obligations owing to the Holders in respect of
the Notes is subordinated, to the extent and in the manner provided in this
Article Ten, to the prior payment in full in cash or cash equivalents, or such
payment duly provided for to the satisfaction of the holders of Senior Debt, of
all Obligations due in respect of Senior Debt (including the Obligations with
respect to the Credit Facilities, whether outstanding on the Issue Date or
thereafter incurred). Notwithstanding anything contained in this Article Ten to
the contrary, payments and distributions (A) of Permitted Junior Securities and
(B) made relating to the Notes from the trust established pursuant to Article
Eight shall not be so subordinated in right of payment, so long as, with respect
to (B), (i) the conditions specified in Article Eight (without any waiver or
modification of the requirement that the deposits pursuant thereto do not
conflict with the terms of the Credit Facilities or any other Senior Debt) are
satisfied on the date of any deposit pursuant to said trust and (ii) such
payments and distributions did not violate the provisions of this Article Ten or
Section 11.02 of this Indenture when made.
This Article Ten shall constitute a continuing offer to all Persons
who become holders of, or continue to hold, Senior Debt, and such provisions are
made for the benefit of the holders of Senior Debt and such holders are made
obligees hereunder and any one or more of them may enforce such provisions.
SECTION 10.02. Suspension of Payment When Senior Debt Is in Default.
(a) If any default occurs and is continuing in the payment when due
(after any applicable grace period), whether at maturity, upon any redemption,
by declaration or otherwise, of any principal of, interest on, unpaid drawings
for letters of credit issued in respect of, or fees with respect to, any Senior
Debt (a "PAYMENT DEFAULT"), then no payment or distribution of any kind or
character (other than in Permitted Junior Securities) shall be made by or on
behalf of the Issuer, the Co-Issuer or any other Person on its or their behalf
with respect to any Obligations on or relating to the Notes or to acquire any of
the Notes for cash or assets or otherwise until the date on which all such
defaults are cured or waived.
(b) If any other event of default (other than a Payment Default)
occurs and is continuing with respect to any Designated Senior Debt (as such
event of default is defined in the instrument creating or evidencing such
Designated Senior Debt) permitting the holders of such Designated Senior Debt
then outstanding to accelerate the maturity thereof (a "NON-PAYMENT DEFAULT")
and if the Representative for the respective issue of Designated Senior Debt
gives notice of the Non-Payment Default to the Trustee stating that such notice
is a payment blockage notice (a "PAYMENT BLOCKAGE NOTICE"), then during the
period (the "PAYMENT BLOCKAGE PERIOD") beginning upon the delivery of such
Payment Blockage Notice and ending on the
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earlier of (1) 179 days after the date on which the applicable Payment Blockage
Notice is received, (2) the date on which all such Non-Payment Defaults have
been cured or waived or cease to exist and (3) the date on which the Trustee
receives notice thereof from the Representative for the respective issue of
Designated Senior Debt terminating the Payment Blockage Period, unless the
maturity of any Designated Senior Debt has been accelerated, neither the Issuer
nor the Co-Issuer shall (x) make any payment of any kind or character with
respect to any Obligations on or with respect to the Notes or (y) acquire any of
the Notes for cash or assets or otherwise. Notwithstanding anything herein to
the contrary, no new Payment Blockage Notice may be delivered unless and until
360 days have elapsed since the effectiveness of the immediately prior Payment
Blockage Notice and at least 181 consecutive days have elapsed during such
360-day period during which no Payment Blockage Notice was in effect. For all
purposes of this Section 10.02(b), no Non-Payment Default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Debt shall be, or be made, the basis for the
commencement of a second Payment Blockage Period by the Representative of such
Designated Senior Debt whether or not within a period of 360 consecutive days,
unless such Non-Payment Default shall have been cured or waived for a period of
not less than 90 consecutive days. Any subsequent action, or any breach of any
financial covenants for a period ending after the date of delivery of such
Payment Blockage Notice that, in either case, would give rise to a Non-Payment
Default pursuant to any provisions under which a Non-Payment Default previously
existed or was continuing shall constitute a new Non-Payment Default for this
purpose.
(c) The foregoing Sections 10.02(a) and (b) shall not apply to
payments and distributions (A) of Permitted Junior Securities and (B) made
relating to the Notes from the trust established pursuant to Article Eight, so
long as, with respect to (B), (i) the conditions specified in Article Eight
(without any waiver or modification of the requirement that the deposits
pursuant thereto do not conflict with the terms of the Credit Facilities or any
other Senior Debt) are satisfied on the date of any deposit pursuant to said
trust and (ii) such payments and distributions did not violate the provisions of
this Article Ten when made.
(d) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by the foregoing provisions of this Section 10.02, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt (pro rata to such holders on the basis of the respective amount of
Senior Debt held by such holders) or their respective Representatives, as their
respective interests may appear. The Trustee shall be entitled to rely on
information regarding amounts outstanding on the Senior Debt, if any, received
from the holders of the Senior Debt (or their Representatives).
Nothing contained in this Article Ten shall limit the right of the
Trustee or Holders to take any action to accelerate the maturity of the Notes
pursuant to Section 6.02 or to pursue any rights or remedies hereunder; provided
that all Senior Debt thereafter due or declared to be due shall first be paid in
full in cash or cash equivalents, or such payment duly provided for to the
satisfaction of the holders of such Senior Debt, before the Holders are entitled
to receive any payment of any kind or character with respect to Obligations on
the Notes.
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SECTION 10.03. Notes Subordinated to Prior Payment of All Senior Debt on
Dissolution, Liquidation or Reorganization of the Issuer or Co-Issuer.
(a) Upon any payment or distribution of assets of the Issuer or the
Co-Issuer of any kind or character, whether in cash, assets or securities, to
creditors upon any total or partial liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors or marshaling of assets
and liabilities of the Issuer or the Co-Issuer or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding relating to
the Issuer or the Co-Issuer or their respective assets, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior Debt shall
first be paid in full in cash or cash equivalents, or such payment duly provided
for to the satisfaction of the holders of Senior Debt, before any payment or
distribution of any kind or character (other than Permitted Junior Securities)
is made on account of any Obligations on or relating to the Notes, or for the
acquisition of any of the Notes for cash or assets or otherwise. Upon any such
dissolution, winding-up, liquidation, reorganization, receivership or similar
proceeding, any payment or distribution of assets of the Issuer or the Co-Issuer
of any kind or character, whether in cash, assets or securities, to which the
Holders of the Notes or the Trustee under this Indenture would be entitled,
except for the provisions hereof, shall be paid by the Issuer or the Co-Issuer
or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, or by the Holders or by the Trustee
under this Indenture if received by them, directly to the holders of Senior Debt
(pro rata to such holders on the basis of the respective amounts of Senior Debt
held by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of Senior Debt remaining unpaid until all such Senior Debt has been paid
in full in cash or cash equivalents, or such payment duly provided for to the
satisfaction of the holders of such Senior Debt, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
Senior Debt.
(b) To the extent any payment of Senior Debt (whether by or on behalf
of the Issuer or the Co-Issuer, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential, set
aside or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Senior Debt or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
It is further agreed that any diminution (whether pursuant to court
decree or otherwise, including without limitation for any of the reasons
described in the preceding sentence) of the Issuer's or the Co-Issuer's
obligation to make any distribution or payment pursuant to any Senior Debt,
except to the extent such diminution occurs by reason of the repayment (which
has not been disgorged or returned) of such Senior Debt in cash or cash
equivalents, or such payment duly provided for to the satisfaction of the
holders of such Senior Debt, shall have no force or effect for purposes of the
subordination provisions contained in this
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Article Ten, with any turnover of payments as otherwise calculated pursuant to
this Article Ten to be made as if no such diminution had occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Issuer or the Co-Issuer of any kind or character,
whether in cash, assets or securities, shall be received by any Holder when such
payment or distribution is prohibited by this Section 10.03, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Debt (pro rata to such holders on the
basis of the respective amounts of Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of Senior Debt
remaining unpaid until all such Senior Debt has been paid in full in cash or
cash equivalents, or such payment duly provided for to the satisfaction of the
holders of such Senior Debt, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Senior Debt.
(d) The consolidation of the Issuer or the Co-Issuer with, or the
merger of the Issuer or the Co-Issuer with or into, another Person or the
liquidation or dissolution of the Issuer or the Co-Issuer following the
conveyance or transfer of all or substantially all of its assets to another
Person upon the terms and conditions provided in Article Five hereof and as long
as permitted under the terms of the Senior Debt shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section if such other Person shall, as a part of such consolidation, merger,
conveyance or transfer, assume the Issuer's or the Co-Issuer's, as the case may
be, obligations hereunder in accordance with Article Five hereof.
SECTION 10.04. Payments May Be Made Prior to Dissolution.
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Issuers, except under the conditions described in Sections
10.02 and 10.03, from making payments at any time for the purpose of making
payments of principal of and interest on the Notes, or from depositing with the
Trustee any moneys for such payments, or (ii) in the absence of actual knowledge
by the Trustee that a given payment would be prohibited by Section 10.02 or
10.03, the application by the Trustee of any moneys deposited with it for the
purpose of making such payments of principal of, and interest on, the Notes to
the Holders entitled thereto unless at least two Business Days prior to the date
upon which such payment would otherwise become due and payable a Responsible
Officer of the Trustee shall have actually received the written notice provided
for in the first sentence of Section 10.02(b) or in Section 10.07 (provided
that, notwithstanding the foregoing, the Holders receiving any payments made in
contravention of Section 10.02 and/or 10.03 (and the respective such payments)
shall otherwise be subject to the provisions of Section 10.02 and Section
10.03). The Issuer shall give prompt written notice to the Trustee of any
dissolution, winding-up, liquidation or reorganization of the Issuer or the
Co-Issuer, although any delay or failure to give any such notice shall have no
effect on the subordination provisions contained herein.
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SECTION 10.05. Holders To Be Subrogated to Rights of Holders of Senior Debt.
Subject to the payment in full in cash or cash equivalents, or such
payment duly provided for to the satisfaction of holders of such Senior Debt, of
all Senior Debt, the Holders of the Notes shall be subrogated to the rights of
the holders of Senior Debt to receive payments or distributions of cash, assets
or securities of the Issuer and the Co-Issuer applicable to the Senior Debt
until the Notes shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Senior Debt
by or on behalf of the Issuer or the Co-Issuer, or by or on behalf of the
Holders by virtue of this Article Ten, which otherwise would have been made to
the Holders shall, as between the Issuers and the Holders, be deemed to be a
payment by the Issuers to or on account of the Senior Debt, it being understood
that the provisions of this Article Ten are and are intended solely for the
purpose of defining the relative rights of the Holders, on the one hand, and the
holders of Senior Debt, on the other hand.
SECTION 10.06. Obligations of the Issuers Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as among the Issuer, the
Co-Issuer, their respective creditors other than the holders of Senior Debt, and
the Holders, the obligations of the Issuers, which is absolute and
unconditional, to pay to the Holders the principal of and any interest on the
Notes as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders and
respective creditors of the Issuer and the Co-Issuer other than the holders of
the Senior Debt, nor shall anything herein or therein prevent the Holder of any
Note or the Trustee on its behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, in respect of cash, assets or securities of the Issuer or the
Co-Issuer received upon the exercise of any such remedy.
SECTION 10.07. Notice to Trustee.
The Issuer shall give prompt written notice to the Trustee of any fact
known to the Issuer which would prohibit the making of any payment to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article Ten,
although any delay or failure to give any such notice shall have no effect on
the subordination provisions contained herein. Regardless of anything to the
contrary contained in this Article Ten or elsewhere in this Indenture, the
Trustee shall not be charged with knowledge of the existence of any default or
event of default with respect to any Senior Debt or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing from the Issuer, or from a
holder of Senior Debt or a Representative therefor and, prior to the receipt of
any such written notice, the Trustee shall be entitled to assume (in the absence
of actual knowledge to the contrary) that no such facts exist. The Trustee shall
be entitled to rely on the delivery to it of any notice pursuant to this Section
10.07 to establish that such notice has been given by a holder of Senior Debt
(or a trustee thereof).
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence
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to the satisfaction of the Trustee as to the amounts of Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Ten, and if such evidence is not furnished the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 10.08. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Issuer or the
Co-Issuer referred to in this Article Ten, the Trustee, subject to the
provisions of Article Seven hereof, and the Holders of the Notes shall be
entitled to conclusively rely upon any order or decree made by any court of
competent jurisdiction in which any insolvency, bankruptcy, receivership,
dissolution, winding-up, liquidation, reorganization or similar case or
proceeding is pending, or upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the Trustee or
the Holders of the Notes, for the purpose of ascertaining the persons entitled
to participate in such payment or distribution, the holders of the Senior Debt
and other Indebtedness of the Issuer or the Co-Issuer, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Ten.
SECTION 10.09. Trustee's Relation to Senior Debt.
The Trustee and any agent of the Issuer, the Co-Issuer or the Trustee
shall be entitled to all the rights set forth in this Article Ten with respect
to any Senior Debt which may at any time be held by it in its individual or any
other capacity to the same extent as any other holder of Senior Debt and nothing
in this Indenture shall deprive the Trustee or any such agent of any of its
rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Debt, the distribution may be made and the notice may be given
to their Representative, if any.
SECTION 10.10. Subordination Rights Not Impaired by Acts or Omissions of the
Issuers or Holders of Senior Debt.
No right of any present or future holders of any Senior Debt to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Issuer or
the Co-Issuer or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Issuer or the Co-Issuer with the terms of
this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.
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Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Notes and without impairing or releasing the
subordination provided in this Article Ten or the obligations hereunder of the
Holders of the Notes to the holders of the Senior Debt, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt, or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Issuer, the Co-Issuer and any other Person.
SECTION 10.11. Noteholders Authorize Trustee To Effectuate Subordination of
Notes.
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between holders of Senior Debt and
Holders, the subordination provided in this Article Ten, and appoints the
Trustee its attorney-in-fact for such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of the Issuer or the
Co-Issuer (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of credits or
otherwise) tending towards liquidation of the business and assets of the Issuer
or the Co-Issuer, the filing of a claim for the unpaid balance of its Notes and
accrued interest in the form required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Debt or their
Representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Notes. Nothing herein contained shall be deemed to authorize the
Trustee or the holders of Senior Debt or their Representative to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 10.12. This Article Ten Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Notes by reason of any provision of this Article Ten will not be
construed as preventing the occurrence of an Event of Default.
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SECTION 10.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article Ten will apply to amounts due to the Trustee
(other than payments of Obligations owing to Holders in respect of Notes)
pursuant to other sections of this Indenture.
ARTICLE ELEVEN
NOTE GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Subject to the provisions of this Article Eleven, each of the
Guarantors, by execution of this Indenture or any supplemental indenture hereto
executed in accordance with Article Nine, hereby, jointly and severally,
unconditionally and irrevocably guarantees, on a senior subordinated basis to
each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the obligations of the Issuers or
any other Guarantors to the Holders or the Trustee hereunder or thereunder: (a)
(x) the due and punctual payment of the principal of, premium, if any, and
interest on the Notes when and as the same shall become due and payable, whether
at maturity, upon redemption or repurchase, by acceleration or otherwise, (y)
the due and punctual payment of interest on the overdue principal and (to the
extent permitted by law) interest, if any, on the Notes and (z) the due and
punctual payment and performance of all other obligations of the Issuers and all
other obligations of the other Guarantors (including under the Note Guarantees),
in each case, to the Holders or the Trustee hereunder or thereunder (including
amounts due the Trustee under Section 7.07 hereof), all in accordance with the
terms hereof and thereof (collectively, the "GUARANTEE OBLIGATIONS"); and (b) in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, the due and punctual payment and performance of Guarantee
Obligations in accordance with the terms of the extension or renewal, whether at
maturity, upon redemption or repurchase, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed, or failing performance of any
other obligation of the Issuers to the Holders under this Indenture or under the
Notes, for whatever reason, each Guarantor shall be obligated to pay, or to
perform or cause the performance of, the same immediately.
Each of the Guarantors hereby agrees that (to the fullest extent
permitted by law) its obligations hereunder shall be unconditional, irrespective
of the validity, regularity or enforceability of the Notes or this Indenture,
the absence of any action to enforce the same, any waiver or consent by any
Holder of the Notes with respect to any provisions hereof or thereof, any
release of any other Guarantor, the recovery of any judgment against the Issuer
or the Co-Issuer, any action to enforce the same, whether or not a Note
Guarantee is affixed to any particular Note, or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each of the Guarantors hereby waives (to the fullest extent permitted
by law) the benefit of diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Issuer or
the Co-Issuer, any right to
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require a proceeding first against the Issuer or the Co-Issuer, protest, notice
and all demands whatsoever and covenants that its Note Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes, this Indenture and its Note Guarantee. Each Note Guarantee is a guarantee
of payment and not of collection. If any Holder or the Trustee is required by
any court or otherwise to return to the Issuer or the Co-Issuer or to any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Issuer or the Co-Issuer or such Guarantor, any amount
paid by the Issuer or the Co-Issuer or such Guarantor to the Trustee or such
Holder, the Note Guarantee of each Guarantor, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor further
agrees (to the fullest extent permitted by law) that, as between it, on the one
hand, and the Holders and the Trustee, on the other hand, (a) subject to this
Article Eleven, the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of its Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (b) in the
event of any acceleration of such obligations as provided in Article Six hereof,
such obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of its Note Guarantee.
SECTION 11.02. Subordination of Note Guarantee.
The obligations of each Guarantor under its Note Guarantee pursuant to
this Article Eleven shall be junior and subordinated to the prior payment in
full in cash or cash equivalents, or such payment duly provided for to the
satisfaction of the holders of such Guarantor Senior Debt, of the Guarantor
Senior Debt of such Guarantor on the same basis as the Notes are junior and
subordinated to Senior Debt of the Issuers. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by any of the Guarantors only at such times as they may receive
and/or retain payments in respect of the Notes pursuant to this Indenture,
including Article Ten hereof.
SECTION 11.03. Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor under its Note Guarantee and this Article Eleven shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article Eleven, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.
Each Guarantor that makes a payment for distribution under its Note
Guarantee is entitled to a contribution from each other Guarantor in a pro rata
amount based on adjusted net assets of each Guarantor.
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SECTION 11.04. Execution and Delivery of Note Guarantee.
To further evidence its Note Guarantee set forth in Section 11.01,
each Guarantor hereby agrees that a notation of such Note Guarantee,
substantially in the form of Exhibit E hereto, shall be endorsed on each Note
authenticated and delivered by the Trustee. Such Note Guarantee shall be
executed on behalf of each Guarantor by either manual or facsimile signature of
one Officer or other person duly authorized by all necessary corporate action of
each Guarantor who shall have been duly authorized to so execute by all
requisite corporate action. The validity and enforceability of any Note
Guarantee shall not be affected by the fact that it is not affixed to any
particular Note or that such Guarantor has not executed a notation of such Note
Guarantee substantially in the form of Exhibit E.
Each of the Guarantors hereby agrees that its Note Guarantee set forth
in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Note Guarantee no longer holds that office at the time the Trustee authenticates
the Note on which such Note Guarantee is endorsed or at any time thereafter,
such Guarantor's Note Guarantee of such Note shall nevertheless be valid.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Note Guarantee set forth
in this Indenture on behalf of each Guarantor.
SECTION 11.05. Release of a Guarantor.
A Guarantor shall be released from its obligations under its Note
Guarantee and its obligations under this Indenture and the Registration Rights
Agreement:
(1) in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the
Equity Interests of such Guarantor then held by the Issuer, the Co-Issuer
and the Restricted Subsidiaries; provided, however, that the Net Available
Proceeds of such sale or other disposition shall be applied in accordance
with Section 4.17, to the extent required thereby (it being understood that
only such portion of the Net Available Proceeds as is required to be
applied on or before the date of such release in accordance with Section
4.17 needs to be applied in accordance therewith at such time);
(2) if such Guarantor is designated as an Unrestricted Subsidiary or
otherwise ceases to be a Restricted Subsidiary, in each case in accordance
with the provisions of this Indenture, upon effectiveness of such
designation or when it first ceases to be a Restricted Subsidiary,
respectively;
(3) if such Guarantor shall not guarantee any Indebtedness of the
Issuer, the Co-Issuer or the Restricted Subsidiaries (other than if such
Guarantor no longer guarantees any Indebtedness of the Issuer, the
Co-Issuer, or the Restricted Subsidiaries as
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a result of payment of such guaranteed Indebtedness); provided that a
Guarantor shall not be permitted to be released from its Note Guarantee if
it is an obligor with respect to Indebtedness that would not under Section
4.10 be permitted to be incurred by a Restricted Subsidiary that is not a
Guarantor; or
(4) in accordance with the discharge, release or defeasance provisions
of Sections 8.01, 8.02 and/or 8.03.
The Trustee shall execute an appropriate instrument prepared by the
Issuer evidencing the release of a Guarantor from its obligations under its Note
Guarantee and this Indenture upon receipt of a request by the Issuer or such
Guarantor accompanied by an Officers' Certificate and an Opinion of Counsel
certifying as to the compliance with this Section 11.05; provided, however, that
the legal counsel delivering such Opinion of Counsel may rely as to matters of
fact on one or more Officers' Certificates of the Issuer.
SECTION 11.06. Waiver of Subrogation.
Until this Indenture is discharged and all of the Notes are discharged
and paid in full, each Guarantor hereby irrevocably waives and agrees not to
exercise any claim or other rights which it may now or hereafter acquire against
the Issuer or the Co-Issuer that arise from the existence, payment, performance
or enforcement of the Issuers' obligations under the Notes or this Indenture and
such Guarantor's obligations under its Note Guarantee and this Indenture, in any
such instance including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, and any right to
participate in any claim or remedy of the Holders against the Issuer or the
Co-Issuer, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Issuer or the Co-Issuer, directly or indirectly, in
cash or other assets or by set-off or in any other manner, payment or security
on account of such claim or other rights. If any amount shall be paid to any
Guarantor in violation of the preceding sentence and any amounts owing to the
Trustee or the Holders under the Notes, this Indenture or any other document or
instrument delivered under or in connection with such agreements or instruments
shall not have been paid in full, such amount shall have been deemed to have
been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Trustee or the Holders and shall forthwith be paid to the
Trustee for the benefit of itself or such Holders to be credited and applied to
the obligations in favor of the Trustee or the Holders, as the case may be,
whether matured or unmatured, in accordance with the terms of this Indenture.
Each Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by this Indenture and that the
waiver set forth in this Section 11.06 is knowingly made in contemplation of
such benefits.
SECTION 11.07. Immediate Payment.
Each Guarantor agrees to make immediate payment to the Trustee on
behalf of the Holders of all Guarantee Obligations owing or payable to the
respective Holders upon receipt of a demand for payment therefor by the Trustee
to such Guarantor in writing.
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ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required or deemed to be included in this
Indenture by the TIA, such required or deemed provision shall control. If any
provision of this Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or excluded, as the case may be.
SECTION 12.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by first-class mail, by telex, by nationally recognized overnight courier
service, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Issuer, the Co-Issuer or a Guarantor:
Xxxxxxx-Xxxxxx Communities, LLC
0000 Xxxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx, Esq. and
Xxxxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0X
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Telecopier: (000) 000-0000
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with a copy to:
Xxxxx, Xxxxxx & Xxxxxx, LLP
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Apar, Esq.
Telecopier: (000) 000-0000
Each of the Issuer, the Co-Issuer, the Guarantors and the Trustee by
written notice to each other such Person may designate additional or different
addresses for notices to such Person. Any notice or communication to the Issuer,
the Co-Issuer, the Guarantors and the Trustee, shall be deemed to have been
given or made as of the date so delivered if personally delivered; when answered
back; when receipt is acknowledged, if telecopied; five (5) calendar days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee); and next Business Day if by nationally
recognized overnight courier service.
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 12.03. Communications by Holders with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture, the Notes or the
Note Guarantees. The Issuer, the Co-Issuer, the Trustee, the Registrar and any
other Person shall have the protection of TIA Section 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuer or the Co-Issuer to the
Trustee to take any action under this Indenture, the Trustee shall be entitled
to receive upon its request:
(1) an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee, stating that, in the opinion of the signers,
all conditions precedent to be performed or effected by the Issuer and the
Co-Issuer, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, any and all such conditions precedent have been complied with.
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SECTION 12.05. 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 the Officers'
Certificate required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he 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 or satisfied; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 12.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee, Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 12.07. Legal Holidays.
If a payment date is not a Business Day, payment may be made on the
next succeeding day that is a Business Day.
SECTION 12.08. Governing Law; Waiver of Jury Trial.
THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
EACH OF THE ISSUER, THE CO-ISSUER, THE GUARANTORS AND THE TRUSTEE
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
SECTION 12.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of any of any Issuer or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
-108-
SECTION 12.10. No Recourse Against Others.
No director, manager, officer, employee, incorporator, member or
stockholder of the Issuer, the Co-Issuer or any Guarantor will have any
liability for any obligations of the Issuer or the Co-Issuer under the Notes or
this Indenture or of any Guarantor under its Note Guarantee 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 and
the Note Guarantees.
SECTION 12.11. Successors.
All agreements of the Issuer, the Co-Issuer and the Guarantors in this
Indenture, the Notes and the Note Guarantees shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successor.
SECTION 12.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy or counterpart shall be an original, but all of them together shall
represent the same agreement.
SECTION 12.13. Severability.
In case any one or more of the provisions in this Indenture, in the
Notes or in the Note Guarantees shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
SECTION 12.14. Force Majeure.
In no event shall the Trustee be responsible or liable for any failure
or delay in the performance of its obligations hereunder arising out of or
caused by, directly or indirectly, forces beyond its control, including, without
limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil
or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that the Trustee shall use
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.
-109-
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the date first written above.
XXXXXXX-XXXXXX COMMUNITIES, LLC,
as Issuer
By: /s/ Xxxxxx X. Alloy
------------------------------------
Name: Xxxxxx X. Alloy
Title: President
S-1
XXXXXXX-XXXXXX FINANCING CORP.,
as Co-Issuer
By: /s/ Xxxxxx X. Alloy
------------------------------------
Name: Xxxxxx X. Alloy
Title: President
X-0
XXXXX XXXXX NEIGHBORHOODS, LLC
BRAM NEIGHBORHOODS, LLC
BRAM III NEIGHBORHOODS, LLC
COLES RUN NEIGHBORHOODS, LLC
FAIR OAKS NEIGHBORHOODS, LLC
GLENKIRK NEIGHBORHOODS, LLC
XXXXX XXXXX ESTATES, LLC
KF NEIGHBORHOODS, LLC
XX XX NEIGHBORHOODS, LLC
LANDMARK NEIGHBORHOODS, LLC
MARUMSCO NEIGHBORHOODS, LLC
NEIGHBORHOODS CAPITAL, LLC
NEIGHBORHOODS I, LLC
NEIGHBORHOODS II, LLC
NEIGHBORHOODS III, LLC
NEIGHBORHOODS IV, LLC
NEIGHBORHOODS V, LLC
NEIGHBORHOODS VI, LLC
OLD DOMINION NEIGHBORHOODS, LLC
SPRING PARK NEIGHBORHOODS, LLC
WALL NEIGHBORHOODS, LLC
WILDEWOOD NEIGHBORHOODS, LLC
ZION NEIGHBORHOODS, LLC
By: Xxxxxx X. Alloy
------------------------------------
Name: Xxxxxx X. Alloy
Title: President
S-3
THE BANK OF NEW YORK, as Trustee
By: Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
S-4
EXHIBIT A
[INSERT THE GLOBAL NOTE LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS OF THE
INDENTURE]
[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
OF THE INDENTURE]
XXXXXXX-XXXXXX COMMUNITIES, LLC
XXXXXXX-XXXXXX FINANCING CORP.
9-3/4% Senior Subordinated Notes due 2015
CUSIP No. ___
No. ______ $________
XXXXXXX-XXXXXX COMMUNITIES, LLC, a Delaware limited liability company
(the "ISSUER"), and XXXXXXX-XXXXXX FINANCING CORP., a Delaware corporation (the
"CO-ISSUER"), for value received promise to pay to CEDE & CO. or its registered
assigns the principal sum of $____________ [(subject to the Schedule of Exchange
of Interests in the Global Note)](1) on August 15, 2015.
Interest Payment Dates: February 15 and August 15, commencing February
15, 2006.
Record Dates: February 1 and August 1.
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
----------
(1) To be included only if the Note is issued in global form.
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IN WITNESS WHEREOF, the Issuer and the Co-Issuer have caused this Note
to be signed manually or by facsimile by their duly authorized Officers.
XXXXXXX-XXXXXX COMMUNITIES, LLC,
as Issuer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXX-XXXXXX FINANCING CORP.,
as Co-Issuer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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This is one of the 9-3/4% Senior Subordinated Notes due 2015 described
in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------------
Authorized Signatory
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(Reverse of Note)
9-3/4% Senior Subordinated Notes due 2015
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
SECTION 1. Interest. The Issuer and the Co-Issuer promise to pay
interest on the principal amount of this Note at 9.750% per annum from August
10, 2005 until maturity. The Issuers will pay interest semi-annually on February
15 and August 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"), commencing
February 15, 2006. Interest on the Notes will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from the date
of original issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date. The
Issuers shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and, to the extent such payments
are lawful, interest on overdue installments of interest, without regard to any
applicable grace periods, at the rate of 1.0% per annum in excess of the
interest rate applicable to the Notes from time to time. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2. Method of Payment. The Issuers will pay interest on the
Notes (except defaulted interest) to the Persons who are registered Holders at
the close of business on the February 1 or August 1 next 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 issued in
denominations of $2,000 and integral multiples thereof. The Issuers shall pay
principal, premium, if any, and interest on the Notes 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 ("U.S. LEGAL TENDER"). Principal, premium,
if any, and interest on the Notes will be payable at the office or agency of the
Issuers maintained for such purpose or, at the option of the Issuers, payment of
interest may be made by check mailed to the Holders at their respective
addresses set forth in the register of Holders; provided that if a Holder has
given wire transfer instructions to the Issuer at least ten Business Days prior
to the Record Date, the Issuer and Co-Issuer shall make all payments on such
Holder's Notes in accordance with such instructions. Until otherwise designated
by the Issuer, the Issuers' office or agency in New York will be the office of
the Trustee maintained for such purpose.
SECTION 3. Paying Agent and Registrar. Initially, The Bank of New
York, the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Issuers may change any Paying Agent or Registrar without notice to any
Holder. The Issuer or any of its Restricted Subsidiaries may act in any such
capacity.
SECTION 4. Indenture and Subordination. The Issuers issued the Notes
under an Indenture dated as of August 10, 2005 ("INDENTURE") by and among the
Issuer, the Co-Issuer, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and
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those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"). The Notes are
subject to all such terms, and Holders are referred to the Indenture and the TIA
for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The payment of the Notes will, to the
extent set forth in the Indenture, be subordinated in right of payment to the
prior payment in full in cash or cash equivalents of all Senior Debt.
SECTION 5. Optional Redemption. Except as set forth in Section 6
below, the Notes may not be redeemed prior to August 15, 2010. At any time or
from time to time on or after August 15, 2010, the Issuer, at its option, may
redeem the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below, together with accrued and
unpaid interest thereon, if any, to the redemption date, if redeemed during the
12-month period beginning August 15 of the years indicated:
OPTIONAL
YEAR REDEMPTION PRICE
---- ----------------
2010................. 104.875%
2011................. 103.250%
2012................. 101.625%
2013 and thereafter.. 100.000%
SECTION 6.Equity Issuance Redemption. At any time or from time to time
prior to August 15, 2008, the Issuer, at its option, may redeem up to 35% of the
aggregate principal amount of the Notes (including Additional Notes, if any),
issued under the Indenture with the net cash proceeds of one or more Equity
Offerings by the Issuer or with the net cash proceeds of one or more Equity
Offerings by Holdings that are contributed to the Issuer as common equity
capital at a redemption price equal to 109.750% of the principal amount of the
Notes to be redeemed, plus accrued and unpaid interest thereon, if any, to the
date of redemption; provided, however, that (1) at least 65% of the aggregate
principal amount of Notes (including Additional Notes, if any), issued under the
Indenture remains outstanding immediately after the occurrence of such
redemption and (2) the redemption occurs within 90 days of the date of the
closing of any such Equity Offering.
SECTION 7. Notice of Redemption. Notice of redemption will be mailed
by first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address, except as set forth in the Indenture. Notes in denominations larger
than $2,000 may be redeemed in part. If any Note is to be redeemed in part only,
the notice of redemption that relates to such Note shall state the portion of
the principal amount thereof to be redeemed. A new Note in principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Note. On and after the redemption
date, interest ceases to accrue on Notes or portions thereof called for
redemption.
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SECTION 8. Mandatory Redemption. For the avoidance of doubt, an offer
to purchase pursuant to Section 9 hereof shall not be deemed a redemption. The
Issuers shall not be required to make mandatory redemption payments with respect
to the Notes.
SECTION 9. Repurchase at Option of Holder. The Indenture provides that
upon the occurrence of a Change of Control or an Asset Sale or upon the Issuer's
Consolidated Tangible Net Worth being below the Minimum Tangible Net Worth at
the end of two consecutive fiscal quarters and subject to further limitations
contained therein, the Issuers shall make an offer to purchase outstanding Notes
in accordance with the procedures set forth in the Indenture.
SECTION 10. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $2,000 and integral
multiples of $2,000. 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 Issuers may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. Neither the Issuer, the
Co-Issuer nor the Registrar is required to transfer or exchange any Note
selected for redemption. Neither the Issuer, the Co-Issuer nor the Registrar is
required to transfer or exchange any Notes for a period of 15 days before a
selection of Notes to be redeemed.
SECTION 11. Persons Deemed Owners. The registered Holder of a Note may
be treated as its owner for all purposes.
SECTION 12. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture and the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default under, or
compliance with, any provision of the Indenture may be waived with the consent
of the Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture, the Notes and/or the Note Guarantees to,
among other things, cure any ambiguity or omission, defect or inconsistency in
the Indenture, provide for uncertificated Notes in addition to or in place of
certificated Notes, comply with any requirements of the SEC in connection with
the qualification of the Indenture under the TIA, or make any change that does
not materially adversely affect the rights of any Holder of a Note.
SECTION 13. Defaults and Remedies. If a Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes generally may declare all the Notes to be due and
payable immediately. Notwithstanding the foregoing, in the case of a Default
arising from certain events of bankruptcy or insolvency as set forth in the
Indenture, with respect to the Issuer, the Co-Issuer or a Significant
Subsidiary, all outstanding Notes will become due and payable without further
action or notice. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default (except a
Default relating to the payment of principal or interest) if a committee of its
Responsible Officers determines in good faith that
A-6
withholding notice is in the interest of the Holders. Subject to certain
conditions, the Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default and its consequences under the Indenture
except a continuing Default in the payment of interest on, or the principal of,
or the premium on, the Notes.
SECTION 14. Restrictive Covenants. The Indenture contains certain
covenants that, among other things, limit the ability of the Issuer and its
Restricted Subsidiaries to make restricted payments, to incur indebtedness, to
create liens, to sell assets, to permit restrictions on dividends and other
payments by Restricted Subsidiaries of the Issuer, to consolidate, merge or sell
all or substantially all of its assets or to engage in transactions with
affiliates. The covenants are subject to a number of important qualifications
and exceptions. The Issuer must annually report to the Trustee on compliance
with such covenants.
SECTION 15. No Recourse Against Others. No director, manager, officer,
employee, incorporator, member or stockholder of the Issuer, the Co-Issuer, or
any Guarantor will have any liability for any obligations of the Issuer or the
Co-Issuer under the Notes or the Indenture or of any Guarantor under its Note
Guarantee 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 and the Note Guarantees.
SECTION 16. Note Guarantees. This Note will be entitled to the
benefits of certain Note Guarantees made for the benefit of the Holders.
Reference is hereby made to the Indenture for a statement of the respective
rights, limitations of rights, duties and obligations thereunder of the
Guarantors, the Trustee and the Holders.
SECTION 17. Trustee Dealings with the Issuers. The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Issuers, their respective
Subsidiaries or their respective Affiliates as if it were not the Trustee.
SECTION 18. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
SECTION 19. 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 entirety), 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).
SECTION 20. Additional Rights of Holders of Restricted Global Notes
and Restricted Definitive Notes. Pursuant to, but subject to the exceptions in,
the Registration Rights Agreement, the Issuer, the Co-Issuer and the Guarantors
will be obligated to consummate an exchange offer pursuant to which the Holder
of this Note shall have the right to exchange this Note for a 9-3/4% Senior
Subordinated Note due 2015 of the Issuers which shall have been registered under
the Securities Act, in like principal amount and having terms identical in all
material respects to this Note (except that such note shall not be entitled to
Additional Interest or
A-7
registration rights). The Holders shall be entitled to receive certain
Additional Interest in the event such exchange offer is not consummated or the
Notes are not offered for resale and upon certain other conditions, all pursuant
to and in accordance with the terms of the Registration Rights Agreement.(2)
SECTION 21. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Issuers have
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.
SECTION 22. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Issuer will furnish to any Holder upon written request and without
charge a copy of the Indenture.
----------
(2) This Section not to appear on Exchange Notes or on Notes otherwise
registered pursuant to the Securities Act.
A-8
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(3)
The following exchanges of a part of this Global Note for an interest
in another Global Note or Physical Notes, or exchanges in part of another Global
Note or Physical Notes for an interest in this Global Note, have been made:
Principal Amount
Amount of Amount of of this Signature of
decrease in increase in Global Note authorized
Date of Principal Amount Principal Amount following such officer of Trustee
Exchange of this Global Note of this Global Note decrease (or increase) or Custodian
-------- ------------------- ------------------- ---------------------- ------------------
----------
(3) To be included only if the Note is issued in global form.
A-9
ASSIGNMENT FORM
I or we assign and transfer this Note to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________ agent to
transfer this Note on the books of the Issuers. The agent may substitute another
to act for him.
Dated: Signed:
------------------------------ --------------------------------
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee:
--------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the date following the second anniversary of the original
issuance of this Note, the undersigned confirms that it has not utilized any
general solicitation or general advertising in connection with the transfer:
[Check One]
(1) ___ to any Issuer or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities Act;
or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
A-10
(4) ___ outside the United States to a non-"U.S. person" (as defined in
Regulation S under the Securities Act) in compliance with Rule 904 of
Regulation S under the Securities Act; or
(5) ___ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(6) ___ pursuant to an effective registration statement under the Securities
Act; or
(7) ___ pursuant to another available exemption from the registration
statement requirements of the Securities Act of 1933;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of any Issuer as defined in Rule 144
under the Securities Act (an "AFFILIATE"):
[ ] The transferee is an Affiliate of any Issuer.
Unless one of the items is checked, the Trustee will refuse to
register any of the Notes evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if item
(3), (4), (5) or (7) is checked, the Issuers or the Trustee may require, prior
to registering any such transfer of the Notes, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3) or (4)) and other information as the Trustee or Issuers have
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
If none of the foregoing items are checked, the Trustee or Registrar
shall not be obligated to register this Note in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Dated: Signed:
------------------------------ --------------------------------
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee:
--------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuers as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is
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aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:
------------------------------ ----------------------------------------
NOTICE: To be executed by an executive
officer
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers
pursuant to Section 4.09, Section 4.13 or Section 4.17 of the Indenture, check
the appropriate box:
Section 4.09 [ ] Section 4.13 [ ] Section 4.17 [ ]
If you want to elect to have only part of this Note purchased by the
Issuers pursuant to Section 4.09, Section 4.13 or Section 4.17 of the Indenture,
state the amount (in denominations of $2,000 and integral multiples thereof):
$___________
Dated: Signed:
----------------- --------------------------------
(Sign exactly as name appears on the
other side of this Note)
Signature Guarantee:
----------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
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EXHIBIT B
FORM OF LEGENDS
[Private Placement Legend]
THIS NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THIS NOTE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT, AND ACCORDINGLY, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF, THE SECURITIES ACT, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION AND IN ACCORDANCE WITH
TRANSFER RESTRICTIONS CONTAINED IN THE INDENTURE UNDER WHICH THIS NOTE WAS
ISSUED AND THE OFFERING MEMORANDUM PURSUANT TO WHICH THIS NOTE WAS ORIGINALLY
SOLD. THE HOLDER OF THIS NOTE WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY A PROPOSED TRANSFEREE OF THE NOTE OF THE RESALE RESTRICTIONS APPLICABLE
TO THE NOTE.
[Temporary Regulation S Global Note Legend]
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE
WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE RULE 144A GLOBAL NOTE OR THE
PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER NOTE REPRESENTING AN INTEREST IN
THE NOTES REPRESENTED HEREBY WHICH DOES NOT CONTAIN A LEGEND CONTAINING
RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY DISTRIBUTION
COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE 903 OF REGULATION S UNDER THE
SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY
TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S.
PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID
NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY
DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY
REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (A)(1) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE
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REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S
GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF SUCH RESALE RESTRICTIONS, IF THEN
APPLICABLE.
[Definitive Note Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
[Global Note Legend]
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO
A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO XXXXXXX-XXXXXX
COMMUNITIES, LLC OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
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INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO THE DEPOSITORY OR ITS NOMINEES OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 2.15 AND 2.16 OF THE INDENTURE.
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EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[_______], [___]
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of 9-3/4% Senior Subordinated
Notes due 2015 (the "NOTES") of XXXXXXX-XXXXXX COMMUNITIES, LLC, a Delaware
limited liability company (the "ISSUER"), and XXXXXXX-XXXXXX FINANCING CORP., a
Delaware corporation (the "CO-ISSUER" and together with the Issuer, the
"ISSUERS"), we confirm that:
1. We have received such information regarding the Issuers and the
Guarantors as we have requested pursuant to Rule 144A or have determined
not to request such information.
2. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture relating
to the Notes (the "INDENTURE") as described in the Offering Memorandum and
the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Notes except in compliance with, such restrictions
and conditions and the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and all applicable State securities laws.
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered
or sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Notes, we will do so only (i) to the
Issuers or any of their respective subsidiaries, (ii) inside the United
States in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act), (iii) inside the United States to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the
Trustee (as defined in the Indenture) a signed letter containing certain
representations and agreements relating to the restrictions on transfer of
the Notes (the form of which letter can be obtained from the Trustee), (iv)
outside the United States in accordance with Regulation S promulgated under
the Securities Act to non-U.S. persons (as defined in
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Regulation S under the Securities Act, (v) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available),
(vi) in accordance with another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel if
the Issuer so requests) or (vii) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing any of the Notes from us a notice advising such purchaser
that resales of the Notes are restricted as stated herein.
4. Either (i) no portion of the assets used by us to acquire or hold
Notes constitutes assets of an employee benefit plan that is subject to
Title I of the U.S. Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), plan, individual retirement account or other arrangement
that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "CODE"), or provisions under any federal, state, local,
non-U.S. or other laws or regulations that are similar to such provisions
of the Code or ERISA (collectively, "SIMILAR LAWS"), or an entity whose
underlying assets are considered to include "plan assets" of any such plan,
account or arrangement, or (ii) our purchase and holding of Notes will not
constitute a non-exempt prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code or similar violation under any applicable
Similar Laws.
5. We understand that, on any proposed resale of any Notes, we will be
required to furnish to the Trustee and the Issuer such certification, legal
opinions and other information as the Trustee and the Issuer may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will
bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
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You, the Issuers, the Trustee and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
___________, ____
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed sale of $______ aggregate principal
amount of the 9-3/4% Senior Subordinated Notes due 2015 (the "NOTES") of
XXXXXXX-XXXXXX COMMUNITIES, LLC, a Delaware limited liability company (the
"ISSUER"), and XXXXXXX-XXXXXX FINANCING CORP., a Delaware corporation (the
"CO-ISSUER" and together with the Issuer, the "ISSUERS"), we confirm that such
sale has been effected pursuant to and in accordance with Regulation S under the
U.S. Securities Act of 1933, as amended (the "SECURITIES ACT"), and,
accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
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You, the Issuers and counsel for the Issuers are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
------------------------------------
Authorized Signature
D-2
EXHIBIT E
NOTE GUARANTEE
For value received, each of the undersigned hereby unconditionally
guarantees, as principal obligor and not only as a surety, to the Holder of this
Note the cash payment in United States dollars of principal of, premium, if any,
and interest on this Note in the amounts and at the times when due and interest
on the overdue principal, premium, if any, and interest, if any, of this Note,
if lawful, and the payment or performance of all other obligations of the Issuer
and the Co-Issuer under the Indenture (as defined below) or the Notes, to the
Holder of this Note and the Trustee, all in accordance with and subject to the
terms and limitations of this Note, Article Eleven of the Indenture and this
Note Guarantee. This Note Guarantee will become effective in accordance with
Article Eleven of the Indenture and its terms shall be evidenced therein. The
validity and enforceability of any Note Guarantee shall not be affected by the
fact that it is not affixed to any particular Note.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Indenture dated as of August 10, 2005, among
XXXXXXX-XXXXXX COMMUNITIES, LLC, a Delaware limited liability company (the
"ISSUER"), XXXXXXX-XXXXXX FINANCING CORP., a Delaware corporation (the
"CO-ISSUER"), the Guarantors named therein and THE BANK OF NEW YORK, as trustee
(the "TRUSTEE"), as amended or supplemented (the "INDENTURE").
The obligations of the undersigned to the Holders and to the Trustee
pursuant to this Note Guarantee and the Indenture are expressly set forth in
Article Eleven of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Note Guarantee and all of the other provisions of
the Indenture to which this Note Guarantee relates.
No director, manager, officer, employee, incorporator or stockholder
of any Guarantor, as such, shall have any liability for any obligations of the
Guarantors under the Guarantors' Note Guarantees or for any claim based on, in
respect of, or by reason of, such obligations or their creation.
This Note Guarantee is subordinated in right of payment, in the manner
and to the extent set forth in Article Eleven of the Indenture, to the prior
payment in full in cash or Cash Equivalents of all Guarantor Senior Debt,
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed.
THIS NOTE GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
This Note Guarantee is subject to release upon the terms set forth in
the Indenture.
IN WITNESS WHEREOF, each Guarantor has caused its Note Guarantee to be
duly executed.
E-1
Date:
----------------
[__________________]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT F
INCUMBENCY CERTIFICATE
The undersigned, ______________, being the ___________ of
XXXXXXX-XXXXXX COMMUNITIES, LLC, a Delaware limited liability company (the
"ISSUER"), does hereby certify that the individuals listed below are qualified
and acting officers of the Issuer and of XXXXXXX-XXXXXX FINANCING CORP., a
Delaware corporation (the "CO-ISSUER"), as set forth in the right column
opposite their respective names and the signatures appearing in the extreme
right column opposite the name of each such officer is a true specimen of the
genuine signature of such officer and such individuals have the authority to
execute documents to be delivered to, or upon the request of, THE BANK OF NEW
YORK, as Trustee under the Indenture dated as of August 10, 2005, by and among
the Issuer, the Co-Issuer, the Guarantors named therein and The Bank of New
York.
Issuer:
Name Title Signature
---- ----- ---------
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
Co-Issuer:
Name Title Signature
---- ----- ---------
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate as of the __ day of ______, 20__.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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