EXHIBIT 1.03
================================================================================
FIRST SUPPLEMENTAL INDENTURE
BY AND AMONG
▇▇▇▇▇▇▇ HOMES, INC.,
▇▇▇▇▇▇▇ HOLDINGS, INC.
AND
BANK OF HAWAII,
ACTING THROUGH ITS PACIFIC CENTURY TRUST DIVISION,
AS TRUSTEE
DATED AS OF APRIL 2, 2001
SUPPLEMENTING AND AMENDING THE
INDENTURE, DATED AS OF JANUARY 15, 1993,
BY AND BETWEEN ▇▇▇▇▇▇▇ HOMES AND ▇▇▇▇▇▇ TRUST COMPANY (AS
PREDECESSOR TRUSTEE)
PROVIDING FOR
6.5% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2003
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; INTERPRETATION............................2
Section 1.1 Definitions.......................................2
Section 1.2 Interpretation....................................2
ARTICLE II AMENDMENTS.............................................3
Section 2.1 Amendment to Form of Debenture....................3
Section 2.2 Amendment to Section 1.01 (Definitions)...........3
Section 2.3 Global Amendment..................................4
Section 2.4 Amendment to Section 15.02........................4
Section 2.5 Amendment to Section 15.05........................4
Section 2.6 Amendment to Section 15.08........................4
Section 2.7 Amendment to Section 15.09........................5
Section 2.8 Amendment to Section 15.10........................5
Section 2.9 Amendment to Section 16.02........................5
Section 2.10 Amendment to Section 16.03........................5
Section 2.11 Amendment to Section 17.03........................5
ARTICLE III MISCELLANEOUS..........................................6
Section 3.1 Conflict with the Trust Indenture Act.............6
Section 3.2 Date and Time of Effectiveness....................6
Section 3.3 Debentures Deemed Conformed.......................6
Section 3.4 Successors........................................6
Section 3.5 Benefits of Supplemental Indenture................6
Section 3.6 Separability......................................6
Section 3.7 Trustee Responsibility............................6
Section 3.8 Headings..........................................6
Section 3.9 Counterparts......................................7
Section 3.10 Governing Law.....................................7
EXHIBIT A - AMENDED FORM OF DEBENTURE
-i-
EXHIBIT 1.03
FIRST SUPPLEMENTAL INDENTURE, dated as of April 2, 2001 (this
"SUPPLEMENTAL INDENTURE"), by and among ▇▇▇▇▇▇▇ HOMES, INC., a Delaware
corporation (the "COMPANY"), ▇▇▇▇▇▇▇ HOLDINGS, INC., a Delaware Corporation
("▇▇▇▇▇▇▇ Holdings"), and BANK OF HAWAII, ACTING THROUGH ITS PACIFIC CENTURY
TRUST DIVISION, as successor trustee (the "TRUSTEE").
WHEREAS, the Company and ▇▇▇▇▇▇ Trust Company, Limited, as the
predecessor to the Trustee, entered into an Indenture, dated as of January 15,
1993 (the "ORIGINAL INDENTURE"), providing for the issuance by the Company of
its 6.5% Convertible Subordinated Debentures (the "DEBENTURES"); and
WHEREAS, as of the date hereof, Debentures in the aggregate principal
amount of $57,500,000 have been issued and are outstanding; and
WHEREAS, pursuant the Original Indenture, the Debentures may be
converted into Common Stock (as defined in the Original Indenture) of the
Company at the times and under the conditions set forth in the Original
Indenture; and
WHEREAS, Section 15.06 of the Original Indenture provides that in the
event of any merger of the Company with another company as a result of which
holders of Common Stock of the Company ("COMMON STOCK") shall be entitled to
receive stock in exchange for such Common Stock, the Company shall execute with
the Trustee a supplemental indenture providing that each Debenture shall be
convertible into the kind and amount of shares of stock receivable upon such
merger by a holder of Common Stock issuable upon conversion of such Debenture
immediately prior to such merger; and
WHEREAS, pursuant to an Agreement and Plan of Reorganization, dated as
of September 12, 2000 (the "PLAN OF REORGANIZATION"), as amended, by and among
the Company, Apollo Real Estate Investment Fund, L.P., a Delaware limited
partnership ("APOLLO"), Blackacre WPH, LLC, a Delaware limited liability company
("BLACKACRE"), Highridge Pacific Housing Investors, L.P., a California limited
partnership ("HIGHRIDGE"), AP WP Partners, L.P., a Delaware limited partnership
("APWP"), AP Western GP Corporation, a Delaware corporation ("AP WESTERN"), API
LHI, Inc., a California corporation ("API"), and Lamco Housing, Inc., a
California corporation ("LAMCO," and collectively with Apollo, Blackacre,
Highridge, APWP, AP Western and API, the "WP PARTNERS"), the Company and the WP
Partners have formed ▇▇▇▇▇▇▇ Holdings; and
WHEREAS, further pursuant to the Plan of Reorganization, at the
Effective Time (as defined in the Plan of Reorganization), a newly formed
wholly-owned subsidiary of ▇▇▇▇▇▇▇ Holdings shall merge into the Company and,
concurrently therewith, each outstanding share of Common Stock shall be
converted into one share of Class A Common Stock, par value $.001 per share, of
▇▇▇▇▇▇▇ Holdings ("CLASS A COMMON STOCK"); and
WHEREAS, pursuant to Section 15.06 of the Original Indenture, the
Company has requested ▇▇▇▇▇▇▇ Holdings and the Trustee to join with the Company
in executing this Supplemental Indenture so that, as of the Effective Time, the
Debentures shall be convertible into Class A Common Stock instead of Common
Stock; and
1
WHEREAS, Section 11.01 of the Original Indenture provides that the
Company and the Trustee may enter into a supplemental indenture without the
consent of any holder of the Debentures to provide for the conversion rights of
the Debenture holders in accordance with Section 15.06 of the Original Indenture
and to make other changes which shall not adversely affect the interests of the
Debenture holders; and
WHEREAS, except as otherwise provided herein, the Company shall
continue to be the obligor with respect to all the covenants, duties and
obligations set forth in the Original Indenture (including, without limitation,
all payments of principal of, and premium, if any, and interest on, the
Debentures) after the effective date of this Supplemental Indenture; and
WHEREAS, the Company, ▇▇▇▇▇▇▇ Holdings and the Trustee have agreed to
execute this Supplemental Indenture and have done all things necessary under
their respective charters and by-laws and the Original Indenture to enter into
this Supplemental Indenture; and
NOW, THEREFORE, in consideration of these premises, it is mutually
covenanted and agreed for the equal and proportionate benefit of all holders of
the Debentures as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1 DEFINITIONS. Capitalized terms that are defined in the
preamble or the recitals hereto shall have such meanings throughout this
Supplemental Indenture. Capitalized terms used but not defined in this
Supplemental Indenture shall have the meanings ascribed to them in the Original
Indenture. The meanings assigned to all defined terms used in this Supplemental
Indenture shall be equally applicable to both the singular and plural forms of
such defined terms. The term "Indenture" as used herein shall mean the Original
Indenture, as amended and supplemented by this Supplemental Indenture, or as
otherwise supplemented or amended from time to time by one or more supplemental
indentures thereto or hereto entered into pursuant to the applicable provisions
of the Indenture.
Section 1.2 INTERPRETATION. References in the Original Indenture
(including references in the Original Indenture as amended or supplemented
hereby) to "this Indenture" (and indirect references such as "hereunder,"
"herein" and "hereof") shall be deemed references to the Original Indenture as
amended and supplemented hereby. All of the covenants, agreements and provisions
of Supplemental Indenture shall be deemed to be and construed as part of the
Original Indenture to the same effect as if fully set forth therein and shall be
fully enforceable in the manner provided in the Original Indenture. Except as
otherwise expressly provided in this Supplemental Indenture, all of the
covenants, agreements and provisions of the Original Indenture shall remain in
full force and effect.
2
ARTICLE II
AMENDMENTS
Section 2.1 AMENDMENT TO FORM OF DEBENTURE. With reference to Section
3.3 below (providing that all then outstanding Debentures as of the effective
date of this Supplemental Agreement shall be deemed conformed to this
Supplemental Agreement without necessity of reissuance or exchange), the form of
Debenture set forth in the second "Whereas" clause of the Original Indenture is
hereby deleted in its entirety and replaced with the form of Debenture set forth
in EXHIBIT A hereto.
Section 2.2 AMENDMENT TO SECTION 1.01 (DEFINITIONS). Section 1.01 of
the Original Indenture shall be amended as follows:
(a) Section 1.01 of the Original Indenture shall be amended by
inserting therein the following terms and definitions:
(i) CLASS A COMMON STOCK: The term "Class A Common Stock"
shall mean Class A Common Stock of ▇▇▇▇▇▇▇ Holdings or shares of any
class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of ▇▇▇▇▇▇▇ Holdings
and which are not subject to redemption by ▇▇▇▇▇▇▇ Holdings; PROVIDED
that if at any time there shall be more than one such resulting class,
the shares of each such class then so issuable shall be substantially
in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.
(ii) FIRST SUPPLEMENTAL INDENTURE: The term "First
Supplemental Indenture" shall mean the First Supplemental Indenture,
dated as of April 2, 2001, by and among the Company, ▇▇▇▇▇▇▇ Holdings
and the Trustee.
(iii) ▇▇▇▇▇▇▇ HOLDINGS: The term "▇▇▇▇▇▇▇ Holdings" shall
mean ▇▇▇▇▇▇▇ Holdings, Inc., a Delaware corporation.
(b) The definition of the term "Common Stock" shall be
deleted from Section 1.01 of the Original Indenture.
(c) The definitions of the terms "Corporate Office of the
Trustee," "Subsidiary" and "Trustee" shall be amended each to read in its
entirety as follows:
(i) CORPORATE TRUST OFFICE OF THE TRUSTEE: The term
"Corporate Trust Office of the Trustee," or other similar terms, shall
mean the office of the Trustee at which, at any particular time, its
corporate trust business shall be principally administered, which
office, at the date of the First Supplemental Indenture, is located at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇."
3
(ii) SUBSIDIARY: The term "Subsidiary" shall mean a
corporation more than 50% of the outstanding voting stock of which is
owned, directly or indirectly, by the Company or by one or more other
Subsidiaries of the Company; PROVIDED that, where specified as such in
this Indenture, the term `Subsidiary of ▇▇▇▇▇▇▇ Holdings'
shall mean a corporation more than 50% of the outstanding voting stock
of which is owned, directly or indirectly, by ▇▇▇▇▇▇▇ Holdings or by
one or more other Subsidiaries of ▇▇▇▇▇▇▇ Holdings. For the purposes of
this definition, "voting stock" means stock which ordinarily has voting
power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
(iii) TRUSTEE: The term "Trustee" shall mean Bank of Hawaii,
acting through its Pacific Century Trust division, and its successors
and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor
trustee at the time serving as successor trustee hereunder.
Section 2.3 GLOBAL AMENDMENT. All instances in the Original Indenture
to the term "Common Stock" shall be replaced with the term "Class A Common
Stock."
Section 2.4 AMENDMENT TO SECTION 15.02. Section 15.02 of the Original
Indenture shall be amended as follows:
(a) The first sentence of the second paragraph of Section
15.02 of the Original Indenture shall be amended such that all instances
therein of the words "the Company" shall be replaced with the words "▇▇▇▇▇▇▇
Holdings."
(b) The proviso clause of the (only) sentence of the third
paragraph of Section 15.02 of the Original Indenture shall be amended such
that the words "the stock transfer books of the Company" shall be replaced
with the words "the stock transfer books of ▇▇▇▇▇▇▇ Holdings."
Section 2.5 AMENDMENT TO SECTION 15.05. Section 15.05 of the Original
Indenture shall be amended as follows:
(a) All instances therein of the words "the Company" shall be
replaced with the words "▇▇▇▇▇▇▇ Holdings."
(b) All instances therein of the words "Board of Directors"
or "Board of Directors of the Company" shall be replaced with the words
"Board of Directors of ▇▇▇▇▇▇▇ Holdings."
(c) All instances therein of the word "Subsidiary" shall be
replaced with the words "Subsidiary of ▇▇▇▇▇▇▇ Holdings."
Section 2.6 AMENDMENT TO SECTION 15.08. Section 15.08 of the Original
Indenture shall be amended such that all instances therein of the words
"the Company" shall be replaced with "▇▇▇▇▇▇▇ Holdings."
4
Section 2.7 AMENDMENT TO SECTION 15.09. The third sentence of Section
15.09 of the Original Indenture shall be amended to read in its entirety as
follows:
"Subject to the provisions of Section 9.01, neither the Trustee nor any
conversion agent shall be responsible for any failure of ▇▇▇▇▇▇▇
Holdings, or the Company, as the case may be, to issue, transfer or
deliver any shares of Class A Common Stock or stock certificates or
other securities or property or cash upon the surrender of any
Debenture for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of ▇▇▇▇▇▇▇ Holdings or the
Company contained in this Article."
Section 2.8 AMENDMENT TO SECTION 15.10. Section 15.10 of the Original
Indenture shall be amended as follows:
(a) Clauses (a), (b) and (c) of Section 15.10 of the Original
Indenture shall be amended such that all instances therein of the words "the
Company" shall be replaced with the words "▇▇▇▇▇▇▇ Holdings."
(b) Clause (d) of Section 15.10 of the Original Indenture
shall be amended to read in its entirety as follows: "(d) of the voluntary or
involuntary dissolution, liquidation or winding up of ▇▇▇▇▇▇▇ Holdings or the
Company;".
Section 2.9 AMENDMENT TO SECTION 16.02. Section 16.02 of the Original
Indenture shall be amended as follows:
(a) The proviso clause of subsection (d) of Section 16.02 of
the Original Indenture shall be amended such that the words "the stock
transfer books of the Company" therein shall be replaced with the words "the
stock transfer books of ▇▇▇▇▇▇▇ Holdings."
(b) Subsection (h) of Section 16.02 of the Original Indenture
shall be amended such that the words "the Company" therein shall be replaced
with the words "▇▇▇▇▇▇▇ Holdings."
Section 2.10 AMENDMENT TO SECTION 16.03. Section 16.03 shall be amended
such that all instances therein of the words "the Company" shall be replaced
with "▇▇▇▇▇▇▇ Holdings."
Section 2.11 AMENDMENT TO SECTION 17.03. The last sentence of Section
17.03 shall be amended to read in its entirety as follows:
"Any notice direction, request or demand hereunder to and upon the
Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made in writing at the Corporate Trust
Office of the Trustee, which office is, as the date of the First
Supplemental Indenture, located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department; telephone: (808)
538-4489; facsimile: (▇▇▇) ▇▇▇-▇▇▇▇."
5
ARTICLE III
MISCELLANEOUS
Section 3.1 CONFLICT WITH THE TRUST INDENTURE ACT. If any provision of
this Supplemental Indenture modifies or excludes with any provision of the Trust
Indenture Act of 1939 (the "TIA") that is required under the TIA to be part of
and govern the Indenture, such provision of the TIA shall control. If any
provision hereof modifies or excludes any provision of the TIA that may be so
modified or excluded under the TIA with respect to the Indenture, such provision
of the TIA shall be deemed to be so modified or excluded with respect to this
Supplemental Indenture.
Section 3.2 DATE AND TIME OF EFFECTIVENESS. This Supplemental Indenture
shall take effect and become a legally binding instrument at and as of the
Effective Time (as defined in the Plan of Reorganization).
Section 3.3 DEBENTURES DEEMED CONFORMED. As of the effective date of
this Supplemental Indenture, the provision of each Debenture then outstanding
shall be deemed to be conformed, without necessity for any reissuance or
exchange of such Debenture or any other action on the part of the holders of the
Debentures, the Company or the Trustee, so as to reflect this Supplemental
Indenture.
Section 3.4 SUCCESSORS. All agreements by the Company, ▇▇▇▇▇▇▇ Holdings
and the Trustee in this Supplemental Indenture and in the Original Indenture
shall bind their respective successors.
Section 3.5 BENEFITS OF SUPPLEMENTAL INDENTURE. Nothing in this
Supplemental Indenture, express or implied, shall give any Person, other than
the parties hereto and their successors hereunder, and the holders of the
Debentures, any benefit or any legal and equitable right, remedy or claim under
this Supplemental Indenture or the Original Indenture.
Section 3.6 SEPARABILITY. In case any provision in this Supplemental
Indenture, or in the Original Indenture, shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not be in any way affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the fullest
extent permitted by law.
Section 3.7 TRUSTEE RESPONSIBILITY. The Trustee assumes no duties,
responsibilities or liabilities by reason of this Supplemental Indenture other
than as set forth in the Original Indenture. The Supplemental Indenture is
executed and accepted by the Trustee subject to all of the terms and conditions
of its acceptance of the trusts under the Original Indenture, as fully as if
said terms and conditions were set forth in full herein.
Section 3.8 HEADINGS. The Article, Section and Exhibit headings of this
Supplemental Indenture have been inserted for convenience and reference only,
are not to be considered a part of this Supplemental Indenture and shall in no
way modify or restrict any of the terms or provisions hereof.
6
Section 3.9 COUNTERPARTS. This Supplemental Indenture may be executed
in counterparts, each of which shall for all purposes be deemed to be an
original, and all of which shall together constitute but one and the same
instrument.
Section 3.10 GOVERNING LAW. This Supplemental Indenture shall be deemed
to be a contract made under the laws of Delaware, and for all purposes shall be
construed in accordance with the laws of Delaware.
[Signature Page Follows]
7
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first written above.
▇▇▇▇▇▇▇ HOMES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive
Officer
▇▇▇▇▇▇▇ HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President and Chief
Financial Officer
BANK OF HAWAII, ACTING THROUGH ITS PACIFIC
CENTURY TRUST DIVISION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇
Vice President
8
EXHIBIT A
AMENDED FORM OF DEBENTURE
[FORM OF FACE OF DEBENTURE]
No. $_________________
▇▇▇▇▇▇▇ HOMES, INC.
6.5% Convertible Subordinated Debenture Due 2003
▇▇▇▇▇▇▇ HOMES, INC., a corporation duly organized and validly existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to
_____________________________, or registered assigns, the principal sum of
_________________ Dollars on January 15, 2003 at the office or agency of the
Company maintained for that purpose in, at the Company's option, Honolulu,
Hawaii or New York, New York, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, semi-annually on January 15 and
July 15 of each year, commencing July 15, 1993, on said principal sum at said
office or agency, in like coin or currency, at the rate per annum specified in
the title of this Debenture, from the January 15 or July 15, as the case may
be, next preceding the date of this Debenture to which interest has been paid or
duly provided for, unless the date hereof is a date to which interest has been
paid or duly provided for, in which case from the date of this Debenture, or
unless no interest has been paid or duly provided for on the Debentures, in
which case from January 28, 1993, until payment of said principal sum has been
made or duly provided for. Notwithstanding the foregoing, if the date hereof is
after any December 15 or June 15, as the case may be, and before the following
January 15 or July 15, this Debenture shall bear interest from such January 15
or July 15; PROVIDED, HOWEVER, that if the Company shall default in the payment
of interest due on such January 15 or July 15, then this Debenture shall bear
interest from the next preceding January 15 or July 15 to which interest has
been paid or duly provided for or, if no interest has been paid or duly provided
for on the Debentures, from January 28, 1993. The interest so payable on any
January 15 or July 15 will be paid to the person in whose name this Debenture
(or one or more Predecessor Debentures) is registered at the close of business
on the record date, which shall be the January 1 or July 1 whether or not a
business day) next preceding such January 15 or July 15, provided that any such
interest not punctually paid or duly provided for shall be payable as provided
in the Indenture. Interest may, at the option of the Company, be paid by check
mailed to the registered address of such person.
Reference is made to the further provisions of this Debenture set forth
on the reverse hereof including, without limitation, provisions subordinating
the payment of principal of and premium, if any, and interest on the Debentures
to the prior payment in full of all Senior Indebtedness as defined in the
Indenture and provisions giving the holder of this Debenture the right to
convert this Debenture into Class A Common Stock of ▇▇▇▇▇▇▇ Holdings, Inc., a
Delaware corporation ("Class A Common Stock") on the terms and subject to the
limitations
A-1
referred to on the reverse hereof and as more fully specified in the
Indenture. Such further provisions shall for all purposes have the same effect
as though fully set forth at this place.
This Debenture shall be deemed to be a contract made under the laws of
the State of Delaware, and for all purposes shall be construed in accordance
with and governed by the laws of said State.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee under the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
▇▇▇▇▇▇▇ HOMES, INC.
By:
-----------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President and Chief Executive
Officer
ATTEST:
----------------------------------
Secretary
===============================================================================
[FORM OF TRUSTEE'S OR AUTHENTICATING AGENT'S CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-mentioned Indenture.
A-2
BANK OF HAWAII, acting through its Pacific
Century Trust division, as Trustee
By:
-----------------------------------------------
Authorized Officer
A-3
[FORM OF REVERSE OF DEBENTURE]
▇▇▇▇▇▇▇-HOMES, INC.
6.5% Convertible Subordinated Debenture Due 2003
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 6.5% Convertible Subordinated Debentures Due 2003
(herein called the "Debentures"), limited to the aggregate principal amount of
$57,500,000 all issued or to be issued under and pursuant to an Indenture, dated
as of January 15, 1993, by and between the Company and ▇▇▇▇▇▇ Trust Company,
Limited (the predecessor trustee), as amended and supplemented by a First
Supplemental Indenture, dated as of April 2, 2001, by and among the Company,
▇▇▇▇▇▇▇ Holdings, Inc. ("▇▇▇▇▇▇▇ Holdings") and Bank of Hawaii, acting through
its Pacific Century Trust division, as successor trustee (the "Trustee") (as so
amended and supplemented, the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Debentures (herein sometimes
called the "Debentureholders").
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of and accrued interest on all
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee with the consent of the holders of a majority of the principal amount of
the Debentures at the time outstanding, evidenced as in the Indenture provided,
to execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any,
supplemental indenture or modifying in any manner the rights of the holders of
the Debentures; PROVIDED, HOWEVER, that no such supplemental indenture shall (i)
extend the fixed maturity of any Debenture, or reduce the rate or extend the
time of payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable on redemption thereof; or
impair or affect the right of any Debentureholder to institute suit for the
payment thereof, or make the principal thereof or interest or premium, if any,
thereon payable in any coin or currency other than that provided in the
Debentures, or modify the provisions of the Indenture with respect to the
subordination of the Debentures in a manner adverse to the Debentureholders, or
impair the right to convert the Debentures into Class A Common Stock of ▇▇▇▇▇▇▇
Holdings ("Class A Common Stock") subject to the terms set forth in the
Indenture, including Section 15.06, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Debentures then outstanding. It is
also provided in the Indenture that, prior to any declaration accelerating the
maturity of the Debentures, the holders of a majority in aggregate principal
amount of the Debentures at the time outstanding may on behalf of the holders of
all of the Debentures waive any past default or Event of Default under the
Indenture and its consequences except (i) a default in the payment of interest
or premium, if any, on or the principal of, any of the Debentures, (ii) a
failure by the Company to convert any Debentures into Class A Common Stock or
(iii) a default in respect of a covenant or provision hereof which under Article
Eleven of
A-4
the Indenture cannot be modified or amended without the consent of the
holders of all Debentures then outstanding. Any such consent or waiver by the
holder of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Debenture and any Debentures which may be issued in exchange or
substitution therefor, irrespective of whether or not any notation thereof is
made upon this Debenture or such other Debentures.
The indebtedness evidenced by the Debentures is, to the extent and in
the manner provided in the Indenture, expressly subordinate and subject in right
of payment to the prior payment in full of all Senior Indebtedness of the
Company, as defined in the Indenture, whether outstanding at the date of the
Indenture or thereafter incurred, and this Debenture is issued subject to the
provisions of the Indenture with respect to such subordination. Each holder of
this Debenture, by accepting the same, agrees to and shall be bound by such
provisions and authorizes the Trustee on his behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee his attorney in fact for such purpose.
No reference herein to the Indenture and no provision of this Debenture
or the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Debenture at the place, at the respective times, at the rate and in the
coin or currency herein prescribed.
Interest on the Debentures shall be computed on the basis of a year of
twelve 30-day months.
The Debentures are issuable in registered form without coupons in
denominations of $1,000 and any multiple of $1,000. At the office or agency of
the Company referred to on the face hereof, and in the manner and subject to the
limitations provided in the Indenture, but without payment of any service
charge, Debentures may be exchanged for a like aggregate principal amount of
Debentures or other authorized denominations.
The Debentures may be redeemed at the option of the Company as a whole,
or from time to time in part, on any Business Day prior to maturity on or after
January 15, 1996, upon mailing a notice of such redemption not less than thirty
nor more than sixty days before the date fixed for redemption to the holders of
Debentures at their last registered addresses, all as provided in the Indenture,
at the following optional redemption prices (expressed as percentages of the
principal amount), together in each case with accrued interest to the date fixed
for redemption:
If redeemed during the twelve-month period beginning January 15:
YEAR PERCENTAGE YEAR PERCENTAGE
---- ---------- ---- ----------
1996 103.5% 2000 101.5%
1997 103.0 2001 101.0
1998 102.5 2002 100.5
1999 102.0 2003 and thereafter 100.0
PROVIDED, that if the date fixed for redemption is a January 15 or July 15, then
the interest
A-5
payable on such date shall be paid to the holder of record on the next preceding
January 1 or July 1, respectively.
Subject to the provisions of the Indenture, the holder hereof has the
right, at his option, at any time on or before the close of business on January
15, 2003, or, as to all or any portion hereof called for redemption during such
period, the close of business on the date fixed for redemption (unless the
Company shall default in payment due upon redemption thereof) to convert the
principal hereof or any portion of such principal which is $1,000 or a multiple
thereof, into that number of shares of Class A Common Stock, as said shares
shall be constituted at the date of conversion, obtained by dividing the
principal amount of this Debenture or portion thereof to be converted by the
conversion price of $21.83 or such conversion price as adjusted from time to
time as provided in the Indenture, upon surrender of this Debenture, together
with a conversion notice as provided in the Indenture, to the Company at the
office or agency of the Company maintained for that purpose in, at the option of
the Company, Honolulu, Hawaii or New York, New York, and, unless the shares
issuable on conversion are to be issued in the same name as this Debenture, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the holder or by his duly authorized attorney. No
adjustments in respect of interest or dividends will be made upon any
conversion; PROVIDED, HOWEVER, that if this Debenture shall be surrendered for
conversion during the period from the close of business on any record date for
the payment of interest to the opening of business on the following interest
payment date, this Debenture (unless it or the portion being converted shall
have been called for redemption on a date in such period) must be accompanied by
an amount, in funds acceptable to the Company, equal to the interest payable on
such interest payment date on the principal amount being converted. No factional
shares will be issued upon any conversion, but an adjustment in cash will be
made, as provided in the Indenture, in respect of any fraction of a share which
would otherwise be issuable upon the surrender of any Debenture of Debentures
for conversion. A holder of Debentures is not entitled any rights of a holder of
Class A Common Stock until such holder has converted his Debentures to Class A
Common Stock, and only to the extent such Debentures are deemed to have been
converted to Class A Common Stock under the Indenture.
Any Debentures called for redemption, unless surrendered for conversion
on or before the close of business on the date fixed for redemption, may be
deemed to be purchased from the holder of such Debentures at an amount equal to
the applicable redemption price, together with accrued interest to the date
fixed for redemption, by one or more investment bankers or other purchasers who
may agree with the Company to purchase such Debentures from the holders thereof
and convert them into Class A Common Stock and to make payment for such
Debentures as aforesaid to the Trustee in trust for such holders.
The Indenture provides that if a Risk Event (as defined therein)
occurs, each holder of Debentures shall have the right, in accordance with the
provisions of the Indenture, to require the Company to repurchase all of such
holder's Debentures, or any portion thereof that is an integral multiple of
$1,000, for cash at a price equal to 100% of the principal amount of such
Debentures to be repurchased together with accrued interest to the Repurchase
Date. The Company may, at its option, in lieu of paying the Repurchase Price in
cash, cause the Repurchase Price to be paid in Class A Common Stock valued at
95% of the average of the closing prices of the Class A Common Stock for the
five trading days ending on the third trading preceding the ▇▇▇▇▇▇▇▇▇▇
▇-▇
Date; provided that payment may not be made in Class A Common Stock unless such
stock is listed on a national securities exchange or quoted on the NASDAQ
National Market System at the time of payment.
Upon due presentment for registration of transfer of this Debenture at
the office or agency of the Company in, at the option of the Company, Honolulu,
Hawaii or New York, New York, a new Debenture or Debentures of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange herefor, subject to the limitations provided in the
Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company, the Trustee, any paying agent, any conversion agent and
any Debenture registrar may deem and treat the registered holder hereof as the
absolute owner of this Debenture (whether or not this Debenture shall be overdue
and notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Company or any Debenture registrar), for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
paying agent nor any other conversion agent nor any Debenture registrar shall be
affected by any notice to the contrary. All payments made to or upon the order
of such registered holder shall, to the extent of the sum or sums paid, satisfy
and discharge liability for monies payable on this Debenture.
No recourse for the payment of the principal of or any premium or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
Terms used in this Debenture and defined in the Indenture are used
herein as therein defined.
A-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
Debenture, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties ______________________ Custodian
(Cust)
JT TEN - as joint tenants with right of ______________________ under
survivorship and not as tenants (Minor)
in common
Uniform Gifts to
Minors Act ______________
(State)
Additional abbreviations may also be used
though not in the above list.
A-8
(FORM OF CONVERSION NOTICE)
CONVERSION NOTICE
To: ▇▇▇▇▇▇▇ Homes, Inc.
The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion hereof (which is
$1,000 or a multiple thereof) below designated, into shares of Class A Common
Stock in accordance with the terms of the Indenture referred to in this
Debenture, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and any
Debentures representing any unconverted principal amount hereof be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Debenture not converted are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest accompanies this Debenture.
Dated:
---------------------------------
---------------------------------
Signature(s)
Signature(s) must be
guaranteed by a commercial
bank or trust company or a
member firm of a major stock
exchange if shares of Class A
Common Stock are to be
delivered, or Debentures to be
issued, other than to and in the
name of the registered holder.
---------------------------------------------
Signature Guarantee
A-9
Fill in for registration of shares
if to be delivered, and
Debentures if to be issued other
than to and in the name of the
registered holder:
---------------------------------------------
(Name)
---------------------------------------------
(Street Address)
---------------------------------------------
(City, State and zip code)
Please print name and address
Principal amount to be converted (if less than all):
$____,000
---------------------------------------------------
Social Security or other Taxpayer Identification
Number
A-10
(FORM OF ASSIGNMENT]
For value received, _______________________ hereby sell(s), assign(s) and
transfer(s) unto__________________________ (please insert social security or
other identifying number of assignee) the within Debenture and hereby
irrevocably constitutes and appoints _________________________ attorney to
transfer the said Debenture on the books of the Company, with full power of
substitution in the premises.
Dated:
----------------------------------- ---------------------------------------
Signature(s).
Signature(s) must be
guaranteed by a commercial
bank or trust company or a
member firm of a major stock
exchange.
-----------------------------------
Signature Guarantee
NOTICE: The signature on the conversion notice or the assignment must correspond
with the name as written upon the face of the Debenture in every particular
without alteration or enlargement or any change whatever.
A-11
