EXHIBIT 4.2
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TECHNICAL OLYMPIC USA, INC.,
as Issuer
10 3/8% SENIOR SUBORDINATED NOTES DUE 2012
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INDENTURE
Dated as of June 25, 2002
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XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
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TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE........................................1
Section 1.01. Definitions..................................................................1
Section 1.02. Other Definitions...........................................................24
Section 1.03. Incorporation by Reference of Trust Indenture Act...........................25
Section 1.04. Rules of Construction.......................................................25
ARTICLE 2. THE NOTES........................................................................26
Section 2.01. Form and Dating.............................................................26
Section 2.02. Execution and Authentication................................................26
Section 2.03. Registrar and Paying Agent..................................................27
Section 2.04. Paying Agent to Hold Money in Trust.........................................27
Section 2.05. Holder Lists................................................................27
Section 2.06. Transfer and Exchange.......................................................27
Section 2.07. Replacement Notes...........................................................38
Section 2.08. Outstanding Notes...........................................................38
Section 2.09. Treasury Notes..............................................................38
Section 2.10. Temporary Notes.............................................................39
Section 2.11. Cancellation................................................................39
Section 2.12. Defaulted Interest..........................................................39
Section 2.13. CUSIP or ISIN Numbers.......................................................39
Section 2.14. Special Interest............................................................39
ARTICLE 3. REDEMPTION AND PREPAYMENT........................................................40
Section 3.01. Notices to Trustee..........................................................40
Section 3.02. Selection of Notes to Be Redeemed...........................................40
Section 3.03. Notice of Redemption........................................................40
Section 3.04. Effect of Notice of Redemption..............................................41
Section 3.05. Deposit of Redemption Price.................................................41
Section 3.06. Notes Redeemed in Part......................................................41
Section 3.07. Optional Redemption.........................................................42
Section 3.08. Mandatory Redemption........................................................42
ARTICLE 4. COVENANTS........................................................................43
Section 4.01. Payment of Notes............................................................43
Section 4.02. Maintenance of Office or Agency.............................................43
Section 4.03. Reports.....................................................................43
Section 4.04. Compliance Certificate......................................................44
Section 4.05. Taxes.......................................................................44
Section 4.06. Stay, Extension and Usury Laws..............................................44
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Section 4.07. Corporate Existence.........................................................44
Section 4.08. Payments for Consent........................................................45
Section 4.09. Maintenance of Consolidated Net Worth.......................................45
Section 4.10. Incurrence of Debt..........................................................46
Section 4.11. Restricted Payments.........................................................48
Section 4.12. Liens.......................................................................50
Section 4.13. Asset Sales.................................................................50
Section 4.14. Restrictions on Distributions from Restricted Subsidiaries..................52
Section 4.15. Transactions with Affiliates................................................53
Section 4.16. Designation of Restricted and Unrestricted Subsidiaries.....................54
Section 4.17. Repurchase at the Option of Holders Upon a Change of Control................56
Section 4.18. Future Subsidiary Guarantors................................................57
Section 4.19. Layered Debt................................................................57
Section 4.20. Business Activities.........................................................57
Section 4.21. Covenant Suspension.........................................................57
ARTICLE 5. SUCCESSORS.......................................................................58
Section 5.01. Merger, Consolidation, or Sale of Property..................................58
Section 5.02. Successor Corporation Substituted...........................................60
ARTICLE 6. DEFAULTS AND REMEDIES............................................................60
Section 6.01. Events of Default...........................................................60
Section 6.02. Acceleration................................................................61
Section 6.03. Other Remedies..............................................................62
Section 6.04. Waiver of Past Defaults.....................................................62
Section 6.05. Control by Majority.........................................................62
Section 6.06. Limitation on Suits.........................................................62
Section 6.07. Rights of Holders to Receive Payment........................................63
Section 6.08. Collection Suit by Trustee..................................................63
Section 6.09. Trustee May File Proofs of Claim............................................63
Section 6.10. Priorities..................................................................63
Section 6.11. Undertaking for Costs.......................................................64
ARTICLE 7. TRUSTEE..........................................................................64
Section 7.01. Duties of Trustee...........................................................64
Section 7.02. Rights of Trustee...........................................................65
Section 7.03. Individual Rights of Trustee................................................65
Section 7.04. Trustee's Disclaimer........................................................66
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(CONTINUED)
PAGE
Section 7.05. Notice of Defaults..........................................................66
Section 7.06. Reports by Trustee to Holders...............................................66
Section 7.07. Compensation and Indemnity..................................................66
Section 7.08. Replacement of Trustee......................................................67
Section 7.09. Successor Trustee by Merger, etc............................................68
Section 7.10. Eligibility; Disqualification...............................................68
Section 7.11. Preferential Collection of Claims Against Company...........................68
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.........................................68
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance....................68
Section 8.02. Legal Defeasance............................................................68
Section 8.03. Covenant Defeasance.........................................................69
Section 8.04. Conditions to Legal or Covenant Defeasance..................................69
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions....................................................70
Section 8.06. Repayment to Company........................................................70
Section 8.07. Reinstatement...............................................................71
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER.................................................71
Section 9.01. Without Consent of Holders of Notes.........................................71
Section 9.02. With Consent of Holders of Notes............................................72
Section 9.03. With Consent of Holders of Senior Debt......................................73
Section 9.04. Compliance with Trust Indenture Act.........................................73
Section 9.05. Revocation and Effect of Consents...........................................73
Section 9.06. Notation on or Exchange of Notes............................................73
Section 9.07. Trustee to Sign Amendments, etc.............................................74
ARTICLE 10. SUBSIDIARY GUARANTIES............................................................74
Section 10.01. Subsidiary Guaranty.........................................................74
Section 10.02. Limitation on Subsidiary Guarantor Liability................................75
Section 10.03. Execution and Delivery of Subsidiary Guaranty...............................75
Section 10.04. Additional Subsidiary Guarantors............................................76
Section 10.05. Release of Subsidiary Guarantor.............................................76
ARTICLE 11. SUBORDINATION....................................................................76
Section 11.01. Agreement to Subordinate....................................................76
Section 11.02. Liquidation, Dissolution, Bankruptcy........................................76
Section 11.03. Default on Senior Debt......................................................77
Section 11.04. Acceleration of Payment of Securities.......................................77
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Section 11.05. When Distribution Must Be Paid Over.........................................77
Section 11.06. Subrogation.................................................................77
Section 11.07. Relative Rights.............................................................78
Section 11.08. Subordination May Not Be Impaired by Company................................78
Section 11.09. Rights of Trustee and Paying Agent..........................................78
Section 11.10. Distribution or Notice to Representative....................................78
Section 11.11. Article 11 Not to Prevent Events of Default or Limit Right to Accelerate....78
Section 11.12. Trust Moneys Not Subordinated...............................................78
Section 11.13. Trustee Entitled to Rely....................................................79
Section 11.14. Trustee to Effectuate Subordination.........................................79
Section 11.15. Trustee Not Fiduciary for Holders of Senior Debt............................79
Section 11.16. Reliance by Holders of Senior Debt on Subordination Provisions..............79
ARTICLE 12. SUBORDINATION OF SUBSIDIARY GUARANTEES...........................................79
Section 12.01. Agreement to Subordinate....................................................79
Section 12.02. Liquidation, Dissolution, Bankruptcy........................................80
Section 12.03. Default on Senior Debt of Subsidiary Guarantor..............................80
Section 12.04. Demand for Payment..........................................................80
Section 12.05. When Distribution Must Be Paid Over.........................................80
Section 12.06. Subrogation.................................................................80
Section 12.07. Relative Rights.............................................................81
Section 12.08. Subordination May Not Be Impaired by Subsidiary Guarantor...................81
Section 12.09. Rights of Trustee and Paying Agent..........................................81
Section 12.10. Distribution or Notice to Representative....................................81
Section 12.11. Article 12 Not to Prevent Events of Default Under a Subsidiary Guaranty or
Limit Right to Demand Payment...............................................81
Section 12.12. Trustee Entitled to Rely....................................................81
Section 12.13. Trustee to Effectuate Subordination.........................................82
Section 12.14. Trustee Not Fiduciary for Holders of Senior Debt of Subsidiary Guarantor....82
Section 12.15. Reliance by Holders of Senior Debt of a Subsidiary Guarantor on
Subordination Provisions....................................................82
ARTICLE 13. SATISFACTION AND DISCHARGE.......................................................82
Section 13.01. Satisfaction and Discharge..................................................82
Section 13.02. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions....................................................83
Section 13.03. Repayment to Company........................................................83
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ARTICLE 14. MISCELLANEOUS....................................................................84
Section 14.01. Trust Indenture Act Controls................................................84
Section 14.02. Notices.....................................................................84
Section 14.03. Communication by Holders of Notes with Other Holders of Notes...............85
Section 14.04. Certificate and Opinion as to Conditions Precedent..........................85
Section 14.05. Statements Required in Certificate or Opinion...............................85
Section 14.06. Rules by Trustee and Agents.................................................85
Section 14.07. No Personal Liability of Directors, Officers, Employees and Stockholders....85
Section 14.08. Governing Law...............................................................86
Section 14.09. No Adverse Interpretation of Other Agreements...............................86
Section 14.10. Successors..................................................................86
Section 14.11. Severability................................................................86
Section 14.12. Counterpart Originals.......................................................86
Section 14.13. Table of Contents, Headings, etc............................................86
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(CONTINUED)
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EXHIBITS
Exhibit A FORM OF NOTE.................................................................A-1
Exhibit B FORM OF CERTIFICATE OF TRANSFER..............................................B-1
Exhibit C FORM OF CERTIFICATE OF EXCHANGE..............................................C-1
Exhibit D FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR............................................D-1
Exhibit E FORM OF NOTATION OF GUARANTEE................................................E-1
Exhibit F FORM OF SUPPLEMENTAL INDENTURE...............................................F-1
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This INDENTURE dated as of June 25, 2002, is by and among Technical
Olympic USA, Inc., a Delaware corporation (the "Company"), the Subsidiary
Guarantors (as defined) parties hereto, and Xxxxx Fargo Bank Minnesota, National
Association, a national banking association, as trustee (the "Trustee").
The Company, the Subsidiary Guarantors and the Trustee agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the 10 3/8% Senior Subordinated Notes due 2012 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
"144A Global Note" means the global Note in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means Debt of a Person outstanding on the date
on which such Person becomes a Restricted Subsidiary or assumed in connection
with the acquisition of assets from such Person.
"Additional Assets" means:
(1) any Property (other than cash, Cash Equivalents and
securities) to be owned by the Company or any Restricted Subsidiary and used in
a Permitted Business; or
(2) Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary from any Person other than the Company or an
Affiliate of the Company; provided, however, that, in the case of this clause
(2), such Restricted Subsidiary is primarily engaged in a Permitted Business.
"Additional Notes" means any Notes (other than Initial Notes
and Exchange Notes) issued under this Indenture in accordance with Sections 2.02
and 4.10, as part of the same series as the Initial Notes or as an additional
series.
"Additional Senior Notes" means any Senior Notes (other than
Initial Senior Notes and Senior Exchange Notes) issued under the Senior Notes
Indenture in accordance with Sections 2.02 and 4.10 thereof, as part of the same
series as the Initial Senior Notes or as an additional series.
"Affiliate" of any specified Person means:
(1) any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person, or
(2) any other Person who is a director or executive officer
of:
(a) such specified Person,
(b) any Subsidiary of such specified Person, or
(c) any Person described in clause (1) above.
1
For the purposes of this definition, "control," when used with respect to any
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the preceding. For purposes of Sections 4.13 and 4.15
and the definition of "Additional Assets" only, "Affiliate" shall also mean any
beneficial owner of shares representing 10% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of the Company.
"Agent" means any Registrar, co-registrar, Paying Agent or
additional paying agent.
"Applicable Procedures" means, with respect to any transfer,
redemption or exchange of or for beneficial interests in any Global Note, the
rules and procedures of the Depositary, Euroclear and Clearstream that apply to
such transfer, redemption or exchange.
"Asset Sale" means any sale, lease, transfer, issuance or
other disposition (or series of related sales, leases, transfers, issuances or
dispositions) by the Company or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "disposition"), of
(1) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares), or
(2) any other Property of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or such
Restricted Subsidiary,
other than, in the case of clause (1) or (2) above,
(a) any disposition by a Restricted Subsidiary to the
Company or by the Company or a Restricted Subsidiary to a Wholly Owned
Restricted Subsidiary,
(b) any disposition that constitutes a Permitted
Investment, a Restricted Payment or Debt under a Warehouse Facility
permitted by Section 4.10 or 4.11,
(c) any disposition effected in compliance with
Section 5.01(a),
(d) any disposition of cash or Cash Equivalents, and
(e) any disposition or series of related dispositions
of Property with an aggregate Fair Market Value, and for net proceeds,
of less than $1.0 million.
"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, at any date of determination,
(1) if such Sale and Leaseback Transaction is a Capital Lease
Obligation, the amount of Debt represented thereby according to the definition
of "Capital Lease Obligations," and
(2) in all other instances, the greater of:
(a) the Fair Market Value of the Property subject to
such Sale and Leaseback Transaction, and
(b) the present value (discounted at the interest
rate borne by the Senior Notes, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term
of the lease included in such Sale and Leaseback Transaction (including
any period for which such lease has been extended).
2
"Average Life" means, as of any date of determination, with
respect to any Debt or Preferred Stock, the quotient obtained by dividing:
(1) the sum of the product of the numbers of years (rounded to
the nearest one-twelfth of one year) from the date of determination to the dates
of each successive scheduled principal payment of such Debt or redemption or
similar payment with respect to such Preferred Stock multiplied by the amount of
such payment by
(2) the sum of all such payments.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"Board of Directors" means the board of directors of the
Company or any committee thereof authorized with respect to any particular
matter to exercise the power of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the applicable Person to have been
duly adopted by 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.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligations" means any obligation under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of Debt represented by such obligation
shall be the capitalized amount of such obligations determined in accordance
with GAAP; and the Stated Maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
For purposes of Section 4.12, a Capital Lease Obligation shall be deemed secured
by a Lien on the Property being leased.
"Capital Stock" means, with respect to any Person, any shares
or other equivalents (however designated) of any class of corporate stock or
partnership interests or any other participations, rights, warrants, options or
other interests in the nature of an equity interest in such Person, including
Preferred Stock, but excluding any debt security convertible or exchangeable
into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate cash
proceeds received by the Company, including the Fair Market Value of Property
other than cash, received from the issuance or sale (other than to a Subsidiary
of the Company or an employee stock ownership plan or trust established by the
Company or any such Subsidiary for the benefit of their employees) by the
Company of its Capital Stock (other than Disqualified Stock) after the Issue
Date (and in no event received in connection with the Merger), net of attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Cash Equivalents" means
(1) securities issued or directly and fully guaranteed or
insured by the United States Government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof), having maturities of not more than one year from the date of
acquisition;
(2) marketable general obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof (provided that the full faith and credit of such state is
pledged in support thereof) and, at the time of acquisition thereof, having
credit ratings of at least AA- (or the equivalent) by S&P and at least Aa3 (or
the equivalent) by Xxxxx'x;
(3) certificates of deposit, time deposits, eurodollar time
deposits, overnight bank deposits or bankers' acceptances having maturities of
not more than one year from the date of acquisition thereof issued by any
3
commercial bank organized in the United States of America or Canada, the
long-term debt of which is rated at the time of acquisition thereof at least AA-
(or the equivalent) by S&P and at least Aa3 (or the equivalent) by Xxxxx'x, and
having combined capital and surplus in excess of $500.0 million;
(4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (1), (2) and
(3) entered into with any bank meeting the qualifications specified in clause
(3) above;
(5) commercial paper rated at the time of acquisition thereof
in one of the two highest categories obtainable from both S&P and Xxxxx'x or
carrying an equivalent rating by a nationally recognized rating agency, if both
of the two named rating agencies cease publishing ratings of investments, and in
any case maturing within one year after the date of acquisition thereof; and
(6) interests in any investment company or money market fund
substantially all of the assets of which are of the type specified in clauses
(1) through (5) above.
"Change of Control" means the occurrence of any of the
following events:
(1) if any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act or any successor provisions to
either of the preceding), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act, other than any one or more of the Permitted
Holders, becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, except that a person will be deemed to have "beneficial ownership"
of all shares that any such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of 50% or more of the total voting power of the Voting Stock of the
Company; (for purposes of this clause (1), such person or group shall be deemed
to beneficially own any Voting Stock of a corporation held by any other
corporation (the "parent corporation") so long as such person or group
beneficially owns, directly or indirectly, in the aggregate a majority of the
total voting power of the Voting Stock of such parent corporation); or
(2) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the Property of
the Company and the Restricted Subsidiaries, considered as a whole (other than a
disposition of such Property as an entirety or virtually as an entirety to a
Wholly Owned Restricted Subsidiary), shall have occurred, or the Company merges,
consolidates or amalgamates with or into any other Person, or any other Person
merges, consolidates or amalgamates with or into the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the Company
is reclassified into or exchanged for cash, securities or other Property, other
than any such transaction where:
(a) the outstanding Voting Stock of the Company is
reclassified into or exchanged all or in part for other Voting Stock of
the Company or for Voting Stock of the Surviving Person, and
(b) the holders of the Voting Stock of the Company
immediately prior to such transaction own, directly or indirectly, not
less than a majority of the Voting Stock of the Company or the
Surviving Person immediately after such transaction and in
substantially the same proportion as before the transaction; or
(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 or appointment by such Board or whose
nomination for election by the stockholders of the Company was approved by a
vote of not less than two-thirds of the directors 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 then in office; or
(4) the stockholders of the Company shall have approved any
plan of liquidation or dissolution of the Company.
4
"Clearstream" means Clearstream Banking S.A. and any successor
thereto.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the U.S. Securities and Exchange
Commission.
"Comparable Treasury Issue" means the United States Treasury
security selected by the Reference Treasury Dealer as having a maturity
comparable to the remaining term of the Notes being redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Notes being redeemed.
"Comparable Treasury Price" means, with respect to any
redemption date:
(1) the average of the bid and ask prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third Business Day preceding such redemption date, as set forth in the
most recently published statistical release designated "H.15(519)" (or any
successor release) published by the Board of Governors of the Federal Reserve
System and which establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities;" or
(2) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, the Reference
Treasury Dealer Quotation for such redemption date.
"Consolidated Current Liabilities" means, as of any date of
determination, the aggregate amount of liabilities of the Company and its
consolidated Restricted Subsidiaries which may properly be classified as current
liabilities (including taxes accrued as estimated), after eliminating all
current maturities of long-term Debt.
"Consolidated Debt" means, as of any date of determination,
the total Debt of the Company and its consolidated Restricted Subsidiaries.
"Consolidated Debt to Consolidated Tangible Net Worth Ratio"
means, as of any date of determination, the ratio of:
(1) Consolidated Debt to
(2) Consolidated Tangible Net Worth.
For purposes of this ratio, pro forma effect shall be given to any Debt to be
Incurred or repaid on the date of determination, and if the Debt that is the
subject of a determination under this provision is Debt to be Incurred in
connection with the simultaneous acquisition of any Person, business or
Property, then such ratio shall be determined on a pro forma basis, as if the
transaction had occurred on the date of determination.
"Consolidated Interest Coverage Ratio" means, as of any date
of determination, the ratio of:
(1) the aggregate amount of EBITDA for the most recent four
consecutive fiscal quarters ending at least 45 days prior to such determination
date to
(2) Consolidated Interest Incurred for such four fiscal
quarters;
provided, however, that:
(a) if
(i) since the beginning of such period the
Company or any Restricted Subsidiary has Incurred any Debt
that remains outstanding or Repaid any Debt, or
5
(ii) the transaction giving rise to the need
to calculate the Consolidated Interest Coverage Ratio is an
Incurrence or Repayment of Debt,
Consolidated Interest Expense and Consolidated Interest Incurred for
such period shall be calculated after giving effect on a pro forma
basis to such Incurrence or Repayment as if such Debt was Incurred or
Repaid on the first day of such period, provided that the amount of
Debt Incurred under revolving credit facilities shall be deemed to be
the average daily balance of such Debt during such four quarter period
(or any shorter period in which such facilities are in effect) and
provided, further, in the event of any such Repayment of Debt, EBITDA
for such period shall be calculated as if the Company or such
Restricted Subsidiary had not earned any interest income actually
earned during such period in respect of the funds used to Repay such
Debt, and
(b) if
(i) since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset
Sale, which shall be deemed to include the sale of Westbrooke,
or an Investment (by merger or otherwise) in any Restricted
Subsidiary (or any Person which becomes a Restricted
Subsidiary) or an acquisition of Property which constitutes
all or substantially all of an operating unit of a business,
(ii) the transaction giving rise to the need
to calculate the Consolidated Interest Coverage Ratio is such
an Asset Sale, Investment or acquisition, or
(iii) since the beginning of such period any
Person (that subsequently became a Restricted Subsidiary or
was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made
such an Asset Sale, Investment or acquisition,
then EBITDA for such period shall be calculated after giving pro forma
effect to such Asset Sale, Investment or acquisition as if such Asset
Sale, Investment or acquisition had occurred on the first day of such
period.
If any Debt bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Debt shall be calculated as
if the base interest rate in effect for such floating rate of interest on the
date of determination had been the applicable base interest rate for the entire
period (taking into account any Interest Rate Agreement applicable to such Debt
if such Interest Rate Agreement has a remaining term in excess of 12 months). In
the event the Capital Stock of any Restricted Subsidiary is sold during the
period, the Company shall be deemed, for purposes of clause (a) above, to have
Repaid during such period the Debt of such Restricted Subsidiary to the extent
the Company and its continuing Restricted Subsidiaries are no longer liable for
such Debt after such sale.
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent Incurred by the Company or its Restricted Subsidiaries,
(1) interest expense attributable to Capital Lease
Obligations;
(2) amortization of debt discount and debt issuance cost,
including commitment fees;
(3) capitalized interest;
(4) non-cash interest expense;
(5) commissions; discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing;
6
(6) net costs associated with Hedging Obligations (including
amortization of fees);
(7) Disqualified Stock Dividends;
(8) Preferred Stock Dividends;
(9) interest Incurred in connection with Investments in
discontinued operations;
(10) interest accruing on any Debt of any other Person to the
extent such Debt is Guaranteed by the Company or any Restricted Subsidiary;
(11) cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used by such plan or trust
to pay interest or fees to any Person (other than the Company) in connection
with Debt Incurred by such plan or trust; and
(12) all interest amortized to cost of sales in such period.
"Consolidated Interest Incurred" means, for any period,
Consolidated Interest Expense, but excluding any interest amortized to cost of
sales in such period.
"Consolidated Net Income" means, for any period, the net
income (loss) of the Company and its consolidated Restricted Subsidiaries;
provided, however, that there shall not be included in such Consolidated Net
Income:
(1) any net income (loss) of any Person (other than the
Company) if such Person is not a Restricted Subsidiary, except that:
(a) subject to the exclusion contained in clause (4)
below, the Company's equity in the net income of any such Person for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash distributed by such Person during such period
to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution
to a Restricted Subsidiary, to the limitations contained in clause (3)
below), and
(b) the Company's equity in a net loss of any such
Person other than an Unrestricted Subsidiary for such period shall be
included in determining such Consolidated Net Income,
(2) for purposes of Section 4.11 only, any net income (loss)
of any Person acquired by the Company or any of its consolidated Subsidiaries in
a pooling of interests transaction for any period prior to the date of such
acquisition,
(3) any net income (loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions, directly or indirectly, to
the Company, except that:
(a) subject to the exclusion contained in clause (4)
below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution to another Restricted
Subsidiary, to the limitation contained in this clause (3)), and
(b) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in determining
such Consolidated Net Income,
7
(4) any gain (but not loss) realized upon the sale or other
disposition of any Property of the Company or any of its consolidated
Subsidiaries that is not sold or otherwise disposed of in the ordinary course of
business,
(5) any extraordinary, non-recurring or unusual gain or loss,
(6) the cumulative effect of a change in accounting
principles, and
(7) any non-cash compensation expense realized for grants of
performance shares, stock options or other rights to officers, directors and
employees of the Company or any Restricted Subsidiary, provided that such
shares, options or other rights can be redeemed at the option of the holder only
for Capital Stock of the Company (other than Disqualified Stock).
Notwithstanding the preceding, for purposes of Section 4.11 only, there shall be
excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of Property from Unrestricted Subsidiaries to the
Company or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under Section
4.11(a)(iii)(4).
"Consolidated Net Tangible Assets" means, as of any date of
determination, the sum of the amounts that would appear on a consolidated
balance sheet of the Company and its consolidated Restricted Subsidiaries as the
total assets (less accumulated depreciation and amortization, allowances for
doubtful receivables, other applicable reserves and other properly deductible
items) of the Company and its Restricted Subsidiaries, after giving effect to
purchase accounting and after deducting therefrom Consolidated Current
Liabilities and, to the extent otherwise included, the amounts of (without
duplication):
(1) the excess of cost over fair market value of assets or
businesses acquired;
(2) any revaluation or other write-up in book value of assets
subsequent to the last day of the fiscal quarter of the Company immediately
preceding the Issue Date as a result of a change in the method of valuation in
accordance with GAAP;
(3) unamortized debt discount and expenses and other
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, copyrights, licenses, organization or developmental expenses and
other intangible items;
(4) minority interests in consolidated Subsidiaries held by
Persons other than the Company or any Restricted Subsidiary;
(5) treasury stock;
(6) cash or securities set aside and held in a sinking or
other analogous fund established for the purpose of redemption or other
retirement of Capital Stock to the extent such obligation is not reflected in
Consolidated Current Liabilities; and
(7) Investments in and assets of Unrestricted Subsidiaries.
"Consolidated Net Worth" means, as of any date of
determination, the stockholders' equity of the Company and its consolidated
Restricted Subsidiaries as of such date, as determined in accordance with GAAP.
"Consolidated Tangible Net Worth" means, as of any date of
determination, the Consolidated Net Worth less the Intangible Assets.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 14.02 or such other address as to
which the Trustee may give notice to the Company.
8
"Credit Facilities" means, with respect to the Company or any
Restricted Subsidiary, one or more debt or commercial paper facilities with
banks or other institutional lenders (including the Senior Credit Facility)
providing for revolving credit loans, term loans, receivables or inventory
financing (including through the sale of receivables or inventory to such
lenders or to special purpose, bankruptcy remote entities formed to borrow from
such lenders against such receivables or inventory) or trade letters of credit,
in each case together with any Refinancings thereof by a lender or syndicate of
lenders.
"Custodian" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
as Custodian with respect to the Notes, any and all successors thereto appointed
as custodian hereunder and having become such pursuant to the applicable
provisions of this Indenture.
"Debt" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal of, premium (if any) and any other
Obligations in respect of:
(a) debt of such Person for money borrowed, and
(b) debt evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such Person is
responsible or liable;
(2) all Capital Lease Obligations of such Person and
Attributable Debt in respect of Sale and Leaseback Transactions entered into by
such Person;
(3) all obligations of such Person issued or assumed as the
deferred purchase price of Property, all conditional sale obligations of such
Person and all obligations of such Person under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business);
(4) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit securing
obligations (other than obligations described in clauses (1) through (3) above)
entered into in the ordinary course of business of such Person to the extent
such letters of credit are not drawn upon or, if and to the extent drawn upon,
such drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit);
(5) the amount of all obligations of such Person with respect
to the Repayment of any Disqualified Stock or, with respect to any Subsidiary of
such Person, any Preferred Stock (but excluding, in each case, any accrued
dividends);
(6) all obligations of the type referred to in clauses (1)
through (5) above of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable, directly
or indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1)
through (6) above of other Persons secured by any Lien on any Property of such
Person (whether or not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the Fair Market Value of such
Property or the amount of the obligation so secured; and
(8) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Debt of any Person at any date shall be (x) the accreted value
thereof at such date in the case of any Debt that does not require current
payments of interest, (y) the outstanding balance of all unconditional
obligations as described above at such date and (z) the maximum liability, upon
the occurrence of the contingency giving rise to the obligation, of any
contingent obligations at such date. The amount of Debt represented by a Hedging
Obligation shall be equal to:
9
(A) zero if such Hedging Obligation has been Incurred pursuant
to Section 4.10(b)(vi), or
(B) the notional amount of such Hedging Obligation if not
Incurred pursuant to such Section 4.10(b)(vi).
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06, in
substantially the form of Exhibit A hereto except that such Note shall not bear
the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Designated Senior Debt" means:
(1) any Senior Debt that has, at the time of determination, an
aggregate principal amount outstanding of at least $25.0 million (including the
amount of all undrawn commitments and matured and contingent reimbursement
obligations pursuant to letters of credit thereunder) that is specifically
designated in the instrument evidencing such Senior Debt and is designated in a
notice delivered by the Company to the holders or a Representative of the
holders of such Senior Debt and in an Officers' Certificate delivered to the
Trustee as "Designated Senior Debt" of the Company for purposes of this
Indenture,
(2) any Senior Debt outstanding under the Senior Credit
Facility, and
(3) any Senior Debt outstanding under the Senior Notes
Indenture.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
as the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provisions of this Indenture.
"Disqualified Stock" means any Capital Stock of the Company or
any of its Restricted Subsidiaries that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable, in either
case at the option of the holder thereof) or otherwise:
(1) matures or is mandatorily redeemable pursuant to a sinking
fund obligation or otherwise,
(2) is or may become redeemable or repurchaseable at the
option of the holder thereof, in whole or in part, or
(3) is convertible or exchangeable at the option of the holder
thereof for Debt or other Disqualified Stock,
on or prior to, in the case of clauses (1), (2) or (3), 30 days after the Stated
Maturity of the Notes.
"Disqualified Stock Dividends" means all dividends with
respect to Disqualified Stock of the Company held by Persons other than a Wholly
Owned Restricted Subsidiary. The amount of any such dividend shall be equal to
the quotient of such dividend divided by the difference between one and the
maximum statutory Federal income tax rate (expressed as a decimal number between
1 and 0) then applicable to the Company.
"Distribution Compliance Period" means the 40-day distribution
compliance period as defined in Regulation S.
"Domestic Restricted Subsidiary" means any Restricted
Subsidiary other than (1) a Foreign Restricted Subsidiary or (2) a Subsidiary of
a Foreign Restricted Subsidiary.
10
"EBITDA" means, for any period, an amount equal to, for the
Company and its consolidated Restricted Subsidiaries:
(1) the sum of Consolidated Net Income for such period, plus
the following to the extent reducing Consolidated Net Income for such period:
(a) the provision for taxes based on income or
profits or utilized in computing net loss,
(b) Consolidated Interest Expense,
(c) depreciation,
(d) amortization of intangibles, and
(e) any other non-cash items (other than any such
non-cash item to the extent that it represents an accrual of, or
reserve for, cash expenditures in any future period), minus
(2) all non-cash items increasing Consolidated Net Income for
such period.
Notwithstanding the preceding clause (1), the provision for taxes and the
depreciation, amortization and non-cash items of a Restricted Subsidiary shall
be added to Consolidated Net Income to compute EBITDA only to the extent (and in
the same proportion) that the net income of such Restricted Subsidiary was
included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be dividended to the
Company 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.
"Equity Offering" means any public or private offering of
common stock of the Company other than to an Affiliate of the Company.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System, and any successor thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means new notes of the Company issued in a
registered offer made pursuant to a registration statement filed with, and
declared effective by, the Commission offering to exchange such new notes for
the Notes and the Additional Notes, provided that such new notes have terms
substantially identical in all material respects to the Notes and the Additional
Notes (except that Exchange Notes will not contain terms with respect to
transfer restrictions) for which such offer is being made.
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"Fair Market Value" means, with respect to any Property, the
price that could be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair Market Value
shall be determined, except as otherwise provided,
(1) if such Property has a Fair Market Value equal to or less
than $5.0 million (or $10.0 million in the case of an Investment made for the
contribution of real property), by any Officer of the Company, or
(2) if such Property has a Fair Market Value in excess of $5.0
million (or $10.0 million in the case of an Investment made for the contribution
of real property), by an Independent Financial Advisor and
11
evidenced by a written opinion from such Independent Financial Advisor, dated
within 30 days of the relevant transaction, delivered to the Trustee.
"Foreign Restricted Subsidiary" means any Restricted
Subsidiary which is not organized under the laws of the United States of America
or any State thereof or the District of Columbia.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Global Notes" means the global Notes in the form of Exhibit A
hereto issued in accordance with Article 2.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Debt of any other Person and
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) such Debt of such other Person (whether arising by
virtue of partnership arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise), or
(2) entered into for the purpose of assuring in any other
manner the obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include:
(a) endorsements for collection or deposit in the
ordinary course of business, or
(b) a contractual commitment by one Person to invest
in another Person for so long as such Investment is reasonably expected
to constitute a Permitted Investment under clause (1) or (2) of the
definition of "Permitted Investment."
The term "Guarantee" used as a verb has a corresponding meaning. The term
"Guarantor" shall mean any Person Guaranteeing any obligation.
"Hedging Obligation" of any Person means any obligation of
such Person pursuant to any Interest Rate Agreement.
"Holder" means a Person in whose name a Note is registered in
the Security Register.
"IAI Global Note" means the global Note in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Notes sold to Institutional Accredited Investors, if any.
"Incur" means, with respect to any Debt or other obligation of
any Person, to create, issue, incur (by merger, conversion, exchange or
otherwise), extend, assume, Guarantee or become liable in respect of such Debt
or other obligation or the recording, as required pursuant to GAAP or otherwise,
of any such Debt or obligation on the balance sheet of such Person (and
"Incurrence" and "Incurred" shall have meanings correlative to the preceding);
provided, however, that a change in GAAP that results in an obligation of such
Person that exists at such time, and is not theretofore classified as Debt,
becoming Debt shall not be deemed an Incurrence of such Debt; provided further,
however, that any Debt or other obligations of a Person existing at the time
such Person becomes a
12
Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary.
"Indenture" means this instrument, as originally executed or
as it may from time to time be supplemented or amended in accordance with
Article 9.
"Independent Financial Advisor" means an investment banking
firm of national standing or any third-party appraiser that is determined by a
majority of the independent directors of the Company to be reasonably competent
to issue an opinion or valuation with respect to the matter for which the
Company has engaged it, provided that such firm or appraiser is not an Affiliate
of the Company.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Notes" means $150,000,000 in aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"Initial Purchaser" means Xxxxxxx Xxxxx Xxxxxx Inc., Deutsche
Bank Securities Inc. or Fleet Securities, Inc., each as an initial purchaser of
the Notes.
"Initial Senior Notes" means $200,000,000 in aggregate
principal amount of Senior Notes issued under the Senior Notes Indenture on the
Issue Date.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act.
"Intangible Assets" means, as of any date of determination,
the amount (to the extent reflected in determining the stockholders' equity of
the Company and its consolidated Restricted Subsidiaries) of (1) all write-ups
(other than write-ups of tangible assets of a going concern business) made
within 12 months after the acquisition of such business in the book value of any
asset, and (2) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, in each case as of such date.
"Interest Rate Agreement" means, for any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement designed to protect against fluctuations in interest
rates.
"Investment" by any Person means any direct or indirect loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person), advance or
other extension of credit or capital contribution (by means of transfers of cash
or other Property to others or payments for Property or services for the account
or use of others, or otherwise) to, or Incurrence of a Guarantee of any
obligation of, or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Debt (other than endorsements of
negotiable instruments in the ordinary course business) issued by, any other
Person. For purposes of Sections 4.11 and 4.16 and the definition of "Restricted
Payment," the term "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market Value of the
net assets of any Restricted Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however, that
upon a redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary of an amount (if positive) equal to:
(1) the Company's "Investment" in such Subsidiary at the time
of such redesignation, less
(2) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net assets of such
Subsidiary at the time of such redesignation.
13
In determining the amount of any Investment made by transfer of any Property
other than cash, such Property shall be valued at its Fair Market Value at the
time of such Investment.
"Investment Grade Rating" means a rating equal to or higher
than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by S&P.
"Issue Date" means the date on which the Initial Notes are
initially issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of
New York, the city in which the Corporate
Trust Office of the Trustee is located, or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Initial Notes for use by
such Holders in connection with a Registered Exchange Offer.
"Lien" means, with respect to any Property of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the preceding).
"Management Services Agreements" means the Management Services
Agreement dated June 1, 2000, by and between Techolym, L.P. and Newmark Homes
Corp. and any management services agreements entered into between Techolym, L.P.
and Xxxxx Homes, Inc. on substantially the same terms (except as to fees), in
each case as may be amended from time to time.
"Merger" means the merger of Xxxxx Holdings Corp. with and
into Newmark Homes Corp. pursuant to the Agreement and Plan of Merger among
Newmark Homes Corp., Xxxxx Holdings Corp. and Technical Olympic, Inc., dated
April 5, 2002.
"Moody's" means Xxxxx'x Investors Service, Inc. or any
successor to the rating agency business thereof.
"Mortgage" means a first priority mortgage or first priority
deed of trust on improved real property.
"Net Available Cash" from any Asset Sale means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Debt or other obligations
relating to the Property that is the subject of such Asset Sale or received in
any other non-cash form), in each case net of:
(1) all legal, title and recording expenses, commissions and
other fees and expenses incurred, and all Federal, state, provincial, foreign
and local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Sale,
(2) all payments made on any Debt that is secured by any
Property subject to such Asset Sale, in accordance with the terms of any Lien
upon such Property, or which must by its terms, or in order to obtain a
necessary consent to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale,
(3) all distributions and other payments required to be made
to minority interest holders in Subsidiaries or joint ventures as a result of
such Asset Sale, and
14
(4) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities associated
with the Property disposed in such Asset Sale and retained by the Company or any
Restricted Subsidiary after such Asset Sale;
provided, however, that if any consideration for an Asset Sale (which would
otherwise constitute Net Available Cash) is required to be held in escrow
pending determination of whether a purchase price adjustment will be made, such
consideration (or any portion thereof) shall become Net Available Cash only at
such time as it is released to the Company or its Restricted Subsidiaries from
escrow.
"Non-Recourse Debt," with respect to any Person, means Debt of
such Person for which the sole legal recourse for collection of principal and
interest on such Debt is against the specific property identified in the
instruments evidencing or securing such Debt, and such property was acquired
with the proceeds of such Debt, or such Debt was Incurred within 90 days after
the acquisition of such property.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Debt.
"Offering Memorandum" means the Offering Memorandum dated June
14, 2002 relating to the Notes and Senior Notes.
"Officer" means the Chief Executive Officer, the President,
the Chief Financial Officer, the Chief Accounting Officer, the Secretary, the
Treasurer or any Vice President of the Company.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers, at least one of whom shall be the principal
executive officer or principal financial officer of such Person, and delivered
to the Trustee.
"Opinion of Counsel" means, with respect to any Person, a
written opinion from legal counsel who is acceptable to the Trustee. The counsel
may be an employee of or counsel to such Person or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively, and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream.
"Permitted Business" means the housebuilding and home sales
businesses and any business that is related, ancillary or complementary to the
housebuilding and home sales businesses.
"Permitted Holders" means Technical Olympic, Inc. and
Technical Olympic S.A. or any Person of which either of the preceding companies
"beneficially owns" (as defined in Rule 13d-3 under the Exchange Act),
individually or collectively with the other company, at least a majority of the
total voting power of the Voting Stock of such Person.
"Permitted Investment" means any Investment by the Company or
a Restricted Subsidiary in:
(1) the Company, any Restricted Subsidiary or any Person that
will, upon the making of such Investment, become a Restricted Subsidiary,
provided that the primary business of such Restricted Subsidiary is a Permitted
Business;
(2) any Person if as a result of such Investment such Person
is merged or consolidated with or into, or transfers or conveys all or
substantially all its Property to, the Company or a Restricted Subsidiary,
provided that such Person's primary business is a Permitted Business;
(3) cash or Cash Equivalents;
15
(4) receivables owing to the Company or a 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
Company or such Restricted Subsidiary deems reasonable under the circumstances;
(5) receivables or loans owing to the Company or a Restricted
Subsidiary made in connection with the sale of any Property otherwise permitted
under this Indenture;
(6) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;
(7) loans and advances to employees made in the ordinary
course of business of the Company or such Restricted Subsidiary, as the case may
be, provided that such loans and advances do not exceed $2.0 million in the
aggregate at any one time outstanding;
(8) stock, obligations or other securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or a Restricted Subsidiary or in satisfaction of judgments;
(9) any Person to the extent such Investment represents the
non-cash portion of the consideration received in connection with (a) an Asset
Sale consummated in compliance with Section 4.13, or (b) any disposition of
Property not constituting an Asset Sale; and
(10) other Investments made for Fair Market Value that do not
exceed $20.0 million in the aggregate outstanding at any one time.
"Permitted Junior Securities" means:
(1) Capital Stock in the Company or any Subsidiary Guarantor
of the Notes; or
(2) debt securities that are subordinated to all Senior Debt
and debt securities that are issued in exchange for Senior Debt to substantially
the same extent as, or to a greater extent than, the Notes and the Subsidiary
Guaranties are subordinated to Senior Debt under this Indenture and have a
Stated Maturity after (and do not provide for scheduled principal payments prior
to) the Stated Maturity of any Senior Debt and any debt securities issued in
exchange for Senior Debt;
provided, however, that, if such Capital Stock or debt securities are
distributed in a bankruptcy or insolvency proceeding, such Capital Stock or debt
securities are distributed pursuant to a plan of reorganization consented to by
each class of Designated Senior Debt.
"Permitted Liens" means:
(1) Liens to secure Debt under Credit Facilities and
intercompany loans pledged as security for Senior Debt permitted to be Incurred
under Section 4.10;
(2) Liens to secure Debt permitted to be Incurred under
Section 4.10(b)(iii), provided that any such Lien may not extend to any Property
of the Company or any Restricted Subsidiary, other than the Property acquired,
constructed or leased with the proceeds of such Debt and any improvements or
accessions to such Property;
(3) Liens to secure Debt permitted to be Incurred under
Section 4.10(b)(vii) or (b)(xi), provided that any such Lien may not extend to
any Property of the Company or any Restricted Subsidiary, other than, in the
case of Debt Incurred under such clause (b)(vii), the mortgages, promissory
notes and other collateral that secures mortgage loans made by the Company or
any of its Restricted Subsidiaries and, in the case of Debt Incurred under such
clause (b)(xi), the collateral that secures the relevant Non-Recourse Debt;
16
(4) Liens to secure Debt permitted to be Incurred under
Section 4.10(b)(ix), provided that any such Lien may not extend to any Property
of the Company or any Restricted Subsidiary, other than Property of the Foreign
Restricted Subsidiary which incurs such Debt;
(5) Liens for taxes, assessments or governmental charges or
levies on the Property of the Company or any Restricted Subsidiary if the same
shall not at the time be delinquent or thereafter can be paid without penalty,
or are being contested in good faith and by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other
appropriate provision that shall be required in conformity with GAAP shall have
been made therefor;
(6) Liens imposed by law, such as carriers', warehousemen's
and mechanics' Liens and other similar Liens, on the Property of the Company or
any Restricted Subsidiary arising in the ordinary course of business and
securing payment of obligations that are not more than 60 days past due or are
being contested in good faith and by appropriate proceedings;
(7) Liens on the Property of the Company or any Restricted
Subsidiary Incurred in the ordinary course of business to secure performance of
obligations with respect to statutory or regulatory requirements, payment or
performance or return-of-money bonds, surety bonds or other obligations of a
like nature and Incurred in a manner consistent with industry practice, in each
case which are not Incurred in connection with the borrowing of money, the
obtaining of advances or credit or the payment of the deferred purchase price of
Property and which do not in the aggregate impair in any material respect the
use of Property in the operation of the business of the Company and the
Restricted Subsidiaries taken as a whole;
(8) Liens on Property at the time the Company or any
Restricted Subsidiary acquired such Property, including any acquisition by means
of a merger or consolidation with or into the Company or any Restricted
Subsidiary; provided, however, that any such Lien may not extend to any other
Property of the Company or any Restricted Subsidiary; provided further, however,
that such Liens shall not have been Incurred in anticipation of or in connection
with the transaction or series of transactions pursuant to which such Property
was acquired by the Company or any Restricted Subsidiary;
(9) Liens on the Property of a Person at the time such Person
becomes a Restricted Subsidiary; provided, however, that any such Lien may not
extend to any other Property of the Company or any other Restricted Subsidiary
that is not a direct Subsidiary of such Person; provided further, however, that
any such Lien was not Incurred in anticipation of or in connection with the
transaction or series of transactions pursuant to which such Person became a
Restricted Subsidiary;
(10) pledges or deposits by the Company or any Restricted
Subsidiary under workmen's compensation laws, unemployment insurance laws or
similar legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Debt) or leases to which the Company or
any Restricted Subsidiary is party, or deposits to secure standby letters of
credit or public or statutory obligations of the Company, or deposits for the
payment of rent, or deposits made pursuant to option agreements for land or
other real property, in each case Incurred in the ordinary course of business;
(11) utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character;
(12) Liens on the Property of the Company or any Restricted
Subsidiary to secure any Refinancing, in whole or in part, of any Debt secured
by Liens referred to in clauses (2), (8) or (9) above or (17) below; provided,
however, that any such Lien shall be limited to all or part of the same Property
that secured the original Lien (together with improvements and accessions to
such Property), and the aggregate principal amount of Debt that is secured by
such Lien shall not be increased to an amount greater than the sum of:
(a) the outstanding principal amount, or, if greater,
the committed amount, of the Debt secured by Liens described under
clauses (2), (8) or (9) above or (17) below, as the case may be, at the
time the original Lien became a Permitted Lien under this Indenture,
and
17
(b) an amount necessary to pay any fees and expenses,
including premiums and defeasance costs, incurred by the Company or
such Restricted Subsidiary in connection with such Refinancing;
(13) Liens securing any Hedging Obligation;
(14) rights of banks to set off deposits against Debt owed to
such banks;
(15) legal or equitable Liens deemed to exist by reason of
negative pledge covenants and other covenants or undertakings of a like nature;
(16) Liens on deposits escrowed with a trustee to defease or
discharge the obligations of Xxxxx Homes, Inc. under the indentures for its 9
1/4% Senior Note due 2008;
(17) Liens existing on the Issue Date not otherwise described
in clauses (1) through (16) above; and
(18) Liens not otherwise permitted by clauses (1) through (17)
above encumbering Property having an aggregate Fair Market Value not in excess
of 5% of Consolidated Net Tangible Assets, as determined based on the
consolidated balance sheet of the Company as of the end of the most recent
fiscal quarter ending at least 45 days prior to the date any such Lien shall be
Incurred.
"Permitted Refinancing Debt" means any Debt that Refinances
any other Debt, including any successive Refinancings, so long as:
(1) such Debt is in an aggregate principal amount (or if
Incurred with original issue discount, an aggregate issue price) not in excess
of the sum of:
(a) the aggregate principal amount (or if Incurred
with original issue discount, the aggregate accreted value) then
outstanding of the Debt being Refinanced, and
(b) an amount necessary to pay any fees and expenses,
including premiums and defeasance costs, related to such Refinancing,
(2) the Average Life of such Debt is equal to or greater than
the Average Life of the Debt being Refinanced,
(3) the Stated Maturity of such Debt is no earlier than the
Stated Maturity of the Debt being Refinanced, and
(4) the new Debt shall not be senior in right of payment to
the Debt that is being Refinanced;
provided, however, that Permitted Refinancing Debt shall not include:
(A) Debt of a Subsidiary that is not a Subsidiary Guarantor
that Refinances Debt of the Company or a Subsidiary Guarantor, or
(B) Debt of the Company or a Restricted Subsidiary that
Refinances Debt of an Unrestricted Subsidiary.
"Person" means any individual, corporation, company (including
any limited liability company), association, partnership, joint venture, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
18
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
the payment of dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such Person, over shares of any
other class of Capital Stock issued by such Person.
"Preferred Stock Dividends" means all dividends with respect
to Preferred Stock of Restricted Subsidiaries held by Persons other than the
Company or a Wholly Owned Restricted Subsidiary. The amount of any such dividend
shall be equal to the quotient of such dividend divided by the difference
between one and the maximum statutory Federal income rate (expressed as a
decimal number between 1 and 0) then applicable to the issuer of such Preferred
Stock.
"Private Placement Legend" means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except
as otherwise permitted by the provisions of this Indenture.
"pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms of this Indenture, a calculation
performed in accordance with Article 11 of Regulation S-X promulgated under the
Securities Act, as interpreted in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
or otherwise a calculation made in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
as the case may be.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including Capital Stock in, and other securities of,
any other Person. For purposes of any calculation required pursuant to this
Indenture, the value of any Property shall be its Fair Market Value.
"Purchase Money Debt" means Debt:
(1) consisting of the deferred purchase price of Property,
conditional sale obligations, obligations under any title retention agreement,
other purchase money obligations and obligations in respect of industrial
revenue bonds, in each case where the maturity of such Debt does not exceed the
anticipated useful life of the Property being financed, and
(2) Incurred to finance the acquisition, construction or lease
by the Company or a Restricted Subsidiary of the Property being financed,
including additions and improvements thereto;
provided, however, that such Debt is Incurred within 180 days after the
acquisition, construction or lease of such Property by the Company or such
Restricted Subsidiary.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Rating Agencies" means Moody's and S&P.
"Reference Treasury Dealer" means Xxxxxxx Xxxxx Barney Inc.
and its successors; provided, however, that if it shall cease to be a primary
U.S. Government securities dealer in
New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotation" means, with respect to
the Reference Treasury Dealer and any redemption date, the average of the bid
and ask prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding such
redemption date.
"Refinance" means, in respect of any Debt, to refinance,
extend, renew, restructure, replace, refund, or Repay, or to issue other Debt,
in exchange or replacement for, such Debt. "Refinanced" and "Refinancing" shall
have correlative meanings.
19
"Registered Exchange Offer" has the meaning set forth in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated June 25, 2002, among the Company, the Subsidiary Guarantors and
the Initial Purchasers, as such agreement may be amended, modified or
supplemented from time to time and, with respect to any Additional Notes, one or
more registration rights agreements between the Company and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means the global Note in the form
of Exhibit A hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with and registered in the name of the Depositary or its
nominee that will be issued in a denomination equal to the outstanding principal
amount of Notes sold in reliance on Regulation S.
"Repay" means, in respect of any Debt, to repay, prepay,
repurchase, redeem, legally defease or otherwise retire such Debt. "Repayment"
and "Repaid" shall have correlative meanings. For purposes of Section 4.13 and
the definition of "Consolidated Interest Coverage Ratio," Debt shall be
considered to have been Repaid only to the extent the related loan commitment,
if any, shall have been permanently reduced in connection therewith.
"Representative" means the trustee, agent or representative
expressly authorized to act in such capacity, if any, for an issue of Senior
Debt.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Department of the Trustee (or any
successor group of the Trustee) with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means one or more Definitive
Notes bearing the Private Placement Legend.
"Restricted Global Notes" means the 144A Global Note, the IAI
Global Note and the Regulation S Global Note.
"Restricted Payment" means:
(1) any dividend or distribution (whether made in cash,
securities or other Property) declared or paid on or with respect to any shares
of Capital Stock of the Company or any Restricted Subsidiary (including any
payment in connection with any merger or consolidation with or into the Company
or any Restricted Subsidiary), except for any dividend or distribution that is
made solely to the Company or a Restricted Subsidiary (and, if a Restricted
Subsidiary is not a Wholly Owned Restricted Subsidiary, to the other
stockholders of such Restricted Subsidiary on a pro rata basis or on a basis
that results in the receipt by the Company or a Restricted Subsidiary of
dividends or distributions of greater value than it would receive on a pro rata
basis) or any dividend or distribution payable solely in shares of Capital Stock
(other than Disqualified Stock) of the Company;
(2) the purchase, repurchase, redemption, acquisition or
retirement for value of any Capital Stock of the Company or any Restricted
Subsidiary (other than from the Company or a Restricted Subsidiary) or any
securities exchangeable for or convertible into any such Capital Stock,
including the exercise of any option to exchange any Capital Stock (other than
for or into Capital Stock of the Company that is not Disqualified Stock);
(3) the purchase, repurchase, redemption, acquisition or
retirement for value, prior to the date for any scheduled maturity, sinking fund
or amortization or other installment payment, of any Subordinated Debt (other
than the purchase, repurchase or other acquisition of any Subordinated Debt
purchased (a) in anticipation of satisfying a scheduled maturity, sinking fund
or amortization or other installment obligation, in each case due within
20
one year of the date of acquisition or (b) to the extent of the Excess Proceeds
remaining after compliance with Section 4.13 hereof and to the extent required
by any covenant similar to that in Section 4.13 hereof contained in the
indenture or other agreement or instrument pursuant to which such Subordinated
Debt was issued;
(4) any Investment (other than Permitted Investments) by the
Company or any Restricted Subsidiary in any Person; or
(5) the issuance, sale or other disposition of Capital Stock
of any Restricted Subsidiary to a Person other than the Company or another
Restricted Subsidiary if the result thereof is that such Restricted Subsidiary
shall cease to be a Restricted Subsidiary, in which event the amount of such
"Restricted Payment" shall be the Fair Market Value of the remaining interest,
if any, in such former Restricted Subsidiary held by the Company and the other
Restricted Subsidiaries.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Rule 903" means Rule 903 promulgated under the Securities
Act.
"Rule 904" means Rule 904 promulgated under the Securities
Act.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement relating to Property now owned or hereafter acquired whereby the
Company or a Restricted Subsidiary transfers such Property to another Person,
and the Company or a Restricted Subsidiary leases it from such Person.
"S&P" means Standard & Poor's Ratings Services or any
successor to the rating agency business thereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Facility" means the credit agreement, dated as
of the Issue Date, by and among the Company, Citicorp North America, Inc., as
Administrative Agent, and the several banks and other financial institutions or
entities from time to time parties thereto, including any related notes,
collateral documents, letters of credit and documentation and Guarantees and any
appendices, exhibits or schedules to any of the preceding, as any or all of such
agreements may be in effect from time to time, in each case, as any or all of
such agreements (or any other agreement that Refinances any or all of such
agreements) may be amended, restated, modified or supplemented from time to
time, or renewed, refunded, Refinanced, restructured, replaced, Repaid or
extended from time to time, whether with the original agents and lenders or
other agents and lenders or otherwise, and whether provided under the original
credit agreement or one or more other credit agreements or otherwise.
"Senior Debt" of the Company means all of its Obligations with
respect to Debt, whether outstanding on the Issue Date of the Notes or
thereafter Incurred, and shall include (i) all obligations for interest accruing
on or after the filing of any petition in bankruptcy or for reorganization
relating to the Company whether or not such post-filing interest is allowed in
such proceeding and (ii) all fees, expenses and indemnities and all other
amounts payable with respect to Debt; provided, however, that Senior Debt shall
not include:
(1) any obligation in respect of the Notes or other Debt of
the Company that is by its terms subordinate or pari passu in right of payment
to the Notes;
(2) any Debt Incurred in violation of the provisions of this
Indenture;
(3) any obligation of the Company to any Subsidiary; or
21
(4) any obligations with respect to any Capital Stock of the
Company.
To the extent that any payment of Senior Debt (whether by or on behalf of the
Company as proceeds of security or enforcement or any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to a trustee, receiver or other similar party under any bankruptcy,
insolvency, receivership or similar law, then if such payment is recovered by,
or paid over to, such trustee, receiver or other similar party, 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. "Senior Debt" of
any Subsidiary Guarantor has a correlative meaning and shall not include any
obligation of such Subsidiary Guarantor to the Company or any other Subsidiary
of the Company.
"Senior Excess Proceeds" has the meaning set forth under
"Excess Proceeds" in Section 4.13 of the Senior Notes Indenture.
"Senior Exchange Notes" means new notes of the Company issued
in a registered offer made pursuant to a registration statement filed with, and
declared effective by, the Commission offering to exchange such new notes for
Senior Notes, provided that such new notes have terms substantially identical in
all material respects to the Senior Notes (except that Senior Exchange Notes
will not contain terms with respect to transfer restrictions) for which such
offer is being made.
"Senior Notes" means the 9% Senior Notes due 2010 of the
Company.
"Senior Notes Indenture" means the Indenture, dated as of June
25, 2002, by and among the Company, the Subsidiary Guarantors and Xxxxx Fargo
Bank Minnesota, National Association, as Trustee, governing the Company's Senior
Notes.
"Senior Notes Prepayment Offer" has the meaning set forth
under "Prepayment Offer" in Section 4.13 of the Senior Notes Indenture.
"Senior Subordinated Debt" of the Company means the Notes and
any other subordinated Debt of the Company that specifically provides that such
Debt is to rank pari passu with the Notes and is not subordinated by its terms
to any other subordinated Debt or other obligation of the Company which is not
Senior Debt. "Senior Subordinated Debt" of any Subsidiary Guarantor has a
correlative meaning.
"Senior Subsidiary Guaranty" means a Guarantee on the terms
set forth in the Senior Notes Indenture by a Subsidiary Guarantor of the
Company's Obligations with respect to the Senior Notes.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission.
"Special Interest" has the meaning set forth in Section 4 of
the Registration Rights Agreement.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Debt" means any Debt of the Company or any
Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
Incurred) that is subordinate or junior in right of payment to the Notes or any
applicable Subsidiary Guaranty pursuant to a written agreement to that effect.
22
"Subsidiary" means, in respect of any Person, any corporation,
company (including any limited liability company), association, partnership,
joint venture or other business entity of which a majority of the total voting
power of the Voting Stock is at the time owned or controlled, directly or
indirectly, by:
(1) such Person,
(2) such Person and one or more Subsidiaries of such Person,
or
(3) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means each Domestic Restricted
Subsidiary of the Company on the Issue Date, except SPV Developers L.L.C.,
Spring Park Village, L.P., SOT Developers, LLC, Silver Oak Trails, L.P., WPines
Developers, L.L.C., Woodland Pines, L.P., Xxxxx/Xxxxx, L.L.C., XxXxx Landing
L.L.C. and Universal Land Title of Colorado, Inc., and any other Person that
becomes a Subsidiary Guarantor pursuant to Section 4.18 or who otherwise
executes and delivers a supplemental indenture providing for a Subsidiary
Guaranty to the Trustee.
"Subsidiary Guaranty" means a Guarantee on the terms set forth
in this Indenture by a Subsidiary Guarantor of the Company's Obligations with
respect to the Notes.
"Surviving Person" means the surviving Person formed by a
merger, consolidation or amalgamation and, for purposes of Section 5.01, a
Person to whom all or substantially all the Property of the Company or a
Subsidiary Guarantor is sold, transferred, assigned, leased, conveyed or
otherwise disposed.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the yield to maturity of the Comparable Treasury
Issue, compounded semi-annually, assuming a price for such Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date. The Treasury Rate will be
calculated on the third Business Day preceding the redemption date.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Definitive Notes" means one or more Definitive
Notes that do not and are not required to bear the Private Placement Legend.
"Unrestricted Global Notes" means one or more Global Notes, in
the form of Exhibit A attached hereto, that do not and are not required to bear
the Private Placement Legend and are deposited with and registered in the name
of the Depositary or its nominee.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that is designated after the
Issue Date as an Unrestricted Subsidiary as permitted or required pursuant to
Section 4.16 and is not thereafter redesignated as a Restricted Subsidiary as
permitted pursuant thereto; and
(2) any Subsidiary of an Unrestricted Subsidiary.
"U.S. Dollar Equivalent" means, with respect to any monetary
amount in a currency other than the U.S. dollar, at or as of any time for the
determination thereof, the amount of U.S. dollars obtained by converting such
foreign currency involved in such computation into U.S. dollars at the spot rate
for the purchase of U.S. dollars with the applicable foreign currency as quoted
by Reuters (or, if Reuters ceases to provide such spot quotations, by any other
reputable service as is providing such spot quotations, as selected by the
Company) at approximately 11:00 a.m. (
New York City time) on a day not more than
two Business Days prior to such determination.
23
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"U.S. Person" has the meaning set forth in Regulation S.
"Voting Stock" of any Person means all classes of Capital
Stock of such Person then outstanding and normally entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof.
"Warehouse Facility" means one or more Credit Facilities and
related mortgage note purchase and sale agreements to finance the making of
mortgage loans originated by the Company or any of its Restricted Subsidiaries
in the ordinary course of business.
"Westbrooke" means Westbrooke Acquisition Corp. and its
subsidiaries.
"Wholly Owned Restricted Subsidiary" means, at any time, a
Restricted Subsidiary all the Voting Stock of which (except directors'
qualifying shares) is at such time owned, directly or indirectly, by the Company
or its other Wholly Owned Restricted Subsidiaries.
Section 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"Affiliate Transaction"....................................................4.15
"Allocable Excess Proceeds"................................................4.13
"Authentication Order".....................................................2.02
"Benefited Party".........................................................10.01
"Change of Control Offer"..................................................4.17
"Change of Control Purchase Price".........................................4.17
"Company"..............................................................Preamble
"Covenant Defeasance"......................................................8.03
"DTC"......................................................................2.03
"Event of Default".........................................................6.01
"Excess Proceeds"..........................................................4.13
"Legal Defeasance".........................................................8.02
"losses"...................................................................7.07
"Minimum Net Worth"........................................................4.09
"Net Worth Notice".........................................................4.09
"Net Worth Offer"..........................................................4.09
"Net Worth Offer Amount"...................................................4.09
"Net Worth Offer Price"....................................................4.09
"Net Worth Repurchase Date"................................................4.09
"Net Worth Trigger Date"...................................................4.09
"Net Worth Trigger Event"..................................................4.09
"Notes"................................................................Preamble
"Paying Agent".............................................................2.03
"Payment Blockage Notice".................................................11.03
"Payment Blockage Period".................................................11.03
"Permitted Debt"...........................................................4.10
"Prepayment Offer".........................................................4.13
"Registrar"................................................................2.03
"Security Register"........................................................2.03
"Suspended Covenants"......................................................4.21
24
Section 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
(a) Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
(b) The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes and the Subsidiary
Guaranties;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Notes means the Company, the Subsidiary
Guarantors and any successor obligor upon the Notes or the Subsidiary
Guaranties.
(c) All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
Section 1.04. RULES OF CONSTRUCTION.
(a) Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined herein
has the meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in
the plural include the singular;
(v) all references in this instrument to designated
"Articles," "Sections" and other subdivisions are to the
designated Articles, Sections and subdivisions of this
instrument as originally executed;
(vi) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision.
(vii) "including" means "including without
limitation";
(viii) provisions apply to successive events and
transactions; and
(ix) references to sections of or rules under the
Securities Act, Exchange Act and TIA shall be deemed to
include substitute, replacement or successor sections or rules
adopted by the Commission from time to time.
25
ARTICLE 2.
THE NOTES
Section 2.01. FORM AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof. The terms and
provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture, and the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby. However, to the extent any provision of any
Note conflicts with the express provisions of this Indenture, the provisions of
this Indenture shall govern and be controlling.
(b) FORM OF NOTES. The Notes shall be issued initially in global form
and shall be substantially in the form of Exhibit A attached hereto (including
the Global Note Legend thereon and the "Schedule of Exchanges of Interests in
the Global Note" attached thereto). Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein, and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06.
(c) BOOK-ENTRY PROVISIONS. This Section 2.01(c) shall only apply to
Global Notes deposited with the Trustee, as custodian for the Depositary.
Participants and Indirect Participants shall have no rights under this Indenture
with respect to any Global Note held on their behalf by the Depositary or by the
Trustee as the custodian for the Depositary or under such Global Note, and the
Depositary shall be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants or
Indirect Participants, the Applicable Procedures or the operation of customary
practices of the Depositary governing the exercise of the rights of a holder of
a beneficial interest in any Global Note.
Section 2.02. EXECUTION AND AUTHENTICATION.
(a) Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
(b) If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
(c) A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
(d) The Trustee shall, upon a written order of the Company signed by an
Officer (an "Authentication Order"), authenticate Notes for original issue.
(e) The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. 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 Holders, the
Company or an Affiliate of the Company.
26
(f) The Company may issue Additional Notes from time to time after the
issuance of the Initial Notes as part of the same series or as an additional
series. The Initial Notes, the Exchange Notes and any Additional Notes
subsequently issued under this Indenture shall be treated as a single class for
all purposes under this Indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase.
Section 2.03. REGISTRAR AND PAYING AGENT.
(a) The Company shall maintain an office or agency where Notes may be
presented for registration of, transfer or exchange ("Registrar") and an office
or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange
(the "Security Register"). The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar" includes any
co-registrar, and the term "Paying Agent" includes any additional paying agent.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company shall notify the Trustee in writing of the name and address
of any Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.
(b) The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
(c) The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest, including Special Interest, if any,
on, the Notes, and shall notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date or such
shorter time as the Trustee may allow, of the names and addresses of the
Holders, and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 90 days after the date of such notice from the Depositary; (ii)
the Company in its sole discretion at any time determines not to have all Notes
represented by the
27
Global Notes and delivers a written notice to such effect to the Trustee; or
(iii) an Event of Default with respect to the Notes represented by such Global
Notes shall have occurred and be continuing, and the Trustee has received a
request from the Depositary to issue Definitive Notes in lieu of Global Notes.
Upon the occurrence of any of the preceding events in (i), (ii) or (iii) above,
Definitive Notes shall be issued in denominations of $1,000 or integral
multiples thereof and in such names as the Depositary shall instruct the
Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.07 and 2.10. A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f).
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either clause (i) or (ii) below, as applicable, as well as one or more of the
other following clauses, as applicable:
(i) Transfer of Beneficial Interests in the Same
Global Note. Beneficial interests in any Restricted Global
Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend; provided, however, that
prior to the expiration of the Distribution Compliance Period,
transfers of beneficial interests in the Regulation S Global
Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser).
Beneficial interests in any Unrestricted Global Note may be
transferred to Persons who take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note. No
written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described
in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers
and exchanges of beneficial interests that are not subject to
Section 2.06(b)(i) above, the transferor of such beneficial
interest must deliver to the Registrar either (1)(A) a written
order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures
directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal
to the beneficial interest to be transferred or exchanged and
(B) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant
account to be credited with such increase or (2)(A) a written
order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures
directing the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to be
transferred or exchanged and (B) instructions given by the
Depositary to the Registrar containing information regarding
the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in
(2)(A) above. Upon consummation of a Registered Exchange Offer
by the Company in accordance with Section 2.06(f), the
requirements of this Section 2.06(b)(ii) shall be deemed to
have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered
by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust
the principal amount of the relevant Global Note(s) pursuant
to Section 2.06(h).
(iii) Transfer of Beneficial Interests in a
Restricted Global Note to Another Restricted Global Note. A
beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form
of a beneficial interest in another Restricted Global Note if
the transfer complies with the requirements of Section
2.06(b)(ii) above and the Registrar receives the following:
28
(1) if the transferee will take delivery in
the form of a beneficial interest in the 144A Global
Note, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(2) if the transferee will take delivery in
the form of a beneficial interest in the Regulation S
Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(3) if the transferee will take delivery in
the form of a beneficial interest in the IAI Global
Note, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the
certifications and certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in
a Restricted Global Note for Beneficial Interests in an
Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof
for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note if the
exchange or transfer complies with the requirements of Section
2.06(b)(ii) above and:
(1) such exchange or transfer is effected
pursuant to a Registered Exchange Offer in accordance
with the Registration Rights Agreement, and the
holder of the beneficial interest to be transferred,
in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (A) a
broker-dealer, (B) a Person participating in the
distribution of the Exchange Notes or (C) a Person
who is an affiliate (as defined in Rule 144) of the
Company;
(2) such transfer is effected pursuant to
the Shelf Registration Statement in accordance with
the Registration Rights Agreement;
(3) such transfer is effected by a
broker-dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(4) the Registrar receives the following:
(A) if the holder of such
beneficial interest in a Restricted Global
Note proposes to exchange such beneficial
interest for a beneficial interest in an
Unrestricted Global Note, a certificate from
such holder in the form of Exhibit C hereto,
including the certifications in item (1)(a)
thereof; or
(B) if the holder of such
beneficial interest in a Restricted Global
Note proposes to transfer such beneficial
interest to a Person who shall take delivery
thereof in the form of a beneficial interest
in an Unrestricted Global Note, a
certificate from such holder in the form of
Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this clause (4),
if the Registrar or the Company so requests or if the
Applicable Procedures so require, an Opinion of
Counsel in form
29
reasonably acceptable to the Registrar or the
Company, as the case may be, to the effect that such
exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend
are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to clause (2) or (4)
above at a time when an Unrestricted Global Note has not yet
been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate one or more Unrestricted Global
Notes in an aggregate principal amount equal to the aggregate
principal amount of beneficial interests transferred pursuant
to clause (2) or (4) above.
(v) Transfer or Exchange of Beneficial Interests in
Unrestricted Global Notes for Beneficial Interests in
Restricted Global Notes Prohibited. Beneficial interests in an
Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE NOTES.
(i) Beneficial Interests in Restricted Global Notes
to Restricted Definitive Notes. If any holder of a beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note or to
transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Restricted Definitive Note,
then, upon receipt by the Registrar of the following
documentation:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(2) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1)
thereof;
(3) if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904,
a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2)
thereof;
(4) if such beneficial interest is being
transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a)
thereof;
(5) if such beneficial interest is being
transferred to an Institutional Accredited Investor
in reliance on an exemption from the registration
requirements of the Securities Act other than those
listed in clauses (2) through (4) above, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates
and Opinion of Counsel required by item (3)(d)
thereof;
(6) if such beneficial interest is being
transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in
item (3)(b) thereof; or
30
(7) if such beneficial interest is being
transferred pursuant to an effective registration
statement under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to
Section 2.06(h), and the Company shall execute and the Trustee
shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal
amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall be registered in such name or
names and in such authorized denomination or denominations as
the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall mail or
deliver such Definitive Notes to the Persons in whose names
such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on
transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes
to Unrestricted Definitive Notes. A holder of a beneficial
interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive
Note only if:
(1) such exchange or transfer is effected
pursuant to a Registered Exchange Offer in accordance
with the Registration Rights Agreement, and the
holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of
Transmittal that it is not (A) a broker-dealer, (B) a
Person participating in the distribution of the
Exchange Notes or (C) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(2) such transfer is effected pursuant to
the Shelf Registration Statement in accordance with
the Registration Rights Agreement;
(3) such transfer is effected by a
broker-dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(4) the Registrar receives the following:
(A) if the holder of such
beneficial interest in a Restricted Global
Note proposes to exchange such beneficial
interest for an Unrestricted Definitive
Note, a certificate from such holder in the
form of Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
(B) if the holder of such
beneficial interest in a Restricted Global
Note proposes to transfer such beneficial
interest to a Person who shall take delivery
thereof in the form of an Unrestricted
Definitive Note, a certificate from such
holder in the form of Exhibit B hereto,
including the certifications in item (4)
thereof;
and, in each such case set forth in this clause (4),
if the Registrar or the Company so requests or if the
Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the
Registrar or the Company, as the case may be, to the
effect that such exchange or transfer is in
compliance with the Securities Act and that the
31
restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global
Notes to Unrestricted Definitive Notes. If any holder of a
beneficial interest in an Unrestricted Global Note proposes to
exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section
2.06(b)(ii), the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(h), and the Company shall execute and
the Trustee shall authenticate and mail or deliver to the
Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section
2.06(c)(iii) shall be registered in such name or names and in
such authorized denomination or denominations as the holder of
such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall mail or deliver such
Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii)
shall not bear the Private Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL INTERESTS.
(i) Restricted Definitive Notes to Beneficial
Interests in Restricted Global Notes. If any Holder of a
Restricted Definitive Note proposes to exchange such Note for
a beneficial interest in a Restricted Global Note or to
transfer such Restricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in
a Restricted Global Note, then, upon receipt by the Registrar
of the following documentation:
(1) if the Holder of such Restricted
Definitive Note proposes to exchange such Note for a
beneficial interest in a Restricted Global Note, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b)
thereof;
(2) if such Restricted Definitive Note is
being transferred to a QIB in accordance with Rule
144A, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in
item (1) thereof;
(3) if such Restricted Definitive Note is
being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904,
a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2)
thereof;
(4) if such Restricted Definitive Note is
being transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(5) if such Restricted Definitive Note is
being transferred to an Institutional Accredited
Investor in reliance on an exemption from the
registration requirements of the Securities Act other
than those listed in clauses (2) through (4) above, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates
and Opinion of Counsel required by item (3)(d)
thereof;
32
(6) if such Restricted Definitive Note is
being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in
item (3)(b) thereof; or
(7) if such Restricted Definitive Note is
being transferred pursuant to an effective
registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (1) above, the appropriate
Restricted Global Note, in the case of clause (2) above, the
144A Global Note, in the case of clause (3) above, the
Regulation S Global Note, and in all other cases, the IAI
Global Note.
(ii) Restricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of a
Restricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(1) such exchange or transfer is effected
pursuant to a Registered Exchange Offer in accordance
with the Registration Rights Agreement, and the
Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not
(A) a broker-dealer, (B) a Person participating in
the distribution of the Exchange Notes or (C) a
Person who is an affiliate (as defined in Rule 144)
of the Company;
(2) such transfer is effected pursuant to
the Shelf Registration Statement in accordance with
the Registration Rights Agreement;
(3) such transfer is effected by a
broker-dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(4) the Registrar receives the following:
(A) if the Holder of such
Definitive Notes proposes to exchange such
Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c)
thereof; or
(B) if the Holder of such
Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery
thereof in the form of a beneficial interest
in the Unrestricted Global Note, a
certificate from such Holder in the form of
Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this clause (4),
if the Registrar or the Company so requests or if the
Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the
Registrar or the Company, as the case may be, to the
effect that such exchange or transfer is in
compliance with the Securities Act and that the
restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
33
Upon satisfaction of the conditions of any of the clauses in
this Section 2.06(d)(ii), the Trustee shall cancel the
Definitive Notes and increase or cause to be increased the
aggregate principal amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of an
Unrestricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer
such Unrestricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a
request for such an exchange or transfer, the Trustee shall
cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal
amount of one of the Unrestricted Global Notes.
(iv) Transfer or Exchange of Unrestricted Definitive
Notes to Beneficial Interests in Restricted Global Notes
Prohibited. An Unrestricted Definitive Note cannot be
exchanged for, or transferred to Persons who take delivery
thereof in the form of, beneficial interests in a Restricted
Global Note.
(v) Issuance of Unrestricted Global Notes. If any
such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to clauses (ii)(2),
(ii)(4) or (iii) of this Section 2.06(d) at a time when an
Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02, the Trustee shall authenticate
one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive
Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted
Definitive Notes. Any Restricted Definitive Note may be
transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Definitive Note
if the Registrar receives the following:
(1) if the transfer will be made pursuant to
Rule 144A, then the transferor must deliver a
certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(2) if the transfer will be made pursuant to
Rule 903 or Rule 904, then the transferor must
deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2)
thereof; and
(3) if the transfer will be made pursuant to
any other exemption from the registration
requirements of the Securities Act, then the
transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted
Definitive Notes. Any Restricted Definitive Note may be
exchanged by the Holder thereof for an Unrestricted Definitive
Note or transferred to a Person or Persons who take delivery
thereof in the form of an Unrestricted Definitive Note if:
34
(1) such exchange or transfer is effected
pursuant to a Registered Exchange Offer in accordance
with the Registration Rights Agreement, and the
Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not
(A) a broker-dealer, (B) a Person participating in
the distribution of the Exchange Notes or (C) a
Person who is an affiliate (as defined in Rule 144)
of the Company;
(2) any such transfer is effected pursuant
to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;
(3) any such transfer is effected by a
broker-dealer pursuant to the Exchange Offer
Registration Statement in accordance with the
Registration Rights Agreement; or
(4) the Registrar receives the following:
(A) if the Holder of such
Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted
Definitive Note, a certificate from such
Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d)
thereof; or
(B) if the Holder of such
Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall
take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B
hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this clause (4),
if the Registrar or the Company so requests, an
Opinion of Counsel in form reasonably acceptable to
the Registrar or the Company, as the case may be, to
the effect that such exchange or transfer is in
compliance with the Securities Act and that the
restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted
Definitive Notes. A Holder of Unrestricted Definitive Notes
may transfer such Notes to a Person who takes delivery thereof
in the form of an Unrestricted Definitive Note. Upon receipt
of a request to register such a transfer, the Registrar shall
register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) REGISTERED EXCHANGE OFFER. Upon the occurrence of a Registered
Exchange Offer in accordance with the relevant Registration Rights Agreement,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (1) they are not broker-dealers, (2) they are not participating
in a distribution of the Exchange Notes and (3) they are not affiliates (as
defined in Rule 144) of the Company, and accepted for exchange in the Registered
Exchange Offer and (ii) Unrestricted Definitive Notes in an aggregate principal
amount equal to the principal amount of the Restricted Definitive Notes tendered
for acceptance by Persons who made the foregoing certification and accepted for
exchange in the Registered Exchange Offer. Concurrently with the issuance of
such Notes, the Trustee shall cause the aggregate principal amount of the
applicable Restricted Global Notes to be reduced accordingly, and the Company
shall execute and the Trustee shall authenticate and mail or deliver to the
Persons designated by the Holders of Restricted Definitive Notes so accepted
Unrestricted Definitive Notes in the appropriate principal amount.
35
(g) LEGENDS. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(1) Except as permitted by clause (2) below,
each Global Note and each Definitive Note (and all
Notes issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the
following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY BEFORE THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) UNDER A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE UNDER RULE 144A OF THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) UNDER OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT OR (F) UNDER ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT BEFORE ANY SUCH OFFER, SALE OR TRANSFER UNDER
CLAUSE (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
(2) Notwithstanding the foregoing, any
Global Note or Definitive Note issued pursuant to
clauses (b)(iv), (c)(ii), (c)(iii), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private
Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear
a legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
36
BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11
OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES
IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11. At any
time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note shall be reduced
accordingly, and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly, and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and, upon receipt of an
Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate Global Notes and Definitive Notes
upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a Holder of a
beneficial interest in a Global Note or to a Holder of a
Definitive Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer
pursuant to Sections 2.10, 3.06, 4.13, 4.17 and 9.06).
(iii) All Global Notes and Definitive Notes issued
upon any registration of transfer or exchange of Global Notes
or Definitive Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of
transfer or exchange.
(iv) Neither the Registrar nor the Company shall be
required (1) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.02 and ending at the close of
business on the day of selection, (2) to register the transfer
of or to exchange any Note so selected for redemption in whole
or in part, except the unredeemed portion of any Note being
37
redeemed in part or (3) to register the transfer of or to
exchange a Note between a record date and the next succeeding
interest payment date.
(v) Prior to due presentment for the registration of
a transfer of any Note, the Trustee, any Agent and the Company
may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose
of receiving payment of principal of, premium, if any, and
interest, including Special Interest, if any, on, such Notes
and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Sections
2.02 and 2.06(i)(i).
(vii) All certifications, certificates and Opinions
of Counsel required to be submitted to the Registrar pursuant
to this Section 2.06 to effect a registration of transfer or
exchange may be submitted by facsimile.
(viii) The Trustee is hereby authorized to enter into
a letter of representations with the Depository in the form
provided by the Company and to act in accordance with such
letter.
Section 2.07. REPLACEMENT NOTES.
(a) If any mutilated Note is surrendered to the Trustee or the Company,
or the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
(b) Every replacement Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08. OUTSTANDING NOTES.
(a) The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.08 as not outstanding. Except as set forth in Section 2.09, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(c).
(b) If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced note is held by a bona fide purchaser.
(c) If the principal amount of any Note is considered paid under
Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
(d) If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
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
Company, or by any Person directly or indirectly controlling or
38
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
Section 2.10. TEMPORARY NOTES.
(a) Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate Definitive Notes in exchange for temporary Notes.
(b) Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
Section 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and, at the request of
the Company, shall destroy cancelled Notes (subject to the record retention
requirements of the Exchange Act). Certification of the destruction of all
cancelled Notes shall be delivered to the Company. The Company may not issue new
Notes to replace Notes that it has paid or, except as contemplated by a
Registered Exchange Offer, that have been delivered to the Trustee for
cancellation.
Section 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest, including Special
Interest, if any, on the Notes, it shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in
each case at the rate provided in the Notes and in Section 4.01. The Company
shall notify the Trustee in writing of the amount of defaulted interest proposed
to be paid on each Note and the date of the proposed payment. The Company shall
fix or cause to be fixed each such special record date and payment date,
provided that no such special record date shall be less than 10 days prior to
the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
Section 2.13. CUSIP OR ISIN NUMBERS.
The Company in issuing the Notes may use "CUSIP" or "ISIN" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" or "ISIN"
numbers in notices of redemption as a convenience to Holders; provided, however,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" or "ISIN" numbers.
Section 2.14. SPECIAL INTEREST.
If Special Interest is payable by the Company pursuant to the
Registration Rights Agreement and paragraph 1 of the Notes, the Company shall
deliver to the Trustee a certificate to that effect stating (a) the amount of
such Special Interest that is payable and (b) the date on which such interest is
payable. Unless and until a Responsible Officer of the Trustee receives such a
certificate or instruction or direction from the Holders in accordance with the
terms of this Indenture, the Trustee may assume without inquiry that no Special
Interest is payable. The foregoing shall not prejudice the rights of the Holders
with respect to their entitlement to Special Interest as otherwise set forth
39
in this Indenture or the Notes and pursuing any action against the Company
directly or otherwise directing the Trustee to take any such action in
accordance with the terms of this Indenture and the Notes. If the Company has
paid Special Interest directly to the Persons entitled to it, the Company shall
deliver to the Trustee a certificate setting forth the particulars of such
payment.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07, it shall furnish to the Trustee, at least
30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (a) the paragraph of the Notes or the Section (or
clause) of this Indenture pursuant to which the redemption shall occur, (b) the
redemption date, (c) the principal amount of Notes to be redeemed and (d) the
redemption price or if the redemption is made pursuant to Section 3.07(b), a
calculation of the redemption price.
Section 3.02. SELECTION OF NOTES TO BE REDEEMED.
(a) If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes on
a pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate. In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
(b) The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
(c) The provisions of clauses (a) and (b) of this Section 3.02 shall
not apply with respect to any redemption affecting only a Global Note, whether
such Global Note is to be redeemed in whole or in part, to the extent such
provisions conflict with Applicable Procedures. In case of any such redemption
in part, the unredeemed portion of the principal amount of the Global Note shall
be in an authorized denomination.
Section 3.03. NOTICE OF REDEMPTION.
(a) At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at its
registered address.
(b) The notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price or if the redemption is
made pursuant to Section 3.07(b), a calculation of the
redemption price;
(iii) if any Note is being redeemed in part, the
portion of the principal amount of such Note to be redeemed
and that, after the redemption date upon surrender of such
Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the
original Note;
40
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption
price;
(vi) that, unless the Company defaults in making such
redemption payment, interest, including Special Interest, if
any, on Notes called for redemption ceases to accrue on and
after the redemption date;
(vii) the paragraph of the Notes or Section (or
clause) of this Indenture pursuant to which the Notes called
for redemption are being redeemed; and
(viii) that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed in
such notice or printed on the Notes.
If any of the Notes to be redeemed is in the form of a beneficial interest in a
Global Note, then the Company shall modify such notice to the extent necessary
to accord with the procedures of the Depositary applicable to redemption.
(c) At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days, or such shorter
period allowed by the Trustee, prior to the redemption date, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in this Section 3.03.
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 irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05. DEPOSIT OF REDEMPTION PRICE.
(a) On or before 11:00 a.m. Eastern Time on the Business Day prior to
any redemption date, the Company shall deposit with the Trustee or with the
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 2.04) money sufficient to pay the
redemption price of, and accrued interest, including Special Interest, if any,
on, all Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest, including Special Interest, if any,
on, all Notes to be redeemed.
(b) If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest, including Special
Interest, if any, shall cease to accrue on the Notes or the portions of Notes
called for redemption. If a Note is redeemed on or after an interest record date
but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Note was
registered at the close of business on such record date. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest,
including Special Interest, if any, shall be paid on the unpaid principal from
the redemption date until such principal is paid, and to the extent lawful on
any interest not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 4.01.
Section 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
41
Section 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this Section 3.07,
the Notes will not be redeemable at the option of the Company prior to July 1,
2007. Starting on that date, the Company may redeem all or any portion of the
Notes, at once or over time, after giving the required notice under this
Indenture. The Notes may be redeemed at the redemption prices set forth below,
plus accrued and unpaid interest, including Special Interest, if any, to the
redemption date (subject to the right of Holders on the relevant record date to
receive interest due on the relevant interest payment date). The following
prices are for Notes redeemed during the 12-month period commencing on July 1 of
the years set forth below, and are expressed as percentages of principal amount:
Year Redemption Price
---- ----------------
2007........................................................................... 105.188%
2008........................................................................... 103.458%
2009........................................................................... 101.729%
2010 and thereafter............................................................ 100.000%
(b) At any time prior to July 1, 2007, the Company may, subject to the
terms of the Senior Notes Indenture and its other Senior Debt, redeem all or any
portion of the Notes, at once or over time, after giving the required notice
under this Indenture at a redemption price equal to the greater of:
(i) 100% of the principal amount of the Notes to be
redeemed, and
(ii) the sum of the present values of (1) the
redemption price of the Notes at July 1, 2007 (as set forth in
clause (a) of this Section 3.07) and (2) the remaining
scheduled payments of interest from the redemption date to
July 1, 2007, but excluding accrued and unpaid interest to the
redemption date, discounted to the redemption date at the
Treasury Rate plus 50 basis points,
plus, in either case, accrued and unpaid interest, including Special Interest,
if any, to the redemption date (subject to the right of Holders on the relevant
record date to receive interest due on the relevant interest payment date).
Any notice to Holders of such a redemption shall include the
appropriate calculation of the redemption price, but need not include the
redemption price itself. The actual redemption price, calculated as described in
this clause (b), shall be set forth in an Officers' Certificate delivered to the
Trustee no later than two Business Days prior to the redemption date.
(c) At any time and from time to time prior to July 1, 2005, the
Company may redeem up to a maximum of 35% of the aggregate principal amount of
the Notes (including any Additional Notes) that have been issued under this
Indenture on or after the Issue Date with the proceeds of one or more Equity
Offerings, at a redemption price equal to 110.375% of the principal amount
thereof, plus accrued and unpaid interest, including Special Interest, if any,
to the redemption date (subject to the right of Holders on the relevant record
date to receive interest due on the relevant interest payment date); provided,
however, that after giving effect to any such redemption, at least 65% of the
aggregate principal amount of the Notes (including any Additional Notes) that
have been issued under this Indenture on or after the Issue Date remains
outstanding. Any such redemption shall be made within 75 days of such Equity
Offering upon not less than 30 nor more than 60 days' prior notice.
(d) Any prepayment pursuant to this Section 3.07 shall be made pursuant
to the provisions of Sections 3.01 through 3.06.
Section 3.08. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
42
ARTICLE 4.
COVENANTS
Section 4.01. PAYMENT OF NOTES.
(a) The Company shall pay or cause to be paid the principal of,
premium, if any, and interest, including Special Interest, if any, on, the Notes
on the dates and in the manner provided in the Notes. Principal, premium, if
any, and interest, including Special Interest, if any, shall be considered paid
on the date due if the Paying Agent, if other than the Company or a Subsidiary
thereof, holds as of 11:00 a.m. Eastern Time on the due date money deposited by
the Company in immediately available funds and designated for and sufficient to
pay all principal, premium, if any, and interest, including Special Interest, if
any, then due. The Company shall pay Special Interest, if any, in the same
manner, on the dates and in the amounts set forth in the Registration Rights
Agreement, the Notes and this Indenture.
(b) The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest,
including Special Interest, if any, (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
(c) Interest shall be computed on the basis of a 360-day year of twelve
30-day months.
Section 4.02. MAINTENANCE OF OFFICE OR AGENCY.
(a) The Company shall maintain, in the continental United States, an
office or agency (which may be an office or drop facility of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar, Paying Agent or additional
paying agent) where Notes may be presented or surrendered for payment,
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
(b) The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
(c) The Company hereby designates the Corporate Trust Office of the
Trustee, as one such office, drop facility or agency of the Company in
accordance with Section 2.03.
Section 4.03. REPORTS.
(a) Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as
any Notes are outstanding, the Company shall file with the Commission and
provide the Trustee and Holders with such annual reports (other than an annual
report on Form 11-K or any successor form) and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such sections, such information,
documents and reports so to be filed with the Commission and provided at the
times specified for the filing of such information, documents and reports under
such Sections; provided, however, that the Company shall not be so obligated to
file such information, documents and reports with the Commission if the
Commission does not permit such filings.
43
(b) For so long as any Notes remain outstanding, the Company 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.
Section 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company 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 his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered to the Trustee pursuant to Section 4.03 above shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Articles 4 or 5 or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Default, its status and what action the Company is taking or proposes to
take with respect thereto.
Section 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 4.07. CORPORATE EXISTENCE.
Subject to Article 5, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, and the corporate, limited liability company, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary; provided, however,
44
that the Company shall not be required to preserve the corporate, limited
liability company, partnership or other existence of any of its Restricted
Subsidiaries if (i) the cessation of such existence complies with Article 5 or
(ii) an Officer of the Company shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries, taken as a whole, and that the loss thereof is not
adverse in any material respect to the Holders of the Notes.
Section 4.08. PAYMENTS FOR CONSENT.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
or is paid to all Holders of Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.09. MAINTENANCE OF CONSOLIDATED NET WORTH.
(a) In the event (the "Net Worth Trigger Event") the Consolidated Net
Worth at the end of each of any two consecutive fiscal quarters ending after the
Issue Date (the last day of such second fiscal quarter being referred to as the
"Net Worth Trigger Date") is less than $150.0 million (the "Minimum Net Worth"),
the Company shall make an offer to all Holders of the Notes (a "Net Worth
Offer") to repurchase Notes in an aggregate principal amount equal to the Net
Worth Offer Amount on a pro rata basis from such Holders, on a Business Day (the
"Net Worth Repurchase Date") that is no earlier than 30 days or later than 60
days following the date the Net Worth Notice is mailed and at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest,
including Special Interest, if any, to the Net Worth Repurchase Date (the "Net
Worth Offer Price") (subject to the right of Holders on the relevant record date
to receive interest due on the relevant interest payment date).
(b) The "Net Worth Offer Amount" shall equal 10% of the aggregate
principal amount of the Notes then outstanding (or if less than 10% of the
original aggregate principal amount of such Notes (including any Additional
Notes) issued are then outstanding, the amount of all the Notes outstanding at
the time).
(c) The Company may credit against the Net Worth Offer Amount the
principal amount of Notes acquired by the Company prior to the Net Worth Trigger
Date through purchase, optional redemption or exchange; provided, however, no
credit shall be made for any mandatory repurchase, including, without
limitation, repurchases pursuant to a Change of Control Offer or Prepayment
Offer. Notwithstanding anything in the preceding clauses (a) and (b) to the
contrary, in no event shall the Company's failure to maintain a minimum
Consolidated Net Worth result in requiring it to make more than one Net Worth
Offer. The Company shall notify the Trustee promptly after the occurrence of the
Net Worth Trigger Event and shall notify the Trustee in writing if its
Consolidated Net Worth is less than the Minimum Net Worth for any fiscal quarter
ending after the Issue Date and prior to the Net Worth Repurchase Date.
(d) Within 30 days following the Net Worth Trigger Date, the Company
shall:
(i) cause a notice of the Net Worth Offer to be sent
at least once to the Dow Xxxxx News Service or a similar
business news service in the United States; and
(ii) send, by first-class mail, with a copy to the
Trustee, to each Holder of Notes, at such Holder's address
appearing in the Security Register, a notice (the "Net Worth
Notice") stating:
(1) that a Net Worth Trigger Event has
occurred and a Net Worth Offer is being made and that
all Notes timely tendered will be accepted for
payment on a pro rata basis or otherwise in
accordance with DTC's Applicable Procedures;
(2) the Net Worth Offer Price, the Net Worth
Offer Amount and the Net Worth Repurchase Date;
45
(3) the date by which the Net Worth Offer
must be accepted; and
(4) the procedures that Holders of Notes
must follow in order to tender their Notes (or
portions thereof) for payment, and the procedures
that Holders of Notes must follow in order to
withdraw an election to tender Notes (or portions
thereof) for payment.
(e) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to the Net
Worth Offer. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.09, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.09 by virtue of
such compliance.
Section 4.10. INCURRENCE OF DEBT.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Debt (including any Acquired
Debt) unless, after giving effect to the application of the proceeds thereof, no
Default or Event of Default would occur as a consequence of such Incurrence or
be continuing following such Incurrence and either:
(i) such Debt is Debt of the Company or a Subsidiary
Guarantor, and after giving effect to the Incurrence of such
Debt and the application of the proceeds thereof, either (1)
the Consolidated Interest Coverage Ratio would be greater than
2.0 to 1 or (2) the Consolidated Debt to Consolidated Tangible
Net Worth Ratio would not be greater than 3.0 to 1; or
(ii) such Debt is Permitted Debt.
(b) The term "Permitted Debt" is defined to include the following:
(i) (1) Debt of the Company evidenced by the Initial
Notes issued pursuant to this Indenture and the Exchange Notes
issued in exchange for such Initial Notes and in exchange for
any Additional Notes, (2) Debt of the Subsidiary Guarantors
evidenced by the Subsidiary Guaranties relating to the Initial
Notes and the Exchange Notes issued in exchange for such
Initial Notes and in exchange for any Additional Notes, (3)
Debt of the Company evidenced by the Initial Senior Notes
issued pursuant to the Senior Notes Indenture and the Senior
Exchange Notes issued in exchange for such Initial Senior
Notes and in exchange for any Additional Senior Notes and (4)
Debt of the Subsidiary Guarantors evidenced by the Senior
Subsidiary Guaranties relating to the Initial Senior Notes and
the Senior Exchange Notes issued in exchange for such Initial
Senior Notes and in exchange for any Additional Senior Notes;
(ii) Debt of the Company or a Subsidiary Guarantor
under Credit Facilities, provided that the aggregate principal
amount of all such Debt under Credit Facilities at any one
time outstanding shall not exceed the greater of:
(1) $225.0 million, which amount shall be
permanently reduced by the amount of Net Available
Cash used to Repay Debt under Credit Facilities and
not subsequently reinvested in Additional Assets or
used to Repay other Debt, pursuant to Section 4.13
and
(2) 25% of Consolidated Net Tangible Assets;
(iii) Debt of the Company or a Subsidiary Guarantor
in respect of Capital Lease Obligations and Purchase Money
Debt, provided that:
46
(1) the aggregate principal amount of such
Debt does not exceed the Fair Market Value (on the
date of the Incurrence thereof) of the Property
acquired, constructed or leased, and
(2) the aggregate principal amount of all
Debt Incurred and then outstanding pursuant to this
clause (iii) (together with all Permitted Refinancing
Debt Incurred and then outstanding in respect of Debt
previously Incurred pursuant to this clause (iii))
does not exceed $10.0 million;
(iv) Debt of the Company owing to and held by any
Wholly Owned Restricted Subsidiary and Debt of a Restricted
Subsidiary owing to and held by the Company or any Wholly
Owned Restricted Subsidiary; provided, however, that any
subsequent issue or transfer of Capital Stock or other event
that results in any such Wholly Owned Restricted Subsidiary
ceasing to be a Wholly Owned Restricted Subsidiary or any
subsequent transfer of any such Debt (except to the Company or
a Wholly Owned Restricted Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Debt by the issuer
thereof;
(v) Debt of a Restricted Subsidiary outstanding on
the date on which such Subsidiary is acquired by the Company
or otherwise becomes a Restricted Subsidiary (other than Debt
Incurred as consideration in, or to provide all or any portion
of the funds or credit support utilized to consummate, the
transaction or series of transactions pursuant to which such
Restricted Subsidiary became a Subsidiary of the Company or
was otherwise acquired by the Company), provided that at the
time such Restricted Subsidiary is acquired by the Company or
otherwise becomes a Restricted Subsidiary and after giving
effect to the Incurrence of such Debt, the Company would have
been able to Incur $1.00 of additional Debt pursuant to clause
(a)(i) of this Section 4.10; and provided, further, such
Restricted Subsidiary executes and delivers a supplemental
indenture providing for a Subsidiary Guaranty in accordance
with Section 4.18 to the extent so required by such Section
4.18;
(vi) Debt under Interest Rate Agreements entered into
by the Company or a Subsidiary Guarantor for the purpose of
limiting interest rate risk in the ordinary course of the
financial management of the Company or such Subsidiary
Guarantor and not for speculative purposes, provided that the
obligations under such agreements are directly related to
payment obligations on Debt otherwise permitted by the terms
of this Section 4.10;
(vii) Debt Incurred by the Company or a Subsidiary
Guarantor under a Warehouse Facility, provided that the amount
of such Debt (including funding drafts issued thereunder)
outstanding at any time pursuant to this clause (vii) does not
exceed the value of the Mortgages pledged to secure Debt
thereunder;
(viii) Debt in connection with one or more standby
letters of credit or payment or performance bonds issued by
the Company or a Subsidiary Guarantor in the ordinary course
of business or pursuant to self-insurance obligations and not
in connection with the borrowing of money or the obtaining of
advances or credit;
(ix) Debt of a Foreign Restricted Subsidiary in an
aggregate principal amount outstanding at any one time not to
exceed $15.0 million;
(x) Debt of a Domestic Restricted Subsidiary (other
than a Subsidiary Guarantor) in an aggregate principal amount
outstanding at any one time not to exceed $10.0 million;
(xi) Non-Recourse Debt of the Company or a Restricted
Subsidiary;
47
(xii) Debt outstanding on the Issue Date not
otherwise described in clauses (i) through (xi) above;
(xiii) Debt of the Company or a Subsidiary Guarantor
in an aggregate principal amount outstanding at any one time
not to exceed $35.0 million; and
(xiv) Permitted Refinancing Debt Incurred in respect
of Debt Incurred pursuant to clause (a)(i) of this Section
4.10 and clauses (b)(i), (iii), (v) and (xii) of this Section
4.10.
(c) Notwithstanding anything to the contrary contained in this Section
4.10,
(i) the Company shall not, and shall not permit any
Subsidiary Guarantor to, Incur any Debt pursuant to this
Section 4.10, other than pursuant to clause (a)(i) of this
Section 4.10 and clause (b)(xiii) of this Section 4.10, if the
proceeds thereof are used, directly or indirectly, to
Refinance any Subordinated Debt in respect of the Notes or
Subsidiary Guaranty unless such Debt shall be subordinated to
the Notes or the applicable Subsidiary Guaranty, as the case
may be, to at least the same extent as such Subordinated Debt;
(ii) the Company shall not permit any Restricted
Subsidiary that is not a Subsidiary Guarantor of the Notes to
Incur any Debt pursuant to this Section 4.10 if the proceeds
thereof are used, directly or indirectly, to Refinance any
Debt of the Company or any Subsidiary Guarantor of the Notes;
and
(iii) accrual of interest, accretion or amortization
of original issue discount and the payment of interest or
dividends in the form of additional Debt, will be deemed not
to be an Incurrence of Debt for purpose of this Section 4.10.
(d) For purposes of determining compliance with this Section 4.10, in
the event that an item of Debt meets the criteria of more than one of the
categories of Permitted Debt described in clauses (b)(i) through (b)(xiv) of
this Section 4.10 or is entitled to be incurred pursuant to clause (a)(i) of
this Section 4.10, the Company shall, in its sole discretion, classify such item
of Debt on the date of its Incurrence, or later reclassify all or a portion of
such item of Debt, in any manner that complies with this Section 4.10, and such
item of Debt will be treated as having been incurred pursuant to one or more of
such categories of Permitted Debt or pursuant to clause (a)(i) of this Section
4.10.
Section 4.11. RESTRICTED PAYMENTS.
(a) The Company shall not make, and shall not permit any Restricted
Subsidiary to make, directly or indirectly, any Restricted Payment if at the
time of, and after giving effect to, such proposed Restricted Payment,
(i) a Default or Event of Default shall have occurred
and be continuing,
(ii) the Company could not Incur at least $1.00 of
additional Debt pursuant to Section 4.10(a)(i), or
(iii) the aggregate amount of such Restricted Payment
and all other Restricted Payments declared or made since the
Issue Date (the amount of any Restricted Payment, if made
other than in cash, to be based upon Fair Market Value) would
exceed an amount equal to the sum of:
(1) 45% of the aggregate amount of
Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning
of the fiscal quarter during which the Issue Date
occurs to the end of the most recent fiscal quarter
ending at least 45 days prior to the date of such
Restricted Payment (or if the aggregate amount of
48
Consolidated Net Income for such period shall be a
deficit, minus 100% of such deficit), plus
(2) 100% of the Capital Stock Sale Proceeds,
plus
(3) the aggregate net cash proceeds received
by the Company or any Restricted Subsidiary from the
issuance or sale after the Issue Date of convertible
or exchangeable Debt that has been converted into or
exchanged for Capital Stock (other than Disqualified
Stock) of the Company excluding,
(A) any such Debt issued or sold to
the Company or a Subsidiary of the Company
or an employee stock ownership plan or trust
established by the Company or any such
Subsidiary for the benefit of their
employees, and
(B) the aggregate amount of any
cash or other Property distributed by the
Company or any Restricted Subsidiary upon
any such conversion or exchange, plus
(4) an amount equal to the sum of:
(A) the net reduction in
Investments in any Person other than the
Company or a Restricted Subsidiary resulting
from dividends, repayments of loans or
advances or other transfers of Property, in
each case to the Company or any Restricted
Subsidiary from such Person, and
(B) the portion (proportionate to
the Company's equity interest in such
Unrestricted Subsidiary) of the Fair Market
Value of the net assets of an Unrestricted
Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted
Subsidiary;
provided, however, that the preceding sum shall not
exceed, in the case of any Person, the amount of
Investments previously made (and treated as a
Restricted Payment) by the Company or any Restricted
Subsidiary in such Person, plus
(5) $15.0 million.
(b) Notwithstanding the preceding limitation, the Company or any
Restricted Subsidiary may:
(i) pay dividends on its Capital Stock within 60 days
of the declaration thereof if, on the declaration date, such
dividends could have been paid in compliance with this
Indenture; provided, however, such dividends shall be included
in the calculation of the amount of Restricted Payments;
(ii) purchase, repurchase, redeem, legally defease,
acquire or retire for value its Capital Stock or Subordinated
Debt in exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company
(other than Disqualified Stock, and other than Capital Stock
issued or sold to a Subsidiary of the Company or an employee
stock ownership plan or trust established by the Company or
any such Subsidiary for the benefit of their employees);
provided, however, that
49
(1) such purchase, repurchase, redemption,
legal defeasance, acquisition or retirement shall be
excluded in the calculation of the amount of
Restricted Payments, and
(2) the Capital Stock Sale Proceeds from
such exchange or sale shall be excluded from the
calculation pursuant to clause (a)(iii)(2) of this
Section 4.11;
(iii) purchase, repurchase, redeem, legally defease,
acquire or retire for value any of its Subordinated Debt in
exchange for, or out of the proceeds of the substantially
concurrent sale of, Permitted Refinancing Debt;
(iv) so long as no Default or Event of Default has
occurred and is continuing, purchase, repurchase, redeem,
legally defease, acquire or retire for value Capital Stock
from any officer, director or employee of the Company or its
Restricted Subsidiaries in an aggregate amount not to exceed
$2.0 million per year;
(v) acquire the Capital Stock of the Company in
connection with the exercise of stock options or stock
appreciation rights by way of cashless exercise or in
connection with the satisfaction of withholding tax
obligations;
(vi) in connection with an acquisition by the Company
or by any of its Restricted Subsidiaries, receive or accept
the return to the Company or any of its Restricted
Subsidiaries Capital Stock of the Company or any of its
Restricted Subsidiaries constituting a portion of the purchase
price consideration in settlement of indemnification claims;
and
(vii) purchase fractional shares of the Capital Stock
of the Company arising out of stock dividends, splits or
combinations or business combinations.
(c) Any Restricted Payment described in the preceding clauses (b)(iii)
through (vii) shall be excluded in the calculation of the amount of Restricted
Payments.
Section 4.12. LIENS.
The Company shall not, and shall not permit any Subsidiary Guarantor
to, directly or indirectly, Incur or suffer to exist, any Lien (other than
Permitted Liens or Liens securing Senior Debt) upon any of its Property
(including Capital Stock of a Restricted Subsidiary), whether owned at the Issue
Date or thereafter acquired, or any interest therein or any income or profits
therefrom securing any Debt of the Company or any Subsidiary Guarantor, unless:
(a) if such Lien secures Senior Subordinated Debt pari passu to the
Notes or any Subsidiary Guaranty, the Notes or the applicable Subsidiary
Guaranty are secured on an equal and ratable basis with such Debt; and
(b) if such Lien secures Subordinated Debt, such Lien shall be
subordinated to a Lien securing the Notes or the applicable Subsidiary Guaranty
in the same Property as that securing such Lien to the same extent as such
Subordinated Debt is subordinated to the Notes and the Subsidiary Guaranties.
Section 4.13. ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
(i) the Company or such Restricted Subsidiary
receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the Property subject to such
Asset Sale;
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(ii) at least 75% of the consideration paid to the
Company or such Restricted Subsidiary in connection with such
Asset Sale is in the form of cash or Cash Equivalents;
provided, however, that the amount of (1) any liabilities (as
shown on the Company's or such Restricted Subsidiary's most
recent balance sheet) of the Company or such Restricted
Subsidiary (other than contingent liabilities and liabilities
that are by their terms subordinated to the Notes or any
Subsidiary Guaranty) that are assumed by the transferee of any
such Property pursuant to a customary novation agreement that
releases the Company or such Restricted Subsidiary from
further liability and (2) any securities, notes or other
obligations received by the Company or such Restricted
Subsidiary from such transferee that are converted within 30
days by the Company or such Restricted Subsidiary into cash
(to the extent of the cash received) shall be deemed to be
cash for the purposes of this provision;
(iii) no Default or Event of Default would occur as a
result of such Asset Sale; and
(iv) the Company delivers an Officers' Certificate to
the Trustee certifying that such Asset Sale complies with the
preceding clauses (a)(i) through (iii).
(b) The Net Available Cash (or any portion thereof) from Asset Sales
may be applied by the Company or a Restricted Subsidiary, to the extent the
Company or such Restricted Subsidiary elects (or is required by the terms of any
Debt):
(i) to Repay Senior Debt of the Company or any
Subsidiary Guarantor (excluding, in any such case, any Debt
owed to the Company or an Affiliate of the Company); or
(ii) to reinvest in Additional Assets (including by
means of an Investment in Additional Assets by a Restricted
Subsidiary with Net Available Cash received by the Company or
another Restricted Subsidiary).
(c) Any Net Available Cash from an Asset Sale not applied in accordance
with the preceding paragraph within 360 days from the date of the receipt of
such Net Available Cash or that is not segregated from the general funds of the
Company for investment in identified Additional Assets in respect of a project
that shall have been commenced, and for which binding contractual commitments
have been entered into, prior to the end of such 360-day period and that shall
not have been completed or abandoned shall constitute "Excess Proceeds;"
provided, however, that any Net Available Cash applied to complete a Senior
Notes Prepayment Offer which is commenced within 365 days from the date of the
receipt of such Net Available Cash shall be deemed to have been applied within
such 360-day period; provided, further, that the amount of any Net Available
Cash that ceases to be so segregated as contemplated above and any Net Available
Cash that is segregated in respect of a project that is abandoned or completed
shall also constitute "Excess Proceeds" at the time any such Net Available Cash
ceases to be so segregated or at the time the relevant project is so abandoned
or completed, as applicable; provided further, however, that the amount of any
Net Available Cash that continues to be segregated for investment and that is
not actually reinvested within 24 months from the date of the receipt of such
Net Available Cash shall also constitute "Excess Proceeds."
(d) When the aggregate amount of Excess Proceeds exceeds $5.0 million
(taking into account income earned on such Excess Proceeds, if any), the Company
will be required to make an offer to repurchase (the "Prepayment Offer") the
Notes, which offer shall be in the amount of the Allocable Excess Proceeds
(rounded to the nearest $1,000), on a pro rata basis according to principal
amount, at a purchase price equal to 100% of the principal amount thereof, plus
accrued and unpaid interest, including Special Interest, if any, to the purchase
date (subject to the right of Holders on the relevant record date to receive
interest due on the relevant interest payment date), in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
this Indenture. To the extent that any portion of the amount of Net Available
Cash remains after compliance with the preceding sentence and provided that all
Holders of Notes have been given the opportunity to tender their Notes for
purchase in accordance with this Indenture, the Company or such Restricted
Subsidiary may use such remaining amount for any purpose permitted by this
Indenture, and the amount of Excess Proceeds will be reset to zero.
(e) The term "Allocable Excess Proceeds" means the product of:
51
(i) the Excess Proceeds and
(ii) a fraction,
(1) the numerator of which is the aggregate
principal amount of the Notes outstanding on the date
of the Prepayment Offer, and
(2) the denominator of which is the sum of
the aggregate principal amount of the Notes
outstanding on the date of the Prepayment Offer and
the aggregate principal amount of other Debt of the
Company outstanding on the date of the Prepayment
Offer that is pari passu in right of payment with the
Notes and subject to terms and conditions in respect
of Asset Sales similar in all material respects to
this Section 4.13 and requiring the Company to make
an offer to purchase such Debt at substantially the
same time as the Prepayment Offer.
(f) Within five Business Days after the Company is obligated to make a
Prepayment Offer as described in clause (d) of this Section 4.13, the Company
shall send a written notice, by first-class mail, to the Holders of Notes,
accompanied by such information regarding the Company and its Subsidiaries as
the Company in good faith believes will enable such Holders to make an informed
decision with respect to such Prepayment Offer. Such notice shall state, among
other things, the purchase price and the purchase date, which shall be, subject
to any contrary requirements of applicable law, a Business Day no earlier than
30 days nor later than 60 days from the date such notice is mailed.
(g) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 4.13. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.13, the Company will
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
thereof.
Section 4.14. RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist any consensual restriction on the right of any Restricted Subsidiary to:
(i) pay dividends, in cash or otherwise, or make any
other distributions on or in respect of its Capital Stock, or
pay any Debt or other obligation owed, to the Company or any
other Restricted Subsidiary,
(ii) make any loans or advances to the Company or any
other Restricted Subsidiary, or
(iii) transfer any of its Property to the Company or
any other Restricted Subsidiary.
(b) The preceding limitations will not apply:
(i) with respect to clauses (a)(i), (ii) and (iii),
to restrictions:
(1) in effect on the Issue Date (including,
without limitation, restrictions pursuant to the
Senior Credit Facility),
(2) relating to Debt of a Restricted
Subsidiary and existing at the time it became a
Restricted Subsidiary if such restriction was not
created in connection with or in anticipation of the
transaction or series
52
of transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was
acquired by the Company, or
(3) that result from the Refinancing of Debt
Incurred pursuant to an agreement referred to in
clause (b)(i)(1) or (2) or in (b)(ii)(1) or (2) of
this Section 4.14, provided such restrictions are not
materially less favorable, taken as a whole, to the
Holders of Notes than those under the agreement
evidencing the Debt so Refinanced, and
(ii) with respect to clause (a)(iii) of this Section
4.14 only, to restrictions:
(1) relating to Debt that is permitted to be
Incurred and secured pursuant to Sections 4.10 and
4.12 that limit the right of the debtor to dispose of
the Property securing such Debt,
(2) encumbering Property at the time such
Property was acquired by the Company or any
Restricted Subsidiary, so long as such restriction
relates solely to the Property so acquired and was
not created in connection with or in anticipation of
such acquisition,
(3) resulting from customary provisions
restricting subletting or assignment of leases or
customary provisions in other agreements that
restrict assignment of such agreements or rights
thereunder,
(4) customary restrictions contained in
stock or asset sale agreements limiting the transfer
of such Property pending the closing of such sale,
(5) customary restrictions contained in
joint venture agreements entered into in the ordinary
course of business and in good faith, or
(6) reasonable and customary borrowing base
covenants set forth in agreements evidencing Debt
otherwise permitted by this Indenture.
Section 4.15. TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including the purchase, sale,
transfer, assignment, lease, conveyance or exchange of any Property or the
rendering of any service) with, or for the benefit of, any Affiliate of the
Company (an "Affiliate Transaction"), unless:
(i) the terms of such Affiliate Transaction are:
(1) set forth in writing,
(2) in the best interest of the Company or
such Restricted Subsidiary, as the case may be, and
(3) no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those
that could be obtained in a comparable arm's-length
transaction with a Person that is not an Affiliate of
the Company, or, if there is no such comparable
53
transaction, on terms that are fair and reasonable to
the Company or such Restricted Subsidiary,
(ii) if such Affiliate Transaction involves aggregate
payments or value in excess of $5.0 million, the Board of
Directors (including a majority of the disinterested members
of the Board of Directors) approves such Affiliate Transaction
and, in its good faith judgment, believes that such Affiliate
Transaction complies with clauses (a)(i)(2) and (3) of this
Section 4.15 as evidenced by a Board Resolution promptly
delivered to the Trustee, and
(iii) if such Affiliate Transaction involves
aggregate payments or value in excess of $25.0 million, the
Company obtains a written opinion from an Independent
Financial Advisor to the effect that the consideration to be
paid or received in connection with such Affiliate Transaction
is fair, from a financial point of view, to the Company and
the Restricted Subsidiaries.
(b) Notwithstanding the preceding limitation, the following shall not
be Affiliate Transactions:
(i) any transaction or series of related transactions
between the Company and one or more Restricted Subsidiaries or
between two or more Restricted Subsidiaries, provided that no
more than 5% of the total voting power of the Voting Stock (on
a fully diluted basis) of any such Restricted Subsidiary is
owned by an Affiliate of the Company (other than a Restricted
Subsidiary);
(ii) any Restricted Payment permitted to be made
pursuant to Section 4.11 or any Permitted Investment;
(iii) any employment agreement or other employee
compensation plan or arrangement entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course
of business of the Company or such Restricted Subsidiary and
approved by the Board of Directors in good faith;
(iv) indemnities of officers, directors and employees
of the Company or any of its Restricted Subsidiaries permitted
by bylaw or statutory provisions;
(v) the payment of reasonable and customary regular
fees to directors of the Company or any of its Restricted
Subsidiaries who are not employees of the Company or any
Affiliate;
(vi) agreements in effect on the Issue Date and
disclosed in the Offering Memorandum (other than the
Management Services Agreements), without regard to any
modifications, extensions or renewals thereof; and
(vii) the Management Services Agreements, provided
that payments made by the Company or any of its Restricted
Subsidiaries under such agreements do not exceed $3.5 million
in any fiscal year.
Section 4.16. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
(a) The Board of Directors may designate any Subsidiary of the Company
to be an Unrestricted Subsidiary if the Subsidiary to be so designated:
(i) does not own any Capital Stock or Debt of, or own
or hold any Lien on any Property of, the Company or any other
Restricted Subsidiary,
(ii) has no Debt other than Debt:
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(1) as to which neither the Company nor any
of its Restricted Subsidiaries (A) provides credit
support of any kind (including any undertaking,
agreement or instrument that would constitute Debt),
(B) is directly or indirectly liable as a Guarantor
or otherwise, or (C) constitutes the lender;
provided, however, the Company or a Restricted
Subsidiary may loan, advance or extend credit to, or
Guarantee the Debt of, an Unrestricted Subsidiary at
any time following the date such Subsidiary is
designated as an Unrestricted Subsidiary in
accordance with Section 4.11,
(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 Debt
(other than the Notes or any Guarantee permitted by
the proviso to the preceding clause (a)(ii)(1)) of
the Company or any of its Restricted Subsidiaries to
declare a default on such other Debt or cause the
payment thereof to be accelerated or payable prior to
its Stated Maturity, and
(3) as to which the lenders have been
notified in writing that they will not have any
recourse to the stock or other Property of the
Company or any of its Restricted Subsidiaries, except
for Debt that has been Guaranteed as permitted by the
proviso to the preceding clause (a)(ii)(1);
(iii) is not party to any agreement, contract,
arrangement or understanding with the Company or any
Restricted Subsidiary of the Company unless the terms of any
such agreement, contract, arrangement or understanding are no
less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who
are not Affiliates of the Company;
(iv) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation (1) to subscribe for additional Capital
Stock or (2) to maintain or preserve such Person's financial
condition or to cause such Person to achieve any specified
levels of operating results;
(v) has not Guaranteed or otherwise directly or
indirectly provided credit support for any Debt of the Company
or any of its Restricted Subsidiaries; and
(vi) has at least one director on its board of
directors that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries and has at least
one executive officer that is not a director or executive
officer of the Company or any of its Restricted Subsidiaries.
(b) Unless so designated as an Unrestricted Subsidiary, any Person that
becomes a Subsidiary of the Company will be classified as a Restricted
Subsidiary; provided, however, that such Subsidiary shall not be designated a
Restricted Subsidiary and shall be automatically classified as an Unrestricted
Subsidiary if either of the requirements set forth in clauses (d)(i) and (ii) of
this Section 4.16 will not be satisfied after giving pro forma effect to such
classification or if such Person is a Subsidiary of an Unrestricted Subsidiary.
(c) Except as provided in the first sentence of clause (a) of this
Section 4.16, no Restricted Subsidiary may be redesignated as an Unrestricted
Subsidiary, and neither the Company nor any Restricted Subsidiary shall at any
time be directly or indirectly liable for any Debt that provides that the holder
thereof may (with the passage of time or notice or both) declare a default
thereon or cause the payment thereof to be accelerated or payable prior to its
Stated Maturity upon the occurrence of a default with respect to any Debt, Lien
or other obligation of any Unrestricted Subsidiary (including any right to take
enforcement action against such Unrestricted Subsidiary). Upon designation of a
Restricted Subsidiary as an Unrestricted Subsidiary in compliance with this
Section 4.16, such
55
Restricted Subsidiary shall, by execution and delivery of a supplemental
indenture, substantially in the form of Exhibit F hereto, be released from any
Subsidiary Guaranty previously made by such Restricted Subsidiary.
(d) The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary if, immediately after giving pro forma effect to such
designation,
(i) the Company could Incur at least $1.00 of
additional Debt pursuant to Section 4.10(a)(i), and
(ii) no Default or Event of Default shall have
occurred and be continuing or would result therefrom.
(e) Any such designation or redesignation by the Board of Directors
will be evidenced to the Trustee by filing with the Trustee a Board Resolution
giving effect to such designation or redesignation and an Officers' Certificate
that:
(i) certifies that such designation or redesignation
complies with the preceding provisions, and
(ii) gives the effective date of such designation or
redesignation,
such filing with the Trustee to occur within 45 days after the end of the fiscal
quarter of the Company in which such designation or redesignation is made (or,
in the case of a designation or redesignation made during the last fiscal
quarter of the Company's fiscal year, within 90 days after the end of such
fiscal year).
Section 4.17. REPURCHASE AT THE OPTION OF HOLDERS UPON A CHANGE OF
CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall make
an offer to all Holders of the Notes to repurchase all or any part of a Holder's
Notes pursuant to the terms described below (the "Change of Control Offer") at a
purchase price (the "Change of Control Purchase Price") equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, including Special
Interest, if any, to the repurchase date (subject to the right of Holders on the
relevant record date to receive interest due on the relevant interest payment
date).
(b) Within 30 days following any Change of Control, the Company shall:
(i) cause a notice of the Change of Control Offer to
be sent at least once to the Dow Xxxxx News Service or a
similar business news service in the United States; and
(ii) send, by first-class mail, with a copy to the
Trustee, to each Holder of Notes, at such Holder's address
appearing in the Security Register, a notice stating:
(1) that a Change of Control has occurred
and an offer is being made pursuant to this Section
4.17 and that all Notes timely tendered will be
accepted for payment;
(2) the purchase price and the repurchase
date, which shall be, subject to any contrary
requirements of applicable law, a Business Day no
earlier than 30 days nor later than 60 days from the
date such notice is mailed;
(3) the circumstances and relevant facts
regarding the Change of Control (including
information with respect to pro forma historical
income, cash flow and capitalization after giving
effect to the Change of Control); and
56
(4) the procedures that Holders of Notes
must follow in order to tender their Notes (or
portions thereof) for payment, and the procedures
that Holders of Notes must follow in order to
withdraw an election to tender Notes (or portions
thereof) for payment.
(c) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to a Change
of Control Offer. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.17, the Company will
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
such compliance.
Section 4.18. FUTURE SUBSIDIARY GUARANTORS.
The Company shall cause each Person that becomes a Domestic Restricted
Subsidiary following the Issue Date to execute and deliver to the Trustee a
supplemental indenture to this Indenture, substantially in the form of Exhibit F
hereto, providing for a Subsidiary Guaranty at the time such Person becomes a
Domestic Restricted Subsidiary.
Section 4.19. LAYERED DEBT.
The Company shall not, and shall not permit any Subsidiary Guarantor
to, Incur, directly or indirectly, any Debt that is subordinate or junior in
right of payment to any Senior Debt unless such Debt is Senior Subordinated Debt
or is expressly subordinated in right of payment to the Notes or the Subsidiary
Guaranties, as the case may be. In addition, no Subsidiary Guarantor shall
Guarantee, directly or indirectly, any Debt of the Company that is subordinate
or junior in right of payment to any Senior Debt unless such Guarantee is
expressly subordinate in right of payment to, or ranks pari passu with, the
Subsidiary Guaranty of such Subsidiary Guarantor.
Section 4.20. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted Subsidiary,
to, directly or indirectly, engage in any business other than the Permitted
Business.
Section 4.21. COVENANT SUSPENSION.
(a) During any period of time that:
(i) the Notes have Investment Grade Ratings from both
Rating Agencies; and
(ii) no Default or Event of Default has occurred and
is continuing under this Indenture,
the Company and the Restricted Subsidiaries will not be subject to the following
provisions of this Indenture:
o Section 4.09,
o Section 4.10,
o Section 4.11,
o Section 4.13,
o Section 4.14,
o Section 4.15,
o Section 4.16(d)(i) (and such Section 4.16(d)(i) as referred to
in Section 4.16(b)),
57
o Section 4.20, and
o Section 5.01(a)(v), (a)(vi), (b)(v) and (b)(vi)
(collectively, the "Suspended Covenants").
(b) In the event that the Company and the Restricted Subsidiaries are
not subject to the Suspended Covenants for any period of time as a result of
clause (a) of this Section 4.21 and, subsequently, one or both of the Rating
Agencies withdraws its ratings or downgrades the ratings assigned to the Notes
below the required Investment Grade Ratings or a Default or Event of Default
occurs and is continuing, then the Company and the Restricted Subsidiaries will
thereafter again be subject to the Suspended Covenants, and compliance with the
Suspended Covenants with respect to Restricted Payments made after the time of
such withdrawal, downgrade, Default or Event of Default will be calculated in
accordance with the terms of Section 4.11 as though such Section 4.11 had been
in effect during the entire period of time from the Issue Date, it being
understood that no actions taken by the Company or any of its Restricted
Subsidiaries during the suspension period shall constitute a Default or an Event
of Default under the Suspended Covenants.
ARTICLE 5.
SUCCESSORS
Section 5.01. MERGER, CONSOLIDATION, OR SALE OF PROPERTY.
(a) The Company shall not merge, consolidate or amalgamate with or into
any other Person (other than a merger of a Wholly Owned Restricted Subsidiary
into the Company or, subject to compliance with Section 4.11, a merger of a
Subsidiary Guarantor into the Company) or sell, transfer, assign, lease, convey
or otherwise dispose of all or substantially all its Property in any one
transaction or series of related transactions unless:
(i) the Company shall be the Surviving Person, or the
Surviving Person (if other than the Company) formed by such
merger, consolidation or amalgamation or to which such sale,
transfer, assignment, lease, conveyance or disposition is made
shall be a corporation organized and existing under the laws
of the United States of America, any State thereof or the
District of Columbia;
(ii) the Surviving Person (if other than the Company)
expressly assumes, by supplemental indenture, substantially in
the form of Exhibit F hereto, executed and delivered to the
Trustee by such Surviving Person, the due and punctual payment
of the principal of, and premium, if any, and interest on, all
the Notes, according to their tenor, and the due and punctual
performance and observance of all the covenants of this
Indenture to be performed by the Company;
(iii) in the case of a sale, transfer, assignment,
lease, conveyance or other disposition of all or substantially
all the Property of the Company, such Property shall have been
transferred as an entirety or virtually as an entirety to one
Person;
(iv) immediately after giving effect to such
transaction or series of related transactions on a pro forma
basis (and treating, for purposes of this clause (iv) and
clauses (v) and (vi) of this Section 5.01(a), any Debt that
becomes, or is anticipated to become, an obligation of the
Surviving Person or any Restricted Subsidiary as a result of
such transaction or series of related transactions as having
been Incurred by the Surviving Person or such Restricted
Subsidiary at the time of such transaction or series of
related transactions), no Default or Event of Default shall
have occurred and be continuing;
58
(v) immediately after giving effect to such
transaction or series of related transactions on a pro forma
basis, the Company or the Surviving Person, as the case may
be, would be able to Incur at least $1.00 of additional Debt
under Section 4.10(a)(i);
(vi) immediately after giving effect to such
transaction or series of related transactions on a pro forma
basis, the Surviving Person shall have a Consolidated Net
Worth in an amount which is not less than the Consolidated Net
Worth of the Company immediately prior to such transaction or
series of related transactions; and
(vii) the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an
Opinion of Counsel, each stating that such transaction or
series of related transactions and the supplemental indenture,
if any, in respect thereto comply with this Section 5.01(a)
and that all conditions precedent herein provided for relating
to such transaction or series of related transactions have
been satisfied.
(b) The Company shall not permit any Subsidiary Guarantor to merge,
consolidate or amalgamate with or into any other Person (other than a merger of
a Wholly Owned Restricted Subsidiary into such Subsidiary Guarantor or the
Company or subject to compliance with Section 4.11, a merger of a Subsidiary
Guarantor into the Company) or sell, transfer, assign, lease, convey or
otherwise dispose of all or substantially all its Property in any one
transaction or series of related transactions unless:
(i) the Surviving Person (if other than such
Subsidiary Guarantor) formed by such merger, consolidation or
amalgamation or to which such sale, transfer, assignment,
lease, conveyance or disposition is made shall be a
corporation, company (including a limited liability company)
or partnership organized and existing under the laws of the
United States of America, any State thereof or the District of
Columbia;
(ii) the Surviving Person (if other than such
Subsidiary Guarantor) expressly assumes, by supplemental
indenture, substantially in the form of Exhibit F hereto,
executed and delivered to the Trustee by such Surviving
Person, the due and punctual performance and observance of all
the obligations of such Subsidiary Guarantor under its
Subsidiary Guaranty;
(iii) in the case of a sale, transfer, assignment,
lease, conveyance or other disposition of all or substantially
all the Property of such Subsidiary Guarantor, such Property
shall have been transferred as an entirety or virtually as an
entirety to one Person;
(iv) immediately after giving effect to such
transaction or series of related transactions on a pro forma
basis (and treating, for purposes of this clause (iv) and
clauses (v) and (vi) of this Section 5.01(b), any Debt that
becomes, or is anticipated to become, an obligation of the
Surviving Person, the Company or any Restricted Subsidiary as
a result of such transaction or series of transactions as
having been Incurred by the Surviving Person, the Company or
such Restricted Subsidiary at the time of such transaction or
series of related transactions), no Default or Event of
Default shall have occurred and be continuing;
(v) immediately after giving effect to such
transaction or series of related transactions on a pro forma
basis, the Company would be able to Incur at least $1.00 of
additional Debt under Section 4.10(a)(i);
(vi) immediately after giving effect to such
transaction or series of related transactions on a pro forma
basis, the Company shall have a Consolidated Net Worth in an
amount which is not less than the Consolidated Net Worth of
the Company immediately prior to such transaction or series of
related transactions; and
59
(vii) the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an
Opinion of Counsel, each stating that such transaction or
series of related transactions and such Subsidiary Guaranty,
if any, in respect thereto comply with this Section 5.01(b)
and that all conditions precedent herein provided for relating
to such transaction or series of related transactions have
been satisfied.
The preceding clause (b) (other than clause (b)(iv)) shall not apply to any
transaction or series of related transactions which constitutes an Asset Sale if
the Company has complied with Section 4.13.
Section 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
The Surviving Person shall succeed to, and be substituted for, and may
exercise every right and power of the Company under this Indenture (or of the
Subsidiary Guarantor under the Subsidiary Guaranty, as the case may be), but the
predecessor company in the case of a lease shall not be released from any of the
obligations or covenants under this Indenture, including with respect to the
payment of the Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT.
(a) Each of the following is an "Event of Default":
(i) failure to make the payment of any interest,
including Special Interest, if any, on the Notes issued under
this Indenture when the same becomes due and payable, and such
failure continues for a period of 30 days;
(ii) failure to make the payment of any principal of,
or premium, if any, on, any of the Notes issued under this
Indenture when the same becomes due and payable at their
Stated Maturity, upon acceleration, redemption, required
repurchase or otherwise;
(iii) failure to comply with Section 5.01;
(iv) failure to comply with any other covenant or
agreement in the Notes or in this Indenture (other than a
failure that is the subject of the preceding clause (i), (ii)
or (iii)), and such failure continues for 30 days after
written notice is given to the Company as provided in clause
(b) below;
(v) a default under any Debt (other than Non-Recourse
Debt) by the Company or any Restricted Subsidiary that results
in acceleration of the maturity of such Debt, or failure to
pay any such Debt at maturity, in an aggregate amount greater
than $10.0 million;
(vi) any judgment or judgments for the payment of
money in an aggregate amount in excess of $10.0 million that
shall be rendered against the Company or any Restricted
Subsidiary and that shall not be waived, satisfied or
discharged for any period of 30 consecutive days during which
a stay of enforcement shall not be in effect;
(vii) the Company or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(1) commences a voluntary case,
60
(2) consents to the entry of an order for
relief against it in an involuntary case,
(3) consents to the appointment of a
custodian of it or for all or substantially all of
its property,
(4) makes a general assignment for the
benefit of its creditors, or
(5) generally is not paying its debts as
they become due;
(viii) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(1) is for relief against the Company or any
Significant Subsidiary in an involuntary case,
(2) appoints a custodian of the Company or
any Significant Subsidiary or for all or
substantially all of the property of the Company or
any Significant Subsidiary, or
(3) orders the liquidation of the Company or
any Significant Subsidiary,
and the order or decree remains unstayed and
in effect for 60 days; or
(ix) any Subsidiary Guaranty relating to the Notes
ceases to be in full force and effect (other than in
accordance with the terms of such Subsidiary Guaranty), or any
Subsidiary Guarantor denies or disaffirms its obligations
under its Subsidiary Guaranty relating to the Notes.
(b) A Default under clause (a)(iv) is not an Event of Default in
respect of the Notes until the Trustee or the Holders of not less than 25% in
aggregate principal amount of Notes then outstanding notify the Company of the
Default, and the Company does not cure such Default within the time specified
after receipt of such notice. Such notice must specify the Default, demand that
it be remedied and state that such notice is a "Notice of Default."
Section 6.02. ACCELERATION.
(a) If an Event of Default (other than an Event of Default specified in
Section 6.01(a)(vii) or (a)(viii)), shall have occurred and be continuing, the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Notes then outstanding may declare to be immediately due and payable the
principal amount of all the Notes then outstanding, plus accrued but unpaid
interest, including Special Interest, if any, to the date of acceleration. In
the case of an Event of Default specified in Section 6.01(a)(vii) or (a)(viii),
such amount with respect to all the Notes will become due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders. Holders may not enforce this Indenture or the Notes except as
provided in this Indenture.
(b) In the event of a declaration of acceleration of the Notes because
an Event of Default has occurred and is continuing as a result of the
acceleration of any Debt described in Section 6.01(a)(v), the declaration of
acceleration of the Notes shall be automatically annulled if the holders of any
Debt described in Section 6.01(a)(v) have rescinded the declaration of
acceleration in respect of such Debt within 30 days of the date of such
declaration and if (i) the annulment of the acceleration of the Notes would not
conflict with any judgment or decree of a court of competent jurisdiction, and
(ii) all existing Events of Default, except nonpayment of principal or interest
on the Notes that became due solely because of the acceleration of the Notes,
have been cured or waived.
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Section 6.03. OTHER REMEDIES.
(a) If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, premium, if
any, and interest, including Special Interest, if any, on, the Notes or to
enforce the performance of any provision of the Notes or this Indenture.
(b) The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
Section 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest, including Special
Interest, if any, on, the Notes; provided, however, that after any acceleration,
but before a judgment or decree based on acceleration is obtained by the
Trustee, the Holders of a majority in aggregate principal amount of the Notes
then outstanding may rescind and annul such acceleration if all Events of
Default, other than the nonpayment of accelerated principal, premium, if any, or
interest, including Special Interest, if any, have been cured or waived as
provided in this Indenture. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
Section 6.05. CONTROL BY MAJORITY.
Subject to Section 7.01, in case an Event of Default shall occur and be
continuing, the Trustee will not be under any obligation to exercise any of its
rights or powers under this Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to the Trustee reasonable
indemnity. Subject to Section 7.07, the Holders of a majority in aggregate
principal amount of the Notes then outstanding will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Notes.
Section 6.06. LIMITATION ON SUITS.
(a) No Holder will have any right to institute any proceeding with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any remedy hereunder, unless:
(i) such Holder has previously given to the Trustee
written notice of a continuing Event of Default,
(ii) the Holders of at least 25% in aggregate
principal amount of Notes then outstanding under this
Indenture have made written request and offered reasonable
indemnity to the Trustee to institute such proceeding as
trustee, and
(iii) the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of Notes
then outstanding a direction inconsistent with such request
and shall have failed to institute such proceeding within 60
days.
However, the preceding limitations do not apply to a suit instituted by a Holder
for enforcement of payment of the principal of, and premium, if any, or
interest, including Special Interest, if any, on, a Note on or after the
respective due dates expressed in such Note.
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(b) A Holder may not use this Indenture to affect, disturb or prejudice
the rights of another Holder or to obtain a preference or priority over another
Holder.
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, premium, if any, and interest,
including Special Interest, if any, on, a Note, on or after the respective due
dates expressed in the Note (including in connection with an offer to purchase),
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or (a)(ii)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal, premium, if any, and interest, including Special Interest,
if any, remaining unpaid on the Notes and interest on overdue principal and, to
the extent lawful, interest and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims, and any custodian in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 out of the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10. PRIORITIES.
(a) If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07, including payment of all compensation, expenses and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, including Special Interest, if any,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium, if any, and interest,
including Special Interest, if any, respectively; and
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Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
(b) The Trustee may fix a record date and payment date for any payment
to Holders pursuant to this Section 6.10.
Section 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the 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 Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7.
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 its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined
solely by the express provisions of this Indenture, and the
Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
However, 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) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this clause (c) does not limit the effect of
clause (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to clauses (a),
(b) and (c) of this Section 7.01.
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(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request or direction of any Holders, unless such Holders shall have offered to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel, and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of any Default or
Event of 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 or Event of Default is received by a Responsible Officer of the Trustee
at the Corporate Trust Office of the Trustee, and such notice references the
specific Default or Event of Default, the Notes and this Indenture.
(h) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
(i) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(j) The Trustee shall have no duty to inquire as to the performance of
the Company's covenants herein.
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 Company or any
Affiliate of the Company with the same rights it would have if it were not
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Trustee. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11.
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 Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders a notice of the Default
or Event of Default within 90 days after it occurs unless such Default or Event
of Default has since been cured. Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, or interest, including
Special Interest, if any, on, any Note, the Trustee may withhold notice of any
continuing Default or Event of Default if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interest of the Holders.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS.
(a) Within 60 days after each May 15 beginning with May 15, 2003, and
for so long as Notes remain outstanding, the Trustee shall mail to the Holders a
brief report dated as of such reporting date that complies with TIA Section
313(a) (but if no event described in TIA Section 313(a) has occurred within the
12 months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the Holders
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
Section 7.07. COMPENSATION AND INDEMNITY.
(a) The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of its duties under this Indenture and services
hereunder as agreed to in writing. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee or any predecessor Trustee
against any and all losses, claims, damages, penalties, fines, liabilities or
expenses, including incidental and out-of-pocket expenses and reasonable
attorneys fees ("losses") incurred by it arising out of or in connection with
the acceptance or administration of its duties under this Indenture, including
the costs and expenses of enforcing this Indenture against the Company
(including this Section 7.07) and defending itself against any claim (whether
asserted by the Company or any Holder or any other Person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such losses may be attributable to its
negligence, willful misconduct or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim, and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel, and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
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(c) The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of,
premium, if any, and interest, including Special Interest, if any, on,
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
(e) When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(a)(vii) or (a)(viii) occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
(f) The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.08. REPLACEMENT OF TRUSTEE.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time upon 30 days' prior
notice to the Company and be discharged from the trust hereby created by so
notifying the Company. The Holders of a majority in principal amount of the then
outstanding Notes may remove the Trustee by so notifying the Trustee and the
Company in writing. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged to be bankrupt or
insolvent, or an order for relief is entered with respect to
the Trustee under any Bankruptcy Law;
(iii) a custodian or public officer takes charge of
the Trustee or its property; or (iv) the Trustee becomes
incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
(d) If a successor Trustee does not take office within 30 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee; provided, however, that all sums
owing to the Trustee hereunder shall have been paid. Notwithstanding replacement
of the Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 shall continue for the benefit of the retiring Trustee.
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Section 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee. As soon as practicable, the successor Trustee shall mail a notice of
its succession to the Company and the Holders. Any such successor must
nevertheless be eligible and qualified under the provisions of Section 7.10.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
(a) There shall at all times be a Trustee hereunder that is a Person
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by Federal or state
authorities and that has a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition.
(b) This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option and at any time, elect to have either
Section 8.02 or 8.03 be applied to all outstanding Notes upon compliance with
the conditions set forth below in this Article 8.
Section 8.02. LEGAL DEFEASANCE.
Upon the Company's exercise under Section 8.01 of the option applicable
to this Section 8.02, subject to the satisfaction of the conditions set forth in
Section 8.04, the Company shall be deemed to have been discharged from its
obligations with respect to all outstanding Notes, and each Subsidiary Guarantor
shall be deemed to have been discharged from its obligations with respect to its
Subsidiary Guaranty, on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Debt
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 and the other Sections of
this Indenture referred to in (a) and (b) below, and to have satisfied all its
other obligations under such Notes and this Indenture, and each Subsidiary
Guarantor shall be deemed to have satisfied all its obligations under its
Subsidiary Guaranty and this Indenture (and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.04, and as
more fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest, including Special Interest, if any, on, such
Notes when such payments are due, (b) the Company's obligations with respect to
such Notes under Article 2 and Section 4.02, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (d) this Article 8. If the Company exercises under
Section 8.01 the option applicable to this Section 8.02, subject to the
satisfaction of the conditions set forth in Section 8.04, payment of the Notes
may not be accelerated because of an Event of Default. Subject to compliance
with this Article 8, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03.
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Section 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 of the option applicable
to this Section 8.03, the Company shall, subject to the satisfaction of the
conditions set forth in Section 8.04, be released from its obligations under the
covenants contained in Sections 4.03, 4.04(b), 4.05, 4.09 through 4.18 and 4.20
through 4.21, and the limitations of Section 5.01(a)(v), (a)(vi), (b)(v) and
(b)(vi), with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01,
but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby. If the Company exercises under Section 8.01 the
option applicable to this Section 8.03, subject to the satisfaction of the
conditions set forth in Section 8.04, payment of the Notes may not be
accelerated because of an Event of Default specified in Section 6.01 (a)(iii)
(with respect to the covenants contained in Sections 5.01(a)(v), (a)(vi), (b)(v)
or (b)(vi) only), (a)(iv) (with respect to the covenants contained in Sections
4.03, 4.04(b), 4.05, 4.09 through 4.18 and 4.20 through 4.21), (a)(v), (a)(vi),
(a)(vii) and (a)(viii) (but in the case of clauses (a)(vii) and (a)(viii), with
respect to Significant Subsidiaries only). If the Company exercises its Covenant
Defeasance option, each Subsidiary Guarantor will be released from all its
obligations under its Subsidiary Guaranty.
Section 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The Legal Defeasance option or Covenant Defeasance option may be
exercised only if:
(a) the Company irrevocably deposits in trust with the Trustee money or
U.S. Government Obligations for the payment of principal of, premium, if any,
and interest, including Special Interest, if any, on, the Notes to be defeased
to maturity or redemption, as the case may be;
(b) the Company delivers to the Trustee a certificate from a nationally
recognized firm of independent certified public accountants expressing their
opinion that the payments of principal, premium, if any, and interest, including
Special Interest, if any, when due and without reinvestment on the deposited
U.S. Government Obligations plus any deposited money without investment will
provide cash at such times and in such amounts as will be sufficient to pay
principal, premium, if any, and interest, including Special Interest, if any,
when due on all the Notes to be defeased to maturity or redemption, as the case
may be;
(c) no Default or Event of Default has occurred and is continuing on
the date of such deposit and after giving effect thereto;
(d) such deposit does not constitute a default under any other
agreement or instrument binding on the Company;
(e) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940;
(f) in the case of the Legal Defeasance option, the Company delivers to
the Trustee an Opinion of Counsel stating that:
(i) the Company has received from the Internal
Revenue Service a ruling, or
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(ii) since the date of this Indenture there has been
a change in the applicable Federal income tax law, to the
effect, in either case, that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the Notes to be
defeased will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same
manner and at the same time as would have been the case if
such defeasance had not occurred;
(g) in the case of the Covenant Defeasance option, the Company delivers
to the Trustee an Opinion of Counsel to the effect that the Holders of the Notes
to be defeased will not recognize income, gain or loss for Federal income tax
purposes as a result of such Covenant Defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred; and
(h) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the defeasance
and discharge of the Notes to be defeased have been complied with as required by
this Indenture.
Section 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
(a) Subject to Section 8.06, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant
to Section 8.04 in respect of the outstanding Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, including Special Interest, if any, but such
money need not be segregated from other funds except to the extent required by
law.
(b) The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 8.04 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Notes.
(c) Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or U.S. Government Obligations held by it as provided
in Section 8.04 which, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the certification delivered under
Section 8.04(b)), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.06. REPAYMENT TO COMPANY.
Subject to applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or interest,
including Special Interest, if any, on, any Note and remaining unclaimed for two
years after such principal, premium, if any, or interest, including Special
Interest, if any, has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder shall thereafter, as an unsecured creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The
New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Company.
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Section 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 8.02 or 8.03,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
and each Subsidiary Guarantor's obligations under this Indenture and its
Subsidiary Guaranty shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03, as the case may be; provided, however, that, if the Company or any
Subsidiary Guarantor makes any payment of principal of, premium, if any, or
interest, including Special Interest, if any, on, any Note following the
reinstatement of its obligations, then it shall be subrogated to the rights of
the Holders to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
(a) Notwithstanding Section 9.02 of this Indenture, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement this Indenture or
the Notes without the consent of any Holder to:
(i) cure any ambiguity, omission, defect or
inconsistency;
(ii) provide for the assumption by a Surviving Person
of the obligations of the Company under this Indenture or of a
Subsidiary Guarantor under this Indenture and its Subsidiary
Guaranty;
(iii) provide for uncertificated Notes in addition to
or in place of certificated Notes (provided that the
uncertificated Notes are issued in registered form for
purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code);
(iv) add additional Guarantees with respect to the
Notes or to release Subsidiary Guarantors from Subsidiary
Guaranties as provided by the terms of this Indenture;
(v) secure the Notes, add to the covenants of the
Company for the benefit of the Holders of the Notes or
surrender any right or power conferred upon the Company;
(vi) make any change that does not adversely affect
in any material respect the rights of any Holder of the Notes
under this Indenture;
(vii) make any change to the subordination provisions
of this Indenture that would limit or terminate the benefits
available to any holder of Senior Debt under such provisions,
subject to Section 9.03;
(viii) comply with any requirement of the Commission
in connection with the qualification of this Indenture under
the TIA; or
(ix) provide for the issuance of additional Notes in
accordance with this Indenture.
(b) Upon the request of the Company accompanied by a Board Resolution
of the Board of Directors authorizing the execution of any such amended or
supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 9.07, the Trustee shall join with the Company and the
Subsidiary Guarantors in the execution of any amended or supplemental indenture
authorized or permitted by the terms of this Indenture and to
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make any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or
supplemental indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
Section 9.02. WITH CONSENT OF HOLDERS OF NOTES.
(a) Except as provided in Section 9.02(f), the Company, the Subsidiary
Guarantors and the Trustee may amend or supplement this Indenture and the Notes
with the consent of the Holders of at least a majority in aggregate principal
amount of the Notes, including Additional Notes, if any, then outstanding voting
as a single class (including consents obtained in connection with a tender offer
or exchange offer for the Notes), and, subject to Sections 6.04 and 6.07, any
existing Default or Event of Default or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of at least
a majority in aggregate principal amount of the Notes, including Additional
Notes, if any, then outstanding voting as a single class (including consents
obtained in connection with a tender offer or exchange offer for the Notes).
(b) Upon the request of the Company accompanied by a Board Resolution
of the Board of Directors authorizing the execution of any such amended or
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 9.07, the
Trustee shall join with the Company in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental indenture.
(c) The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date, provided that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
(d) It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
(e) After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders to such Holder's address
appearing in the Security Register a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such amended or supplemental indenture or waiver.
(f) Without the consent of each Holder of an outstanding Note under
this Indenture, no amendment, supplement or waiver under this Section 9.02 may:
(i) reduce the amount of Notes whose Holders must
consent to an amendment, supplement or waiver under this
Indenture,
(ii) reduce the rate of, or extend the time for
payment of, interest, including Special Interest, if any, on
any Note issued under this Indenture,
(iii) reduce the principal of, or extend the Stated
Maturity of, any Note issued under this Indenture,
(iv) make any Note payable in money other than that
stated in the Note,
(v) impair the right of any Holder of the Notes to
receive payment of principal of, premium, if any, and
interest, including Special Interest, if any, on, such
Holder's Notes on or
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after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder's
Notes or any Subsidiary Guaranty,
(vi) release any security interest that may have been
granted in favor of the Holders of the Notes under this
Indenture other than pursuant to the terms of such security
interest,
(vii) reduce the premium payable upon the redemption
of any Note or change the time at which any Note may be
redeemed pursuant to Section 3.07,
(viii) reduce the premium payable upon a Change of
Control or, at any time after a Change of Control has
occurred, change the time at which the Change of Control Offer
must be made or at which the Notes must be repurchased
pursuant to such Change of Control Offer,
(ix) at any time after the Company is obligated to
make an offer pursuant to Section 4.09 or 4.13, change the
time at which such offer must be made or at which the Notes
must be repurchased pursuant thereto,
(x) make any change to the subordination provisions
of this Indenture that would adversely affect the Holders of
the Notes, or
(xi) make any change in any Subsidiary Guaranty that
would adversely affect in any material respect the holders of
the Notes under this Indenture.
Section 9.03. WITH CONSENT OF HOLDERS OF SENIOR DEBT.
No amendment or supplement may be made to the subordination provisions
of this Indenture that adversely affects the rights of any holder of Senior Debt
then outstanding unless the holders of such Senior Debt (or their
Representative) consents to such change.
Section 9.04. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental indenture that complies with the TIA as
then in effect.
Section 9.05. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder 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 its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
Section 9.06. NOTATION ON OR EXCHANGE OF NOTES.
(a) The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
(b) Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
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Section 9.07. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01) shall be fully
protected in relying upon an Officers' Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
SUBSIDIARY GUARANTIES
Section 10.01. SUBSIDIARY GUARANTY.
(a) Subject to this Article 10, each of the Subsidiary Guarantors
hereby, jointly and severally, unconditionally Guarantees 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 Company hereunder or thereunder,
that: (a) the principal of, premium, if any, and interest, including Special
Interest, if any, on, the Notes shall be promptly paid in full when due, whether
at maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of, premium, if any, and interest, including Special Interest,
if any on, the Notes, if lawful, and all other Obligations of the Company to the
Holders or the Trustee hereunder or thereunder shall be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
Obligations, that same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. Failing payment when due of any amount
so Guaranteed or any performance so Guaranteed for whatever reason, the
Subsidiary Guarantors shall be jointly and severally obligated to pay the same
immediately. Each Subsidiary Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection.
(b) Each Subsidiary Guarantor hereby agrees that its Obligations with
regard to this Subsidiary Guaranty shall be absolute and unconditional,
irrespective of the validity or enforceability of the Notes or the Obligations
of the Company under this Indenture, the absence of any action to enforce the
same, any waiver, modification or indulgence granted to the Company with respect
to the same by the Holders or the Trustee, the recovery of any judgment against
the Company or any other obligor with respect to this Indenture, the Notes or
the Obligations of the Company under this Indenture or the Notes, any action to
enforce the same or any other circumstances (other than complete performance)
which might otherwise constitute a legal or equitable discharge or defense of a
Subsidiary Guarantor. Each Subsidiary Guarantor further, to the extent permitted
by law, waives and relinquishes all claims, rights and remedies accorded by
applicable law to guarantors and agrees not to assert or take advantage of any
such claims, rights or remedies, including but not limited to: (i) any right to
require any of the Trustee, the Holders or the Company (each a "Benefited
Party"), as a condition of payment or performance by such Subsidiary Guarantor,
to (1) proceed against the Company, any other guarantor (including any other
Subsidiary Guarantor) of the Obligations under the Subsidiary Guaranties or any
other Person, (2) proceed against or exhaust any security held from the Company,
any such other guarantor or any other Person, (3) proceed against or have resort
to any balance of any deposit account or credit on the books of any Benefited
Party in favor of the Company or any other Person, or (4) pursue any other
remedy in the power of any Benefited Party whatsoever; (ii) any defense arising
by reason of the incapacity, lack of authority or any disability or other
defense of the Company including any defense based on or arising out of the lack
of validity or the unenforceability of the Obligations under the Subsidiary
Guaranties or any agreement or instrument relating thereto or by reason of the
cessation of the liability of the Company from any cause other than payment in
full of the Obligations under the Subsidiary Guaranties; (iii) any defense based
upon any statute or rule of law which provides that the Obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal; (iv) any defense based upon any Benefited Party's errors or
omissions in the administration of the Obligations under the Subsidiary
Guaranties, except behavior which amounts to bad faith; (v)(1) any principles or
provisions of law, statutory or otherwise, which are or might be in conflict
with the terms of the Subsidiary Guaranties and any legal or equitable discharge
of such Subsidiary Guarantor's Obligations hereunder, (2) the benefit of any
statute of limitations affecting such Subsidiary Guarantor's
74
liability hereunder or the enforcement hereof, (3) any rights to set-offs,
recoupments and counterclaims and (4) promptness, diligence and any requirement
that any Benefited Party protect, secure, perfect or insure any security
interest or Lien on any Property subject thereto; (vi) notices, demands,
presentations, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance of the Subsidiary Guaranties,
notices of default under the Notes or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Obligations
under the Subsidiary Guaranties or any agreement related thereto, and notices of
any extension of credit to the Company and any right to consent to any thereof;
(vii) to the extent permitted under applicable law, the benefits of any "One
Action" rule; and (viii) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of the Subsidiary Guaranties.
Each Subsidiary Guarantor hereby covenants that its Subsidiary Guaranty shall
not be discharged except as provided in Section 10.05 or by complete performance
of the Obligations contained in its Subsidiary Guaranty and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Subsidiary Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Subsidiary Guarantors, any amount paid by either to the Trustee or such
Holder, this Subsidiary Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect.
(d) Each Subsidiary Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
Obligations Guaranteed hereby until payment in full of all Obligations
Guaranteed hereby. Each Subsidiary Guarantor further agrees that, as between the
Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the
other hand, (i) the maturity of the Obligations Guaranteed hereby may be
accelerated as provided in Article 6 for the purposes of this Subsidiary
Guaranty, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Obligations Guaranteed hereby and (ii) in
the event of any declaration of acceleration of such Obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purpose of this
Subsidiary Guaranty. Each Subsidiary Guarantor that makes a payment or
distribution under a Subsidiary Guaranty shall be entitled to a contribution
from each other Subsidiary Guarantor and the Company in a pro rata amount based
on the proportion that the net worth of the Company or the relevant Subsidiary
Guarantor represents relative to the aggregate net worth of the Company and all
of the Subsidiary Guarantors combined.
Section 10.02. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY.
Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Subsidiary
Guaranty of such Subsidiary Guarantor not constitute a fraudulent transfer or
conveyance for purposes of any Federal or state law to the extent applicable to
any Subsidiary Guaranty. To effectuate the foregoing intention, the Trustee, the
Holders and the Subsidiary Guarantors hereby irrevocably agree that the
Obligations of such Subsidiary Guarantor under this Article 10 shall be limited
to the maximum amount as shall, after giving effect to such maximum amount and
all other contingent and fixed liabilities of such Subsidiary Guarantor that are
relevant under such laws, including, if applicable, its Guarantee of all
Obligations under the Senior Credit Facility, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Subsidiary Guarantor in respect of the Obligations of such
other Subsidiary Guarantor under this Article 10, result in the Obligations of
such Subsidiary Guarantor under its Subsidiary Guaranty not constituting a
fraudulent transfer or conveyance under Federal or state law.
Section 10.03. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTY.
(a) To evidence its Subsidiary Guaranty set forth in this Article 10,
each Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guaranty in substantially the form included in Exhibit E shall be endorsed by
the manual or facsimile signature of an Officer of such Subsidiary Guarantor on
each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Subsidiary Guarantor by the manual or
facsimile signature of an Officer of the Subsidiary Guarantor.
(b) Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guaranty set forth in Section 10.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guaranty.
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(c) If an Officer whose signature is on this Indenture or on the
notation of Subsidiary Guaranty no longer holds that office at the time the
Trustee authenticates the Note on which a notation of Subsidiary Guaranty is
endorsed, the Subsidiary Guaranty shall be valid nevertheless.
(d) The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guaranty set
forth in this Indenture on behalf of each Subsidiary Guarantor.
Section 10.04. ADDITIONAL SUBSIDIARY GUARANTORS.
The Company covenants and agrees that it will cause any Person which
becomes obligated to Guarantee the Notes pursuant to the terms of Section 4.18
hereof to execute a supplemental indenture, substantially in the form of Exhibit
F hereto, pursuant to which such Subsidiary Guarantor shall Guarantee the
Obligations of the Company under the Notes and this Indenture in accordance with
this Article 10 with the same effect and to the same extent as if such Person
had been named herein as a Subsidiary Guarantor.
Section 10.05. RELEASE OF SUBSIDIARY GUARANTOR.
A Subsidiary Guarantor shall be released from all of its Obligations
under its Subsidiary Guaranty and this Indenture if:
(a) the Company or such Subsidiary Guarantor has sold all or
substantially all of the assets of such Subsidiary Guarantor; or
(b) the Company and its Restricted Subsidiaries have sold all of the
Capital Stock of the Subsidiary Guarantor owned by them,
in each case in a transaction in compliance with Sections 4.13 or 5.01(b) (as
applicable); and in each such case, the Subsidiary Guarantor has delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to such transactions
have been complied with.
Notwithstanding the foregoing, upon designation of a Restricted Subsidiary as an
Unrestricted Subsidiary in compliance with Section 4.16, such Restricted
Subsidiary shall, by execution and delivery of a supplemental indenture,
substantially in the form of Exhibit F hereto, be released from any Subsidiary
Guaranty previously made by such Restricted Subsidiary and its obligations under
this Indenture.
ARTICLE 11.
SUBORDINATION
Section 11.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that
the payment of principal of, premium, if any, and interest, including Special
Interest, if any, on, and all other amounts payable in respect of, the Notes is
subordinated in right of payment, to the extent and in the manner provided in
this Article 11, to the payment when due in cash of all Senior Debt of the
Company and that the subordination is for the benefit of and enforceable by the
holders of such Senior Debt. The Notes shall in all respects rank pari passu
with any future Senior Subordinated Debt and senior to all existing and future
Subordinated Debt of the Company, and only Senior Debt shall rank senior to the
Notes in accordance with the provisions set forth herein. All provisions of this
Article 11 shall be subject to Section 11.12. All references to "Senior Debt" in
this Article 11 are to Senior Debt of the Company.
Section 11.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY.
(a) Upon any payment or distribution of the assets of the Company to
creditors upon a liquidation, dissolution or winding up of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar
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proceeding relating to the Company or its Property or upon an assignment for the
benefit of the Company's creditors or the marshaling of its asset and
liabilities, the holders of Senior Debt will be entitled to receive payment in
full in cash before the Holders of the Notes are entitled to receive any payment
of principal of, premium, if any, or interest, including Special Interest, if
any, on, the Notes, except that Holders of Notes may receive and retain
Permitted Junior Securities; and
(b) Until the Senior Debt is paid in full in cash, any distribution to
which Holders of the Notes would be entitled but for this Article 11 will be
made to holders of the Senior Debt as their interests may appear.
Section 11.03. DEFAULT ON SENIOR DEBT.
The Company may not pay principal of, or premium, if any, or interest,
including Special Interest, if any, on, the Notes, or make any deposit pursuant
to Section 8.04, and may not repurchase, redeem or otherwise retire any Notes
(collectively, "pay the Notes") if (a) any principal, premium, interest or any
other amount payable in respect of any Senior Debt is not paid within any
applicable grace period (including at maturity) or (b) any other default on
Senior Debt occurs and the maturity of such Senior Debt is accelerated in
accordance with its terms unless, in either case, (1) the default has been cured
or waived and any such acceleration has been rescinded or (2) such Senior Debt
has been paid in full in cash; provided, however, that the Company may pay the
Notes without regard to the foregoing if the Company and the Trustee receive
written notice approving such payment from the Representative of such issue of
Senior Debt. During the continuance of any default (other than a default
described in clause (a) or (b) of the preceding sentence) with respect to any
Designated Senior Debt pursuant to which the maturity thereof may be accelerated
immediately without further notice (except any notice required to effect the
acceleration) or the expiration of any applicable grace period, the Company may
not pay the Notes for a period (a "Payment Blockage Period") commencing upon the
receipt by the Company and the Trustee of written notice of such default from
the Representative of the holders of such Designated Senior Debt specifying an
election to effect a Payment Blockage Period (a "Payment Blockage Notice") and
ending 179 days thereafter (unless such Payment Blockage Notice is earlier
terminated (a) by written notice to the Trustee and the Company from the
Representative that gave such Payment Blockage Notice, (b) because such default
is no longer continuing or (c) because such Designated Senior Debt has been
repaid in full in cash). Unless the holders of such Designated Senior Debt or
the Representative of such holders have accelerated the maturity of such
Designated Senior Debt and not rescinded such acceleration, the Company may
(unless otherwise prohibited as described in the first two sentences of this
paragraph) resume payments on the Notes after the end of such Payment Blockage
Period. Not more than one Payment Blockage Notice with respect to all issues of
Designated Senior Debt may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to one or more issues of
Designated Senior Debt during such period.
Section 11.04. ACCELERATION OF PAYMENT OF SECURITIES.
If payment of the Notes is accelerated when Designated Senior Debt is
outstanding, the Company may not pay the Notes until three Business Days after
the Representatives of all issues of Designated Senior Debt receive notice of
such acceleration and, thereafter, may pay the Notes only if this Indenture
otherwise permits payment at that time.
Section 11.05. WHEN DISTRIBUTION MUST BE PAID OVER.
If a payment or distribution is made to holders that because of this
Article 11 should not have been made to them, the Trustee or the holders who
receive the distribution shall hold it in trust for holders of Senior Debt and
pay it over to them as their interests may appear.
Section 11.06. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders shall be subrogated to the rights of holders of Senior Debt to
receive distributions applicable to Senior Debt. A distribution made under this
Article 11 to holders of Senior Debt that otherwise would have been made to
Holders is not, as between the Company and Holders, a payment by the Company on
such Senior Debt.
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Section 11.07. RELATIVE RIGHTS.
This Article 11 defines the relative rights of Holders and holders of
Senior Debt. Nothing in this Indenture shall:
(a) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of, premium, if
any, and interest, including Special Interest, if any, on, the Notes in
accordance with their terms; or
(b) prevent the Trustee or any Holder from exercising its available
remedies upon an Event of Default, subject to the rights of holders of Senior
Debt to receive distributions otherwise payable to Holders.
Section 11.08. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the Debt evidenced by the Notes shall be impaired by any act or failure to act
by the Company or by its failure to comply with this Indenture.
Section 11.09. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 11.03, the Trustee or Paying Agent may continue
to make payments on the Notes and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Responsible
Officer receives notice satisfactory to it that payments may not be made under
this Article 11. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt may give the notice; provided,
however, that, if an issue of Senior Debt has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. The Registrar
and co-registrar and the Paying Agent may do the same with like rights. The
Trustee shall be entitled to all the rights set forth in this Article 11 with
respect to any Senior Debt that may at any time be held by it, to the same
extent as any other holder of such Senior Debt; and nothing in Article 7 shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
11 shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.07.
Section 11.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative (if any).
Section 11.11. ARTICLE 11 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT
RIGHT TO ACCELERATE.
Nothing in this Article 11 shall prevent an Event of Default in
accordance with Article 6 or have any effect on the right of the Holders or the
Trustee to accelerate the maturity of the Notes or to exercise the rights and
remedies in Article 6.
Section 11.12. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments
from money or the proceeds of U.S. Government Obligations held in trust under
Article 8 by the Trustee for the payment of principal of and interest on the
Notes shall not be subordinated to the prior payment of any Senior Debt or
subject to the restrictions set forth in this Article 11, and none of the
Holders shall be obligated to pay over any such amount to the Company or any
holder of Senior Debt or any other creditor of the Company.
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Section 11.13. TRUSTEE ENTITLED TO RELY.
Upon any payment or distribution pursuant to this Article 11, the
Trustee and the Holders shall be entitled to rely (a) upon any order or decree
of a court of competent jurisdiction in which any proceedings of the nature
referred to in Section 11.02 are pending, (b) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Holders or (c) upon the Representative for the holders
of Senior Debt for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Debt and
other Debt of the Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article 11. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article 11, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior Debt held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and other facts pertinent to the rights of such
Person under this Article 11, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Section
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 11.
Section 11.14. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder by accepting a Note authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination between the Holders and the holders of Senior
Debt as provided in this Article 11 and appoints the Trustee as attorney-in-fact
for any and all such purposes.
Section 11.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall be liable to any such holders if it shall
mistakenly pay over or distribute to Holders or the Company or any other Person,
money or assets to which any holders of Senior Debt shall be entitled by virtue
of this Article 11 or otherwise.
Section 11.16. RELIANCE BY HOLDERS OF SENIOR DEBT ON SUBORDINATION
PROVISIONS.
Each Holder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Debt, whether such Senior Debt
was created or acquired before or after the issuance of the Note, to acquire and
continue to hold, or to continue to hold, such Senior Debt and such holder of
such Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Debt.
ARTICLE 12.
SUBORDINATION OF SUBSIDIARY GUARANTEES
Section 12.01. AGREEMENT TO SUBORDINATE.
Each Subsidiary Guarantor agrees, and each Holder by accepting a Note
agrees, that the Obligations of such Subsidiary Guarantor are subordinated in
right of payment, to the extent and in the manner provided in this Article 12,
to the payment when due in cash of all Senior Debt of such Subsidiary Guarantor
and that the subordination is for the benefit of and enforceable by the holders
of such Senior Debt. The Obligations of a Subsidiary Guarantor shall in all
respects rank pan passu with any future Senior Subordinated Debt of such
Subsidiary Guarantor and senior to all existing and future Subordinated Debt of
such Subsidiary Guarantor, and only Senior Debt shall rank senior to the
Obligations of such Subsidiary Guarantor in accordance with the provisions set
forth herein. All references to "Obligations" in this Article 12 are to
Obligations of the Subsidiary Guarantors under the Subsidiary Guaranties.
79
Section 12.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY.
(a) Upon any payment or distribution of the assets of any Subsidiary
Guarantor to creditors upon a liquidation, dissolution or winding up of such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Subsidiary Guarantor or its
Property or upon an assignment for the benefit of the Subsidiary Guarantor's
creditors or the marshaling of its asset and liabilities, holders of Senior Debt
of such Subsidiary Guarantor shall be entitled to receive payment in full in
cash of such Senior Debt before Holders shall be entitled to receive any payment
pursuant to any Obligations of such Subsidiary Guarantor.
(b) Until the Senior Debt of any Subsidiary Guarantor is paid in full
in cash, any distribution made by or on behalf of such Subsidiary Guarantor to
which Holders would be entitled but for this Article 12 shall be made to holders
of the Senior Debt as their interests may appear.
Section 12.03. DEFAULT ON SENIOR DEBT OF SUBSIDIARY GUARANTOR.
No Subsidiary Guarantor may make any payment pursuant to any of its
Obligations or repurchase, redeem or otherwise retire or defease any Notes or
other Obligations (collectively, "pay its Subsidiary Guaranty") if (a) any
principal, premium, interest or other amount payable in respect of any Senior
Debt of such Subsidiary Guarantor is not paid within any applicable grace period
(including at maturity) or (b) any other default on Senior Debt of such
Subsidiary Guarantor occurs and the maturity of such Senior Debt is accelerated
in accordance with its terms unless, in either case, (i) the default has been
cured or waived and any such acceleration has been rescinded or (ii) such Senior
Debt has been paid in full in cash; provided, however, that any Subsidiary
Guarantor may pay its Subsidiary Guaranty without regard to the foregoing if
such Subsidiary Guarantor and the Trustee receive written notice approving such
payment from the Representative of such issue of Senior Debt of such Subsidiary
Guarantor. No Subsidiary Guarantor may pay its Subsidiary Guaranty during the
continuance of any Payment Blockage Period after receipt by the Company and the
Trustee of a Payment Blockage Notice under Section 11.03. Unless the holders of
Designated Senior Debt giving such Payment Blockage Notice or the Representative
of such holders shall have accelerated the maturity of such Designated Senior
Debt and not rescinded such acceleration, any Subsidiary Guarantor may resume
(unless otherwise prohibited as described in the first two sentences of this
paragraph) resume payments pursuant to its Subsidiary Guaranty after the end of
such Payment Blockage Period.
Section 12.04. DEMAND FOR PAYMENT.
If a demand for payment is made on a Subsidiary Guarantor pursuant to
Article 10, such Subsidiary Guarantor may not pay its Subsidiary Guaranty until
three Business Days after the Representatives of all issues of Designated Senior
Debt receive notice of such acceleration and, thereafter, may pay its Subsidiary
Guaranty only if this Indenture otherwise permits payment at that time.
Section 12.05. WHEN DISTRIBUTION MUST BE PAID OVER.
If a payment or distribution is made to holders that because of this
Article 12 should not have been made to them, the Trustee or the Holders who
receive the distribution shall hold it in trust for holders of the relevant
Senior Debt and pay it over to them or their Representatives as their interests
may appear.
Section 12.06. SUBROGATION.
After all Senior Debt of a Subsidiary Guarantor is paid in full and
until the Notes are paid in full, Holders shall be subrogated to the rights of
holders of Senior Debt to receive distributions applicable to Senior Debt. A
distribution made under this Article 12 to holders of such Senior Debt that
otherwise would have been made to Holders is not, as between the relevant
Subsidiary Guarantor and Holders, a payment by such Subsidiary Guarantor on such
Senior Debt.
80
Section 12.07. RELATIVE RIGHTS.
This Article 12 defines the relative rights of Holders and holders of
Senior Debt of a Subsidiary Guarantor. Nothing in this Indenture shall:
(a) impair, as between a Subsidiary Guarantor and Holders, the
obligation of such Subsidiary Guarantor, which is absolute and unconditional, to
pay the Obligations to the extent set forth in Article 10; or
(b) prevent the Trustee or any Holder from exercising its available
remedies upon a default by such Subsidiary Guarantor under the Obligations,
subject to the rights of holders of Senior Debt of such Subsidiary Guarantor to
receive distributions otherwise payable to Holders.
Section 12.08. SUBORDINATION MAY NOT BE IMPAIRED BY SUBSIDIARY
GUARANTOR.
No right of any holder of Senior Debt of any Subsidiary Guarantor to
enforce the subordination of the Obligation of such Subsidiary Guarantor shall
be impaired by any act or failure to act by such Subsidiary Guarantor or by its
failure to comply with this Indenture.
Section 12.09. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 12.03, the Trustee or Paying Agent may continue
to make payments on any Subsidiary Guaranty and shall not be charged with
knowledge of the existence of facts that would prohibit the making of any such
payments unless, not less than two Business Days prior to the date of such
payment, a Trust Officer receives written notice satisfactory to it that
payments may not be made under this Article 12. The Company, the relevant
Subsidiary Guarantor, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt of any Subsidiary Guarantor may give
the notice; provided, however, that, if an issue of Senior Debt of any
Subsidiary Guarantor has a Representative, only the Representative may give the
notice.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. The Registrar
and co-registrar and the Paying Agent may do the same with like rights. The
Trustee shall be entitled to all the rights set forth in this Article 12 with
respect to any Senior Debt of any Subsidiary Guarantor that may at any time be
held by it, to the same extent as any other holder of Senior Debt; and nothing
in Article 7 shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article 12 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 7.07.
Section 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt of any Subsidiary Guarantor, the distribution may be made and the
notice given to their Representative (if any).
Section 12.11. ARTICLE 12 NOT TO PREVENT EVENTS OF DEFAULT UNDER A
SUBSIDIARY GUARANTY OR LIMIT RIGHT TO DEMAND PAYMENT.
Nothing in this Article 12 shall prevent a default under any Subsidiary
Guaranty or have any effect on the right of the Holders or the Trustee to make a
demand for payment on any Subsidiary Guarantor pursuant to Article 10.
Section 12.12. TRUSTEE ENTITLED TO RELY.
Upon any payment or distribution pursuant to this Article 12, the
Trustee and the Holders shall be entitled to rely (i) upon any order or decree
of a court of competent jurisdiction in which any proceedings of the nature
referred to in Section 12.02 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Holders or (iii) upon the Representatives for the
holders of Senior Debt of any Subsidiary Guarantor for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other Debt of such Subsidiary
Guarantor, the amount thereof
81
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 12. In the event that the
Trustee determines, in good faith, that evidence is required with respect to the
right of any Person as a holder of Senior Debt of any Subsidiary Guarantor to
participate in any payment or distribution pursuant to this Article 12, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of such Subsidiary
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 12, 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. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 12.
Section 12.13. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder by accepting a Note authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination between the Holders and the holders of Senior
Debt of any Subsidiary Guarantor as provided in this Article 12 and appoints the
Trustee as attorney-in-fact for any and all such purposes.
Section 12.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT OF
SUBSIDIARY GUARANTOR.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt of any Subsidiary Guarantor and shall not be liable to
any such holders if it shall mistakenly pay over or distribute to Holders or the
Company or any other Person, money or assets to which any holders of such Senior
Debt shall be entitled by virtue of this Article 12 or otherwise.
Section 12.15. RELIANCE BY HOLDERS OF SENIOR DEBT OF A SUBSIDIARY
GUARANTOR ON SUBORDINATION PROVISIONS.
Each Holder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Debt of any Subsidiary
Guarantor, whether such Senior Debt was created or acquired before or after the
issuance of the Note, to acquire and continue to hold, or to continue to hold,
such Senior Debt and such holder of Senior Debt shall be deemed conclusively to
have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Debt.
ARTICLE 13.
SATISFACTION AND DISCHARGE
Section 13.01. SATISFACTION AND DISCHARGE.
(a) This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder (except as to surviving rights of
registration of transfer or exchange of Notes expressly provided for herein, the
Company's obligations under Section 7.07, and the Trustee's and each Paying
Agent's obligations under Sections 13.02 and 13.03), when:
(i) either:
(1) all Notes that have been authenticated
(except lost, stolen or destroyed Notes that have
been replaced or paid and Notes for whose payment
money has theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered
to the Trustee for cancellation; or
82
(2) all Notes that have not been delivered
to the Trustee for cancellation have become due and
payable by reason of the making of a notice of
redemption or otherwise or will become due and
payable within one year and the Company has
irrevocably deposited or caused to be deposited with
the Trustee as trust funds in trust solely for the
benefit of the Holders, money or 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 on the Notes not delivered to
the Trustee for cancellation for principal, premium,
if any, and accrued interest, including Special
Interest, if any, to the date of maturity or
redemption;
(ii) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or
shall occur as a result of such deposit and such deposit will
not result in a breach or violation of, or constitute a
default under, any other instrument to which the Company is a
party or by which the Company is bound;
(iii) the Company has paid or caused to be paid all
sums payable by it under this Indenture; and
(iv) the Company has delivered irrevocable
instructions to the Trustee under this Indenture to apply the
deposited money and/or U.S. Government Obligations toward the
payment of the Notes at maturity or the redemption date, as
the case may be.
(b) The Company shall deliver an Officers' Certificate and an Opinion
of Counsel to the Trustee stating that all conditions precedent to satisfaction
and discharge have been satisfied.
Section 13.02. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 13.03, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 13.02, the "Trustee")
pursuant to Section 13.01 in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, and interest and Special
Interest, if any, but such money need not be segregated from other funds except
to the extent required by law.
Section 13.03. REPAYMENT TO COMPANY.
Subject to applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or interest,
including Special Interest, if any, on, any Note and remaining unclaimed for two
years after such principal, and premium, if any, or interest has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder shall thereafter
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in The
New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
83
ARTICLE 14.
MISCELLANEOUS
Section 14.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
Section 14.02. NOTICES.
(a) Any notice or communication by the Company, the Subsidiary
Guarantors or the Trustee to the others is duly given if in writing (in the
English language) and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next-day delivery, to the other's address:
If to the Company or the Subsidiary Guarantors:
Technical Olympic USA, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attention: General Counsel
Telecopier No.: 000-000-0000
With a copy to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: T. Xxxx Xxxxx
Telecopier No.: 000-000-0000
If to the Trustee:
Xxxxx Fargo Bank Minnesota, National Association
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Services
Telecopier No.: 000-000-0000
(b) The Company, the Subsidiary Guarantors or the Trustee, by notice to
the others, may designate additional or different addresses for subsequent
notices or communications.
(c) All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next-day delivery. Notwithstanding the foregoing, notices
to the Trustee shall be effective only upon receipt by the Trustee.
(d) Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next-day delivery to its address shown on the Security
Register. Any notice or communication shall also be so mailed to any Person
described in TIA Section 313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder or any defect in it shall not affect
its sufficiency with respect to other Holders.
84
(e) If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
(f) If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 14.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 14.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 14.05) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 14.05)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been complied with.
Section 14.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable such Person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
Section 14.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 14.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator,
member, partner or stockholder of the Company or any Subsidiary Guarantor as
such, shall have any liability for any Obligations of the Company or any
Subsidiary Guarantor under the Notes, this Indenture or for any claim based on,
in respect of, or by reason of, such Obligations or their creation. Each Holder
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.
85
Section 14.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES.
Section 14.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 14.10. SUCCESSORS.
All covenants and agreements of the Company and the Subsidiary
Guarantors in this Indenture and the Notes shall bind their successors. All
covenants and agreements of the Trustee in this Indenture shall bind its
successors.
Section 14.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 14.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 14.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings in this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.
[Signatures on following page]
86
SIGNATURES
Dated as of June 25, 2002
ISSUER:
TECHNICAL OLYMPIC USA, INC.
By: /s/ Xxxxx X. XxXxxx
--------------------------------------
Name: Xxxxx X. XxXxxx
Title: Vice President - Finance and
Administration and Chief
Financial Officer
GUARANTORS:
XXXXX REALTY CO.
ADRO CONST., INC.
BANYAN TRAILS, INC.
XXXXX HOMES DELAWARE, INC.
XXXXX HOMES FINANCING, INC.
XXXXX HOMES REALTY, INC.
XXXXX HOMES, INC.
XXXXX HOMES/ARIZONA CONSTRUCTION, INC.
XXXXX HOMES/ARIZONA, INC.
XXXXX HOMES/ATLANTA, INC.
XXXXX HOMES/BROWARD, INC.
XXXXX HOMES/COLORADO, INC.
XXXXX HOMES/GEORGIA, INC.
XXXXX HOMES/GULF COAST, INC.
XXXXX HOMES/JACKSONVILLE, INC.
XXXXX HOMES/XXXX XXXXXXXXXX, INC.
XXXXX HOMES/NORTH CAROLINA, INC.
XXXXX HOMES/ORLANDO, INC.
XXXXX HOMES/PALM BEACH, INC.
XXXXX HOMES/PEMBROKE, INC.
XXXXX HOMES/SOUTHWEST FLORIDA, INC.
XXXXX HOMES/TEXAS, INC.
XXXXX HOMES/VIRGINIA, INC.
XXXXXXXXX HOMES, INC.
NEWMARK FINANCE AFFILIATE, LTD.
NEWMARK FINANCE CORPORATION
NEWMARK HOME CORPORATION
NEWMARK HOMES BUSINESS TRUST
NEWMARK HOMES X.X.
XXXXXXX HOMES PURCHASING, L.P.
NHC HOMES, INC.
NMH INVESTMENTS, INC.
PACIFIC UNITED DEVELOPMENT CORP.
PACIFIC UNITED L.P.
PEMBROKE FALLS REALTY, INC.
PREFERRED BUILDERS REALTY, INC.
PREFERRED HOME MORTGAGE COMPANY
PRESTIGE ABSTRACT & TITLE, LLC
PROFESSIONAL ADVANTAGE TITLE, LTD.
87
PUDC, INC.
SILVERLAKE INTERESTS, L.C.
ST. TROPEZ AT BOCA GOLF, INC.
TAP ACQUISITION CO.
TECHNICAL MORTGAGE, L.P.
THE XXXXX COMPANIES, INC.
TM INVESTMENTS, L.L.C.
UNIVERSAL LAND TITLE AGENCY, INC.
UNIVERSAL LAND TITLE, INC.
UNIVERSAL LAND TITLE INVESTMENT #1,
L.L.C.
UNIVERSAL LAND TITLE INVESTMENT #2,
L.L.C.
UNIVERSAL LAND TITLE INVESTMENT #3,
L.L.C.
UNIVERSAL LAND TITLE INVESTMENT #4,
L.L.C.
UNIVERSAL LAND TITLE OF SOUTH FLORIDA,
LTD.
UNIVERSAL LAND TITLE OF TEXAS, INC.
UNIVERSAL LAND TITLE OF THE PALM BEACHES,
LTD.
UNIVERSAL LAND TITLE OF VIRGINIA, INC.
By: /s/ Xxxxx X. XxXxxx
--------------------------------------
Name: Xxxxx X. XxXxxx
Title: Vice President - Finance and
Administration
TRUSTEE:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, AS TRUSTEE
By: /s/ Xxxxxx X. X'Xxxxxxx
--------------------------------------
Name: Xxxxxx X. X'Xxxxxxx
---------------------------------
Title: Corporate Trust Officer
--------------------------------
88
EXHIBIT A
================================================================================
(Face of Note)
10 3/8% SENIOR NOTE DUE 2012
CUSIP
-------------
NO. $
----- -------------
TECHNICAL OLYMPIC USA, INC.
promises to pay to _____________ or registered assigns, the principal sum of
_________________ Dollars ($______________) on July 1, 2012.
Interest Payment Dates: January 1 and July 1, commencing January 1, 2003.
Record Dates: December 15 and June 15.
A-1
IN WITNESS WHEREOF, the Issuer has caused this Note to be
signed manually or by facsimile by its duly authorized officers.
TECHNICAL OLYMPIC USA, INC.
By:
--------------------------------------
Name: Xxxxx X. XxXxxx
Title: Vice President - Finance and
Administration and Chief
Financial Officer
By:
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President and Secretary
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------
Authorized Signatory
Dated _____________, 2002
A-2
(Back of Note)
10 3/8% Senior Note due 2012
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY BEFORE THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) UNDER A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE UNDER RULE 144A OF THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) UNDER OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT OR (F) UNDER ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT BEFORE ANY SUCH OFFER, SALE OR TRANSFER UNDER
CLAUSE (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN
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AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Technical Olympic USA, Inc., a Delaware corporation (the
"ISSUER"), promises to pay interest on the principal amount of this Note at
10 3/8% per annum until maturity and shall pay Special Interest, if any, as
provided in Section 4 of the Registration Rights Agreement. The Issuer shall pay
interest semi-annually on January 1 and July 1 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each an "INTEREST
PAYMENT DATE"). Interest on the Notes shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided, however, that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be January 1, 2003. The Issuer shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Issuer shall pay interest on the Notes to the
Holders at the close of business on the December 15 or June 15 next preceding
the Interest Payment Date, even if such Notes are cancelled 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 shall be
payable as to principal, premium, if any, and interest and Special Interest, if
any, at the office or agency of the Issuer maintained for such purpose within or
without the City and State of
New York, or, at the option of the Issuer, payment
of interest may be made by check mailed to the Holders at their addresses set
forth in the Security Register; provided, however, that payment by wire transfer
of immediately available funds shall be required with respect to principal of,
and interest and Special Interest, if any, and premium, if any, on, all Global
Notes and all other Notes the Holders of which shall have provided wire transfer
instructions to the Issuer or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.The principal of the Notes
shall be payable only upon surrender of any Note at the Corporate Trust Office
of the Trustee or at the specified offices of any other Paying Agent. If any
Interest Payment Date for, or the due date for payment of the principal of, the
Notes is not a Business Day at the place in which it is presented for payment,
the Holder thereof shall not be entitled to payment of the amount due until the
next succeeding Business Day at such place and shall not be entitled to any
further interest or other payment in respect of such delay.
3. PAYING AGENT AND REGISTRAR. Initially, Xxxxx Fargo Bank Minnesota,
National Association, the Trustee under the Indenture, shall act as Paying Agent
and Registrar. The Issuer may change any Paying Agent or Registrar without
notice to any Holder. The Issuer or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Issuer issued the Notes under an Indenture dated as
of June 25, 2002 ("Indenture") among the Issuer, the guarantors party thereto
(the "SUBSIDIARY GUARANTORS") and the Trustee. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. 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 Notes are
obligations of the Issuer unlimited in aggregate principal amount, except only
$150,000,000 in aggregate principal amount of the Notes may be issued on the
Issue Date.
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5. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this Section 5, the
Notes will not be redeemable at the option of the Issuer prior to July 1, 2007.
Starting on that date, the Issuer may redeem all or any portion of the Notes, at
once or over time, after giving the required notice under the Indenture. The
Notes may be redeemed at the redemption prices set forth below, plus accrued and
unpaid interest, including Special Interest, if any, to the redemption date
(subject to the right of Holders on the relevant record date to receive interest
due on the relevant Interest Payment Date). The following prices are for Notes
redeemed during the 12-month period commencing on July 1 of the years set forth
below, and are expressed as percentages of principal amount:
Year Redemption Price
---- ---------------
2007.............................................................................................. 105.188%
2008.............................................................................................. 103.458%
2009.............................................................................................. 101.729%
2010 and thereafter............................................................................... 100.000%
(b) At any time prior to July 1, 2007, the Issuer may redeem, subject
to the terms of the Senior Notes Indenture and its other Senior Debt, all or any
portion of the Notes, at once or over time, after giving the required notice
under the Indenture at a redemption price equal to the greater of:
(i) 100% of the principal amount of the Notes to be
redeemed, and
(ii) the sum of the present values of (1) the
redemption price of the Notes at July 1, 2007 (as set forth in
clause (a) of this Section 5) and (2) the remaining scheduled
payments of interest from the redemption date to July 1, 2007,
but excluding accrued and unpaid interest to the redemption
date, discounted to the redemption date at the Treasury Rate
plus 50 basis points,
plus, in either case, accrued and unpaid interest, including Special Interest,
if any, to the redemption date (subject to the right of Holders on the relevant
record date to receive interest due on the relevant Interest Payment Date).
Any notice to Holders of a redemption pursuant to this clause (b) shall
include the appropriate calculation of the redemption price, but need not
include the redemption price itself. The actual redemption price, calculated as
described in this clause (b), shall be set forth in an Officers' Certificate
delivered to the Trustee no later than two Business Days prior to the redemption
date.
(c) At any time and from time to time prior to July 1, 2005, the Issuer
may redeem up to a maximum of 35% of the aggregate principal amount of the Notes
(including any Additional Notes) that have been issued under the Indenture on or
after the Issue Date with the proceeds of one or more Equity Offerings, at a
redemption price equal to 110.375% of the principal amount thereof, plus accrued
and unpaid interest, including Special Interest, if any, to the redemption date
(subject to the right of Holders on the relevant record date to receive interest
due on the relevant Interest Payment Date); provided, however, that after giving
effect to any such redemption, at least 65% of the aggregate principal amount of
the Notes (including any Additional Notes) that have been issued under the
Indenture on or after the Issue Date remains outstanding. Any such redemption
shall be made within 75 days of such Equity Offering upon not less than 30 nor
more than 60 days' prior notice.
(d) Any prepayment pursuant to this Section 5 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 of the Indenture.
6. MANDATORY REDEMPTION. The Issuer shall not be required to make
mandatory redemption or sinking fund payments with respect to the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
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denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Issuer may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Issuer need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Issuer need
not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
9. PERSONS DEEMED OWNERS. The registered holder of a Note may be
treated as its owner for all purposes.
10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes voting as a single class, and any existing default or
compliance with any provision of the Indenture or the Notes may be waived with
the consent of the Holders of at least a majority in aggregate principal amount
of the then outstanding Notes voting as a single class. Without the consent of
any Holder, the Indenture or the Notes may be amended or supplemented to: cure
any ambiguity, omission, defect or inconsistency; provide for the assumption by
a Surviving Person of the obligations of the Issuer under the Indenture or of a
Subsidiary Guarantor under the Indenture or its Subsidiary Guaranty; provide for
uncertificated Notes in addition to or in place of certificated Notes (provided
that the uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated Notes
are described in Section 163(f)(2)(B) of the Code); add additional Guarantees
with respect to the Notes or to release Subsidiary Guarantors from Subsidiary
Guaranties as provided by the terms of the Indenture; secure the Notes, add to
the covenants of the Issuer for the benefit of the Holders of the Notes or
surrender any right or power conferred upon the Issuer; make any change that
does not adversely affect in any material respect the rights of any Holder of
the Notes under the Indenture; make any change to the subordination provisions
of the Indenture that would limit or terminate the benefits available to any
holder of Senior Debt under such provisions (subject to the consent of such
holders of Senior Debt pursuant to Section 9.03 of the Indenture); comply with
any requirement of the Commission in connection with the qualification of the
Indenture under the TIA; or provide for the issuance of additional Notes in
accordance with the Indenture. No amendment or supplement may be made to the
subordination provisions of this Indenture that adversely affects the rights of
any holder of Senior Debt then outstanding unless the holders of such Senior
Debt (or their Representative) consents to such change.
11. DEFAULTS AND REMEDIES. Each of the following is an Event of Default
under the Indenture: (1) failure to make the payment of any interest, including
Special Interest, on the Notes issued under the Indenture when the same becomes
due and payable, and such failure continues for a period of 30 days; (2) failure
to make the payment of any principal of, or premium, if any, on, any of the
Notes issued under the Indenture when the same becomes due and payable at their
Stated Maturity, upon acceleration, redemption, required repurchase or
otherwise; (3) failure to comply with Section 5.01 of the Indenture; (4) failure
to comply with any other covenant or agreement in the Notes or in the Indenture
(other than a failure that is the subject of the preceding clause (1), (2) or
(3)), and such failure continues for 30 days after written notice is given to
the Issuer as provided in Section 6.01(b) of the Indenture; (5) a default under
any Debt (other than Non-Recourse Debt) by the Issuer or any Restricted
Subsidiary that results in acceleration of the maturity of such Debt, or failure
to pay any such Debt at maturity, in an aggregate amount greater than $10.0
million; (6) any judgment or judgments for the payment of money in an aggregate
amount in excess of $10.0 million that shall be rendered against the Issuer or
any Restricted Subsidiary and that shall not be waived, satisfied or discharged
for any period of 30 consecutive days during which a stay of enforcement shall
not be in effect; (7) certain events involving bankruptcy, insolvency or
reorganization of the Issuer or any Significant Subsidiary; and (8) any
Subsidiary Guaranty relating to the Notes ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guaranty), or any
Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary
Guaranty relating to the Notes. A Default under clause (4) is not an Event of
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Default in respect of the Notes until the Trustee or the Holders of not less
than 25% in aggregate principal amount of Notes then outstanding notify the
Issuer of the Default, and the Issuer does not cure such Default within the time
specified after receipt of such notice. If any Event of Default (other than
under clause (7)) occurs and is continuing, the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Notes then outstanding may
declare all the Notes to be due and payable. In the case of an Event of Default
under clause (7), all outstanding Notes shall become due and payable immediately
without any declaration or other act on the part of the Trustee or the Holders.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. In the event of a declaration of acceleration of the Notes because an
Event of Default has occurred and is continuing as a result of the acceleration
of any Debt described in clause (5), the declaration of acceleration of the
Notes shall be automatically annulled if the holders of any Debt described in
clause (5) have rescinded the declaration of acceleration in respect of such
Debt within 30 days of the date of such declaration and if (i) the annulment of
the acceleration of the Notes would not conflict with any judgment or decree of
a court of competent jurisdiction, and (ii) all existing Events of Default,
except nonpayment of principal or interest on the Notes that became due solely
because of the acceleration of the Notes, have been cured or waived. Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the payment
of principal, premium, if any, or interest, including Special Interest, if any)
if it determines that withholding the notice is in the interest of the Holders.
Holders of not less than a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its consequences
under the Indenture, except a continuing Default or Event of Default in the
payment of interest or Special Interest on, or the principal of, the Notes. The
Issuer is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Issuer is required upon becoming aware of
any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
12. TRUSTEE DEALINGS WITH ISSUER. The Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and may otherwise deal
with the Issuer or any Affiliate of the Issuer with the same rights it would
have if it were not Trustee.
13. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, member, partner or stockholder of the Issuer or
any Subsidiary Guarantor as such, shall have any liability for any Obligations
of the Issuer or any Subsidiary Guarantor under the Notes, the Indenture or for
any claim based on, in respect of, or by reason of, such Obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
14. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuer has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Issuer shall furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to:
Technical Olympic USA, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attention: General Counsel
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
to transfer this Note on the books of the Issuer. The agent may substitute
another to act for him.
--------------------------------------------------------------------------------
Date:
--------------
Your Signature:
--------------------------
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee:
---------------------
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant
to Section 4.09, 4.13 or 4.17 of the Indenture, check the box below:
[ ] Section 4.09 [ ] Section 4.13 [ ] Section 4.17
If you want to elect to have only part of the Note purchased by the
Issuer pursuant to Section 4.09, 4.13 or Section 4.17 of the Indenture, state
the amount you elect to have purchased: $
-----------
Date: Your Signature:
------------------------ --------------------------
(Sign exactly as your name appears on the
Note)
Soc. Sec. or Tax Identification
No.:
-------------------------------------
Signature Guarantee:
------------------------------------------------------------
(Signature must be guaranteed by a financial
institution that is a member of the Securities
Transfer Agent Medallion Program ("STAMP"), the
Stock Exchange Medallion Program ("SEMP"), the
New
York Stock Exchange, Inc. Medallion Signature
Program ("MSP") or such other signature guarantee
program as may be determined by the Registrar in
addition to, or in substitution for, STAMP, SEMP or
MSP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
A-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of an interest in this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of an
interest in another Global Note or Definitive Note for an interest in this
Global Note, have been made:
Principal Amount
Amount of of this Global Note Signature of
decrease in Amount of increase following such authorized signatory
Principal Amount in Principal Amount decrease (or of Trustee or
Date of Exchange of this Global Note of this Global Note increase) Note Custodian
---------------- ------------------- ------------------- ------------------- --------------------
A-10
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Technical Olympic USA, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attention: General Counsel
Xxxxx Fargo Bank Minnesota, National Association, as Trustee
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Services
Re: 10 3/8% Senior Notes due 2012
Reference is hereby made to the Indenture, dated as of June
25, 2002 (the "Indenture"), among Technical Olympic USA, Inc., as issuer (the
"Issuer"), the Subsidiary Guarantors party thereto and Xxxxx Fargo Bank
Minnesota, National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to ___________________________ (the "Transferee"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a Person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Distribution Compliance Period, the transfer is not being made
to a U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on
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Transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note, the Temporary Regulation S Global Note and/or the Definitive Note
and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF
A BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to
and in accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Issuer
or a subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to
an effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) [ ] such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, in an aggregate principal amount of at least
$250,000, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) an Opinion of Counsel provided by the Transferor or
the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with
the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the IAI
Global Note and/or the Definitive Notes and in the Indenture and the
Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not
B-2
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no longer
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Issuer.
-----------------------------------------
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
Dated:
-------------------
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the
following:
[CHECK ONE OF (A) OR (B)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP
_________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP
_________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP
_________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Technical Olympic USA, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attention: General Counsel
Xxxxx Fargo Bank Minnesota, National Association, as Trustee
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Services
Re: 10 3/8% Senior Notes due 2012
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of June
25, 2002 (the "Indenture"), among Technical Olympic USA, Inc., as issuer (the
"Issuer"), the Subsidiary Guarantors party thereto and Xxxxx Fargo Bank
Minnesota, National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount of $____________ in such Note[s] or interests (the "Exchange").
In connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without
C-1
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted Definitive
Note is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI
Global Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
C-2
This certificate and the statements contained herein are made
for your benefit and the benefit of the Issuer.
-----------------------------------------
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
Dated:
-------------------
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Technical Olympic USA, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attention: General Counsel
Xxxxx Fargo Bank Minnesota, National Association, as Trustee
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Services
Re: 10 3/8% Senior Notes due 2012
Reference is hereby made to the Indenture, dated as of June
25, 2002 (the "Indenture"), among Technical Olympic USA, Inc., as issuer (the
"Issuer"), the Subsidiary Guarantors signatory thereto and Xxxxx Fargo Bank
Minnesota, National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein 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 the Notes or any
interest therein, we will do so only (A) to the Issuer or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) 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 you and to the
Issuer a signed letter substantially in the form of this letter and an Opinion
of Counsel in form reasonably acceptable to the Issuer to the effect that such
transfer is in compliance with the Securities Act, and such transfer is in an
aggregate principal amount of at least $250,000, (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Issuer such certifications, legal opinions and other information as you 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.
4. 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 its investment.
D-1
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own 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.
You and the Issuer 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.
-----------------------------------------
[Insert Name of Accredited Investor]
By:
--------------------------------------
Name:
Title:
Dated:
-----------------------
D-2
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Subsidiary Guarantor (which term includes any
successor Person under the Indenture), jointly and severally, unconditionally
guarantees, to the extent set forth in the Indenture and subject to the
provisions in the Indenture, dated as of June 25, 2002 (the "Indenture"), among
Technical Olympic USA, Inc., as issuer (the "Issuer"), the Subsidiary Guarantors
listed on the signature pages thereto and Xxxxx Fargo Bank Minnesota, National
Association, as trustee (the "Trustee"), (a) the due and punctual payment of the
principal of, premium, if any, and interest, including Special Interest, if any,
on, the Notes, whether at maturity, by acceleration, redemption or otherwise,
the due and punctual payment of interest on overdue principal of, premium, if
any, and interest, including Special Interest, if any, on, the Notes, if lawful,
and the due and punctual performance of all other obligations of the Issuer to
the Holders or the Trustee, all in accordance with the terms of the Indenture
and (b) in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, that the same shall be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. The obligations of the
Subsidiary Guarantors to the Holders of Notes and to the Trustee pursuant to the
Subsidiary Guaranty and the Indenture are expressly set forth in Article 10 of
the Indenture, and reference is hereby made to the Indenture for the precise
terms of the Subsidiary Guaranty. This Subsidiary Guaranty is subject to release
as and to the extent set forth in Sections 8.02, 8.03 and 10.05 of the
Indenture. Each Holder of a Note, by accepting the same, agrees to and shall be
bound by such provisions. Capitalized terms used herein and not defined are used
herein as so defined in the Indenture.
XXXXX REALTY CO.
ADRO CONST., INC.
BANYAN TRAILS, INC.
XXXXX HOMES DELAWARE, INC.
XXXXX HOMES FINANCING, INC.
XXXXX HOMES REALTY, INC.
XXXXX HOMES, INC.
XXXXX HOMES/ARIZONA CONSTRUCTION, INC.
XXXXX HOMES/ARIZONA, INC.
XXXXX HOMES/ATLANTA, INC.
XXXXX HOMES/BROWARD, INC.
XXXXX HOMES/COLORADO, INC.
XXXXX HOMES/GEORGIA, INC.
XXXXX HOMES/GULF COAST, INC.
XXXXX HOMES/JACKSONVILLE, INC.
XXXXX HOMES/XXXX XXXXXXXXXX, INC.
XXXXX HOMES/NORTH CAROLINA, INC.
XXXXX HOMES/ORLANDO, INC.
XXXXX HOMES/PALM BEACH, INC.
XXXXX HOMES/PEMBROKE, INC.
XXXXX HOMES/SOUTHWEST FLORIDA, INC.
XXXXX HOMES/TEXAS, INC.
XXXXX HOMES/VIRGINIA, INC.
XXXXXXXXX HOMES, INC.
NEWMARK FINANCE AFFILIATE, LTD.
NEWMARK FINANCE CORPORATION
NEWMARK HOME CORPORATION
NEWMARK HOMES BUSINESS TRUST
NEWMARK HOMES X.X.
XXXXXXX HOMES PURCHASING, L.P.
NHC HOMES, INC.
NMH INVESTMENTS, INC.
PACIFIC UNITED DEVELOPMENT CORP.
PACIFIC UNITED L.P.
PEMBROKE FALLS REALTY, INC.
PREFERRED BUILDERS REALTY, INC.
PREFERRED HOME MORTGAGE COMPANY
PRESTIGE ABSTRACT & TITLE, LLC
PROFESSIONAL ADVANTAGE TITLE, LTD.
E-1
PUDC, INC.
SILVERLAKE INTERESTS, L.C.
ST. TROPEZ AT BOCA GOLF, INC.
TAP ACQUISITION CO.
TECHNICAL MORTGAGE, L.P.
THE XXXXX COMPANIES, INC.
TM INVESTMENTS, L.L.C.
UNIVERSAL LAND TITLE AGENCY, INC.
UNIVERSAL LAND TITLE, INC.
UNIVERSAL LAND TITLE INVESTMENT #1,
L.L.C.
UNIVERSAL LAND TITLE INVESTMENT #2,
L.L.C.
UNIVERSAL LAND TITLE INVESTMENT #3,
L.L.C.
UNIVERSAL LAND TITLE INVESTMENT #4,
L.L.C.
UNIVERSAL LAND TITLE OF SOUTH FLORIDA,
LTD.
UNIVERSAL LAND TITLE OF TEXAS, INC.
UNIVERSAL LAND TITLE OF THE PALM BEACHES,
LTD.
UNIVERSAL LAND TITLE OF VIRGINIA, INC.
By:
--------------------------------------
Name: Xxxxx X. XxXxxx
Title: Vice President - Finance and
Administration
E-2
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
This SUPPLEMENTAL INDENTURE, dated as of __________ ___, ____, is among
Technical Olympic USA, Inc., a Delaware corporation (the "Company"), each of the
parties identified under the caption "Subsidiary Guarantors" on the signature
page hereto (the "Guarantors") and Xxxxx Fargo Bank Minnesota, National
Association, a national banking association, as Trustee.
RECITALS
WHEREAS, the Company, certain Subsidiary Guarantors and the Trustee
entered into an Indenture, dated as of June 25, 2002 (the "Indenture"), pursuant
to which the Company has originally issued $150,000,000 in aggregate principal
amount of 10 3/8% Senior Notes due 2012 (the "Notes"); and
WHEREAS, Section 9.01(a)(iv) of the Indenture provides that the
Company, the Subsidiary Guarantors and the Trustee may amend or supplement the
Indenture in order to add any new Subsidiary Guarantor to comply with Section
10.04 thereof, without the consent of the Holders of the Notes; and
WHEREAS, all acts and things prescribed by the Indenture, by law and by
the charter and the bylaws (or comparable constituent documents) of the Company,
of the Subsidiary Guarantors and of the Trustee necessary to make this
Supplemental Indenture a valid instrument legally binding on the Company, the
Subsidiary Guarantors and the Trustee, in accordance with its terms, have been
duly done and performed;
NOW, THEREFORE, to comply with the provisions of the Indenture and in
consideration of the above premises, the Company, the Subsidiary Guarantors and
the Trustee covenant and agree for the equal and proportionate benefit of the
respective Holders of the Notes as follows:
ARTICLE 1.
Section 1.01. This Supplemental Indenture is supplemental to the
Indenture and does and shall be deemed to form a part of, and shall be construed
in connection with and as part of, the Indenture for any and all purposes.
Section 1.02. This Supplemental Indenture shall become effective
immediately upon its execution and delivery by each of the Company, the
Subsidiary Guarantors and the Trustee.
ARTICLE 2.
Section 2.01. From this date, in accordance with Section 10.04 and by
executing this Supplemental Indenture and the accompanying notation of
Subsidiary Guarantee (a copy of which is attached hereto), the Subsidiary
Guarantors whose signatures appear below are subject to the provisions of the
Indenture to the extent provided for in Article 10 thereof.
ARTICLE 3.
Section 3.01. Except as specifically modified herein, the Indenture and
the Notes are in all respects ratified and confirmed (mutatis mutandis) and
shall remain in full force and effect in accordance with their terms with all
capitalized terms used herein without definition having the same respective
meanings ascribed to them as in the Indenture.
Section 3.02. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to all
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.
F-1
Section 3.03. THE LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE AND ENFORCE THIS SUPPLEMENTAL INDENTURE.
Section 3.04. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
TECHNICAL OLYMPIC USA, INC.
By
---------------------------------------
Name:
Title:
[SUBSIDIARY GUARANTORS]
By
---------------------------------------
Name:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By
---------------------------------------
Name:
Title:
F-2
CROSS-REFERENCE TABLE*
Trust Indenture Act Indenture
------------------- ---------
310 (a)(1)........................................................................................ 7.10
(a)(2)............................................................................................ 7.10
(a)(3)............................................................................................ N.A.
(a)(4)............................................................................................ N.A.
(a)(5)............................................................................................ 7.10
(b)............................................................................................... 7.10
(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)(2)............................................................................................ 7.06; 7.07
(c)............................................................................................... 7.06; 12.02
314 (a)........................................................................................... 4.03; 12.02
(c)(1)............................................................................................ 12.04
(c)(2)............................................................................................ 12.04
(c)(3)............................................................................................ N.A.
(e)............................................................................................... 12.05
(f)............................................................................................... NA
315 (a)........................................................................................... 7.01
(b)............................................................................................... 7.05; 12.02
(c)............................................................................................... 7.01
(d)............................................................................................... 7.01
(e)............................................................................................... 6.11
316 (a)(last sentence)............................................................................ 2.09
(a)(1)(A)......................................................................................... 6.05
(a)(1)(B)......................................................................................... 6.04
(a)(2)............................................................................................ N.A.
(b)............................................................................................... 6.07
(c)............................................................................................... 2.02; 12.03
317 (a)(1)........................................................................................ 6.08
(a)(2)............................................................................................ 6.09
(b)............................................................................................... 2.04
318 (a)........................................................................................... 12.01
(b)............................................................................................... N.A.
(c)............................................................................................... 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of this Indenture.
i
