-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GOZFeWac9CkB925KpQpCn6WAg2fC/AGUEgKo+4DXCT+YhBTx9JVXfBnV0CeVC0bP rs2EH796W5lutnFprp+4Uw== 0000950168-99-000492.txt : 19990223 0000950168-99-000492.hdr.sgml : 19990223 ACCESSION NUMBER: 0000950168-99-000492 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19990222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OAKWOOD HOMES CORP CENTRAL INDEX KEY: 0000073609 STANDARD INDUSTRIAL CLASSIFICATION: MOBILE HOMES [2451] IRS NUMBER: 560985879 STATE OF INCORPORATION: NC FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-47053 FILM NUMBER: 99547149 BUSINESS ADDRESS: STREET 1: 7800 MCCLOUD RD CITY: GREENSBORO STATE: NC ZIP: 27409-9634 BUSINESS PHONE: 9198552400 MAIL ADDRESS: STREET 1: 7800 MCCLOUD RD CITY: GREENSBORO STATE: NC ZIP: 27409-9634 S-3/A 1 OAKWOOD HOMES CORPORATION, S-3/A AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 22, 1999 REGISTRATION NO. 333-47053 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 2 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- OAKWOOD HOMES CORPORATION (Exact Name of Registrant as Specified in its Charter)
NORTH CAROLINA 56-0985879 (State or Other Jurisdiction (I.R.S. Employer of Incorporation) Identification No.)
7800 MCCLOUD ROAD GREENSBORO, N.C. 27425-7081 (336) 664-2400 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) --------------- MYLES E. STANDISH EXECUTIVE VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER AND GENERAL COUNSEL OAKWOOD HOMES CORPORATION 7800 MCCLOUD ROAD GREENSBORO, N.C. 27425 (336) 664-2400 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) --------------- PLEASE SEND COPIES OF ALL COMMUNICATIONS TO: SEAN M. JONES B. ANDREW PICKENS, JR. KENNEDY COVINGTON LOBDELL & HICKMAN, L.L.P. MCGUIRE, WOODS, BATTLE & BOOTHE, LLP 100 NORTH TRYON STREET, 42ND FLOOR 100 NORTH TRYON STREET, SUITE 2900 CHARLOTTE, N.C. 28202-4006 CHARLOTTE, N.C. 28202 704/331-7400 704/373-8999
--------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this Registration Statement. --------------- If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] --------------- If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] --------------- If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [X] --------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITITES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED FEBRUARY 22, 1999 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROSPECTUS SUPPLEMENT FEBRUARY , 1999 (TO PROSPECTUS DATED FEBRUARY , 1999) [OAKWOOD LOGO APPEARS HERE] OAKWOOD HOMES CORPORATION $ % SENIOR NOTES DUE - -------------------------------------------------------------------------------- THE COMPANY: o We design, manufacture and market manufactured and modular homes, serving retail customers and wholesale dealers throughout the United States. We combine manufacturing, retail sales and financing of manufactured homes. o Oakwood Homes Corporation 7800 McCloud Road Greensboro, North Carolina 27409-9634 (336) 664-2400 THE OFFERING: o We intend to use the net proceeds from the offering to repay outstanding indebtedness. o Closing: February , 1999 PROPOSED TRADING FORMAT: o The Notes will not be listed on any securities exchange or included in any automated quotation system. THE NOTES: o Maturity: o Interest Payments: Semi-annually in cash in arrears on and , commencing on , 1999. o Redemption: We can redeem some or all of the Notes at our option on at least 30 days' notice at the redemption prices described on page S-15. o Mandatory Offer to Repurchase: If we experience certain types of change in control, holders of Notes have the option to require us to repurchase some or all of their Notes. o Ranking of Notes: The Notes rank equally with all of our other unsecured and unsubordinated indebtedness. ----------------------------------------------------------------------------
PER NOTE TOTAL ---------- ------ Public offering price: % $ Underwriting fees: % $ Proceeds to the Company: % $
- -------------------------------------------------------------------------------- BEFORE MAKING ANY INVESTMENT IN OUR COMPANY, YOU SHOULD CONSIDER CAREFULLY CERTAIN RISKS THAT ARE DESCRIBED IN THE "RISK FACTORS" SECTION BEGINNING ON PAGE S-8. - -------------------------------------------------------------------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the related base prospectus. Any representation to the contrary is a criminal offense. - -------------------------------------------------------------------------------- NATIONSBANC MONTGOMERY SECURITIES LLC FIRST UNION CAPITAL MARKETS CORP. MERRILL LYNCH & CO. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Where You Can Find More Information .......... S-2 Forward-Looking Statements ................... S-3 Summary ...................................... S-4 Risk Factors ................................. S-8 Use of Proceeds .............................. S-11 Capitalization ............................... S-11 Description of Notes ......................... S-12 Underwriting ................................. S-19 Legal Matters ................................ S-20 Experts ...................................... S-20 PROSPECTUS Available Information ........................ 2 Documents Incorporated By Reference .......... 2 The Company .................................. 3 Ratio of Earnings To Fixed Charges ........... 3 Use of Proceeds .............................. 3 Description of Debt Securities ............... 3 Plan of Distribution ......................... 10 Legal Matters ................................ 12 Experts ...................................... 12
--------------- This document is in two parts. The first part is the prospectus supplement, which describes the specific terms of the Notes we are offering and certain other matters relating to us and our business. The second part, the base prospectus, gives more general information, some of which does not apply to the Notes we are offering. Generally, when we refer to the prospectus, we are referring to both parts combined. If the description of your Notes varies between the prospectus supplement and the accompanying base prospectus, you should rely on the information in the prospectus supplement. --------------- You should rely only on the information contained or incorporated by reference in this prospectus supplement and the base prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus supplement and the base prospectus, as well as information we previously filed with the Securities and Exchange Commission and incorporated by reference, is accurate as of the date on the front cover of this prospectus supplement only. Our business, financial condition, results of operations and prospects may have changed since that date. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. These filings are available to the public over the Internet at the SEC's website at http://www.sec.gov. You may also read and copy any document filed by Oakwood with the SEC at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. The SEC's public reference room in Washington, D.C. is located at 450 Fifth Street, N.W., Washington, D.C. 20549. You can call the SEC at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges. Oakwood's common stock is listed on the New York Stock Exchange. You can obtain information about Oakwood from the New York Stock Exchange at 20 Broad Street, New York, New York 10005. This prospectus supplement "incorporates by reference" information filed or to be filed by Oakwood with the SEC. The information incorporated by reference is an important part of the prospectus. The following documents that have been S-2 filed with the SEC, as well as all other documents filed by Oakwood with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, after the date of this prospectus supplement and prior to the closing of this offering, are incorporated by reference into the prospectus: o Oakwood's Annual Report on Form 10-K for the fiscal year ended September 30, 1998; o Oakwood's Current Report on Form 8-K dated October 13, 1998; and o Oakwood's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1998. All documents incorporated by reference are available from Oakwood without charge. You may obtain these documents free of charge by making a request to Oakwood by telephone at (336) 664-2400 or in writing at the following address: Oakwood Homes Corporation P.O. Box 27081 Greensboro, North Carolina 27425-7081 Attn: Secretary FORWARD-LOOKING STATEMENTS This prospectus supplement and the accompanying base prospectus contain or incorporate by reference forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about Oakwood, including, among other things, those described in the "Risk Factors" section of this prospectus supplement. We caution you that forward-looking statements are necessarily estimates that reflect the best current judgment of our senior management. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. We recommend that you consider these forward-looking statements in light of various important factors, including those set forth in this prospectus supplement (see "Risk Factors") and other factors set forth from time to time in the information that we file with the SEC. To identify forward-looking statements, you should look for words such as "estimate," "project," "intend," "expect" or "believe." These forward-looking statements are found at various places throughout this prospectus supplement, the base prospectus and the documents incorporated by reference herein. You are cautioned not to rely to a great extent on these forward-looking statements, which speak only as of the date of such documents. We do not undertake to update these forward-looking statements to reflect actual results, changes and assumptions or other factors that could affect these statements. In addition, we may from time to time make additional or revised forward-looking statements about us or our business or about the matters described or incorporated by reference in this document. S-3 SUMMARY IN THIS PROSPECTUS SUPPLEMENT, THE WORDS "COMPANY," "OAKWOOD," "WE," "OUR" AND "US" REFER TO OAKWOOD HOMES CORPORATION, A NORTH CAROLINA CORPORATION, AND ITS SUBSIDIARIES AND PREDECESSORS, UNLESS THE CONTEXT OTHERWISE REQUIRES. THE FOLLOWING SUMMARY CONTAINS BASIC INFORMATION ABOUT THIS OFFERING. IT MAY NOT CONTAIN ALL THE INFORMATION THAT IS IMPORTANT TO YOU. THE "DESCRIPTION OF NOTES" SECTION OF THIS PROSPECTUS SUPPLEMENT CONTAINS MORE DETAILED INFORMATION REGARDING THE TERMS AND CONDITIONS OF THE NOTES. THE COMPANY We design, manufacture and market manufactured and modular homes, serving retail customers and wholesale dealers throughout the United States. We operate 32 manufacturing plants across the United States. We sell manufactured homes primarily through 362 company-owned sales centers and over 100 exclusive retailers and key dealers. We operate our sales centers under the names Oakwood(R) Mobile Homes, Freedom Homes(R), Victory Homes, Schult(R) Homes and Golden West Homes(R). During fiscal 1998, approximately 96% of our retail sales of new homes were homes that we manufactured. We believe that our company is the largest retailer and the third largest manufacturer of manufactured homes in the United States. Through our captive reinsurance subsidiary, we also reinsure risks with respect to homeowners insurance, credit life insurance and other insurance policies written for customers in connection with our retail sales activities. We combine manufacturing, retail sales and financing of manufactured homes. We believe that the extent of our integration provides us with a competitive advantage over many others in the industry. Our ability to control the design, manufacture and distribution of our homes enables us to plan our inventory requirements, control the quality and servicing of our products and respond promptly to changes in the retail market. Additionally, our ability to finance our sales allows us to make credit decisions promptly and minimize the inconvenience to the customer of obtaining credit. We provide financing for a majority of the homes we sell through loans that we originate. During fiscal 1998, approximately 87% of our retail unit sales were financed by installment sale contracts or loans that we originated. We have historically obtained funds to finance loans primarily through sales of real estate mortgage investment conduit ("REMIC") trust certificates to institutional investors. We also use short-term credit facilities and internally-generated funds to support loans until a pool of loans is accumulated to provide for permanent financing. Internal financing of loans has allowed us to broaden our sources of financing by obtaining funds secured by loans directly from institutional investors and from the public markets. Our ability to continue to finance loans is dependent upon the continued availability of adequate sources of capital. Our company was founded in 1946 and our principal executive offices are located at 7800 McCloud Road, Greensboro, North Carolina 27409-9634. Our telephone number at this location is (336) 664-2400. S-4 THE OFFERING Issuer.......................... Oakwood Homes Corporation. Securities Offered.............. $ million principal amount of % Senior Notes due . Maturity........................ The Notes will mature . Interest Rate................... The Notes will bear interest at the rate of % per annum. Interest Payment Dates.......... We will pay interest on the Notes semi-annually on and beginning , 1999. Optional Redemption............. We may redeem all or part of the Notes, on at least 30 days' notice, at the redemption prices described herein, plus any accrued and unpaid interest to the date fixed for redemption. Change in Control............... If a change in control were to occur, each holder of Notes would have the option to require us to repurchase such Notes, in whole or in part, at a price equal to 101.0% of the principal amount of those Notes, plus any accrued and unpaid interest. Ranking......................... The Notes will be unsecured senior debt securities of ours. As of December 31, 1998 and giving effect to this offering (assuming an offering of $300.0 million of Notes), we would have had outstanding approximately $623.3 million aggregate principal amount of indebtedness, $289.9 million of which would have been secured. Additionally, we have pledged the stock of Tarheel Insurance Company, Ltd. to support our $175.0 million revolving credit facility. None of that indebtedness would have been senior to the Notes and the Notes would not have been senior to that indebtedness. The Notes, however, effectively will be subordinated to secured indebtedness of ours with respect to the assets pledged as collateral for that indebtedness. The Notes will rank equally in right of payment with all unsecured and unsubordinated indebtedness of ours. Certain Covenants............... The Indenture governing the Notes will contain covenants that will, among other things, limit our ability to: o incur secured indebtedness; o permit our subsidiaries to incur indebtedness; o engage in certain sale-leaseback transactions; and o enter into certain mergers or consolidations or dispose of stock or certain assets. Use of Proceeds................. The net proceeds of this offering will be used to repay outstanding indebtedness. Risk Factors.................... See "Risk Factors" on page S-8 for a discussion of certain factors you should consider carefully before deciding whether to invest in the Notes. S-5 SUMMARY FINANCIAL DATA We derived the summary financial data presented below for each of the five fiscal years in the period ended September 30, 1998 from our audited consolidated financial statements. We derived the summary financial data for the three month periods ended December 31, 1997 and 1998 from our unaudited consolidated financial statements, which in management's opinion include all normal, recurring adjustments necessary for a fair statement of the information for the periods presented. Results of operations for a three month period are not necessarily indicative of results of operations for a full year. You should read the financial data presented below in conjunction with the consolidated financial statements, the related notes and other financial information contained in our Annual Report on Form 10-K for the year ended September 30, 1998 and our Quarterly Report on Form 10-Q for the quarter ended December 31, 1998, which are incorporated in this prospectus summary by reference. See "Where You Can Find More Information."
FISCAL YEAR ENDED SEPTEMBER 30, ------------------------------------------------------------------------ 1994 1995 1996 1997 1998(1) ------------- ------------- ------------- -------------- --------------- (IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS) STATEMENT OF INCOME DATA(2): Net sales ........................ $ 595,127 $ 741,521 $ 862,079 $ 952,704 $ 1,404,432 Total revenues ................... 664,610 821,412 973,922 1,070,051 1,482,553 Net income ....................... 35,655 45,318 68,255 81,913 55,353 Earnings per common share: Basic ........................... .82 1.03 1.53 1.79 1.20 Diluted ......................... .78 .99 1.47 1.75 1.17 Ratio of earnings to fixed charges(3) ...................... 3.07 3.51 4.97 5.77 3.39 Pro forma ratio of earnings to fixed charges(4) ................ -- -- -- -- 2.68 THREE MONTHS ENDED DECEMBER 31, --------------------------- 1997 1998 ------------- ------------- (IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS) STATEMENT OF INCOME DATA(2): Net sales ........................ $ 221,893 $ 359,814 Total revenues ................... 254,663 389,384 Net income ....................... 17,802 11,459 Earnings per common share: Basic ........................... .39 .25 Diluted ......................... .38 .24 Ratio of earnings to fixed charges(3) ...................... 4.77 2.80 Pro forma ratio of earnings to fixed charges(4) ................ -- 2.42
AS OF AS OF SEPTEMBER 30, DECEMBER 31, 1998 ------------------------------------------------------------- ----------------------------- 1994 1995 1996 1997 1998 ACTUAL AS ADJUSTED(5) ----------- ----------- ----------- ----------- ------------- ------------- --------------- (IN THOUSANDS) BALANCE SHEET DATA: Total assets ................ $590,397 $782,640 $841,977 $904,506 $1,283,376 $1,455,889 $1,458,308 Short-term borrowings ....... 25,000 154,400 145,506 175,800 375,023 551,505 253,924 Notes and bonds payable ..... 207,990 198,812 134,379 78,815 61,875 69,367 369,367 Shareholders' equity ........ 276,330 318,408 391,974 483,882 547,675 561,854 561,854
- --------- (1) Includes special charges of approximately $51.3 million (or $.67 per share after tax) primarily relating to residual interests retained in certain REMIC securitizations. (2) On April 1, 1998, we acquired Schult Homes Corporation in a transaction accounted for as a purchase. Prior to its acquisition, Schult Homes Corporation was the eighth largest manufacturer of manufactured homes in the United States. On June 30,1995, we acquired Destiny Industries, Inc. and on September 30, 1994, we acquired Golden West Homes. Both of these acquisitions were accounted for as "pooling of interests," and, accordingly, the table set forth above reflects the combined results of operations and financial position of the Company, Destiny Industries, Inc. and Golden West Homes for all periods presented. (3) In calculating the ratio of earnings to fixed charges, earnings consist of earnings before income taxes plus fixed charges (excluding capitalized interest). Fixed charges consist of interest expense (which includes amortization of deferred financing costs), whether expensed or capitalized, and that portion of rental expense estimated to be attributed to interest. (4) The pro forma ratio of earnings to fixed charges for the fiscal year ended September 30, 1998 and the three months ended December 31, 1998 sets forth our ratio of earnings to fixed charges on a pro forma basis assuming an offering S-6 of $300.0 million of Notes had been completed as of the beginning of each period, and that the estimated net proceeds thereof of approximately $297.6 million had been used to repay our $100.0 million term loan from NationsBank, N.A. and the balance had been used to repay borrowings outstanding under short-term credit facilities as described under "Use of Proceeds." The pro forma reduction in interest expense relating to the repayment of the $100.0 million of indebtedness to NationsBank, N.A. has been reflected only from April 1, 1998, the date on which we incurred such indebtedness in connection with the acquisition of Schult Homes Corporation. The pro forma increase in interest expense to reflect interest on the Notes reflects an assumed interest rate of 8% and an assumed amortization period of costs of the offering of ten years. (5) Assumes an offering of $300.0 million of Notes. S-7 RISK FACTORS You should carefully read this entire prospectus supplement, the accompanying base prospectus and the documents incorporated by reference herein and therein before investing in the Notes. A number of factors may adversely impact your investment in the Notes, including, without limitation, the following: OUR INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL RESULTS AND PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THE NOTES. We currently have a significant amount of indebtedness. At December 31, 1998, after giving effect to this offering, our total consolidated indebtedness would have been approximately $623.3 million. See "Capitalization." Our indebtedness could have important consequences for the holders of the Notes, including: o limiting our ability to satisfy our obligations with respect to the Notes; o increasing our vulnerability to general adverse economic and industry conditions; o limiting our ability to obtain additional financing to fund our future retail financing activities as well as our working capital, capital expenditure and other general corporate requirements; o requiring a substantial portion of our cash flow from operations for the payment of principal of, and interest on, our indebtedness and reducing our ability to use our cash flow to fund our retail financing activities as well as our working capital, capital expenditure and other general corporate requirements; o limiting our flexibility in planning for or reacting to changes in our business and industry; and o placing us at a disadvantage compared to our competitors with less indebtedness. SERVICING OUR INDEBTEDNESS WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL. Our ability to make payments on our indebtedness, including the Notes, and to fund our capital needs will depend on our ability to generate cash in the future. Based on our current level of operations, we believe our securitization and other financing activities together with cash flow from operations will be adequate to meet our liquidity needs for the foreseeable future. We cannot assure you, however, that we will be able to consummate any such securitizations or financings or that our business will generate sufficient cash flow from operations so that we will be able to pay our indebtedness, including the Notes, or meet our other liquidity needs. We may need to refinance all or a portion of our indebtedness, including the Notes, on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness either on commercially reasonable terms or at all. OUR RETAIL FINANCING ACTIVITIES REQUIRE SUBSTANTIAL AMOUNTS OF CAPITAL AND WE ARE DEPENDENT UPON OUR ABILITY TO SECURITIZE LOANS THAT WE ORIGINATE Retail financing of sales of the manufactured homes that we manufacture is an integral part of our vertical integration strategy. This financing requires substantial amounts of capital. We have successfully financed these consumer lending activities in the past by securitizing the loans that we originate, primarily using REMICs. Since 1994, we generally have sold to investors securities having a principal balance approximately equal to the principal balance of the loans securitized and, accordingly, we have not been required to fund our consumer finance business outside of the asset-backed securities market. Late in 1998, however, global economic conditions significantly reduced the liquidity in the asset-backed securities market and the credit spreads over treasury securities demanded by the purchasers of our asset-backed securities rose significantly. Additionally, demand for the most deeply subordinated asset-backed securities we offer for sale has significantly decreased and, as a result, we have retained more of these deeply subordinated securities in our recent securitizations than we have in previous securitizations. These widening credit spreads adversely affect our permanent funding costs and could adversely affect our profitability if we are unable to increase the interest rates we charge customers to compensate for these higher costs. Moreover, decreased demand for asset-backed securities could require us either to seek alternative, less attractive sources of financing for the loans originated by our consumer finance business or to curtail our retail financing activities. S-8 Several other factors affect our ability to securitize our loans, including: o conditions in the securities markets, in general; o the credit quality of our loans; and o compliance of our loans with the eligibility requirements established by the securitization documents for the loans and the absence of any downgrading or withdrawal of ratings given to securities issued in our previous securitizations. Adverse changes in any of these factors could impair our ability to originate and sell loans on a favorable or timely basis. Our inability to sell or securitize loans or otherwise finance our retail financing activities could materially and adversely affect our financial performance and growth prospects. WE RETAIN RESIDUAL INTERESTS IN CONNECTION WITH OUR REMIC SECURITIZATIONS. IF WE ARE REQUIRED TO RECOGNIZE SPECIAL CHARGES TO REDUCE THE CARRYING VALUE OF THESE RESIDUAL INTERESTS, OUR EARNINGS COULD BE MATERIALLY AND ADVERSELY IMPACTED. In connection with our REMIC securitizations, we retain a residual interest in the trusts that are formed to acquire the loans and issue the asset-backed securities. Our ownership of this residual interest entitles us to all of the cash proceeds from the securitized loans after the bondholders and the servicers have been paid. Accounting rules require that we estimate the fair value of these retained residual interests based, in part, upon default and prepayment assumptions that we believe market participants would use for similar instruments. The actual rates of voluntary prepayments and the amount and timing of credit losses affect our yield on retained REMIC residual interests and the fair value of such interests in periods subsequent to the securitization. The actual rates of voluntary prepayments and credit losses typically vary over the life of each transaction and from transaction to transaction. If, over time, our actual experience is more favorable than that assumed, our yield on the retained residual interests will be enhanced. However, if over time our actual experience is less favorable than that assumed, our yield on these retained interests will be reduced or impairment may result. During 1998, we experienced increases in the rates of voluntary prepayments of, and credit losses with respect to, loans in a number of our securitized loan pools. These higher rates of voluntary prepayments and credit losses adversely affected our ability to recover the carrying value of our residual interests in these securitizations. As a result, we recognized special charges of approximately $51.3 million primarily related to reducing the carrying value of retained residual interests in these securitizations. We cannot assure you that we will not be required to recognize additional material charges in the future. If this happens, our earnings could be materially and adversely impacted. WE COULD BE ADVERSELY IMPACTED BY GOVERNMENTAL REGULATION Our business is subject to numerous federal and state consumer protection and other laws and regulations that are subject to change. These laws relate to, among other things, virtually all aspects of our consumer finance and insurance businesses as well as numerous aspects of our manufacturing and retail operations. Any of the following could have a material and adverse impact on our business and financial condition: o an adverse change in or interpretation of existing laws or regulations; o the promulgation of new laws or regulations; or o our failure to comply with any of these laws or regulations. Our insurance activities in the United States are subject to state-by-state regulation that is primarily intended to protect policyholders. No assurance can be given that we will be able to maintain licenses that are required or to procure additional licenses as necessary in the future. Tarheel Insurance Company, Ltd., our captive reinsurance subsidiary ("Tarheel"), reinsures risks on property and casualty and credit life insurance policies and extended service contracts written by an unrelated insurance company in connection with sales of our products. Tarheel is subject to regulation and supervision in Bermuda and is required, among other things, to maintain minimum solvency and liquidity standards and to comply with auditing and reporting requirements. The insurance laws of each state of the United States regulate the sale of insurance and reinsurance within that jurisdiction by foreign insurance companies such as Tarheel that are not authorized or admitted to do business in that jurisdiction. In addition, Tarheel is required to make certain security arrangements for United States insurance companies to receive "credit for reinsurance" on risks assumed by it. There can be no assurance that Tarheel will be able to meet, or to continue to meet, these requirements. S-9 WE COULD BE ADVERSELY IMPACTED BY LITIGATION Participants in our industry (including us) are frequently named as defendants in litigation involving alleged violations of federal and state consumer protection or other similar laws and regulations. A judgment against us in connection with any litigation could have a material adverse effect on our financial condition and results of operations. In addition, if it were determined that we failed to comply with applicable laws, our financial condition and results of operations could be adversely impacted. Finally, an adverse judgment against a competitor relating to a standard business practice in the manufactured housing industry or the consumer finance or insurance business could have an adverse effect on both us and our industry. There can be no assurances that any such litigation will not have a material adverse effect on us or our operations in the future. In November 1998, we, along with certain of our present and former officers and directors, were named as defendants in lawsuits filed on behalf of purchasers of our common stock for various periods between April 11, 1997 and July 21, 1998. These complaints, which seek class action certification, allege violations of federal securities laws based on alleged false and misleading financial statements, reports filed by us and other representations made by us during this period. While we intend to defend these lawsuits vigorously, there can be no assurances that we will be successful in doing so or that they or any associated regulatory actions will not have a material adverse effect on us. OUR BERMUDA CAPTIVE REINSURANCE SUBSIDIARY COULD EXPERIENCE SIGNIFICANT LOSSES Tarheel, our captive reinsurance subsidiary, establishes loss reserves when insured events occur for the ultimate settlement costs of all losses and loss expenses incurred in connection with reinsurance written by it. Under GAAP, Tarheel is not permitted to establish loss reserves until an insured event occurs. As a result, only loss reserves applicable to insured events up to the reporting date may be set aside, with no allowance for the provision of a contingency reserve to account for future losses. To protect against the adverse consequences of the accumulation of losses from catastrophic occurrences, Tarheel purchases reinsurance under which other reinsurers agree to pay all claims and related expenses for certain specified amounts, subject to an aggregate maximum amount. If a reinsurer is unable to meet any of its obligations to Tarheel under the reinsurance agreements, Tarheel will be responsible for the payment of all claims and claim settlement expenses ceded to the reinsurer by Tarheel. Any such failure by a reinsurer, the inability to obtain reinsurance, or any claims in excess of the maximum aggregate amount of reinsurance coverage could have a material adverse effect on us. OUR BUSINESS IS EXTREMELY COMPETITIVE AND WE COULD LOSE BUSINESS TO OUR COMPETITORS The manufactured housing industry is highly competitive with particular emphasis on price, financing terms and features offered. There are many retail dealers and financing sources in most locations where we have retail and financing operations. Several of these financing sources are larger than we are and have significantly greater access to capital. There are numerous companies producing manufactured homes in our market area, many of which are in direct competition with us. Certain of these manufacturers, which sell the majority of their homes through independent dealers, are larger than we are and have greater financial resources. A number of our manufacturing competitors are establishing their own retail distribution systems. To the extent these competitors successfully enter the retail market, we could face increased competition at that level. There can be no assurance that any of this competition will not have a material adverse effect on us. ALTHOUGH THESE NOTES ARE REFERRED TO AS "SENIOR NOTES," THEY EFFECTIVELY WILL BE SUBORDINATED TO OUR SECURED INDEBTEDNESS. The Notes are unsecured and therefore effectively will be subordinated to any secured indebtedness we may incur to the extent of the value of the assets securing such indebtedness. In the event of a bankruptcy or similar proceeding involving us, our assets that serve as collateral will be available to satisfy the obligations under any secured indebtedness before any payments are made on the Notes. In addition, our subsidiaries will not guarantee the Notes. In the event of a bankruptcy, liquidation or reorganization of any of our subsidiaries, creditors of our subsidiaries will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us, except to the extent we may also have a claim as a creditor. Assuming this offering had been completed on December 31, 1998, the Notes effectively would have been subordinated to approximately $289.9 million of secured indebtedness (which would have included $163.2 million in outstanding indebtedness under our $325.0 million revolving warehouse financing facility) and $211.8 million of indebtedness of subsidiaries of Oakwood Homes Corporation (all of which was secured indebtedness). S-10 YOU CANNOT BE SURE THAT AN ACTIVE TRADING MARKET WILL DEVELOP FOR THE NOTES. Prior to this offering, there was no public market for the Notes. The Notes will not be listed on any securities exchange or included in any automated quotation system. We have been informed by the underwriters that they intend to make a market in the Notes after this offering is completed. However, the underwriters are not obligated to do so and may cease their market-making at any time without notice. In addition, the liquidity of the trading in the Notes, and the market price quoted for the Notes, may be adversely affected by changes in the overall market for these types of securities and by changes in our financial performance, in the market for our asset-backed securities or in the prospects for our company or for companies in our industry generally. As a result, you cannot be sure that a trading market will develop for the Notes. USE OF PROCEEDS We estimate our net proceeds from the sale of the Notes will be approximately $297.6 million after deducting underwriting discounts and commissions and estimated offering expenses. We intend to use the proceeds from this offering as follows: o $100.0 million to repay a term loan from NationsBank, N.A. made on April 1, 1998 to finance the acquisition of Schult Homes Corporation, a producer of manufactured and modular housing. This term loan bears interest at LIBOR plus 1% (6.56% at December 31, 1998) and matures on March 30, 1999. o To repay borrowings under our $175.0 million revolving credit facility (the "Revolving Credit Facility") with First Union National Bank, as agent. At December 31, 1998, $140.0 million was outstanding under the Revolving Credit Facility. NationsBank, N.A. and First Union National Bank are both lenders under the Revolving Credit Facility, which matures on November 7, 1999. Borrowings under the Revolving Credit Facility currently bear interest at LIBOR plus .5%. The weighted average interest rate with respect to borrowings under this facility was 6.07% at December 31, 1998. o All remaining amounts will be used to repay borrowings under our $325.0 million revolving warehouse financing facility (the "Warehouse Facility") with a multi-seller conduit commercial paper issuer sponsored by NationsBank, N.A. At December 31, 1998, $220.8 million was outstanding under this facility and the weighted average interest rate with respect to borrowings thereunder was 6.32%. The Warehouse Facility terminates March 25, 1999. Borrowings under both the Revolving Credit Facility and the Warehouse Facility during the past twelve months were used to fund our consumer finance activities and general working capital requirements. We are permitted under the terms of these facilities to subsequently reborrow amounts repaid. CAPITALIZATION The following table sets forth our capitalization as of December 31, 1998 on a historical basis and as adjusted to give effect to the assumed amount for this offering of $300.0 million and the application of the estimated net proceeds as described under "Use of Proceeds." You should read this table in conjunction with our summary financial data presented elsewhere in this prospectus supplement along with our consolidated financial statements and the related notes incorporated by reference in this prospectus supplement.
AS OF DECEMBER 31, 1998 ------------------------- ACTUAL AS ADJUSTED ------------ ------------ (UNAUDITED) (DOLLARS IN THOUSANDS) Cash and cash equivalents ......... $ 29,287 $ 29,287 ========== ========== Short-term borrowings ............. $ 551,505 $ 253,924 Notes and bonds payable ........... 69,367 369,367 Shareholders' equity .............. 561,854 561,854 ---------- ---------- Total capitalization ............. $1,182,726 $1,185,145 ========== ==========
S-11 DESCRIPTION OF NOTES The following description of the particular terms of the Notes offered hereby supplements and, to the extent inconsistent therewith, supersedes the description of the general terms of the debt securities, of which the Notes are a part, set forth under the heading "Description of Debt Securities" in the accompanying base prospectus, which should be read in conjunction with this prospectus supplement. Because this is a summary, it does not contain all the information that may be important to you. You should read the entire indenture, including the definitions of certain terms, and the applicable prospectus supplement before you make any investment decision. Capitalized terms used below and not otherwise defined have the meanings set forth in the indenture. The covenants in the indenture do not necessarily protect you from a decline in our credit quality due to highly leveraged or other transactions involving the Company. GENERAL The Notes will be unsecured obligations of ours and are to be issued under an Indenture, dated as of , 1999 (the "indenture"), among us, as issuer, and The First National Bank of Chicago, as trustee (the "trustee"). First National Bank of Chicago is a lender under our Revolving Credit Facility. The Notes are limited to an aggregate principal amount of $ . The Notes will mature on . Interest on the Notes will accrue from , 1999 and will be payable semi-annually on and , beginning , 1999, and at maturity to the persons in whose names the Notes are registered at the close of business on the or prior to the applicable payment date, at the annual rate set forth on the cover page of this prospectus supplement. Payments on the Notes will be made to DTC (as defined below). See the provisions under the heading "Description of Debt Securities -- Book-Entry, Delivery and Form" in the accompanying base prospectus. The Notes will not be listed on any securities exchange. The Notes will be a new issue of securities with no established trading market and there can be no assurance as to whether any market will develop, the liquidity of any markets that may develop or the prices at which holders of the Notes would be able to sell the Notes. BOOK-ENTRY, DELIVERY AND FORM The Notes will be issued in whole or in part in the form of one or more global debt securities that will be deposited with, or on behalf of The Depository Trust Company, New York, New York ("DTC"), and registered in the name of a nominee of DTC. Global debt securities may not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee to a successor of DTC or a nominee of the successor. A further description of DTC's procedures with respect to global debt securities representing the Notes is set forth in the accompanying prospectus under "Description of Debt Securities -- Book-Entry, Delivery and Form." RANKING The Notes will rank pari passu with all our other unsecured and unsubordinated indebtedness. COVENANTS The Notes will be subject to the restrictive covenants described below and the defeasance provisions described under "Description of Debt Securities -- Defeasance" in the accompanying base prospectus. RESTRICTIONS ON SECURED DEBT So long as any Notes are outstanding, we will not be permitted to issue, assume or guarantee, and will not permit any restricted subsidiary to issue, assume or guarantee, any indebtedness secured by a mortgage, pledge, security interest, lien or encumbrance (referred to in this section as "liens") on or of any of our or a restricted subsidiary's property, or on the shares of stock or debt of any restricted subsidiary now owned or later acquired by us. However, this restriction will not apply if the Notes are secured by a lien ranking ratably with and equal to (or at our option, prior to) the secured indebtedness. In any event, the foregoing restriction will not apply to the following: (i) liens on indebtedness outstanding or available to us under facilities existing on the date of original issuance of the Notes; S-12 (ii) liens on indebtedness secured by the stock of a restricted subsidiary and indebtedness of a restricted subsidiary existing when the restricted subsidiary becomes a subsidiary, other than indebtedness created in connection with the transaction by which the restricted subsidiary becomes a subsidiary of ours; (iii) liens on indebtedness of ours or any subsidiary of ours having a term of less than 365 days arising from any funding arrangement with one or more financial institutions or other lenders or purchasers exclusively to finance the purchase, origination or production of loans held or to be held for sale by us or by any of our subsidiaries for the purpose of pooling those loans prior to securitization or sale of those loans in the ordinary course of our or our subsidiaries' business; (iv) liens on property at the time of its acquisition by us or a restricted subsidiary that secure obligations assumed by us or a restricted subsidiary, or on the property of an entity at the time it is merged into us or a restricted subsidiary (other than indebtedness created in contemplation of the acquisition of the property or the consummation of such a merger); (v) liens to secure the payment of some or all of the purchase price of property or loan portfolios upon the acquisition of that property or those loan portfolios by us or a restricted subsidiary; (vi) liens on indebtedness arising from conditional sales agreements or title retention agreements relating to property acquired by us or a restricted subsidiary; (vii) liens on indebtedness owed by a restricted subsidiary to us or to another restricted subsidiary that is wholly-owned (directly or indirectly) by us; (viii) mechanics', materialmen's, carriers' or similar liens arising in the ordinary course of business (including in the construction of facilities) relating to obligations not due or which are being contested; (ix) liens for taxes not due or being contested, landlords' liens, tenants' rights under leases, and similar liens not impairing the use or value of the property involved; (x) liens on any property to secure all or part of the cost of improvements or construction on the property or indebtedness incurred to provide funds for that purpose in a principal amount not exceeding the cost of the improvements or construction; (xi) liens incurred in connection with any amendment, restatement, supplement, renewal, replacement, extension, refinancing or refunding in whole or in part, of indebtedness, provided that the principal amount of the indebtedness secured by a lien will not exceed the principal amount of indebtedness secured at the time any such action is taken (other than with respect to the Revolving Credit Facility, as to which the principal amount of indebtedness may be increased) and that any such action will be limited to the portion of assets that secured the lien at the time any such action was taken. In addition, the Company and its restricted subsidiaries may issue, assume or guarantee indebtedness that would be subject to the foregoing restrictions without equally and ratably securing the Notes if immediately thereafter the sum of (i) the aggregate principal amount of all indebtedness outstanding that would be subject to the foregoing restrictions (excluding indebtedness permitted under the exceptions to the restriction set forth above), and (ii) all "attributable debt from a sale and leaseback" (as defined below) (excluding any sale and leaseback as to which the net proceeds of the property sold or transferred are applied to retire indebtedness or to the purchase of property as described under " -- Restrictions on Sale and Leaseback Transactions" below) as of the date of determination would not exceed 15% of Consolidated Net Tangible Assets (as those terms are defined below). RESTRICTIONS ON DEBT OF RESTRICTED SUBSIDIARIES So long as any Notes are outstanding, none of our restricted subsidiaries will be permitted to issue, assume or guarantee any indebtedness. The foregoing restriction will not apply to the following: (i) any indebtedness of any restricted subsidiary permitted under the provisions described under the heading "Restrictions on Secured Debt" above; (ii) indebtedness existing on the date of original issuance of the Notes; S-13 (iii) indebtedness of a restricted subsidiary existing when the restricted subsidiary becomes a subsidiary, other than indebtedness created in connection with the transaction by which the restricted subsidiary becomes a subsidiary of ours; (iv) indebtedness owed by a restricted subsidiary to us or to another restricted subsidiary that is wholly-owned (directly or indirectly) by us; and (v) any amendment, restatement, supplement, renewal, replacement, extension or refunding in whole or in part, of indebtedness permitted at the time of its original incurrence. In addition, any restricted subsidiary may issue, assume or guarantee indebtedness if immediately thereafter the sum of (i) the aggregate principal amount of all indebtedness outstanding (excluding indebtedness permitted under the exceptions to the restriction set forth above and under the heading "Restrictions on Secured Debt"), and (ii) all "attributable debt from a sale and leaseback" (as defined below) (excluding any sale and leaseback as to which the net proceeds of the property sold or transferred are applied to retire indebtedness or to the purchase of property as described under " -- Restrictions on Sale and Leaseback Transactions" below) as of the date of determination would not exceed 15% of Consolidated Net Tangible Assets (as those terms are defined below). RESTRICTIONS ON SALE AND LEASEBACK TRANSACTIONS We will not, and will not permit any restricted subsidiary to, sell or transfer, except to one another, any property if such a sale or transfer is made with the agreement, commitment or intention of leasing that property back to us or to a restricted subsidiary for a period of more than three years (referred to herein as a "sale and leaseback"), unless: (i) notice is promptly given to the Trustee of the sale and leaseback; (ii) we or the restricted subsidiary receives fair value for the property sold (as determined in good faith by the Board of Directors of the Company and a copy of the resolution setting forth that determination is delivered to the Trustee); and (iii) we or a restricted subsidiary, within 180 days after completion of the sale and leaseback, applies an amount equal to the net proceeds from the sale and leaseback to either (A) the redemption or retirement of the Notes or the repayment of other funded indebtedness ranking pari passu with the Notes, or (B) the purchase by us or the restricted subsidiary of property substantially similar to the property sold or transferred. In lieu of applying any or all of the net proceeds from a sale or leaseback to the redemption or retirement of indebtedness, the Company may deliver Notes to the Trustee for cancellation and reduce the amount to be applied to the redemption of Notes by an amount equal to the aggregate principal amount of Notes delivered. In addition, the Company and its restricted subsidiaries may enter into a sale and leaseback if immediately afterward the sum of (i) the aggregate amount of all indebtedness outstanding (excluding indebtedness permitted under the exceptions to the restriction set forth in " -- Restrictions on Secured Debt" above and (ii) all attributable debt from a sale and leaseback (as defined below) (excluding any sale and leaseback as to which the net proceeds of the property sold or transferred are applied to retire indebtedness or to the purchase of property as described in clause (B) of the immediately preceding paragraph) as of the date of determination would not exceed 15% of Consolidated Net Tangible Assets. As used in this section, "attributable debt from a sale and leaseback" means the present value (discounted at the weighted average effective interest cost of the outstanding Notes) of all remaining rental payments under the lease due through the date through which the lease has been or may, at the option of the lessor, be extended or, if earlier, through the earliest date on which the lessee may terminate the lease upon payment of a penalty (which penalty will be considered in calculating the present value), after excluding all amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water and utility rates and similar charges. RESTRICTIONS ON MERGERS, CONSOLIDATIONS AND TRANSFERS OF ASSETS The restrictions described under the heading "Restrictions on Consolidation, Merger and Certain Sales of Assets" in the accompanying prospectus are superseded in their entirety by this section entitled "Restrictions on Mergers, Consolidations and Transfers of Assets." S-14 We will not, and will not permit any restricted subsidiary to, consolidate or merge into or sell, assign, transfer, lease or otherwise dispose of all or substantially all of its assets other than in the ordinary course of its business or any of the capital stock or other equity interests of any restricted subsidiary held by us or a restricted subsidiary to another person unless: (a)(i) the person is a corporation organized under the laws of the United States of America or any state thereof or the District of Columbia; (ii) the person assumes by supplemental indenture all of our obligations or the obligations of the restricted subsidiary, as the case may be, relating to the Notes and the Indenture; and (iii) immediately after the transaction no event of default, and no event which, after notice or lapse of time or both, would become an event of default, exists; provided that this clause (iii) will not restrict or be applicable to a merger, consolidation or liquidation of a restricted subsidiary with or into us or with or into another subsidiary that is wholly-owned, directly or indirectly, by us; or (b) in the case of the sale, assignment, transfer, lease or other disposition of all or substantially all of the assets or any capital stock or other equity interests of any restricted subsidiary, we (A) receive, upon the occurrence of such an event, cash consideration at least equal to the fair market value of the assets, stock or equity interests sold, as determined in good faith by our Board of Directors, and (B) apply within 180 days of such an action the proceeds received to (1) permanently repay indebtedness of ours or of a restricted subsidiary ranking pari passu with the Notes, (2) the purchase of property or assets (including the origination of consumer loans) of a business related to any business that we or any of our restricted subsidiaries conduct at that time, (3) redemption of the Notes, or (4) any combination of clauses 1, 2 and 3. The procedures to be followed by us in making an offer to purchase Notes from the holders under this section, and for the acceptance of the offer by the holders, will be the same as those set forth below under "Purchase of the Notes at the Option of the Holder" relating to a Change in Control. Except as set forth in clause (b) above, upon any such consolidation, merger, sale, assignment, transfer, lease or other disposition, the successor corporation will be substituted for us or the restricted subsidiary, as the case may be, under the Indenture. The successor corporation may then exercise every power and right of ours or of the restricted subsidiary under the Indenture, and we or the restricted subsidiary, as the case may be, will be released from all of our or its liabilities and obligations relating to the Notes and the Indenture. If we or any restricted subsidiary leases all or substantially all of our or its assets, the lessee corporation will be the successor to us or the restricted subsidiary and may exercise every power and right of ours or of the restricted subsidiary, as the case may be, under the Indenture, but we or the restricted subsidiary, as the case may be, will not be released from our or its obligations to pay the principal of and premium, if any, and interest, if any, on the Notes. OPTIONAL REDEMPTION The Notes will be redeemable, in whole or in part, at our option at any time at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes, and (ii) as determined by the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest on the Notes (not including any portion of those payments of interest accrued as of the redemption date) discounted to the redemption date on a semi-annual basis assuming a 360 day year consisting of twelve 30 day months at the Adjusted Treasury Rate (as defined below) plus 25 basis points plus, in each case, accrued and unpaid interest on the Notes to the redemption date. In the case of a partial redemption, selection of the Notes for redemption will be made pro rata, by lot or such other method as the trustee in its sole discretion deems appropriate and fair; however, any redemption relating to a public equity offering of equity securities will be made on a pro rata basis or on as nearly a pro rata basis as practicable (subject to DTC procedures). No Notes of a principal amount of $1,000 or less will be redeemed in part. Notice of any redemption will be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each holder of the Notes to be redeemed at its registered address. If any Note is to be redeemed in part only, the notice of redemption that relates to the Note will state the portion of the principal amount of the Note to be redeemed. A new Note in a principal amount equal to the unredeemed portion of the Note will be issued in the name of the holder of the Note upon surrender for cancellation of the original Note. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the Notes or the portions of the Notes called for redemption. S-15 MANDATORY REDEMPTION We will not be required to make any mandatory sinking fund payments with regard to the Notes. PURCHASE OF THE NOTES AT THE OPTION OF THE HOLDER If any Change in Control Triggering Event regarding us occurs on or prior to maturity of the Notes, each holder of Notes will have the right, at the holder's option, subject to the terms and conditions of the indenture, to require us to purchase all or any part of the holder's Notes (so long as the principal amount is $1,000 or an integral multiple of $1,000) on the date that is 30 business days after the occurrence of the Change in Control Triggering Event (the "Purchase Date"). If a holder exercises this option, we will purchase that holder's Notes for cash equal to 101% of the principal amount of the Notes plus any interest accrued and unpaid on the Notes through the Purchase Date (the "Purchase Price"). Within 15 business days after a Change in Control Triggering Event, we are obligated to mail to the Trustee and to all holders of the Notes at their addresses shown in the securities register (and to beneficial owners as required by applicable law) a notice regarding the Change in Control Triggering Event. The notice shall state, among other things: (i) the date by which the holder must give the Purchase Notice (as defined below); (ii) the Purchase Price; (iii) the Purchase Date; (iv) the name and address of the trustee and of any other office or agency maintained for the purpose of the surrender of the Notes for purchase; (v) the procedures for withdrawing a Purchase Notice; and (vi) the procedures that a holder must follow to exercise these rights. We will have the notice published in a daily newspaper of national circulation. To exercise the right to have us purchase the Notes, a holder must deliver written notice (a "Purchase Notice") to the trustee or to any other office or agency maintained for that purpose of the holder's exercise of that right before the close of business on the business day immediately prior to the Purchase Date. The Purchase Notice must state: (i) the certificate number of the Note to be delivered by the holder for purchase by us; (ii) the portion of the principal amount of the Notes to be purchased (which must be $1,000 or an integral multiple of $1,000); and (iii) that the Notes will be submitted to us for purchase on the Purchase Date pursuant to the applicable provisions of the Notes. A holder may withdraw any Purchase Notice by written notice of withdrawal delivered to the trustee or to any other office or agency maintained for such purpose no later than the business day immediately prior to the Purchase Date. The notice of withdrawal must state the principal amount and the certificate numbers of the Notes as to which the withdrawal notice relates and the principal amount, if any, of the holder's Notes which remains subject to the original Purchase Notice. Payment of the Purchase Price for a Note for which a Purchase Notice has been delivered and not withdrawn is conditioned on delivery of the Note (together with any endorsements) to the trustee or to any other office or agency maintained for that purpose, at any time (whether prior to, on or after the Purchase Date) after delivery of the Purchase Notice. Payment of the Purchase Price for the Note will be made promptly following the later of the Purchase Date or the time of delivery of the Note. If we have deposited with the trustee, in accordance with the indenture, money sufficient to pay the Purchase Price of the Note on the Purchase Date, then, on and after the Purchase Date, the Note will cease to be outstanding and interest on the Note will cease to accrue, whether or not the Note is delivered to the trustee or to any other office or agency maintained for that purpose, and all other rights of the holder will terminate (other than the right to receive the Purchase Price on delivery of the Note). In accordance with the indenture, no Notes may be purchased pursuant to a Change in Control Triggering Event if there has occurred and is continuing an event of default other than a default in the payment of the Purchase Price, relating to the Notes. We will comply with and make all filings required under all federal and state securities laws regulating the purchase of the Notes at the option of holders upon a Change in Control Triggering Event, including, if applicable, Section 14(e) S-16 of the Securities and Exchange Act of 1934, as amended, (the "Exchange Act") and Rule 14e-1 promulgated under the Exchange Act and any other applicable tender offer rules. The Change in Control Triggering Event purchase feature of the Notes may in certain circumstances make more difficult or discourage a takeover of us and, as a result, the removal of incumbent management. If a Change in Control Triggering Event were to occur, we cannot assure you that we would have sufficient funds to pay the Purchase Price for all Notes tendered by the holders. A default by us on our obligation to pay the Purchase Price could result in acceleration of the payment of other indebtedness of ours that is outstanding at the time. SAME-DAY SETTLEMENT AND PAYMENT We will make all payments of principal and interest under the Notes in immediately available funds. Secondary trading in the long-term notes and notes of corporate issuers is generally settled in clearing house or next-day funds. In contrast, the Notes will trade in DTC's Same-Day Funds Settlement System until maturity or until the Notes are issued in certificated form, and secondary market trading activity in the Notes will therefore be required by DTC to settle in immediately available funds. No assurance can be given as to the effect, if any, of settlement in immediately available funds on trading activity in the Notes. DEFINITIONS "Adjusted Treasury Rate" means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date. "Change in Control" means, with regard to us, the occurrence of: (i) any consolidation, share exchange or merger regarding us in which we are not the continuing or surviving corporation or where our voting stock would be converted into cash, securities or other property, other than a merger in which the holders of our voting stock immediately prior to the merger have the same or greater direct or indirect proportionate ownership of the surviving corporation's voting stock immediately after the merger as they had of our voting stock immediately before the merger, or (ii) any person, including affiliates of ours (but not including us, our restricted subsidiaries, employee stock ownership plans or employee benefit plans of ours or our subsidiaries), filing a Schedule 13D or 14D-1 (or any successor schedule, form or report under the Exchange Act) disclosing that such a person has become the beneficial owner of 50% or more of the our voting stock. "Change in Control Triggering Event" means the occurrence of both a Change in Control and a Rating Decline. "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of a selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. "Comparable Treasury Price" means, with respect to any redemption date, (i) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotation, or (ii) if the Trustee obtains fewer than three Reference Treasury Dealer Quotations, the average of the quotations. "Consolidated Net Tangible Assets" means, at any date, the total assets appearing on our and our subsidiaries' most recently prepared consolidated balance sheet at the end of a fiscal quarter, prepared in accordance with GAAP at the time of calculation, less (a) all current liabilities as shown on the balance sheet and (b) Intangible Assets. "Intangible Assets" means the value (net of applicable reserves), as shown on or reflected in our and our subsidiaries' most recent consolidated balance sheet, of (a) all trade names, trademarks, licenses, patents, copyrights, and goodwill; (b) organizational costs; and (c) deferred charges (other than prepaid items such as insurance, taxes, interest, commissions, rents and similar items and intangible assets being amortized). In no event, however, will the term "Intangible Assets" include product development costs. "Investment Grade" means a rating of BBB- or higher by Standard & Poor's Corporation ("S&P") and Baa3 or higher by Moody's Investors Service ("Moody's") or the equivalent of those ratings by either of those Rating Agencies. "Quotation Agent" means the Reference Treasury Dealer appointed by us. S-17 "Rating Agency" means (i) S&P, (ii) Moody's, or (iii) if S&P or Moody's or both shall not make a rating of the Notes publicly available, a nationally recognized securities rating agency or agencies selected by us. "Rating Category" means (i) regarding S&P, any of the following categories: BB, B, CCC, CC, C and D (or equivalent successor categories), (ii) regarding Moody's, any of the following categories: Ba, B, Caa, Ca and C (or equivalent successor categories), and (iii) the equivalent of any such category of S&P or Moody's used by another Rating Agency. Gradations within Rating Categories (+ and - for S&P; 1, 2 and 3 for Moody's; or the equivalent gradations for another Rating Agency) will be taken into account in determining whether the rating of the Notes has decreased by one or more gradations. For example, regarding S&P, a decline in rating from BB+ to BB will constitute a decrease of one gradation. "Rating Date" means the date that is 30 days prior to the earliest of (i) a Change in Control, (ii) public notice of a Change in Control and (iii) public notice of the intention by us to effect a Change in Control. "Rating Decline" means the occurrence on or within 30 days after the earlier of the date of public notice of the occurrence of a Change in Control or the public announcement of our intention to effect a Change in Control (which period will be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by any of the Rating Agencies) of: (i) If the Notes are rated by either Moody's or S&P on the Rating Date as Investment Grade, the rating of the Notes by both Moody's and S&P below Investment Grade, or (b) If the Notes are rated below Investment Grade by both Moody's and S&P on the Rating Date, the rating of the Notes is decreased by either Moody's or S&P by one or more gradations (including gradations within Rating Categories as well as between Rating Categories). "Reference Treasury Dealer" means (i) each of NationsBanc Montgomery Securities LLC, First Union Capital Markets Corp. and Merrill Lynch & Co. and their respective successors; however, if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), we will substitute another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer selected by us. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by us, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by the Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding the redemption date. "restricted subsidiary" means any corporation or other entity of which we hold capital stock or other equity interests representing at least a majority of the outstanding aggregate voting power. S-18 UNDERWRITING Subject to the terms and conditions set forth in an underwriting agreement among us and the underwriters named below, we have agreed to sell to each of the underwriters and each of the underwriters severally has agreed to purchase from us the principal amount of the Notes set forth opposite its name below. The underwriting agreement provides that the obligations of the underwriters are subject to certain conditions and that the underwriters will be obligated to purchase all of the Notes if any are purchased.
PRINCIPAL UNDERWRITERS AMOUNT OF NOTES - ------------------------------------------------------------ ---------------- NationsBanc Montgomery Securities LLC ...................... $ First Union Capital Markets Corp. .......................... Merrill Lynch, Pierce, Fenner & Smith Incorporated ......... Total ..................................................... $ ================
The underwriters propose to offer the Notes to the public at the public offering price set forth on the cover page of this prospectus supplement and to dealers at that price less a concession of no more than % of the principal amount of the Notes. The underwriters may allow, and the dealers may reallow, a discount of no more than % of the principal amount of the Notes to other dealers. The public offering price, concession and discount may be changed after the offering to the public of the Notes. The Notes are a new issue of securities with no established trading market. We do not intend to apply for listing of the Notes on any national securities exchange or for quotation of the Notes on any automated dealer quotation system. The underwriters have advised us that they intend to make a market in the Notes after the offering, although they are under no obligation to do so. The underwriters may discontinue any market-making activities at any time without any notice. We can give no assurance as to the liquidity of the trading market for the Notes or that a public trading market for the Notes will develop. If no active public trading market develops, the market price and liquidity of the Notes may be adversely affected. If the Notes are traded, they may trade at a discount from their initial offering price, depending on factors such as prevailing interest rates, the market for similar securities, the performance of our company as well as other factors not listed here. We have agreed to indemnify the underwriters against, or to contribute to payments that the underwriters may be required to make with respect to, certain liabilities, including liabilities under the Securities Act of 1933, as amended. The underwriters, as well as dealers and agents, may purchase and sell Notes in the open market. These transactions may include stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. Stabilizing transactions consist of bids and purchases made to prevent or slow a decline in the market price of the Notes. Syndicate short positions arise when the underwriters or agents sell more Notes than we are required to sell to them in the offering. The underwriters may also impose penalty bids whereby the underwriting syndicate may reclaim selling concessions allowed either syndicate members or broker dealers who sell Notes in the offering for their own account if the syndicate repurchases the Notes in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the Notes, which may be higher as a result of these activities than it might otherwise be in the open market. These activities, if commenced, may be discontinued at any time without notice. We and the underwriters make no representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the Notes. In addition, we and the underwriters make no representation that the underwriters will engage in those types of transactions or that those transactions, once commenced, will not be discontinued without notice. NationsBank, N.A., an affiliate of NationsBanc Montgomery Securities LLC, has made a $100.0 million term loan to us and received customary fees in connection therewith. This term loan will be repaid from the proceeds of this offering. Our $175.0 million Revolving Credit Facility is with First Union National Bank, as agent. First Union National Bank and NationsBank, N.A. are both lenders under the Revolving Credit Facility. First Union Capital Markets Corp. is an affiliate of First Union National Bank. Borrowings under the Revolving Credit Facility will be repaid from the proceeds of this offering. At December 31, 1998, $140.0 million was outstanding under the Revolving Credit Facility. We have a $325.0 million Warehouse Facility with a multi-seller conduit commercial paper issuer sponsored by NationsBank, N.A. NationsBank, N.A. is an affiliate of NationsBanc Montgomery Securities LLC. A portion of the proceeds of this offering will be used to repay borrowings under the Warehouse Facility. S-19 Each of the underwriters, and certain of their affiliates, have provided, and may continue to provide, investment banking, financial advisory, commercial banking and other services to us and have received, and may continue to receive, customary fees in connection with those services. We estimate that our share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $500,000. LEGAL MATTERS Kennedy Covington Lobdell & Hickman, L.L.P. will issue opinions about the validity of the Notes and certain other legal matters for us in connection with this offering. Kennedy Covington Lobdell & Hickman, L.L.P. is located at 100 North Tryon Street, Suite 4200, Charlotte, North Carolina 28202. Clarence W. Walker, a partner in the firm of Kennedy Covington Lobdell & Hickman, L.L.P., is a member of the Board of Directors of the Company. As of February 15, 1999, partners, counsel and associates of Kennedy Covington Lobdell & Hickman, L.L.P. and their spouses and minor children beneficially owned an aggregate of 115,545 shares of common stock of the Company (which includes 56,488 shares subject to options that are presently exercisable or exercisable within 60 days). McGuire, Woods, Battle & Boothe, LLP will issue opinions regarding certain legal matters with respect to the Notes for the underwriters. McGuire, Woods, Battle & Boothe, LLP is located at 100 North Tryon Street, Suite 2900, Charlotte, North Carolina 28202. EXPERTS The Company's consolidated financial statements appearing in our Annual Report on Form 10-K for the fiscal year ended September 30, 1998 have been audited by PricewaterhouseCoopers LLP, independent public accountants. These financial statements are incorporated by reference in this prospectus supplement in reliance on the report of PricewaterhouseCoopers LLP, given on the authority of such firm as experts in auditing and accounting. S-20 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED FEBRUARY 22, 1999 PROSPECTUS [OAKWOOD LOGO APPEARS HERE] $400,000,000 OAKWOOD HOMES CORPORATION DEBT SECURITIES --------------- Oakwood Homes Corporation (the "Company") intends to issue, from time to time in one or more series, its unsecured debt securities (the "Debt Securities") with an aggregate initial public offering price or purchase price of up to $400,000,000 or the equivalent thereof in one or more foreign or composite currencies. The Debt Securities will be offered for sale on terms to be determined when the agreement to sell is made or at the time of sale, as the case may be. For each issue of Debt Securities in respect of which this Prospectus is being delivered, there is an accompanying prospectus supplement (the "Prospectus Supplement"). The Prospectus Supplement sets forth for each series the designation, designated currency (which may be U.S. dollars, any other currency or a composite currency), aggregate principal amount, rate (which may be fixed, floating or adjustable) or method of calculation of interest, if any, and dates for payment thereof, premium, if any, maturity, authorized denominations, any subordination terms, initial price, any exchangeability, redemption or prepayment rights at the option of the Company or the holder, any covenants or events of default that are in addition to or different from that described herein, and other special terms of the Debt Securities, together with the terms of the offering of the Debt Securities and the net proceeds to the Company from the sale thereof. In the event of the issuance of Debt Securities at original issue discount, the aggregate principal amount of Debt Securities offered hereby will be a higher amount, provided that the total price at which Debt Securities are sold to the public pursuant to this Prospectus will not exceed $400,000,000, or the equivalent thereof in other currencies or composite currencies. If any agents of the Company or any underwriters are involved in the sale of any series of Debt Securities in respect of which this Prospectus is being delivered, the names of such agents or underwriters and any applicable commissions and discounts are set forth in the Prospectus Supplement. Unless otherwise specified in a Prospectus Supplement, the Debt Securities, when issued, will be unsecured and unsubordinated obligations of the Company and will rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of the Company. The Company may (but is not required to) make application to list one or more series of Debt Securities on one or more national securities exchanges. Any such application to list the Debt Securities is described in the Prospectus Supplement related thereto. --------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF DEBT SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT APPLICABLE TO SUCH DEBT SECURITIES. --------------- The Debt Securities will be sold directly, through agents designated from time to time, or through underwriters or dealers. The names of any underwriters or agents of the Company involved in the sale of the Debt Securities in respect of which this Prospectus is being delivered and any applicable commissions or discounts will be set forth in the applicable Prospectus Supplement. --------------- The date of this Prospectus is February 22, 1999. CERTAIN PERSONS, INCLUDING ANY UNDERWRITERS, PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBT SECURITIES. SUCH TRANSACTIONS MAY INCLUDE STABILIZING AND THE PURCHASE OF THE DEBT SECURITIES TO COVER SHORT POSITIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION." --------------- AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; and at the regional offices of the Commission at 7 World Trade Center, Suite 1300, New York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained at prescribed rates from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains a Web site that contains reports, proxy and information statements and other information concerning registrants that file electronically with the Commission, which can be accessed at http://www.sec.gov. Such reports, statements and other information concerning the Company can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. The Company's common stock is listed on the New York Stock Exchange. This Prospectus constitutes a part of a registration statement on Form S-3 (the "Registration Statement") filed by the Company with the Commission under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus omits certain of the information contained in the Registration Statement, and reference is hereby made to the Registration Statement and to the exhibits relating thereto for further information with respect to the Company and the Debt Securities offered hereby. Any statements contained herein concerning the provisions of any document are not necessarily complete and, in each instance, reference is hereby made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. DOCUMENTS INCORPORATED BY REFERENCE The Company's Annual Report on Form 10-K for the year ended September 30, 1998, the Company's Current Report on Form 8-K dated October 13, 1998 and the Company's Quarterly Report on Form 10-Q for the Quarterly Period ended December 31, 1998, which were previously filed by the Company with the Commission under the Exchange Act, are incorporated herein by reference. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the Debt Securities offered hereby (except to the extent specified therein or in rules or regulations of the Commission) shall be deemed to be incorporated herein by reference and to be part hereof from the date of filing of such documents. Any statement contained herein or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom a copy of this Prospectus has been delivered, on the written or oral request of such person, a copy of any or all of the documents referred to above which have been or may be incorporated in this Prospectus by reference other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into the incorporated document. Requests for such copies should be directed to: Oakwood Homes Corporation, 7800 McCloud Road, Greensboro, North Carolina 27425, Attention: Secretary; Telephone: (336) 664-2400. 2 THE COMPANY Oakwood Homes Corporation, a North Carolina corporation (the "Company") designs, manufactures and markets manufactured and modular homes. The Company operates 32 manufacturing plants across the United States. The Company sells manufactured homes primarily through 362 Company-owned sales centers and over 100 exclusive retailers and key dealers. The Company operates its sales centers under the names Oakwood(R) Mobile Homes, Freedom Homes(R), Victory Homes, Schult(R) Homes and Golden West Homes(R). During fiscal 1998, approximately 96% of the Company's retail sales of new homes were of homes manufactured by the Company. The Company believes that it is the largest retailer, and the third largest manufacturer, of manufactured homes in the United States. Through our captive reinsurance subsidiary, the Company also reinsures risks with respect to homeowners insurance, credit life insurance and other insurance policies written for customers in connection with the Company's retail sales activities. The Company combines manufacturing, retail sales and financing of manufactured homes. The Company believes that the extent of its integration provides it with a competitive advantage over many others in the industry. The Company's ability to control the design, manufacture and distribution of its homes enables it to plan its inventory requirements, to control the quality and servicing of its products and to respond promptly to changes in the retail market. In addition, the Company's ability to finance its sales allows the Company to make credit decisions promptly and to minimize the inconvenience to the customer of obtaining credit. The Company provides financing for the majority of homes it sells through loans originated by the Company. During fiscal 1998, approximately 87% of the Company's retail unit sales were financed by installment sales contracts or loans that the Company originated. The Company has historically obtained funds to finance loans primarily through sales of REMIC trust certificates to institutional investors. The Company also uses short-term credit facilities and internally generated funds to support loans until a pool of loans is accumulated to provide for permanent financing generally at fixed rates. Internal financing of loans has allowed the Company to broaden its sources of financing by obtaining funds secured by loans directly from institutional investors and from public markets. The Company's ability to continue to finance loans is dependent upon the continued availability of adequate sources of capital. The Company was founded in 1946 and its principal executive offices are located at 7800 McCloud Road, Greensboro, North Carolina 27409-9634. Its telephone number at that location is (336) 664-2400. Except as otherwise indicated by the context, references herein to the "Company" include the Company, its subsidiaries and its predecessors. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratio of earnings to fixed charges for the Company for each of the last five fiscal years.
FISCAL QUARTER ENDED FISCAL YEAR ENDED SEPTEMBER 30, DECEMBER 31, - --------------------------------------------------- ------------------- 1994 1995 1996 1997 1998 1997 1998 - ------ ---- ---- ---- ---- ---- ---- 3.07 3.51 4.97 5.77 3.39 4.77 2.80
In calculating the ratio of earnings to fixed charges, earnings consist of earnings before income taxes plus fixed charges (excluding capitalized interest). Fixed charges consist of interest expense (which includes amortization of deferred financing costs), whether expensed or capitalized, and that portion of rental expense estimated to be attributed to interest. USE OF PROCEEDS Except as otherwise set forth in the Prospectus Supplement relating to a series of Debt Securities, net proceeds to be received by the Company from the sale of the Debt Securities will be used for general corporate purposes which may include expenses relating to potential acquisitions, repayment of certain long-term and short-term debt, and supporting the Company's retail expansion. DESCRIPTION OF DEBT SECURITIES The Debt Securities are to be issued under an Indenture (the "Indenture") to be entered into between the Company and the trustee named in the applicable Prospectus Supplement (the "Trustee"). A form of the Indenture has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. The following summaries of certain provisions of the Debt Securities and the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Indenture, including the definitions therein of certain terms. Wherever 3 particular provisions or defined terms of the Indenture (or of any form of Debt Security which is adopted pursuant to the Indenture) are referenced, such provisions or defined terms are incorporated herein by reference. As used under this heading, the term "Debt Securities" includes the debt securities being offered pursuant to this Prospectus and all other debt securities issued by the Company from time to time under the Indenture. GENERAL The Debt Securities will be unsecured obligations of the Company. Unless otherwise stated in the applicable Prospectus Supplement, the Debt Securities will be unsubordinated obligations of the Company and will rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of the Company. The Company may also issue Debt Securities that are subordinated in right of payment, in the manner and to the extent described in the applicable Prospectus Supplement, to all existing and future Senior Indebtedness (as defined in the applicable Prospectus Supplement) of the Company. The Indenture does not limit the amount of Debt Securities which can be issued thereunder and provides that Debt Securities may be issued thereunder in one or more series up to the aggregate principal amount which may be authorized from time to time by the Company. All Debt Securities of one series need not be issued at the same time and, unless otherwise provided, a series may be reopened, without the consent of any holder, for issuances of additional Debt Securities of such series. The Indenture provides that there may be more than one Trustee thereunder, each Trustee serving with respect to one or more series of Debt Securities. Reference is made to the Prospectus Supplement for the terms of the series of Debt Securities being offered thereby, including, where applicable: (i) the title of such Debt Securities; (ii) the limit, if any, upon the aggregate principal amount of such Debt Securities; (iii) the person to whom any interest on a Debt Security of that series shall be payable, if other than the person in whose name that Debt Security is registered at the close of business on the regular record date for such series; (iv) the date or dates, or the method of determination thereof, on which the principal and premium, if any, of such Debt Securities are payable; (v) the rate or rates (which may be fixed, floating or adjustable), or the method of determination thereof, at which such Debt Securities will bear interest, if any; the date or dates from which such interest will accrue or method by which such date or dates will be determined; the interest payment dates on which such interest will be payable and the record dates for the interest payable on such interest payment dates or method by which such date or dates will be determined; and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months; (vi) the place or places where the principal of, and premium, if any, and any interest on such Debt Securities will be payable; (vii) the price or prices at which, the period or periods within which, the currencies, currency units or composite currencies in which and the terms and conditions upon which such Debt Securities may be redeemed in whole or in part, at the option of the Company; (viii) the obligation, if any, of the Company to redeem or purchase such Debt Securities pursuant to any sinking fund or analogous provisions or at the option of a holder and the price or prices at which and the period or periods within which and the terms and conditions upon which such Debt Securities will be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation; (ix) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which such Debt Securities will be issuable; (x) whether the Debt Securities of that series or any covenants of the Company with respect to that series may be subject to defeasance or covenant defeasance and, if so, the requirements for such defeasance or covenant defeasance; (xi) if the amount of payments of principal of or any premium or interest on any Debt Securities of the series may be determined with reference to an index, formula or other method, the manner in which such amounts shall be determined; (xii) whether any of the Debt Securities of the series will be issued in book-entry form and, in such case, the depositary for such book-entry securities and the circumstances under which any such book-entry security may be registered for transfer or exchange in the name of a person other than such depositary or its nominee; (xiii) if other than the principal amount, the portion of the principal amount of such Debt Securities which will be payable upon declaration of acceleration of the maturity thereon pursuant to the Indenture; (xiv) provisions, if any, granting special rights to holders of the Debt Securities upon the occurrence of any specified events; (xv) any additions, deletions or changes in the Events of Default or covenants of the Company with respect to such Debt Securities; (xvi) the terms pursuant to which the Debt Securities of the series will be subordinate and subject in right of payment to the prior payment in full of all senior indebtedness of the Company; (xvii) whether the payment of principal and any premium or interest on the Debt Securities will be guaranteed by one or more guarantors, including subsidiaries of the Company; (xviii) whether Debt Securities of any series are to be issuable as registered securities, bearer securities or alternatively as bearer and registered securities and whether the bearer securities are to be issuable with coupons, without coupons or both, and any restrictions applicable to the offer, sale or delivery of the bearer securities and the terms, if any, upon which bearer securities of the series may be exchanged for registered securities of the series and vice versa; and (xix) any other terms of such Debt Securities whether or not consistent with the provisions of the Indenture. (Section 301) 4 If the principal of (and premium, if any) or any interest on Debt Securities of any series are payable in a foreign or composite currency, the restrictions, elections, federal income tax consequences, specific terms and other information with respect to such Debt Securities and such currency will be described in the Prospectus Supplement relating thereto. One or more series of Debt Securities may be sold at a discount below their stated principal amount bearing no interest or interest at a rate that at the time of issuance is below market rates ("Original Issue Discount Securities"). (Section 502) One or more series of Debt Securities may be debt securities the terms of which provide that the principal amount payable at the stated maturity may be more or less than the principal face amount of such security at the time of issuance ("Indexed Securities"). One or more series of Debt Securities may be variable-rate debt securities that may be exchangeable for fixed-rate debt securities. Federal income tax consequences and other special considerations applicable to any such series will be described in the Prospectus Supplement relating thereto. Unless otherwise provided in the applicable Prospectus Supplement, the principal of (and premium, if any) and any interest on Debt Securities will be payable at the principal corporate trust office of the Trustee at the location identified in the applicable Prospectus Supplement; provided, however, that payment of interest on Debt Securities may be made at the option of the Company by check mailed to the holders thereof or by wire transfer to an account maintained by the person entitled thereto. (Section 307) All moneys paid by the Company to the Trustee for the payment of principal of (and premium, if any) or any interest on any Debt Security that remains unclaimed by the holder of such Debt Security at the end of two years after such principal, premium or interest shall have become due and payable will be repaid by the Trustee to the Company on demand, and such holder will thereafter look only to the Company for payment thereof. (Section 1003) The Indenture contains no covenants or other provisions to afford protection to holders of the Debt Securities in the event of a highly leveraged transaction or a change in control of the Company, except to the limited extent described under " -- Covenants" and " -- Restrictions on Consolidation, Merger and Certain Sales of Assets" below. In the event such protective covenants or provisions are added at a later time, they will be described in the applicable Prospectus Supplement. Unless otherwise indicated in the applicable Prospectus Supplement, the Debt Securities will be issued only in fully-registered form without coupons, which form may be a Global Debt Security as described below, in denominations of $1,000 or any integral multiple thereof. See " -- Book-Entry, Delivery and Form." The Company will not charge a service charge for any registration of transfer or exchange of Debt Securities but may require payment of a sum sufficient to cover any tax or other governmental charge in connection therewith. (Section 305) The Debt Securities will be direct obligations of the Company and will be unsecured. The Indenture does not restrict the amount of additional unsecured debt which the Company may incur. BOOK-ENTRY, DELIVERY AND FORM If the related Prospectus Supplement so indicates, a series of Debt Securities will be issued in the form of one or more fully-registered global debt securities (each, a "Global Debt Security"). Each Global Debt Security will be deposited with, or on behalf of, The Depository Trust Company, New York, New York ("DTC") and registered in the name of DTC's nominee. One or more Global Debt Securities will represent all Debt Securities of a series that have the same terms, including, but not limited to, the same interest payment dates, rates of interest (if any), maturity and repayment and redemption provisions (if any). Ownership of beneficial interests in Global Debt Securities will be shown on, and transfers thereof will be effected only through, records maintained by DTC (with respect to interests of Participants (defined below)) and its Participants (with respect to interests of persons other than Participants). Payments of principal and interest on beneficial interests in Global Debt Securities will be made through the Trustee to DTC. Global Debt Securities will not be exchangeable for a certificate in definitive registered form (each, a "Certificated Note") and, except as set forth herein, will not otherwise be issuable in definitive form. Except as set forth below, the Global Debt Security may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. The Company understands that DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" 5 registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in each Participant's account, thereby eliminating the need for physical movement of securities certificates. Direct Participants ("Direct Participants") include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to DTC's system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Commission. Purchases of beneficial interests in Global Debt Securities under DTC's system must be made by or through Direct Participants, which will receive a credit for the beneficial interests in Global Debt Securities on DTC's records. The ownership interest of each actual purchaser of each beneficial interest in a Global Debt Security (the "Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of beneficial interests in Global Debt Securities are to be accomplished by entries made on the books of Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Global Debt Securities, except in the event that use of the book-entry system for one or more Debt Securities is discontinued. To facilitate subsequent transfers, all Global Debt Securities deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Global Debt Securities with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Global Debt Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Global Debt Securities are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Global Debt Securities within an issue are being redeemed, DTC's current practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to Global Debt Securities. Under its usual procedures, DTC will mail an "Omnibus Proxy" to the Company as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Global Debt Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Global Debt Securities will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as in the case of securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, or the Company, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Company, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its interest in a Global Debt Security purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such interest in a Global Debt Security by causing the Direct Participant to transfer the Participant's interest, on DTC's records, to the Paying Agent. The requirement for physical delivery of Global Debt Securities in connection with a demand for purchase or a mandatory purchase will be deemed satisfied when the ownership rights in the Global Debt Securities are transferred by a Direct Participant on DTC's records. 6 DTC may discontinue providing its services as securities depositary with respect to the Global Debt Securities at any time by giving reasonable notice to the Company or the agents or underwriters involved in the sale of the Global Debt Securities. Under such circumstances, in the event that a successor securities depositary is not obtained, Certificated Notes will be printed and delivered in exchange for the Global Debt Securities held by DTC. The Company may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depositary). In that event, Certificated Notes will be printed and delivered in exchange for the Global Debt Securities held by DTC. If an Event of Default with respect to the Debt Securities has occurred and is continuing, Certificated Notes may be printed and delivered in exchange for the Global Debt Securities held by DTC. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in such a global security. So long as DTC, or its nominee, is the registered owner of the global security, DTC or its nominee, as the case may be, will be considered the sole owner or holder of the book-entry securities for all purposes under the Indenture. Except as described in this section, beneficial owners will not be entitled to have book-entry securities registered in their names, will not receive or be entitled to receive physical delivery of securities in definitive form and will not be considered the owners or holders of the securities under the Indenture. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof. None of the Company, any underwriter or agent, the Trustee, any paying agent or the registrar for the Debt Securities will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Debt Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. SUBORDINATION The board resolutions adopted, officers' certificates executed or indentures supplemental to the Indenture established in connection with any particular series of Debt Securities may provide that such Debt Securities are subordinated to other Debt Securities or to other indebtedness of the Company. Such board resolutions, officers' certificates or indentures supplemental will state the terms pursuant to which such series of subordinated Debt Securities will be made subordinate and subject in right of payment to the prior payment in full of all senior indebtedness of the Company, and the definition of any such senior indebtedness, all of which will be described in the Prospectus Supplement relating thereto. (Section 301 and Article Thirteen) COVENANTS The particular covenants, if any, relating to any series of Debt Securities will be described in the Prospectus Supplement relating to such series. If any such covenants are described, the Prospectus Supplement will also state whether the "covenant defeasance" provisions described below under " - -- Defeasance -- Defeasance of Certain Covenants" also apply. RESTRICTIONS ON CONSOLIDATION, MERGER AND CERTAIN SALES OF ASSETS The Indenture provides that the Company may consolidate with or merge with or into, or convey, transfer or lease its properties and assets substantially as an entirety to any entity, and may permit any entity to consolidate with or merge with or into, or convey, transfer or lease its properties and assets substantially as an entirety to, the Company, provided that (i) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or the lapse of time, or both, would become an Event of Default, shall have occurred and be continuing and (ii) either the Company shall be the continuing corporation, or the successor entity (if other than the Company) shall be a corporation, trust or partnership organized under the laws of the United States, any state thereof or the District of Columbia, and such successor entity shall expressly assume by an indenture supplemental to the Indenture the due and punctual payment of the principal of, and any premium and interest on, all of the Debt Securities, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of the Indenture to be performed by the Company. Upon the assumption of the Company's obligations by such an entity in such circumstances, subject to certain exceptions, the Company shall be discharged from all obligations under the Debt Securities and the Indenture. (Article Eight) 7 EVENTS OF DEFAULT Except as may otherwise be provided in a Prospectus Supplement with respect to a particular series of Debt Securities, the following events with respect to a particular series of Debt Securities are defined as an "Event of Default": (i) default for 30 days in payment of any interest on the Debt Securities; (ii) default in payment of principal of (and premium, if any, on) any of the Debt Securities at maturity; (iii) default in the deposit of any sinking fund payment, when due by the terms of the Debt Securities of such series; (iv) default for 45 days after notice in performance of any other covenant in the Indenture or Debt Securities; or (v) certain events of bankruptcy, insolvency, receivership or reorganization. (Section 501) No Event of Default with respect to a particular series of Debt Securities issued under the Indenture necessarily constitutes an Event of Default with respect to any other series of Debt Securities issued thereunder. If an Event of Default shall have occurred and be continuing in respect of any series of Debt Securities, either the Trustee or the holders of not less than 25% in principal amount of the Debt Securities of such series then outstanding may declare the principal amount (or, if the Debt Securities of such series are Original Issue Discount Securities or Indexed Securities, such portion of the principal amount as may be specified by the terms of such series) of all the Debt Securities of such series to be due and payable immediately by a notice in writing to the Company (and to the Trustee, if given by the holders). Upon certain conditions, such declaration may be annulled and past defaults (except, unless theretofore cured, a default in payment of principal of or premium, if any, or interest on the Debt Securities or in respect of a covenant which cannot be modified or amended without the consent of every holder) may be waived by the holders of a majority in aggregate principal amount of the Debt Securities of such series then outstanding. (Section 502) The Indenture requires the Company to file annually with the Trustee an officers' certificate either stating the absence of any default or specifying any default that may exist. (Section 1009) The Indenture provides that the Trustee shall, within 45 days after the occurrence of a default, give to the holders of the Debt Securities notice of such default, unless such default has been cured or waived; provided that, except in the case of default in the payment of principal of or premium, if any, or interest on any of the Debt Securities of such series, or in the payment of any sinking fund installment with respect to the Debt Securities of such series, the Trustee shall be protected in withholding such notice if the Trustee in good faith determines that the withholding of such notice is in the interest of the holders of the Debt Securities. The term "default" for the purpose of this provision only shall mean the occurrence of any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to the Debt Securities of such series. (Section 602) The Indenture provides that the Trustee will be under no obligation, subject to the duty of the Trustee during a default to act with the required standard of care, to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders of the Debt Securities of any series, unless such holders shall have offered to the Trustee reasonable security or indemnity against costs, expenses and liabilities which might be incurred by it in compliance with such request. (Section 507) Subject to such provisions for indemnification of the Trustee, the holders of a majority in principal amount of the Debt Securities of any series 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 Debt Securities of that series. (Section 512) No holder of a Debt Security will have any right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver, assignee, trustee, liquidator or sequestrator (or other similar official), or for any other remedy thereunder, unless (i) the holder has previously given to the Trustee written notice of a continuing event of default with respect to the Debt Securities of that series, (ii) holders of at least 25% in aggregate principal amount of the outstanding Debt Securities of that series have made a written request to the Trustee to institute the proceeding and the holder or holders have offered indemnity satisfactory to the Trustee in its reasonable judgment; and (iii) the Trustee has failed to institute the proceeding, and has not received from the holders of a majority in aggregate principal amount of the outstanding Debt Securities of that series a direction inconsistent with that request, within 60 days after the notice, request and offer. (Section 507) These limitations do not apply to a suit instituted by a holder of a Debt Security to enforce payment of the principal of, premium, if any, or interest on the Debt Security on or after the applicable due date specified in the Debt Security. (Section 508) Reference is made to the Prospectus Supplement relating to each series of Debt Securities which are Original Issue Discount Securities or Indexed Securities for the particular provisions relating to acceleration of the maturity of a portion of the principal amount of such Original Issue Discount Securities or Indexed Securities upon the occurrence of an Event of Default and the continuation thereof. 8 DEFEASANCE The Indenture shall cease to be of further effect with respect to the Debt Securities of any series (except as to any surviving rights of registration of transfer or exchange of Debt Securities expressly provided for in the Indenture and rights to receive the principal, premium, if any, and interest, if any, on the Debt Securities) when all such Debt Securities have been delivered to the Trustee for cancellation or have become due and payable or will upon Stated Maturity or redemption within one year become due and payable and the Company has irrevocably deposited with the Trustee (as trust funds for the purpose) an amount in the currency or currencies, currency unit or composite currency sufficient to pay and discharge the entire indebtedness on such Debt Securities as described below. The Prospectus Supplement relating to the Debt Securities of any series will state if any additional defeasance provisions will apply to the Debt Securities of such series. DEFEASANCE AND DISCHARGE The Indenture provides, with respect to the Debt Securities of any series to the extent established in the terms thereof, that the Company will be deemed discharged from any and all obligations in respect of the Debt Securities of such series (except for certain obligations to register the transfer or exchange of Debt Securities of such series, to replace stolen, lost or mutilated Debt Securities of such series, to maintain paying agencies and hold moneys for payment in trust) upon the deposit with the Trustee, in trust, cash or U.S. Government Obligations (as defined in the Indenture), which through the payment of interest and principal thereof in accordance with their terms will provide money in an amount sufficient to pay any installment of principal of (and premium, if any) and each installment of interest and any mandatory sinking fund payments in respect of the Debt Securities of such series on the stated maturity of such payments in accordance with the terms of the Indenture and such Debt Securities of such series. Such option may be exercised only if, among other things, the Company has delivered to the Trustee an opinion of independent counsel to the effect that, among other things, there has been a change in federal income tax law or the judicial interpretation thereof, or there has been published by, or the Company has received from, the Internal Revenue Service a ruling to the effect that, in each case, such a discharge will not be deemed, or result in, a taxable event with respect to the holders of the Debt Securities of such series. (Section 403) DEFEASANCE OF CERTAIN COVENANTS The Indenture provides, with respect to the Debt Securities of any series to the extent established in the terms thereof, that the Company may omit to comply with certain restrictive covenants applicable to such Debt Securities and that such omissions shall not be deemed to be Events of Default under the Indenture and the Debt Securities of such series if the Company deposits with the Trustee, in trust, cash or U.S. Government Obligations which through the payment of interest and principal thereof in accordance with their terms will provide money in an amount sufficient to pay principal (and premium, if any) and interest and any mandatory sinking fund payments in respect of the Debt Securities on the stated maturity of such payments in accordance with the terms of the Indenture and such Debt Securities of such series. The Company will also be required to deliver to the Trustee, among other things, an opinion of counsel to the effect that the holders 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 amount and in the same manner and at the same times, as would have been the case if such deposit and defeasance had not occurred. (Section 1008) MODIFICATION OF THE INDENTURE Modifications and amendments of the Indenture may be made by the Company and the Trustee with the consent of the holders of a majority in aggregate principal amount of the outstanding Debt Securities of each series affected by such modification or amendment; provided that no such modification or amendment, without the consent of the holders of each of the Debt Securities affected thereby, may (i) change the stated maturity of the principal of, or waive a default in the payment of the principal of or interest on, any Debt Security, or reduce the principal amount thereof or any premium or interest thereon or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to the terms of the Indenture, or change any place of payment where any Debt Security or any premium or interest thereon is payable, change the currency in which a Debt Security or any premium or interest therein is payable or impair the right to institute suit for the enforcement of any such payment on or after the stated maturity thereof (or, in the case of redemption, on or after the redemption date, or, in the case of repayment at the option of the holder, on or after the date fixed for repayment); (ii) reduce the percentage in principal amount of the outstanding 9 Debt Securities of any series, the consent of whose holders is required for any such supplemental indenture, or the consent of whose holders is required for any amendment or waiver (of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences) provided for in the Indenture; (iii) modify any of the provisions relating to supplemental indentures, waiver of past defaults or waiver of certain covenants, except to increase any such percentage or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the holder of each outstanding Debt Security affected thereby; (iv) in the case of any subordinated Debt Securities, modify any of the provisions in the Indenture relating to subordination or to the definition of "Senior Indebtedness" in a manner adverse to the holders of such subordinated Debt Securities; or (v) effect certain other changes. (Section 902) Modifications and amendments of the Indenture may be made by the Company and the Trustee without the consent of any holder of Debt Securities for any of the following purposes: (i) to evidence the succession of another entity to the Company and the assumption by any such successor of the covenants of the Company in the Indenture and in the Debt Securities as obligor under the Indenture; (ii) to add to the covenants of the Company for the benefit of the holders of all or any series of Debt Securities or to surrender any right or power conferred upon the Company in the Indenture; (iii) to add additional Events of Default; (iv) to add or change any provisions of the Indenture to such extent as shall be necessary to permit or facilitate the issuance of Debt Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Debt Securities in uncertificated form; (v) to add to, change or eliminate any of the provisions of the Indenture in respect of one or more series of Debt Securities, provided that any such addition, change or elimination (1) shall neither (A) apply to any Debt Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the holder of any such Debt Security with respect to such provision or (2) shall become effective only when there is no such Debt Security outstanding; (vi) to establish the form or terms of Debt Securities of any series as permitted by the Indenture; (vii) to evidence and provide for the acceptance of appointment under the Indenture by a successor Trustee with respect to the Debt Securities of one or more series and to add to or change any of the provisions of the Indenture as shall be necessary to provide for or facilitate the administration of the trusts under the Indenture by more than one Trustee; (viii) to secure the Debt Securities; (ix) to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the defeasance, covenant defeasance or satisfaction and discharge of any series of Debt Securities pursuant to the Indenture; provided that any such action shall not adversely affect the interests of the holders of Debt Securities of such series or any other series of Debt Securities; (x) to cure any ambiguity, to correct or supplement any provision in the Indenture which may be inconsistent with any other provision in the Indenture, or to make any other provisions with respect to matters or questions arising under the Indenture, provided that such action shall not adversely affect the interests of the holders of Debt Securities of any series; (xi) to add a guarantor or guarantors for any or all series of Debt Securities; and (xii) to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act of 1939, as amended. (Section 901) CONCERNING THE TRUSTEE The Company may maintain banking and other commercial relationships with the Trustee and its affiliates in the ordinary course of business. GOVERNING LAW The Indenture and the Debt Securities will be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws. PLAN OF DISTRIBUTION The Company may sell the Debt Securities through one or more underwriters or dealers, directly to a limited number of purchasers or to a single purchaser, through agents or through a combination of any such or other methods. The Prospectus Supplement with respect to a series of Debt Securities will set forth the terms of the offering of the Debt Securities, including the name or names of any underwriters, the purchase price of the Debt Securities and the proceeds to the Company from such sale, any delayed delivery arrangements, any underwriting discounts and other items constituting underwriters' compensation, any initial public offering price, any discounts or concessions allowed or reallowed or paid to dealers and any securities exchanges on which such securities may be listed. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. Only underwriters named in the Prospectus Supplement are deemed to be underwriters in connection with the securities offered thereby. 10 If underwriters are used in the sale, the Debt Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The Debt Securities may be offered to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. The underwriter or underwriters with respect to a particular underwritten offering of Debt Securities will be named in the Prospectus Supplement relating to such offering and, if in an underwriting syndicate is used, the managing underwriter or underwriters will be set forth on the cover of such Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement, the obligations of the underwriters to purchase the Debt Securities will be subject to certain conditions precedent and the underwriters will be obligated to purchase all the Debt Securities if any are purchased. In connection with the sale of Debt Securities, underwriters or agents may receive compensation from the Company or from purchasers of Debt Securities for whom they may act as agents in the form of discounts, concessions or commissions. Underwriters may sell Debt Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of Debt Securities may be deemed to be underwriters, and any discounts or commissions received by them from the Company and any profit on the resale of Debt Securities by them may be deemed to be underwriting discounts and commissions under the Securities Act. Any such underwriter or agent will be identified, and any such compensation received from the Company will be described, in the related Prospectus Supplement. The Debt Securities may be sold directly by the Company or through agents designated by the Company from time to time. Any agent involved in the offer or sale of the Debt Securities in respect of which this Prospectus is delivered is named, and any commissions payable by the Company to such agent will be set forth, in the Prospectus Supplement relating thereto. Unless otherwise indicated in the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment. If so indicated in the Prospectus Supplement, the Company will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase Debt Securities from the Company at the public offering price set forth in the Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. The obligations of any purchaser under any such contract will be subject to the condition that the purchase of the Debt Securities shall not be prohibited at the time of delivery under the laws of the jurisdiction to which such purchaser is subject. The underwriters and such other agents will not have any responsibility in respect of the validity or performance of such contracts. Agents and underwriters may be entitled under agreements entered into with the Company to indemnification by the Company against certain civil liabilities, including liabilities under the Securities Act, or to contribution by the Company with respect to payments they may be required to make in respect thereof. Agents and underwriters may be customers of, engage in transactions with, or perform services for the Company in the ordinary course of business. The Debt Securities may or may not be listed on a national securities exchange or quoted on the Nasdaq National Market System. No assurances can be given that there will be an active trading market for the Debt Securities. If underwriters or dealers are used in the sale, until the distribution of the Debt Securities is completed, rules of the Commission may limit the ability of any such underwriters and selling group members to bid for and purchase the Debt Securities. As an exception to these rules, representatives of any underwriters are permitted to engage in certain transactions that stabilize the price of the Debt Securities. Such transactions may consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of the Debt Securities. If the underwriters create a short position in the Debt Securities in connection with the offerings, I.E., if they sell more Debt Securities than are set forth on the cover page of the Prospectus Supplement, the representatives of the underwriters may reduce that short position by purchasing Debt Securities in the open market. The representatives of the underwriters may also elect to reduce any short portion by exercising all or part of any over-allotment option described in the Prospectus Supplement. In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases. The Company makes no representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the Debt Securities. In addition, the Company makes no representation that the representatives of any underwriters will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice. 11 LEGAL MATTERS Certain legal matters in connection with this offering will be passed upon for the Company by Kennedy Covington Lobdell & Hickman, L.L.P., 100 North Tryon Street, Charlotte, North Carolina 28202. Clarence W. Walker, a partner in the firm of Kennedy Covington Lobdell & Hickman, L.L.P., is a member of the Board of Directors of the Company. As of February 15, 1999, partners, counsel and associates of Kennedy Covington Lobdell & Hickman, L.L.P. and their spouses and minor children beneficially owned an aggregate of 115,545 shares of common stock of the Company (which includes 56,488 shares subject to options that are presently exercisable or exercisable within 60 days). EXPERTS The financial statements incorporated in this Prospectus by reference to the Company's Annual Report on Form 10-K for its fiscal year ended September 30, 1998 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of such firm as experts in auditing and accounting. 12 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FEBRUARY , 1999 [OAKWOOD HOMES LOGO APPEARS HERE] OAKWOOD HOMES CORPORATION $ % SENIOR NOTES DUE -------------------------- PROSPECTUS SUPPLEMENT -------------------------- NATIONSBANC MONTGOMERY SECURITIES LLC FIRST UNION CAPITAL MARKETS CORP. MERRILL LYNCH & CO. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following is an itemized statement of expenses of the Registrant in connection with the issuance and distribution of the securities being registered hereby, other than underwriting discounts and commissions. All amounts are estimates except for the SEC registration fee. SEC registration fee ....................... $ 118,000.00 Accounting fees and expenses ............... 75,000.00 Legal fees and expenses .................... 80,000.00 Blue Sky fees and expenses ................. 5,000.00 Trustee's, transfer agent's and registrar's fees 30,000.00 Rating Agency fees ......................... 120,000.00 Printing and engraving expenses ............ 50,000.00 Miscellaneous .............................. 22,000.00 ------------- Total Expenses ............................. $ 500,000.00 =============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Sections 55-8-51 through 55-8-56 of the North Carolina Business Corporation Act (the "Act") provide, in substance, that North Carolina corporations shall have the power, under specified circumstances, to indemnify their directors, officers, employees and agents in connection with proceedings brought against them by a third party or in the right of the corporation, by reason of the fact that they were or are such directors, officers, employees or agents, against expenses incurred in any such proceedings. Section 9.5 of the Registrant's Bylaws provides that a director of the Registrant shall have the right to be indemnified by the Registrant against expenses, including reasonable attorneys' fees, incurred by him or her in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether or not brought by or on behalf of the Registrant, arising out of his or her status as such director or as an officer, employee or agent of the Registrant and against any liability incurred by him or her, including without limitation, satisfaction of any judgment, money decree, fine, penalty or settlement, for which he or she may have become liable in connection with any such action, suit or proceeding. The Bylaws further contemplate that the indemnification provisions permitted thereunder are not exclusive of any other rights to which such person may be entitled apart from the provisions of the Bylaws, and shall not be limited by the provisions for indemnification in Sections 55-8-51 through 55-8-56 of the Act or any successor statutory provisions. Section 55-8-57 of the Act also permits a corporation to purchase and maintain insurance on behalf of its directors and officers against liabilities which they may incur in their capacities as such, whether or not the corporation would have the power to indemnify them under other provisions of the statute. The Registrant has purchased insurance to provide for indemnification of directors and officers. Paragraph 11 of the Registrant's Articles of Incorporation provides that a director of the Registrant shall have no personal liability arising out of any action for monetary damages for breach of his or her duty as a director to the full extent permitted by the laws of the State of North Carolina. Reference is made to the proposed form of Underwriting Agreement filed as Exhibit 1.1 to this Registration Statement, pursuant to which the underwriters thereunder may, under certain circumstances, indemnify the directors and officers of the Company from certain liabilities arising out of the offering of the securities sold thereunder, including liabilities under the Securities Act of 1933, as amended. II-1 ITEM 16. EXHIBITS. 1.1 Form of Underwriting Agreement (filed herewith). 4.1 Form of Indenture (filed herewith). 5.1 Opinion of Kennedy Covington Lobdell & Hickman, L.L.P. with respect to legality (previously filed). 12.1 Computation of Ratios of Earnings to Fixed Charges (filed herewith). 23.1 Consent of PricewaterhouseCoopers LLP (filed herewith). 23.2 Consent of Kennedy Covington Lobdell & Hickman, L.L.P. (included as part of Exhibit 5.1) (previously filed). 24.1 Power of Attorney (previously filed). 25.1 Form T-1 Statement of Eligibility and Qualification Under the Trust Indenture Act of 1939 (filed herewith)
ITEM 17. UNDERTAKINGS. (a) Undertaking in respect of Rule 415. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933. (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) Undertaking in respect of incorporation by reference. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (c) Undertaking in respect of Rule 430A. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective. II-2 (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (d) Undertaking in respect of qualification of trust indentures. The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939 in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act of 1939. (e) Undertaking in respect of indemnification. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Greensboro, North Carolina, on February 22, 1999. OAKWOOD HOMES CORPORATION By: /s/ ROBERT A. SMITH ------------------------------------ NAME: ROBERT A. SMITH TITLE: EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE CAPACITY DATE - --------------------------------------- ------------------------------------------ ------------------ * Director and Chairman and Chief February 22, 1999 ---------------------------------- Executive Officer (Principal NICHOLAS J. ST. GEORGE Executive Officer) /s/ ROBERT A. SMITH Executive Vice President and Chief February 22, 1999 ---------------------------------- Financial Officer (Principal Financial ROBERT A. SMITH Officer) /s/ LISA K. CARTER Vice President and Controller (Principal February 22, 1999 ---------------------------------- Accounting Officer) LISA K. CARTER /s/ WILLIAM G. EDWARDS Director February 22, 1999 ---------------------------------- WILLIAM G. EDWARDS * Director February 22, 1999 ---------------------------------- DENNIS I. MEYER * Director February 22, 1999 ---------------------------------- KERMIT G. PHILLIPS, II * Director February 22, 1999 ---------------------------------- ROGER W. SCHIPKE * Director February 22, 1999 ---------------------------------- LANTY L. SMITH * Director February 22, 1999 ---------------------------------- SABIN C. STREETER * Director February 22, 1999 ---------------------------------- FRANCIS T. VINCENT, JR. * Director February 22, 1999 ---------------------------------- CLARENCE W. WALKER * Director February 22, 1999 ---------------------------------- H. MICHAEL WEAVER
*By: /s/ MYLES E. STANDISH ------------------------------ MYLES E. STANDISH ATTORNEY-IN-FACT II-4 EX-1 2 1.1 =============================================================================== OAKWOOD HOMES CORPORATION (a North Carolina corporation) UNDERWRITING AGREEMENT February _____, 1999 ===================================================================== TABLE OF CONTENTS
Page SECTION 1. Representations and Warranties.........................................................................3 (a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY............................................................3 (b) OFFICER'S CERTIFICATES..................................................................................13 SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING............................................................13 (a) UNDERWRITTEN SECURITIES.................................................................................13 (b) OPTION UNDERWRITTEN SECURITIES..........................................................................13 (c) PAYMENT.................................................................................................13 (d) DENOMINATIONS; REGISTRATION.............................................................................14 SECTION 3. COVENANTS OF THE COMPANY..............................................................................14 (a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS..........................................14 (b) FILING OF AMENDMENTS....................................................................................15 (c) DELIVERY OF REGISTRATION STATEMENTS.....................................................................15 (d) DELIVERY OF PROSPECTUSES................................................................................15 (e) CONTINUED COMPLIANCE WITH SECURITIES LAWS...............................................................16 (f) BLUE SKY QUALIFICATIONS.................................................................................16 (g) EARNINGS STATEMENT......................................................................................16 (h) REPORTS TO SECURITYHOLDERS..............................................................................17 (j) LISTING.................................................................................................17 (k) RESTRICTION ON SALE OF SECURITIES.......................................................................17 (l) REPORTING REQUIREMENTS..................................................................................17 SECTION 4. PAYMENT OF EXPENSES...................................................................................17 (a) EXPENSES................................................................................................17 (b) TERMINATION OF AGREEMENT................................................................................18 SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS...............................................................18 (a) EFFECTIVENESS OF REGISTRATION STATEMENT.................................................................18 (b) OPINION OF COUNSEL FOR COMPANY..........................................................................19 (c) OPINION OF COUNSEL FOR UNDERWRITERS.....................................................................19 (d) OFFICERS' CERTIFICATE...................................................................................19 (e) ACCOUNTANT'S COMFORT LETTER.............................................................................19 (f) BRING-DOWN COMFORT LETTER...............................................................................20 (g) RATINGS.................................................................................................20 (h) APPROVAL OF LISTING.....................................................................................20 (i) NO OBJECTION............................................................................................20 (j) LOCK-UP ARRANGEMENTS....................................................................................20 (k) OVER-ALLOTMENT OPTION...................................................................................20 (l) ADDITIONAL DOCUMENTS....................................................................................21 (m) TERMINATION OF TERMS AGREEMENT..........................................................................21
ii
SECTION 6. INDEMNIFICATION.......................................................................................22 (a) INDEMNIFICATION OF UNDERWRITERS.........................................................................22 (b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS......................................................23 (c) ACTIONS AGAINST PARTIES; NOTIFICATION...................................................................23 (d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE......................................................24 SECTION 7. CONTRIBUTION..........................................................................................24 SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY........................................25 SECTION 9. TERMINATION...........................................................................................26 (a) UNDERWRITING AGREEMENT..................................................................................26 (b) TERMINATION; GENERAL....................................................................................26 (c) LIABILITIES.............................................................................................26 SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS...........................................................27 SECTION 11. NOTICES..............................................................................................28 SECTION 12. PARTIES..............................................................................................28 SECTION 13. GOVERNING LAW AND TIME...............................................................................28 SECTION 14. EFFECT OF HEADINGS...................................................................................28
iii OAKWOOD HOMES CORPORATION (a North Carolina corporation) Debt Securities UNDERWRITING AGREEMENT February ___, 1999 To the Representative of the Underwriters named in the Terms Agreement hereinafter described Ladies and Gentlemen: Oakwood Homes Corporation, a North Carolina corporation (the "Company"), proposes to issue and sell up to $400,000,000 aggregate initial public offering price of its senior or subordinated debt securities (the "Debt Securities"), or any combination thereof, from time to time, in or pursuant to one or more offerings on terms to be determined at the time of sale. The Debt Securities will be issued in one or more series as senior indebtedness (the "Senior Debt Securities") or as senior subordinated or subordinated indebtedness (the "Subordinated Debt Securities") under an indenture, dated as of February ___, 1999 (the "Indenture"), between the Company and The First National Bank of Chicago, as trustee (the "Trustee"). Each series of Debt Securities may vary, as applicable, as to title, aggregate principal amount, rank, interest rate or formula and timing of payments thereof, stated maturity date, redemption and/or payment provisions, sinking fund requirements, guarantors and any other variable terms established by or pursuant to the applicable Indenture. As used herein, "Securities" shall mean the Senior Debt Securities or Subordinated Debt Securities, or any combination thereof, initially issuable by the Company. Whenever the Company determines to make an offering of Securities, the Company will enter into an agreement (each, a "Terms Agreement") providing for the sale of such Securities to, and the purchase and offering thereof by, the underwriters named in the applicable Terms Agreement (the "Underwriters," which term shall include any Underwriter substituted pursuant to Section 10 hereof), for whom the firm designated as representative of the Underwriters of such Underwritten Securities in the Terms Agreement relating thereto will act as representative (the "Representative"). The Terms Agreement relating to the offering of Securities shall specify the 1 aggregate principal amount, as the case may be, of Securities to be initially issued (the "Initial Underwritten Securities"), the name of each Underwriter participating in such offering (subject to substitution as provided in Section 10 hereof) and the name of any Underwriter(s) acting as co-manager in connection with such offering, the aggregate principal amount, as the case may be, of Initial Underwritten Securities which each such Underwriter severally agrees to purchase, whether such offering is on a fixed or variable price basis and, if on a fixed price basis, the initial offering price, the price at which the Initial Underwritten Securities are to be purchased by the Underwriters, the form, time, date and place of delivery and payment of the Initial Underwritten Securities and any other material variable terms of the Initial Underwritten Securities. In addition, if applicable, such Terms Agreement shall specify whether the Company has agreed to grant to the Underwriters an option to purchase additional Securities to cover over-allotments, if any, and the number or aggregate principal amount, as the case may be, of Securities subject to such option (the "Option Underwritten Securities"). As used herein, the term "Underwritten Securities" shall include the Initial Underwritten Securities and all or any portion of any Option Underwritten Securities. The Terms Agreement, which shall be substantially in the form of EXHIBIT A hereto, may take the form of an exchange of any standard form of written telecommunication between the Company and the Representative, acting for itself and, if applicable, as representative of any other Underwriters. Each offering of Underwritten Securities will be governed by this Underwriting Agreement, as supplemented by the applicable Terms Agreement. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (NO. 333-47053) for the registration of the Securities under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"), and the Company has filed such post-effective amendments thereto as may be required prior to the execution of the applicable Terms Agreement. Such registration statement (as so amended, if applicable) has been declared effective by the Commission and each Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement (as so amended, if applicable), including the information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act regulations (the "Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434 Information"), is referred to herein as the "Registration Statement;" and the final prospectus and the final prospectus supplement relating to the offering of the Underwritten Securities, in the form first furnished to the Underwriters by the Company for use in connection with the offering of the Underwritten Securities, are collectively referred to herein as the "Prospectus;" PROVIDED, HOWEVER, that all references to the "Registration Statement" and the "Prospectus" shall also be deemed to include all documents incorporated therein by reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of the applicable Terms Agreement; PROVIDED FURTHER, that if the Company files a registration statement with the Commission pursuant to Rule 462(b) of the 2 1933 Act Regulations (the "Rule 462(b) Registration Statement"), then, after such filing, all references to "Registration Statement" shall also be deemed to include the Rule 462(b) Registration Statement; and PROVIDED FURTHER, that if the Company elects to rely upon Rule 434 of the 1933 Act Regulations, then all references to "Prospectus" shall also be deemed to include the final or preliminary prospectus and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as the case may be, in the form first furnished to the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act Regulations, and all references in this Underwriting Agreement to the date of the Prospectus shall mean the date of the Term Sheet. A "preliminary prospectus" shall be deemed to refer to any prospectus used before the registration statement became effective and any prospectus that omitted, as applicable, the Rule 430A Information, the Rule 434 Information or other information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used after such effectiveness and prior to the execution and delivery of the applicable Terms Agreement. For purposes of this Underwriting Agreement, all references to (i) the Registration Statement, Prospectus, Term Sheet or preliminary prospectus or to any amendment or supplement to any of the foregoing shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"), (ii) the Indenture shall be deemed to include, as applicable, any indenture supplemental thereto, and (iii) the Representative shall be deemed to include, as applicable, all such Representatives if there shall be more than one Representative . All references in this Underwriting Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" (or other references of like import) in the Registration Statement, Prospectus or preliminary prospectus shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, Prospectus or preliminary prospectus, as the case may be; and all references in this Underwriting Agreement to amendments or supplements to the Registration Statement, Prospectus or preliminary prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated by reference in the Registration Statement, Prospectus or preliminary prospectus, as the case may be. SECTION 1. Representations and Warranties (a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents and warrants to the Representative, as of the date hereof, and to each Underwriter named in the applicable Terms Agreement, as of the date thereof, as of the Closing Time (as defined below) and, if applicable, as of each Date of Delivery (as defined below) (in each case, a "Representation Date"), as follows: (i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company 3 meets the requirements for use of Form S-3 under the 1933 Act. Each of the Registration Statement and any Rule 462(b) Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with. In addition, the Indenture has been duly qualified under the 1939 Act. At the respective times the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendments thereto (including the filing of the Company's most recent Annual Report on Form 10-K with the Commission (the "Annual Report on Form 10-K")) became effective and at each Representation Date, the Registration Statement, the Rule 462(b) Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the Commission under the 1939 Act (the "1939 Act Regulations") and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. At the date of the Prospectus, at the Closing Time and at each Date of Delivery, if any, the Prospectus and any amendments and supplements thereto did not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If the Company elects to rely upon Rule 434 of the 1933 Act Regulations, the Company will comply with the requirements of Rule 434. Notwithstanding the foregoing, the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through the Representative expressly for use in the Registration Statement or Prospectus. Each preliminary prospectus and the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with the offering of Underwritten Securities will, at the time of such delivery, be identical to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations") and, when read together with the other information in the Prospectus, at the date of the Prospectus, at the Closing Time and at each Date of Delivery, if any, did not and will not include an untrue statement of a material fact or omit to state a material 4 fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the financial statements and supporting schedules thereto included in the Registration Statement and the Prospectus are independent public accountants as required by the 1933 Act and the 1933 Act Regulations. (iv) FINANCIAL STATEMENTS. The financial statements of the Company included in the Registration Statement and the Prospectus, together with the related schedules and notes, as well as those financial statements, schedules and notes of any other entity included therein, present fairly the financial position of the Company and its consolidated subsidiaries, or such other entity, as the case may be, at the dates indicated and the statement of operations, stockholders' equity and cash flows of the Company and its consolidated subsidiaries, or such other entity, as the case may be, for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Registration Statement and the Prospectus present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement and the Prospectus. In addition, any pro forma financial statements of the Company and its subsidiaries and the related notes thereto included in the Registration Statement and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. (v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change in the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise, and (C) except for regular dividends on the Company's common stock or preferred stock, in amounts per share that are consistent with past practice, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. 5 (vi) GOOD STANDING OF THE COMPANY. The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the state of North Carolina and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under, or as contemplated under, this Underwriting Agreement and the applicable Terms Agreement. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not result in a Material Adverse Effect. (vii) GOOD STANDING OF SUBSIDIARIES. Each subsidiary of the Company (each, a "Subsidiary" and, collectively, the "Subsidiaries") has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not result in a Material Adverse Effect. Except as otherwise stated in the Registration Statement and the Prospectus, all of the issued and outstanding capital stock of each such Subsidiary has been duly authorized and is validly issued, fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity (except for the capital stock of Tarheel Insurance Company, Ltd. all which capital stock is pledged in connection with the Company's $175.0 million revolving credit facility with First Union National Bank, as agent). None of the outstanding shares of capital stock of any Subsidiary was issued in violation of preemptive or other similar rights of any securityholder of such Subsidiary. (viii) CAPITALIZATION. If the Prospectus contains a "Capitalization" section, the authorized, issued and outstanding shares of capital stock of the Company is as set forth in the column entitled "Actual" under such section (except for subsequent issuances thereof, if any, contemplated under this Underwriting Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus or pursuant to the exercise of convertible securities or options referred to in the Prospectus). Such shares of capital stock have been duly authorized and validly issued by the Company and are fully paid and non-assessable; and none of such shares of capital stock was issued in violation of preemptive or other similar rights of any securityholder of the Company. (ix) AUTHORIZATION OF THIS UNDERWRITING AGREEMENT AND TERMS AGREEMENT. This Underwriting Agreement has been, and the applicable Terms Agreement as of the date thereof will have been, duly authorized, executed and delivered by the Company. 6 (x) AUTHORIZATION OF SENIOR DEBT SECURITIES AND/OR SUBORDINATED DEBT SECURITIES. The Underwritten Securities have been, or as of the date of such Terms Agreement will have been, duly authorized by the Company for issuance and sale pursuant to this Underwriting Agreement and such Terms Agreement. Such Underwritten Securities, when issued and authenticated in the manner provided for in the applicable Indenture and delivered against payment of the consideration therefor specified in such Terms Agreement, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors' rights generally or by general equitable principles. Such Underwritten Securities will be in the form contemplated by, and each registered holder thereof is entitled to the benefits of, the applicable Indenture. (xi) AUTHORIZATION OF THE INDENTURE. The Indenture has been, or prior to the issuance of the Debt Securities thereunder will have been, duly authorized, executed and delivered by the Company and, upon such authorization, execution and delivery, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights generally or by general equitable principles. (xii) EMPLOYEE BENEFITS MATTERS. Each employee benefit plan intended to be qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (or any successor code or statute) (the "Internal Revenue Code") has heretofore been determined by the Internal Revenue Service to so qualify, and each trust created thereunder has heretofore been determined by the Internal Revenue Service to so qualify, and each trust created thereunder has heretofore been determined by the Internal Revenue Service to be exempt from tax under the provisions of Section 501(a) of the Internal Revenue Code, and nothing has occurred since the date of the most recent determination (including the merger of the Company's Employee Stock Ownership Plan into the Oakwood Savings Plan) that would cause any such employee plan or trust to fail to qualify under Section 401(a) or 501(a) of the Internal Revenue Code. (xiii) DESCRIPTION OF THE UNDERWRITTEN SECURITIES AND INDENTURE. The Underwritten Securities being sold pursuant to the applicable Terms Agreement and the Indenture, as of the date of the Prospectus, will conform in all material respects to the statements relating thereto contained in the Prospectus and will be in substantially the form filed or incorporated by reference, as the case may be, as an exhibit to the Registration Statement. (xiv) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any 7 of its subsidiaries is in violation of its charter or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any subsidiary is subject (collectively, "Agreements and Instruments"), except for such defaults that would not result in a Material Adverse Effect. The execution, delivery and performance of this Underwriting Agreement, the applicable Terms Agreement and the Indenture, and any other agreement or instrument entered into or issued or to be entered into or issued by the Company in connection with the transactions contemplated hereby or thereby or in the Registration Statement and the Prospectus and the consummation of the transactions contemplated herein and in the Registration Statement and the Prospectus (including the issuance and sale of the Underwritten Securities and the use of the proceeds from the sale of the Underwritten Securities as described under the caption "Use of Proceeds") and compliance by the Company with its obligations hereunder and thereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any assets, property or operations of the Company or any of its subsidiaries pursuant to, any Agreements and Instruments nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any of its subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their assets, properties or operations. As used herein, a "Repayment Event" means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries. (xv) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or any subsidiary's principal suppliers, manufacturers, customers or contractors, which, in either case, may reasonably be expected to result in a Material Adverse Effect. (xvi) ABSENCE OF PROCEEDINGS. There is not pending or threatened any action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company threatened, against or affecting the Company or any of its subsidiaries which is required to be disclosed in the Registration Statement and the Prospectus (other than as stated therein), or which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the assets, properties or operations thereof or the 8 consummation of the transactions contemplated under this Underwriting Agreement, the applicable Terms Agreement or the Indenture or the performance by the Company of its obligations hereunder and thereunder. The aggregate of all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective assets, properties or operations is the subject which are not described in the Registration Statement and the Prospectus, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Material Adverse Effect. (xvii) ACCURACY OF EXHIBITS. There are no contracts or documents which are required to be described in the Registration Statement, the Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described and filed as required. (xviii) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the performance by the Company of its obligations under this Underwriting Agreement or the applicable Terms Agreement or in connection with the transactions contemplated under this Underwriting Agreement, such Terms Agreement or any applicable Indenture, except such as have been already obtained or as may be required under state securities laws. (xix) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, "Intellectual Property") necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect. (xx) POSSESSION OF LICENSES AND PERMITS. The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, "Governmental Licenses") issued by the appropriate federal, state, local or foreign regulatory agencies or bodies (including without limitation all such regulatory agencies or bodies relating to financing and insurance activities) ("Governmental Authorities") necessary to conduct the business now operated by them. The Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply 9 would not, singly or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not result in a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. (xxi) TITLE TO PROPERTY. The Company and its subsidiaries have good and marketable title to all real property owned by the Company and its subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind, except (A) as otherwise stated in the Registration Statement and the Prospectus or (B) those which do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries. All of the leases and subleases material to the business of the Company and its subsidiaries considered as one enterprise, and under which the Company or any of its subsidiaries holds properties described in the Prospectus, are in full force and effect, and neither the Company nor any of its subsidiaries has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of its subsidiaries under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease. (xxii) COMMODITY EXCHANGE ACT. The Debt Securities, upon issuance, will be excluded or exempted under, or beyond the purview of, the Commodity Exchange Act, as amended (the "Commodity Exchange Act"), and the rules and regulations of the Commodity Futures Trading Commission under the Commodity Exchange Act. (xxiii) INVESTMENT COMPANY ACT. Neither the Company nor any of its subsidiaries is, and upon the issuance and sale of the Underwritten Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will not be, an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (xxiv) ENVIRONMENTAL LAWS. Except as otherwise stated in the Registration Statement and the Prospectus and except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human 10 health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, "Hazardous Materials") or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (D) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws. (xxv) REGISTRATION RIGHTS. There are no holders of securities (debt or equity) of the Company or holders of rights (including, without limitation, preemptive rights), warrants or options to obtain securities of the Company, who have the right to request the Company to register securities held by them under the 1933 Act, other than holders who have waived or will not have such rights for a specified period to be agreed upon among the Company and the Underwriters, and have waived their rights with respect to the inclusion of their securities in the Registration Statement. (xxvi) ACCOUNTING CONTROLS. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management's general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management's general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (xxvii) COMPLIANCE WITH APPLICABLE LAW. The Company has complied in all material respects with all federal, state, local, foreign and similar statues, laws, ordinances, rules, regulations, orders, writs, injunctions, judgements, and decrees applicable to the Company or any of its subsidiaries or to any of the Company's or its subsidiary's properties or assets, or with respect to any of the Company's or its subsidiary's officers, directors, employees or agents in their capacity as such ("Applicable Laws"). None of the Company or any of its subsidiaries has received any written notice or other written communication from any Governmental Authority or arbitrator regarding any violation by the Company of, or a failure on the part of the Company to 11 comply with any Applicable Laws, other than any such violation or failure to comply which would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. (xxviii) TAX RETURNS. All material Tax Returns required to be filed by the Company and each of its subsidiaries in any jurisdiction have been filed, and all material Taxes (whether or not actually shown on such Tax Returns) for which any of them is directly or indirectly liable or to which any of their respective properties or assets are subject have been paid other than Taxes being contested in good faith and for which adequate reserves have been established in accordance with GAAP. All such Tax Returns are true, correct and complete in all material respects and accurately set forth all items to the extent required to be reflected or included in such Tax Returns by applicable federal, state, local or foreign Tax Laws, regulations or rules. There is no material proposed Tax assessment against the Company or any of its subsidiaries, and, to the best knowledge of the Company, there is no basis for such assessment, except for contested claims. As used herein, the following terms shall have the respective meanings given to them below: "Tax Return" means a report, return or other information (including any amendments) required to be supplied to a governmental entity with respect to Taxes including, where permitted or required, combined or consolidated returns for any group of entities that includes the Company or any of its subsidiaries. "Taxes" means all taxes however denominated, including any interest or penalties that may become payable in respect thereof, imposed by any federal, state, local or foreign government or any agency or political subdivision of any such government, which taxes shall include all income taxes (including, but not limited to, United States federal income taxes and state income taxes), payroll and employee withholding taxes, unemployment insurance, social security, sales and use taxes, excise taxes, environmental, franchise taxes, gross receipts taxes, occupation taxes, real and personal property taxes, stamp taxes, transfer taxes, withholding taxes, workers' compensation, and other obligations of the same or similar nature. Each of the Company and its subsidiaries is insured (including in each case self-insurance and reinsurance) by insurers of recognized financial responsibility against such losses and risks and in such amounts and covering such risks as are prudent and customary in the businesses in which it is engaged and all such insurance is in full force and effect; neither the Company not any of its subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business; except in the case of each of the foregoing as would not have a Material Adverse Effect. 12 (b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the Company or any of its subsidiaries and delivered to any Underwriter or to counsel for the Underwriters in connection with the offering of the Underwritten Securities shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby on the date of such certificate and, unless subsequently amended or supplemented, at each Representation Date subsequent thereto. SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING. (a) UNDERWRITTEN SECURITIES. The several commitments of the Underwriters to purchase the Underwritten Securities pursuant to the applicable Terms Agreement shall be deemed to have been made on the basis of the representations and warranties herein contained and shall be subject to the terms and conditions herein set forth. (b) OPTION UNDERWRITTEN SECURITIES. In addition, subject to the terms and conditions herein set forth, the Company may grant, if so provided in the applicable Terms Agreement, an option to the Underwriters, severally and not jointly, to purchase up to the number or aggregate principal amount, as the case may be, of the Option Underwritten Securities set forth therein at a price per Option Underwritten Security equal to the price per Initial Underwritten Security. Such option, if granted, will expire 30 days after the date of such Terms Agreement, and may be exercised in whole or in part from time to time only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of the Initial Underwritten Securities upon notice by the Representative to the Company setting forth the aggregate principal amount, as the case may be, of Option Underwritten Securities as to which the several Underwriters are then exercising the option and the time, date and place of payment and delivery for such Option Underwritten Securities. Any such time and date of payment and delivery (each, a "Date of Delivery") shall be determined by the Representative, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time, unless otherwise agreed upon by the Representative and the Company. If the option is exercised as to all or any portion of the Option Underwritten Securities, each of the Underwriters, severally and not jointly, will purchase that proportion of the total number or aggregate principal amount, as the case may be, of Option Underwritten Securities then being purchased which the number or aggregate principal amount, as the case may be, of Initial Underwritten Securities each such Underwriter has severally agreed to purchase as set forth in such Terms Agreement bears to the aggregate principal amount, as the case may be, of Initial Underwritten Securities, subject to such adjustments as the Representative in its discretion shall make to eliminate any sales or purchases of a fractional number or aggregate principal amount, as the case may be, of Option Underwritten Securities. (c) PAYMENT. Payment of the purchase price for, and delivery of certificates for, 13 the Initial Underwritten Securities shall be made at the offices of Kennedy Covington Lobdell & Hickman, L.L.P. or at such other place as shall be agreed upon by the Representative and the Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day after the date of the applicable Terms Agreement (unless postponed in accordance with the provisions of Section 10 hereof), or such other time not later than ten business days after such date as shall be agreed upon by the Representative and the Company (such time and date of payment and delivery being herein called "Closing Time"). In addition, in the event that the Underwriters have exercised their option, if any, to purchase any or all of the Option Underwritten Securities, payment of the purchase price for, and delivery of such Option Underwritten Securities, shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Representative and the Company, on the relevant Date of Delivery as specified in the notice from the Representative to the Company. Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Representative for the respective accounts of the Underwriters of the Underwritten Securities to be purchased by them. It is understood that each Underwriter has authorized the Representative, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Underwritten Securities which it has severally agreed to purchase. The Representative, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Underwritten Securities to be purchased by any Underwriter whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder. (d) DENOMINATIONS; REGISTRATION. The Underwritten Securities shall be in such denominations and registered in such names as the Representative may request in writing at least one full business day before the Closing Time or the relevant Date of Delivery, as the case may be. The Underwritten Securities will be made available for examination and packaging by the Representative in The City of New York not later than 9:00 A.M. (Eastern time) on the business day prior to the Closing Time or the relevant Date of Delivery, as the case may be. SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with the Representative and with each Underwriter participating in the offering of Underwritten Securities, as follows: (a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The Company, subject to Section 3(b), will comply with the requirements of Rule 430A of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations, if and as applicable, and will notify the Representative immediately, and confirm the notice in writing, of (i) the effectiveness of any post-effective amendment to the Registration Statement or the filing 14 of any supplement or amendment to the Prospectus, (ii) the receipt of any comments from the Commission, (iii) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the Underwritten Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes. The Company will promptly effect the filings necessary pursuant to Rule 424 and will take such steps as it deems necessary to ascertain promptly whether Prospectus transmitted for filing under Rule 424 was received for filing by the Commission and, in the event that it was not, it will promptly file the Prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (b) FILING OF AMENDMENTS. The Company will give the Representative notice of its intention to file or prepare any amendment to the Registration Statement (including any filing under Rule 462(b) of the 1933 Act Regulations), any Term Sheet or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the time it became effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the Representative with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall object. (c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or will deliver to the Representative and counsel for the Underwriters, without charge, signed copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver to the Representative, without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the Underwriters. Copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (d) DELIVERY OF PROSPECTUSES. The Company will deliver to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter may reasonably request, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of the Prospectus as such Underwriter may reasonably request. The 15 Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the completion of the distribution of the Underwritten Securities as contemplated in this Underwriting Agreement and the applicable Terms Agreement and in the Registration Statement and the Prospectus. If at any time when the Prospectus is required by the 1933 Act or the 1934 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to amend the Registration Statement in order that the Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or to amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file with the Commission, subject to Section 3(b), such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Company will furnish to the Underwriters, without charge, such number of copies of such amendment or supplement as the Underwriters may reasonably request. (f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in cooperation with the Underwriters, to qualify the Underwritten Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative may designate and to maintain such qualifications in effect for a period of not less than one year from the date of the applicable Terms Agreement; PROVIDED, HOWEVER, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Underwritten Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for a period of not less than one year from the date of such Terms Agreement. (g) EARNINGS STATEMENT. The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as 16 soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act. (h) REPORTS TO SECURITYHOLDERS. Through its fiscal year ending in 1999, the Company will deliver to the Representative copies of all reports or other communications (financial or otherwise) made to securityholders of the Company. (i) USE OF PROCEEDS. The Company will use the net proceeds received by it from the sale of the Underwritten Securities in the manner specified in the Prospectus under "Use of Proceeds." (j) LISTING. The Company will use its best efforts to effect the listing of the Underwritten Securities, prior to the Closing Time, on any national securities exchange or quotation system if and as specified in the applicable Terms Agreement. (k) RESTRICTION ON SALE OF SECURITIES. Between the date of the applicable Terms Agreement and the Closing Time or such other date specified in such Terms Agreement, the Company will not, without the prior written consent of the Representative, directly or indirectly, issue, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, the securities specified in such Terms Agreement. (l) REPORTING REQUIREMENTS. The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations. SECTION 4. PAYMENT OF EXPENSES. (a) EXPENSES. The Company will pay all expenses incident to the performance of its obligations under this Underwriting Agreement or the applicable Terms Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this Underwriting Agreement, any Terms Agreement, any agreement among underwriters, the Indenture and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Underwritten Securities, (iii) the preparation, issuance and delivery of the Underwritten Securities to the Underwriters, including any transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Underwritten Securities to the Underwriters, (iv) the fees and disbursements of the Company's counsel, accountants and other advisors or agents (including transfer agents and registrars), as well as the fees and disbursements of any Trustees and their respective counsel, (v) the qualification of the Underwritten Securities under state 17 securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation, printing and delivery of the Blue Sky Survey and any Legal Investment Survey, and any amendment thereto, (vi) the printing and delivery to the Underwriters of copies of each preliminary prospectus, any Term Sheet, and the Prospectus and any amendments or supplements thereto, (vii) the fees charged by nationally recognized statistical rating organizations for the rating of the Underwritten Securities, if applicable, (viii) the fees and expenses incurred with respect to the listing of the Underwritten Securities, if applicable, (ix) the filing fees incident to, and the reasonable fees and disbursements of counsel to the Underwriters in connection with, the review, if any, by the National Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Underwritten Securities and (x) the fees and expenses of any Underwriter acting in the capacity of a "qualified independent underwriter" (as defined in the bylaws of the NASD), if applicable. (b) TERMINATION OF AGREEMENT. If the applicable Terms Agreement is terminated by the Representative in accordance with the provisions of Section 5 or Section 9(b)(i) hereof, the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters. SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the Underwriters to purchase and pay for the Underwritten Securities pursuant to the applicable Terms Agreement are subject to the accuracy of the representations and warranties of the Company contained in Section 1 hereof or in certificates of any officer of the Company or any of its subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions: (a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act and no proceedings for that purpose shall have been initiated or be pending or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Underwriters. A prospectus containing information relating to the description of the Underwritten Securities, the specific method of distribution and similar matters shall have been filed with the Commission in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any required post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430A), or, if the Company has elected to rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet including the Rule 434 Information shall have been filed with the Commission in accordance with Rule 424(b)(7). 18 (b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the Representative shall have received the favorable opinion, dated as of Closing Time, of Kennedy Covington Lobdell & Hickman, L.L.P., counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters, to the effect set forth in EXHIBIT B hereto and to such further effect as counsel to the Underwriters may reasonably request. (c) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the Representative shall have received the favorable opinion, dated as of Closing Time, of McGuire Woods Battle & Boothe, LLP, counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters, with respect to the matters set forth in clauses (1), (6), (7), (8), (10), (11) (solely as to the information in the Prospectus under "Description of Notes" and "Description of Capital Stock," if any, or any caption purporting to describe any such Securities), (17), (18) and the penultimate paragraph of EXHIBIT B hereto. In giving such opinion, such counsel may rely, as to all matters governed by the laws of jurisdictions other than the laws of the State of New York and the federal laws of the United States, upon the opinions of counsel satisfactory to the Representative. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. (d) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been, since the date of the applicable Terms Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Representative shall have received a certificate of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company, dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1 are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened by the Commission. (e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of the applicable Terms Agreement, the Representative shall have received from PricewaterhouseCoopers LLP (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements are, or are required to be, included in the Registration Statement) a 19 letter dated such date, in form and substance satisfactory to the Representative, together with signed or reproduced copies of such letter for each of the other Underwriters, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus. (f) BRING-DOWN COMFORT LETTER. At the Closing Time, the Representative shall have received from PricewaterhouseCoopers LLP (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements are, or are required to be, included in the Registration Statement) a letter, dated as of Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e) of this Section 5, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time. (g) RATINGS. At Closing Time and at any relevant Date of Delivery, the Underwritten Securities shall have the ratings accorded by any "nationally recognized statistical rating organization," as defined by the Commission for purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as specified in the applicable Terms Agreement, and the Company shall have delivered to the Representative a letter, dated as of such date, from each such rating organization, or other evidence satisfactory to the Representative, confirming that the Underwritten Securities have such rating. Since the time of execution of such Terms Agreement, there shall not have occurred a downgrading in the rating assigned to the Underwritten Securities or any of the Company's other securities by any such rating organization, and no such rating organization shall have publicly announced that it has under surveillance or review its rating of the Underwritten Securities or any of the Company's other securities. (h) APPROVAL OF LISTING. At Closing Time, the Underwritten Securities shall have been approved for listing, subject only to official notice of issuance, if any, as specified in the applicable Terms Agreement. (i) NO OBJECTION. If the Registration Statement or an offering of Underwritten Securities has been filed with the NASD for review, the NASD shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements. (j) LOCK-UP ARRANGEMENTS. On the date of the applicable Terms Agreement, the Representative shall have received, in form and substance satisfactory to it, each lock-up agreement, if any, specified in such Terms Agreement as being required to be delivered by the persons listed therein. (k) OVER-ALLOTMENT OPTION. In the event that the Underwriters are granted an 20 over-allotment option by the Company in the applicable Terms Agreement and the Underwriters exercise their option to purchase all or any portion of the Option Underwritten Securities, the representations and warranties of the Company contained herein and the statements in any certificates furnished by the Company or any of its subsidiaries hereunder shall be true and correct as of each Date of Delivery, and, at the relevant Date of Delivery, the Representative shall have received: (i) A certificate, dated such Date of Delivery, of the President or a Vice President of the Company and the chief financial officer or chief accounting officer of the Company, confirming that the certificate delivered at the Closing Time pursuant to Section 5(d) hereof remains true and correct as of such Date of Delivery. (ii) The favorable opinion of Kennedy Covington Lobdell & Hickman, L.L.P., counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Underwritten Securities and otherwise to the same effect as the opinion required by Section 5(b) hereof. (iii) The favorable opinion of McGuire, Woods, Battle & Boothe, LLP, counsel for the Underwriters, dated such Date of Delivery, relating to the Opinion Underwritten Securities and otherwise to the same effect as the opinion required by Section 5(c) hereof. (iv) A letter from PricewaterhouseCoopers LLP (and such other accountants) in form and substance satisfactory to the Representative and dated such Date of Delivery, substantially in the same form and substance as the letter furnished to the Representative pursuant to Section 5(f) hereof, except that the "specified date" on the letter furnished pursuant to this paragraph shall be a date not more than three business days prior to such Date of Delivery. (l) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of Delivery, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Underwritten Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Underwritten Securities as herein contemplated shall be satisfactory in form and substance to the Representative and counsel for the Underwriters. (m) TERMINATION OF TERMS AGREEMENT. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, the applicable Terms Agreement (or, with respect to the Underwriters' exercise of any applicable over-allotment option for the purchase of Option Underwritten Securities on a Date of Delivery after the Closing Time, 21 the obligations of the Underwriters to purchase the Option Underwritten Securities on such Date of Delivery) may be terminated by the Representative by notice to the Company at any time at or prior to the Closing Time (or such Date of Delivery, as applicable), and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and remain in full force and effect. SECTION 6. INDEMNIFICATION. (a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information deemed to be a part thereof, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; PROVIDED that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the Representative), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss, liability, 22 claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representative expressly for use in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information deemed to be a part thereof, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto). (b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information deemed to be a part thereof, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representative expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto). (c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by the Representative, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; PROVIDED, HOWEVER, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof 23 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. SECTION 7. CONTRIBUTION. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, from the offering of the Underwritten Securities pursuant to the applicable Terms Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and of the Underwriters, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Underwritten Securities pursuant to the applicable Terms Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of such Underwritten Securities (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding location on the Term Sheet bear to the aggregate initial public offering price of such Securities as set forth on such cover. The relative fault of the Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or 24 alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Underwritten Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Underwriters' respective obligations to contribute pursuant to this Section 7 are several in proportion to the number or aggregate principal amount, as the case may be, of Initial Underwritten Securities set forth opposite their respective names in the applicable Terms Agreement and not joint. SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All representations, warranties and agreements contained in this Underwriting Agreement or the applicable Terms Agreement or in certificates of officers of the Company submitted pursuant hereto or thereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling 25 person, or by or on behalf of the Company, and shall survive delivery of and payment for the Underwritten Securities. SECTION 9. TERMINATION. (a) UNDERWRITING AGREEMENT. This Underwriting Agreement (excluding the applicable Terms Agreement) may be terminated for any reason at any time by the Company or by the Representative upon the giving of 30 days' prior written notice of such termination to the other party hereto. (b) TERMINATION; GENERAL. The Representative may terminate the applicable Terms Agreement, by notice to the Company, at any time at or prior to the Closing Time or any relevant Date of Delivery, if (i) there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change in the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) there has occurred any material adverse change in the financial markets in the United States or in the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representative, impracticable to market the Underwritten Securities or to enforce contracts for the sale of the Underwritten Securities, or (iii) trading in any securities of the Company has been suspended or limited by the Commission or any national securities exchange or quotation system on which the Company's common stock is listed or quoted, or if trading generally on the New York Stock Exchange or the American Stock Exchange or in the Nasdaq National Market has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the NASD or any other governmental authority, or (iv) a banking moratorium has been declared by either Federal or New York authorities or, if the Underwritten Securities include Debt Securities denominated or payable in, or indexed to, one or more foreign or composite currencies, by the relevant authorities in the related foreign country or countries, or (v) there is any downgrading in the rating accorded the Underwritten Securities by any "nationally recognized statistical rating organization" as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act or if any such rating organization shall have publicly announced that it has placed any of such Underwritten Securities on what is commonly termed a "watch list" for possible downgrading. (c) LIABILITIES. If this Underwriting Agreement or the applicable Terms Agreement is terminated pursuant to this Section 9, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that 26 Sections 1, 6, 7 and 8 shall survive such termination and remain in full force and effect. SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of the Underwriters shall fail at the Closing Time or the relevant Date of Delivery, as the case may be, to purchase the Underwritten Securities which it or they are obligated to purchase under the applicable Terms Agreement (the "Defaulted Securities"), then the Representative shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representative shall not have completed such arrangements within such 24-hour period, then: (a) if the number or aggregate principal amount, as the case may be, of Defaulted Securities does not exceed 10% of the number or aggregate principal amount, as the case may be, of Underwritten Securities to be purchased on such date pursuant to such Terms Agreement, the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations under such Terms Agreement bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the number or aggregate principal amount, as the case may be, of Defaulted Securities exceeds 10% of the number or aggregate principal amount, as the case may be, of Underwritten Securities to be purchased on such date pursuant to such Terms Agreement, such Terms Agreement (or, with respect to the Underwriters' exercise of any applicable over-allotment option for the purchase of Option Underwritten Securities on a Date of Delivery after the Closing Time, the obligations of the Underwriters to purchase, and the Company to sell, such Option Underwritten Securities on such Date of Delivery) shall terminate without liability on the part of any non-defaulting Underwriter. No action taken pursuant to this Section 10 shall relieve any defaulting Underwriter from liability in respect of its default. In the event of any such default which does not result in (i) a termination of the applicable Terms Agreement or (ii) in the case of a Date of Delivery after the Closing Time, a termination of the obligations of the Underwriters and the Company with respect to the related Option Underwritten Securities, as the case may be, either the Representative or the Company shall have the right to postpone the Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement or the Prospectus or in any other documents or arrangements. 27 SECTION 11. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the address of the Representative as set forth in the Terms Agreement; notices to the Company shall be directed to the Company at 7800 McCloud Road, Greensboro, North Carolina 27409-9634, attention of General Counsel. SECTION 12. PARTIES. This Underwriting Agreement and the applicable Terms Agreement shall each inure to the benefit of and be binding upon the Company, the Representative and, upon execution of such Terms Agreement, any other Underwriters and their respective successors. Nothing expressed or mentioned in this Underwriting Agreement or such Terms Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Underwriting Agreement or such Terms Agreement or any provision herein or therein contained. This Underwriting Agreement and such Terms Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the parties hereto and thereto and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Underwritten Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase. SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND ANY APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this Underwriting Agreement, along with all counterparts, will become a binding agreement between the Representative and the Company in accordance with its terms. Very truly yours, OAKWOOD HOMES CORPORATION 28 By:____________________________ Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: NATIONSBANC MONTGOMERY SECURITIES LLC FIRST UNION CAPITAL MARKETS CORP. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: NationsBanc Montgomery Securities LLC By: _________________________ Authorized Signatory 29 EXHIBIT A OAKWOOD HOMES CORPORATION (a North Carolina corporation) Debt Securities TERMS AGREEMENT _________ ___, 1999 To: Oakwood Homes Corporation 7800 McCloud Road Greensboro, North Carolina 27409-9634 Ladies and Gentlemen: We understand that Oakwood Homes Corporation, a North Carolina corporation (the "Company"), proposes to issue and sell $[__________] aggregate principal amount of its [senior] [subordinated] debt securities (the "Debt Securities") (such securities also being hereinafter referred to as the "[Initial] Underwritten Securities"). Subject to the terms and conditions set forth or incorporated by reference herein, we [the underwriters named below (the "Underwriters")] offer to purchase [, severally and not jointly,] the principal amount of Underwritten Securities [opposite their names set forth below] at the purchase price set forth below [, and a proportionate share of Option Underwritten Securities set forth below, to the extent any are purchased]. Principal Amount Underwriter of [Initial] Underwritten Securities - --------------- -------------------------------------------- Total _____________________ [$] =================== 1 The Underwritten Securities shall have the following terms: Title: Rank: Ratings: Aggregate principal amount: Denominations: Currency of payment: Interest rate or formula: Interest payment dates: Regular record dates: Stated maturity date: Redemption provisions: Sinking fund requirements: Defeasance provisions: Listing requirements: Black-out provisions: Fixed or Variable Price Offering: [Fixed] [Variable] Price Offering If Fixed Price Offering: initial public offering price: [__]% of the principal amount, plus accrued interest, if any, or amortized original issue discount, if any, from ________________. Purchase price: ___% of principal amount, plus accrued interest, if any, or amortized original issue discount, if any, from ____________. Form: Other terms and conditions: Closing date and location: Additional co-managers, if any: All of the provisions contained in the document attached as Annex I hereto entitled "Oakwood Homes Corporation--Debt Securities--Underwriting Agreement" are hereby incorporated by reference in their entirety herein and shall be deemed to be a part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Terms defined in such document are used herein as therein defined. 2 Please accept this offer no later than ____ o'clock P.M. (New York City time) on ________________ by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us. Very truly yours, [NAME OF REPRESENTATIVE] By: _____________________________ Authorized Signatory [Acting on behalf of itself and the other named Underwriters.] Accepted: OAKWOOD HOMES CORPORATION By: ____________________________ Name: Title: 3 EXHIBIT B FORM OF OPINION OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(b) (1) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the state of North Carolina. (2) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under, or as contemplated under, the Underwriting Agreement and the applicable Terms Agreement. (3) The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not result in a Material Adverse Effect. (4) Each Subsidiary has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not result in a Material Adverse Effect. Except as otherwise stated in the Registration Statement and the Prospectus, all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and is validly issued, fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, and to the best of our knowledge, is free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity (except for the capital stock of Tarheel Insurance Company, Ltd. all which capital stock is pledged in connection with the Company's $175.0 million revolving credit facility with First Union National Bank, as agent). None of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary. (5) [Include if the Prospectus contains a "Capitalization" section.] The authorized, issued and outstanding shares of capital stock of the Company is as set forth in the column entitled "Actual" under the caption "Capitalization" (except for subsequent issuances thereof, if any, contemplated under the Underwriting Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus or pursuant to the exercise of convertible securities or options referred to in the Prospectus). Such shares of capital stock have been duly 1 authorized and validly issued by the Company and are fully paid and non-assessable, and none of such shares of capital stock was issued in violation of preemptive or other similar rights of any securityholder of the Company. (6) The Underwriting Agreement and the applicable Terms Agreement have been duly authorized, executed and delivered by the Company. (7) The Underwritten Securities have been duly authorized by the Company for issuance and sale pursuant to the Underwriting Agreement and the applicable Terms Agreement. The Underwritten Securities, when issued and authenticated in the manner provided for in the Indenture and delivered against payment of the consideration therefor specified in such Terms Agreement, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors' rights generally or by general equitable principles. Such Underwritten Securities will be in the form contemplated by, and each registered holder thereof is entitled to the benefits of, the Indenture. (8) The Indenture has been duly authorized, executed and delivered by the Company and (assuming due authorization, execution and delivery thereof by the Trustee) constitutes a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors' rights generally or by general equitable principles. (9) [Reserved] (10) The Underwritten Securities being sold pursuant to the applicable Terms Agreement conform in all material respects to the statements relating thereto contained in the Prospectus and are in substantially the form filed or incorporated by reference, as the case may be, as an exhibit to the Registration Statement. (11) The information in the Prospectus under "Description of Debt Securities, "Description of Notes" and "Description of Capital Stock," if any, or any caption purporting to describe any such Securities, and "Certain Federal Income Tax Considerations," and in the Registration Statement under Item 15, to the extent that it constitutes matters of law, summaries of legal matters, the Company's charter and bylaws or legal proceedings, or legal conclusions, has been reviewed by us and is correct in all material respects. (12) To the best of our knowledge, neither the Company nor any of its subsidiaries is in violation of its charter or by-laws and no default by the Company or any of its subsidiaries 2 exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Registration Statement or the Prospectus or filed or incorporated by reference as an exhibit to the Registration Statement. (13) The execution, delivery and performance of the Underwriting Agreement, the applicable Terms Agreement and the Indenture and any other agreement or instrument entered into or issued or to be entered into or issued by the Company in connection with the transactions contemplated in the Registration Statement and the Prospectus and the consummation of the transactions contemplated in the Underwriting Agreement and such Terms Agreement and in the Registration Statement and the Prospectus (including the issuance and sale of the Underwritten Securities and the use of the proceeds from the sale of the Underwritten Securities as described under the caption "Use Of Proceeds") and compliance by the Company with its obligations thereunder do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument, known to us, to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the assets, properties or operations of the Company or any of its subsidiaries is subject, except for such conflicts, breaches, defaults, events or liens, charges or encumbrances that would not result in a Material Adverse Effect, nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any of its subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree, known to us, of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their assets, properties or operations. (14) To the best of our knowledge, there is not pending or threatened any action, suit, proceeding, inquiry or investigation to which the Company or any of its subsidiaries thereof is a party or to which the assets, properties or operations of the Company or any of its subsidiaries thereof is subject, before or by any court or governmental agency or body, domestic or foreign, which might reasonably be expected to result in a Material Adverse Effect or which might reasonably be expected to materially and adversely affect the assets, properties or operations thereof or the consummation of the transactions contemplated under the Underwriting Agreement, the applicable Terms Agreement or the Indenture or the performance by the Company of its obligations thereunder. (15) All descriptions in the Registration Statement of contracts and other documents to which the Company or its subsidiaries are a party are accurate in all material respects. To the best of our knowledge, there are no franchises, contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration 3 Statement or to be filed as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto, and the descriptions thereof or references thereto are correct in all material respects. (16) To the best of our knowledge, there are no statutes or regulations that are required to be described in the Prospectus that are not described as required. (17) The Registration Statement has been declared effective under the 1933 Act. Any required filing of the Prospectus pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b). To the best of our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or threatened by the Commission. (18) The Registration Statement and the Prospectus, excluding the documents incorporated by reference therein, and each amendment or supplement to the Registration Statement and Prospectus, excluding the documents incorporated by reference therein, as of their respective effective or issue dates (other than the financial statements and supporting schedules included therein or omitted therefrom, and each Trustee's Statement of Eligibility on Form T-1 (the "Form T-1s"), as to which we express no opinion) complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. (19) The documents incorporated by reference in the Prospectus (other than the financial statements and supporting schedules therein or omitted therefrom, as to which we express no opinion), when they were filed with the Commission complied as to form in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder. (20) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the performance by the Company of its obligations under the Underwriting Agreement or the applicable Terms Agreement or in connection with the transactions contemplated under the Underwriting Agreement, such Terms Agreement or the Indenture other than under the 1933 Act, the 1933 Act Regulations, the 1939 Act and the 1939 Act Regulations, which have been obtained, or as may be required under state securities or blue sky laws. (21) The Underwritten Securities, upon issuance, will be excluded or exempted under, or beyond the purview of, the Commodity Exchange Act, as amended (the "Commodity Exchange Act"), and the rules and regulations of the Commodity Futures Trading Commission under the Commodity Exchange Act. 4 (22) Neither the Company nor any of its subsidiaries is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended. As counsel to the Company, we have examined various documents and records and have participated in the preparation of and reviewed the Registration Statement and the Prospectus, participated in discussions with representatives of the Company and its counsel and accountants, and representatives of the Underwriters and their counsel, and advised the Company as to the requirements of the 1933 Act and the 1934 Act and the 1933 Act Regulations and the 1934 Act Regulations. Nothing has come to our attention that would lead us to believe that the Registration Statement or any post-effective amendment thereto, including the Rule 430A Information and Rule 434 Information (if applicable) (except for financial statements and schedules and other financial data included therein or omitted therefrom and for the Form T-1s, as to which we make no statement), at the time such Registration Statement or any post-effective amendment thereto (including the filing of the Company's Annual Report on Form 10-K with the Commission) became effective or at the date of the applicable Terms Agreement, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus or any amendment or supplement thereto (except for financial statements and schedules and other financial data included therein or omitted therefrom, as to which we make no statement), at the time the Prospectus was issued, at the time any such amended or supplemented prospectus was issued or at the Closing Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. In rendering such opinion, such counsel may rely as to matters of fact (but not as to legal conclusions), to the extent they deem proper, on certificates of responsible officers of the Company and public officials. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). 5 1 ANNEX I FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e) (i) We are independent public accountants with respect to the Company within the meaning of the 1933 Act and the applicable published 1933 Act Regulations. (ii) In our opinion, the audited financial statements and the related financial statement schedules included or incorporated by reference in the Registration Statement and the Prospectus comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the published rules and regulations thereunder. (iii) On the basis of procedures (but not an examination in accordance with generally accepted auditing standards) consisting of a reading of the unaudited interim consolidated financial statements of the Company for the _____-month periods ended _________, 19___ and _________, 19___, included in the Registration Statement and the Prospectus (the "____-month financials"), [a reading of the latest available unaudited interim consolidated financial statements of the Company], a reading of the minutes of all meetings of the stockholders and directors of the Company and its subsidiaries and the and Committees of the Company's Board of Directors and any subsidiary committees since _________________, inquiries of certain officials of the Company and its subsidiaries responsible for financial and accounting matters, a review of interim financial information in accordance with standards established by the American Institute of Certified Public Accountants in Statement on Auditing Standards No. 71, Interim Financial Information ("SAS 71"), with respect to the _____-month financials, and such other inquiries and procedures as may be specified in such letter, nothing came to our attention that caused us to believe that: (A) the _____-month financials included in the Registration Statement and the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations applicable to unaudited interim financial statements included in registration statements or any material modifications should be made to the _____-month financials included in the Registration Statement and the Prospectus for them to be in conformity with generally accepted accounting principles; (B) at _________, 19___ and at a specified date not more than five days(1) prior to the date of the applicable Terms Agreement, there was any change in the capital stock of the Company and its subsidiaries or any decrease in the total assets or stockholders investment of the Company and its subsidiaries or any increase in the notes and bonds payable and total liabilities of the Company and its subsidiaries, in each case as compared with amounts shown in the latest balance sheet included in the Registration Statement and the Prospectus, except in each case for changes, decreases or increases that the Registration Statement and the Prospectus disclose have occurred or may occur; or 1 (C) for the period from _________, 19___ to _________, 19___ and for the period from _________, 19___ to a specified date not more than five days prior to the date of the applicable Terms Agreement, there was any decrease in consolidated total revenues, operating income, or net income, in each case as compared with the comparable period in the preceding year, except in each case for any decreases that the Registration Statement and the Prospectus discloses have occurred or may occur. (iv) Based upon the procedures set forth in clause (iii) above and a reading of the Selected Financial Data included in the Registration Statement and the Prospectus and a reading of the financial statements from which such data were derived, nothing came to our attention that caused us to believe that the Selected Financial Data included in the Registration Statement and the Prospectus do not comply as to form in all material respects with the disclosure requirements of Item 301 of Regulation S-K of the 1933 Act, that the amounts included in the Selected Financial Data are not in agreement with the corresponding amounts in the audited consolidated financial statements for the respective periods or that the financial statements not included in the Registration Statement and the Prospectus from which certain of such data were derived are not in conformity with generally accepted accounting principles. (v) We have compared the information in the Registration Statement and the Prospectus under selected captions with the disclosure requirements of Regulation S-K of the 1933 Act and on the basis of limited procedures specified herein, nothing came to our attention that caused us to believe that this information does not comply as to form in all material respects with the disclosure requirements of Items 302, 402 and 503(d), respectively, of Regulation S-K. - ------------------------------ (1) According to Example A of SAS No. 72, the specified date should be five calendar days prior to the date of the applicable Terms Agreement. However, in unusual circumstances, five business days may be used. - ------------------------------ (vi) We are unable to and do not express any opinion on the Pro Forma Financial Information (the "Pro Forma Statement") included in the Registration Statement and the Prospectus or on the pro forma adjustments applied to the historical amounts included in the Pro Forma Statement; however, for purposes of this letter we have: (A) read the Pro Forma Statement; (B) performed an audit of the financial statements to which the pro forma adjustments were applied; (C) made inquiries of certain officials of the Company who have responsibility for 2 financial and accounting matters about the basis for their determination of the pro forma adjustments and whether the Pro Forma Statement complies as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X; and (D) proved the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts in the Pro Forma Statement; and on the basis of such procedures and such other inquiries and procedures as specified herein, nothing came to our attention that caused us to believe that the Pro Forma Statement included in the Registration Statement does not comply as to form in all material respects with the applicable requirements of Rule 11-02 of Regulation S-X or that the pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements. (vii) In addition to the procedures referred to in clause (ii) above, we have performed other procedures, not constituting an audit, with respect to certain amounts, percentages, numerical data and financial information appearing in the Registration Statement and the Prospectus, which are specified herein, and have compared certain of such items with, and have found such items to be in agreement with, the accounting and financial records of the Company. 3 EX-4 3 EXHIBIT 4.1 ===================================================================== OAKWOOD HOMES CORPORATION, as Issuer, and THE FIRST NATIONAL BANK OF CHICAGO, as Trustee INDENTURE Dated as of February [___], 1999 ===================================================================== TABLE OF CONTENTS -----------------
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION....................................................................... Section 101. Definitions..................................................... Section 102. Compliance Certificates and Opinions............................ Section 103. Form of Documents Delivered to Trustee.......................... Section 104. Acts of Holders; Record Dates................................... Section 105. Notices, Etc., to Trustee and Company........................... Section 106. Notice to Holders; Waiver....................................... Section 107. Conflict with Trust Indenture Act............................... Section 108. Effect of Headings and Table of Contents........................ Section 109. Successors and Assigns.......................................... Section 110. Separability Clause............................................. Section 111. Benefits of Indenture........................................... Section 112. Governing Law................................................... Section 113. Legal Holidays.................................................. Section 114. Independence of Covenants....................................... ARTICLE TWO SECURITY FORMS....................................................... Section 201. Forms of Securities............................................. Section 202. Form of Legend for Book-Entry Securities........................ Section 203. Form of Trustee's Certificate of Authentication................. ARTICLE THREE THE SECURITIES..................................................... Section 301. Amount Unlimited; Issuable in Series............................ Section 302. Denominations................................................... Section 303. Execution, Authentication, Delivery and Dating.................. Section 304. Temporary Securities............................................ Section 305. Registration, Registration of Transfer and Exchange............. Section 306. Mutilated, Destroyed, Lost and Stolen Securities................ Section 307. Payment of Interest; Interest Rights Preserved.................. Section 308. Persons Deemed Owners........................................... Section 309. Cancellation.................................................... Section 310. Computation of Interest; Default Rate.......................... ARTICLE FOUR SATISFACTION AND DISCHARGE i Section 401. Satisfaction and Discharge of Indenture......................... Section 402. Application of Trust Money...................................... Section 403. Defeasance and Discharge of Securities of Any Series............ ARTICLE FIVE REMEDIES ........................................................... Section 501. Events of Default............................................... Section 502. Acceleration of Maturity; Rescission and Annulment.............. Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee. Section 504. Trustee May File Proofs of Claim................................ Section 505. Trustee May Enforce Claims Without Possession of Securities..... Section 506. Application of Money Collected.................................. Section 507. Limitation on Suits............................................. Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.................................................... Section 509. Restoration of Rights and Remedies.............................. Section 510. Rights and Remedies Cumulative.................................. Section 511. Delay or Omission Not Waiver.................................... Section 512. Control by Holders.............................................. Section 513. Waiver of Past Defaults......................................... Section 514. Undertaking for Costs........................................... Section 515. Waiver of Stay or Extension Laws................................ ARTICLE SIX THE TRUSTEE.......................................................... Section 601. Certain Duties and Responsibilities............................. Section 602. Notice of Defaults.............................................. Section 603. Certain Rights of Trustee....................................... Section 604. Not Responsible for Recitals or Issuance of Securities.......... Section 605. May Hold Securities............................................. Section 606. Money Held in Trust............................................. Section 607. Compensation and Reimbursement.................................. Section 608. Disqualification; Conflicting Interests......................... Section 609. Corporate Trustee Required; Eligibility......................... Section 610. Resignation and Removal; Appointment of Successor............... Section 611. Acceptance of Appointment by Successor.......................... Section 612. Merger, Conversion, Consolidation or Succession to Business.... Section 613. Preferential Collection of Claims Against Company............... Section 614. Appointment of Authenticating Agent............................. ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY ii Section 701. Company to Furnish Trustee Names and Addresses of Holders....... Section 702. Preservation of Information; Communications to Holders.......... Section 703. Reports by Trustee.............................................. Section 704. Reports by Company.............................................. ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 801 Restrictions on Mergers, Consolidations and Transfers of Assets.. ARTICLE NINE SUPPLEMENTAL INDENTURES............................................. Section 901. Supplemental Indentures Without Consent of Holders.............. Section 902. Supplemental Indentures with Consent of Holders................. Section 903. Execution of Supplemental Indentures............................ Section 904. Effect of Supplemental Indentures............................... Section 905. Conformity with Trust Indenture Act............................. Section 906. Reference in Securities to Supplemental Indentures.............. Section 907. Notice of Supplemental Indentures............................... ARTICLE TEN COVENANTS............................................................ Section 1001. Payment of Principal, Premium and Interest..................... Section 1002. Maintenance of Office or Agency................................ Section 1003. Money for Securities Payments to Be Held in Trust.............. Section 1004. Corporate Existence............................................ Section 1005. Payment of Taxes and Other Claims.............................. Section 1006. Maintenance of Properties...................................... Section 1007. Maintenance of Insurance....................................... Section 1008. Defeasance of Certain Obligations.............................. Section 1009. Statement as to Compliance..................................... Section 1010. Waiver of Certain Covenants.................................... Section 1011. Restrictions on Secured Debt................................... Section 1012. Restrictions on Debt of Subsidiaries........................... Section 1013. Restrictions on Sale Leaseback Transactions.................... ARTICLE ELEVEN REDEMPTION OF SECURITIES.......................................... Section 1101. Applicability of Article....................................... Section 1102. Election to Redeem; Notice to Trustee.......................... Section 1103. Selection by Trustee of Securities to Be Redeemed.............. Section 1104. Notice of Redemption........................................... Section 1105. Deposit of Redemption Price.................................... Section 1106. Securities Payable on Redemption Date.......................... Section 1107. Securities Redeemed in Part.................................... iii ARTICLE TWELVE SINKING FUNDS..................................................... Section 1201. Applicability of Article....................................... Section 1202. Satisfaction of Sinking Fund Payments with Securities.......... Section 1203. Redemption of Securities for Sinking Fund...................... ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF THE HOLDERS........................... Section 1301. Applicability of Article........................................ Section 1302. Repayment of Securities......................................... Section 1303. Exercise of Option............................................. Section 1304. When Securities Presented for Payment Become Due and Payable... Section 1305. Securities Repaid in Part...................................... ARTICLE FOURTEEN SUBORDINATION OF SECURITIES...................................... Section 1401. Securities Subordinate to Senior Indebtedness..................
iv INDENTURE INDENTURE, dated as of February [___], 1999, between OAKWOOD HOMES CORPORATION, a North Carolina corporation (the "Company"), having its principal office at 7025 Albert Pick Road, Greensboro, North Carolina 27409, and THE FIRST NATIONAL BANK OF CHICAGO, as Trustee hereunder (the "Trustee"), having its Corporate Trust Office at One North State Street, 9th Floor, Chicago, Illinois 60602. RECITALS OF THE COMPANY The Company deems it advisable to issue from time to time for its lawful purposes its unsecured debentures, notes or other evidences of indebtedness (hereinafter called the "Securities") in one or more series as in this Indenture provided, and has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of the Securities, unlimited as to principal amount, to bear interest at the rates or formulas, to mature at such times and to have such other provisions as shall be fixed as hereinafter provided. This Indenture is subject to, and shall be governed by, the provisions of the Trust Indenture Act that are required to be part of and to govern indentures qualified under the Trust Indenture Act. All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows: ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have, when capitalized, the meanings assigned to them in this Article, and include the plural as well as the singular; (b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of the Indenture; (d) 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; (e) all references to "dollars", "$", "U.S. dollars", "United States dollars" or "cash" shall refer to the lawful currency of the United States of America; and (f) the definitions included herein may be modified, expanded, deleted or otherwise amended in a supplemental indenture after the date hereof. "Act", when used with respect to any Holder, has the meaning specified in Section 104. "Affiliate" means, with respect to any specified Person, any other Person which, directly or indirectly, is in control of, is controlled by or is under common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Attributable Debt from a Sale and Leaseback" means, as of any particular time, the aggregate present values (discounted at the weighted average effective interest cost of Outstanding Securities determined on a weighted average basis and compounded semi-annually) of all remaining rental payments for which the Company of any Subsidiary is obligated under all leases due through the date through which such leases have been or may, at the option of the lessor, be extended or, if earlier, through the earliest date on which the lessee may terminate such leases upon payment of a penalty (which penalties will be considered in calculating the present value), after excluding all amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water and utility rates and similar charges. "Authenticating Agent" means any authenticating agent appointed by the Trustee pursuant to Section 614. "Board of Directors" means either the board of directors of the Company or any duly authorized committee of that board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted or consented to by the Board of 2 Directors or any committee thereof and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Book-Entry Security" means a Security bearing the legend specified in Section 202 evidencing all or part of a series of Securities, authenticated and delivered to the Depositary for such series or its nominee, and registered in the name of such Depositary or nominee. "Business Day" when used with respect to any Place of Payment means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in the Place of Payment are authorized or obligated by law or executive order to close. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or if at any time after the execution of the Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by any one of its Chairman of the Board, its Vice Chairman, its Chief Executive Officer, its President or a Vice President (regardless of Vice Presidential designation), and by any one of its Treasurer, Assistant Treasurer, Secretary or Assistant Secretary and delivered to the Trustee. "Consolidated Net Tangible Assets" means, at any date, the total assets appearing on the Company's and Subsidiaries' most recently prepared consolidated balance sheet at the end of a fiscal quarter of the Company, prepared in accordance with generally accepted accounting principals at the time of calculation, less (a) all current liabilities as shown on such balance sheet and (b) Intangible Assets. "Corporate Trust Office" means the office of the Trustee at which, at any particular time, its corporate trust business shall be administered, which office as of the date of this Indenture is the address of the Trustee set forth in Section 105. "Defaulted Interest" has the meaning specified in Section 307. "Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Book-Entry Securities, The Depository Trust Company, its nominees and successors, or another Person designated as Depositary by the Company pursuant to Section 301, which must be a clearing agency registered under the Exchange Act, and if at any time there is more than one such Person, "Depositary" shall mean the Depositary with respect to the Securities of that series. 3 "Event of Default" has the meaning specified in Section 501. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and any statute successor thereto. "Expiration Date" has the meaning specified in Section 104. "Holder" means a Person in whose name a Security is registered in the Security Register. "Indebtedness" means (i) all obligations for borrowed money, (ii) all obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations in respect of letters of credit or bankers acceptances or similar instruments (or reimbursement obligations with respect thereto), (iv) all obligations to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (v) all obligations as lessee which are capitalized in accordance with generally accepted accounting principles, and (vi) all Indebtedness of others guaranteed by the Company or any of its subsidiaries or for which the Company or any of its subsidiaries is otherwise responsible or liable (whether by agreement to purchase indebtedness of, or to supply funds or to invest in, others). "Indemnified Party or Parties" has the meaning specified in Section 607. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, and shall include the terms of particular series of Securities established as contemplated by Section 301; provided, however, that, if at any time more than one Person is acting as Trustee under this instrument, "Indenture" shall mean, with respect to any one or more series of Securities for which such Person is Trustee, this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of those particular series of Securities for which such Person is Trustee established as contemplated by Section 301, exclusive, however, of any provisions or terms which relate solely to other series of Securities for which such Person is Trustee, regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms adopted by means of one or more indentures supplemental hereto executed and delivered after such Person had become such Trustee but to which such Person, as such Trustee, was not a party. "Indexed Security" means a Security the terms of which provide that the principal amount thereof payable at Stated Maturity may be more or less than the principal face amount thereof at original issuance. "Intangible Assets" means the value (net of applicable reserves), as shown on or reflected in the Company's and Subsidiaries' most recently prepared consolidated balance sheet at the end 4 of a fiscal quarter of the Company, of (a) all trade names, trademarks, licenses, patents, copyrights, and goodwill; (b) organizational costs; and (c) deferred charges (other than prepaid items such as insurance, taxes, interest, commissions, rents and similar items and intangible assets being amortized). In no event, however, will the term "Intangible Assets" include product development costs. "Interest", when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, shall mean interest payable after Maturity. "Interest Payment Date", when used with respect to any Security, means the Stated Maturity of an installment of interest on such Securities. "Liens" means any mortgage, pledge, security interest, lien or encumbrance. "Maturity", when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, notice of redemption or otherwise. "Officers' Certificate" means a certificate signed by the Chairman of the Board, Vice Chairman, the Chief Executive Officer, the President or a Vice President (regardless of Vice Presidential designation), and by the Treasurer, Assistant Treasurer, Secretary or Assistant Secretary of the Company, and delivered to the Trustee. "Opinion of Counsel" means a written opinion of counsel, who may be an employee of or counsel for the Company or the Trustee unless an independent opinion of counsel is required pursuant to the terms of this Indenture. "Opinion of Independent Counsel" means a written opinion of counsel, who may be regular outside counsel for the Company, which is issued by a Person who is not an employee or consultant of the Company and who shall be reasonably acceptable to the Trustee. "Original Issue Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502. "Outstanding", when used with respect to Securities means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities, or portions thereof, for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent 5 (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided, that if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and Securities, except to the extent provided in Section 403, with respect to which the Company has effected defeasance as provided in Section 403; and (iii) Securities which have been returned pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof reasonably satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 502, (ii) the principal amount of any Indexed Security of any series that may be counted in making such determination or calculation and that shall be deemed outstanding for such purpose shall be equal to the principal face amount of such Indexed Security at original issuance, unless otherwise established as contemplated by Section 301 with respect to such Security, and (iii) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor. "Paying Agent" means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company. "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment", when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as established as contemplated by Section 301. 6 "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Preferred Stock" means, with respect to any Person, capital stock issued by such Person that is entitled to a preference or priority over any other capital stock issued by such Person upon any distribution of such Person's assets, whether by dividend or upon liquidation. "Redemption Date", when used with respect to any Security to be redeemed, in whole or in part, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any series means the date for that purpose established as contemplated by Section 301. "Responsible Officer", when used with respect to the Trustee, means any officer within the Corporate Trust Department (or any successor department) including, without limitation, any vice president (whether or not designated by a number or a word or words added before or after the title "vice president"), any trust officer, any assistant secretary, the controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject. "Sale and Leaseback" shall have the meaning specified in Section 1013. "Security" has the meaning stated in the first recital of this Indenture and, more particularly, means any Security or Securities authenticated and delivered under this Indenture; provided, however, that, if at any time there is more than one Person acting as Trustee under this Indenture, "Securities" with respect to the Indenture as to which such Person is Trustee shall have the meaning stated in the first recital of this Indenture and shall more particularly mean Securities authenticated and delivered under this Indenture, exclusive, however, of Securities of any series as to which such Person is not Trustee. "Security Register" and "Security Registrar" have the respective meanings specified in Section 305. "Senior Indebtedness" has the meaning determined pursuant to Section 301(17). 7 "Special Record Date" for the payment of any Defaulted Interest on the Securities of any series means a date fixed by the Trustee pursuant to Section 307. "Stated Maturity", when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable. "Subsidiary" means (i) any corporation at least a majority of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries of the Company, or by the Company and one or more other Subsidiaries of the Company, (ii) any partnership in which the Company or a Subsidiary of the Company holds a majority interest in the equity capital or profits of such partnership, or (iii) any other Person in which the Company, a Subsidiary of the Company or the Company and one or more other Subsidiaries of the Company, directly or indirectly, at the date of determination has (x) at least a majority ownership interest or (y) the power to elect or direct the election of a majority of the directors or other governing body of such Person. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "U.S. Government Obligations" means securities which are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation evidenced by such depository receipt. 8 "Yield to Maturity" means the yield to maturity, computed at the time of issuance of a Security (or, if applicable, at the most recent redetermination of interest on such Security) and as set forth in such Security in accordance with generally accepted United States bond yeild computation principles. Section 102. Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, the individual has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 103. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such officer's certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates 9 to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 104. Acts of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders of the Outstanding Securities of all series or one or more series, as the case may be, may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any date not more than 60 days nor less than 5 days prior to the date of any of the following actions as the record date for the purpose of determining the Holders of Securities of any series entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders of Securities of such series. If not set by the Company prior to the first solicitation of a Holder of Securities of such series made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 701) prior to such first solicitation or vote, as the case may be. Notwithstanding the foregoing, the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in 10 the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to each Holder of Securities of the relevant series in the manner set forth in Section 106. (d) The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section 512, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company's expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106. (e) With respect to any record date set pursuant to this Section, the party hereto which sets such record dates may designate any day as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto which set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date. (f) Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. (g) The ownership of Securities shall be proved by the Security Register. 11 (h) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. (i) For purposes of this Indenture, any action by the Holders which may be taken in writing may be taken by electronic means or as otherwise reasonably acceptable to the Trustee. Section 105. Notices, Etc., to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, One North State Street, 9th Floor, Chicago, Illinois 60602, Attention: Corporate Trust Department, or at any other address previously furnished in writing by the Trustee to the Holders or the Company or any other obligor on the Securities, or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing to or with the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument to the "Attention of the Treasurer" with a copy to the Company's General Counsel or at any other address previously furnished in writing to the Trustee by the Company. Any such communication shall be effective upon receipt. Section 106. Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 12 In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. Section 107. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the Trust Indenture Act provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or excluded, as the case may be. Section 108. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 109. Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. Section 110. Separability Clause. In case any provision in this Indenture or in the Securities 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 111. Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 112. Governing Law. This Indenture and the Securities shall be deemed to be a contract under the laws of the State of New York, and for all purposes shall be construed in accordance with the laws of such state, without regard to principles of conflicts of laws. Section 113. Legal Holidays. 13 In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment for such Security, then notwithstanding any other provision of this Indenture or of the Security (other than a provision of the Security established as contemplated by Section 301 and which specifically states that such provision shall apply in lieu of this Section 113), payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, and no interest shall accrue on such payment for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to the next succeeding Business Day. Section 114. Independence of Covenants. All covenants and agreements in this Indenture shall be given independent effect so that if a particular action or condition is not permitted by any such covenants or agreements, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a default or an Event of Default if such action is taken or condition exists. ARTICLE TWO SECURITY FORMS Section 201. Forms of Securities. The Securities of each series shall be in substantially the forms as shall be established by or pursuant to one or more Board Resolutions (as set forth in a Board Resolution or, to the extent established pursuant to rather than as set forth in a Board Resolution, an Officer's Certificate detailing such establishment) or in one or more indentures supplemental hereto, shall have such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or any indenture supplemental hereto, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements placed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Securities may be listed or of the Depositary therefore, or to conform to usage. The definitive Securities shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange or automated quotation system on which the Securities of such series may be listed or traded, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. Section 202. Form of Legend for Book-Entry Securities. 14 Any Book-Entry Security authenticated and delivered hereunder shall bear a legend in substantially the following form: "This Security is a Book-Entry Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depositary or a nominee of a Depositary or a successor depositary. This Security is not exchangeable for Securities registered in the name of a Person other than the Depositary or its nominee except in the limited circumstances described in the Indenture, and no transfer of this Security (other than a transfer of this Security 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) may be registered except in the limited circumstances described in the Indenture." Section 203. Form of Trustee's Certificate of Authentication. The Trustee's certificates of authentication shall be in substantially the following form: "TRUSTEE'S CERTIFICATE OF AUTHENTICATION Dated: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. [_______________________], as Trustee By: _________________________________ Authorized Signatory" If at any time there shall be an Authenticating Agent appointed with respect to one or more series of Securities, then in lieu of the Trustee's certificate of authentication, an alternative certificate of authentication shall be borne by such Securities substantially in the following form: "TRUSTEE'S CERTIFICATE OF AUTHENTICATION Dated: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. By:[____________________], as Trustee, as Authenticating Agent 15 By: ___________________________ Authorized Signatory" ARTICLE THREE THE SECURITIES Section 301. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. All Securities of one series need not be issued at the same time and, unless otherwise provided, a series may be reopened, without the consent of any Holder, for issuances of additional Securities of such series. The Securities may be issued in one or more series. With respect to any series of Securities which may be designated and authenticated and delivered under this Indenture, there shall be established in or pursuant to one or more Board Resolutions (and to the extent established pursuant to rather than as set forth in a Board Resolution, in an Officers' Certificate detailing such establishment) or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series (except as provided in the last paragraph of this Section 301), the following: (1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series); (2) the aggregate principal amount of the Securities and any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder), which limit, unless otherwise expressly established, may be changed from time to time by or pursuant to Board Resolution, Officers' Certificate or indentures supplemental hereto without the consent of any Holders; (3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (4) the date or dates, or the method by which such date or dates will be determined, on which the principal and premium, if any, of the Securities of the series is payable; 16 (5) the rate or rates (which may be fixed, floating, or adjustable) at which the Securities of the series shall bear interest, if any, or the method or methods by which such rate or rates shall be determined, the date or dates from which such interest shall accrue or method by which such date or dates shall be determined, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date, if any, for any interest payable on any Interest Payment Date, or the method by which such date shall be determined, and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months; (6) the place or places where the principal of and any premium and interest on Securities of the series shall be payable and the place or places where the Securities of such series may be presented for requisition of exchange; (7) the period or periods within which, the price or prices at which, the currencies, currency units or composite currencies in which, and the other terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company and if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced; (8) the obligation, if any, of the Company to redeem, repay or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which, and the other terms and conditions upon which Securities of the series shall be redeemed, repaid or purchased, in whole or in part, pursuant to such obligation; (9) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable; (10) the application, if any, of Section 403 to the Securities of the series; (11) the application, if any, of Section 1008 to the Securities of the series; (12) if the amount of payments of principal of or any premium or interest on any Securities of the series may be determined with reference to an index, formula or other method (which index, formula or method may be based, without limitation, on one or more currencies, currency units, composite currencies, commodities, equity indices or other indices), the manner in which such amounts shall be determined; (13) whether the Securities of the series shall be issued in whole or in part in the form of one or more Book-Entry Securities and, in such case, the Depositary with respect to such Book-Entry Security or Securities and the circumstances under which any such Book-Entry Security may be registered for transfer or exchange, or authenticated and delivered, in the name of a Person other than such Depositary or its nominee, if other than as set forth in Section 305; 17 (14) if other than the entire principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502; (15) provisions, if any, granting special rights to the Holders of Securities of the series upon the occurrence of such events as may be specified; (16) any deletions from, modifications of or additions to the Events of Default or covenants of the Company with respect to Securities of the series, whether or not such Events of Default or covenants are consistent with the Events of Default or covenants set forth herein; (17) the terms pursuant to which the Securities of the series will be made subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness of the Company, and the definition of any such Senior Indebtedness; (18) whether the payment of principal, premium and interest and other amounts due hereunder, and performance of the Company's other obligations hereunder, will be guaranteed by one or more guarantors, including subsidiaries of the Company; (19) whether the Securities of such series are registered securities, bearer securities or, alternatively, bearer and registered securities, and whether any bearer securities will be issued with coupons, without coupons or both, and any restrictions applicable to the offer, sale or delivery of bearer securities and the terms, if any, upon which bearer securities of the series may be exchanged for registered securities of the series and vice versa; and (20) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 901(5)). All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided by or pursuant to the Board Resolution or Officer's Certificate referred to above or as set forth in any indenture supplemental hereto. The Securities of any series need not be issued at the same time but may be issued from time to time and the terms of any Security may be established prior to the issuance thereof but after the issuance of other Securities of the same series. If any of the terms of the Securities of such series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate or Company Order setting forth the terms of the series. Section 302. Denominations. 18 The Securities of each series shall be issuable in registered form without coupons in such denominations as shall be established as contemplated by Section 301. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof. Section 303. Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its President or one of its Vice Presidents, under its corporate seal which may, but need not, be attested by its Treasurer, one of its Assistant Treasurers, its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities to or upon the order of the Company or pursuant to such procedures acceptable to the Trustee and to such recipients as the case may be as specified from time to time by a Company Order. If all the Securities of any series are not to be issued at one time and if the terms of such Securities established as contemplated by Section 301 so permit, such Company Order may set forth procedures acceptable to the Trustee for the completion and authentication of such Securities from time to time. In authenticating Securities of any series, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, (i) any Board Resolution, Officers' Certificate and/or indenture supplemental hereto by or pursuant to which the forms and terms of such Securities are established as contemplated by Sections 201 and 301; (ii) an Officers' Certificate setting forth the forms and terms of such Securities and stating that the forms and terms of such Securities have been established pursuant to Sections 201 and 301 and comply with this Indenture, and covering such other matters as the Trustee may reasonably request; and (iii) an Opinion of Independent Counsel substantially to the effect that: (a) the forms and the terms of such Securities have been duly authorized and established in conformity with the provisions of this Indenture, 19 (b) all conditions precedent provided for in this Indenture relating to the Trustee's authentication of such Securities have been complied with, and (c) such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Independent Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles and to such other matters as such counsel may specify. The Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Company Order, Board Resolution, indentures supplemental hereto, Officers' Certificate and Opinion of Independent Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of authentication of each Security of such series if such documents (with such modifications as may be appropriate) are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued and reasonably contemplate such authentication of each such Security. Each Security shall be dated the date of its authentication, unless otherwise established therefor as contemplated by Section 301. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. Section 304. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities of 20 such Series which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. In the case of Securities of any series, such temporary Securities may be in global form. If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, one or more definitive Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor. Section 305. Registration, Registration of Transfer and Exchange. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. If any indenture supplemental hereto refers to any transfer agents (in addition to the Security Registrar) initially designated by the Company with respect to any series of Securities, the Company may at any time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent in each Place of Payment for such series. The Company may at any time designate additional transfer agents with respect to any series of Securities. Upon surrender for registration of transfer of any Security of any series at the office or agency in a Place of Payment for Securities of that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor. At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the 21 Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange or redemption shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer. Neither the Company nor the Trustee shall be required (i) to issue, register the transfer of or exchange Securities of any series, if such Security may be among those selected for redemption, during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. Notwithstanding the foregoing, no Book-Entry Security shall be registered for transfer or exchange, or authenticated and delivered, whether pursuant to this Section, Sections 304, 306, 906 or 1107 or otherwise, in the name of a Person other than the Depositary for such Book-Entry Security or its nominee until (i) the Depositary with respect to a Book-Entry Security notifies the Company that it is unwilling or unable to continue as Depositary for such Book-Entry Security or the Depositary ceases to be a clearing agency registered under the Exchange Act, (ii) the Company executes and delivers to the Trustee a Company Order that such Book-Entry Security shall be so transferable and exchangeable or (iii) there shall have occurred and be continuing an Event of Default with respect to the Securities of such series. Upon the occurrence in respect of any Book-Entry Security of any series of any one or more of the conditions specified in clauses (i), (ii) or (iii) of the preceding sentence or such other conditions as may be established as contemplated by Section 301 for Securities of such series, such Book-Entry Security may be registered for transfer or exchange for Securities registered in the names of, or authenticated and delivered to, such Persons as the Depositary with respect to such series shall direct. Except as provided in the preceding paragraph, any Security authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, any Book-Entry Security, 22 whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall also be a Book-Entry Security and bear the legend specified in Section 202. If the Securities are Book-Entry Securities, the Depositary or its nominee, as registered owner of a Book-Entry Security, shall be the Holder of such Book-Entry Security for all purposes under the Indenture and each series of the Securities, and owners of beneficial interests in a Book-Entry Security shall hold such interests pursuant to the applicable procedures of the Depositary. Accordingly, any such owner's beneficial interest in a Book-Entry Security will be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee. Section 306. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, together with such security or indemnity as may be requested by the Company or the Trustee to save each of them harmless the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If, after the delivery of such new Security, a bona fide purchaser of the original Security in lieu of which such new Security was issued presents for payment or registration such original Security, the Trustee shall be entitled to recover such new Security from the party to whom it was delivered or any party taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Company and the Trustee in connection therewith. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the 23 Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 307. Payment of Interest; Interest Rights Preserved. Except as otherwise established as contemplated by Section 301 with respect to Securities of any series, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest at the office or agency of the Company maintained for such purpose pursuant to Section 1002; provided, however, that, except in the case of a Book-Entry Security, each installment of interest on any Security may at the Company's option be paid by (i) mailing a check for such interest, payable to or upon the written order of the Person entitled thereto pursuant to Section 308, to the address of such Person as it appears on the Security Register or (ii) wire transfer to an account maintained by the payee located inside the United States. Any Paying Agents will be identified in a supplemental indenture hereto. The Company may at any time designate additional Paying Agents or rescind the designation of any Paying Agent; however, the Company at all times will be required to maintain a Paying Agent in each Place of Payment for each series of Securities. Except as otherwise established as contemplated by Section 301 with respect to Securities of any series, any interest on any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in paragraph (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money in cash equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as provided in this clause. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall not be more 24 than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of such Securities at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may pay any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which such Securities may be listed or traded, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. Section 308. Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. Section 309. Cancellation. All Securities surrendered for payment, redemption, repayment at the option of the Holder, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for 25 delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be disposed of as directed by a Company Order. Section 310. Computation of Interest; Default Rate. Except as otherwise established as contemplated by Section 301 in respect of Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months and interest on the Securities of each series for any partial period shall be computed on the basis of a 360-day year of twelve 30-day months and the number of days elapsed in any partial month. Unless otherwise specified, interest on any overdue amounts of any series of Securities, whether for interest or principal, shall bear interest at the rate of interest for the underlying Securities. Section 311. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission o such numbers. The Company shall promptly notify the Trustee in writing of any change in "CUSIP" numbers. ARTICLE FOUR SATISFACTION AND DISCHARGE Section 401. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Order cease to be of further effect with respect to Securities of any series specified in such Company Order (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, upon receipt of Company Order, and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture as to such series, when (1) either (A) all Securities of such series theretofore authenticated and delivered (other than (i) Securities of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities of such series for whose payment money has theretofore been deposited in trust or segregated and held 26 in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (B) all Securities of such series not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) if redeemable at the option of the Company, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose cash or U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide not later than the opening of business on the due date of any payment referred to in clause (i), (ii) or (iii) of subparagraph (B) money in an amount sufficient, without consideration of any reinvestment of such principal and interest, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge (i) the principal of (and premium, if any) and each installment of principal (and premium, if any) and interest on such Outstanding Securities of that series on each applicable Stated Maturity of such principal or installment of principal or interest and (ii) any mandatory sinking fund payments or analogous payments applicable to Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities; (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company in respect of such Securities; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to such Securities have been complied with and that such satisfaction and discharge will not result in a breach of violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound. Notwithstanding the satisfaction and discharge of this Indenture with respect to Securities of any series pursuant to this Section 401, the obligations of the Company to the Trustee under Section 607, the obligations of the Company to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of 27 this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003, in each case with respect to such Securities, shall survive. Section 402. Application of Trust Money. (a) Subject to the provisions of the last paragraph of Section 1003, all cash and U.S. Government Obligations deposited with the Trustee pursuant to Section 401, 403 or 1008 and all money received by the Trustee in respect of U.S. Government Obligations deposited with the Trustee pursuant to Section 401, 403 or 1008, shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with or received by the Trustee or to make mandatory sinking fund payments or analogous payments as contemplated by Section 403 or 1008. (b) The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against U.S. Government Obligations deposited pursuant to Section 401, 403 or 1008 or the interest and principal received in respect of such obligations other than any payable by or on behalf of Holders. (c) The Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 401, 403 or 1008 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are then in excess of the amount thereof which then would have been required to be deposited for the purpose for which such money or U.S. Government Obligations were deposited or received. (d) If the Trustee for any series or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 401, 403 or 1008, 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 series of Securities shall be revived and reinstated with respect to such series, with present and prospective effect, as though no deposit had occurred pursuant to Section 401, 403 or 1008, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such cash or U.S. Government Obligations in accordance with Section 401, 403 or 1008, as the case may be; provided, however, that if the Company makes any payment to the Trustee or Paying Agent of principal of, premium, if any, or interest on any Security following the reinstatement of its obligations, the Trustee or Paying Agent shall promptly pay any such amount to the Holders of the Securities and the Company shall be subrogated to the rights of the Holders of such series of Securities to receive such payment from the cash and U.S. Government Obligations held by the Trustee or Paying Agent. Section 403. Defeasance and Discharge of Securities of Any Series. 28 If this Section 403 is established, as contemplated by Section 301, to be applicable to Securities of any series, then notwithstanding Section 401, (a) the Company shall be deemed to have paid and discharged the entire indebtedness on all the Outstanding Securities of that series, (b) the provisions of this Indenture as it relates to such Outstanding Securities (except as to the rights of Holders of Securities to receive, from the trust funds described in subparagraph (1) below, payment of the principal of (and premium, if any) and any installment of principal of (and premium, if any) or interest on such Securities on each Stated Maturity of such principal or installment of principal or interest or any mandatory sinking fund payments or analogous payments applicable to the Securities of that series on the day on which such payments are due and payable in accordance with the terms of the Indenture and of such Securities, the Company's obligations with respect to such Securities under Sections 304, 305, 306, 403, 1002 and 1003 and the rights, powers, trusts, duties and immunities of the Trustee hereunder) shall no longer be in effect, and (c) the Trustee, at the expense of the Company, shall upon Company Request, execute proper instruments acknowledging the same, provided that the following conditions shall have been satisfied: (1) the Company shall have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 609), irrevocably (irrespective of whether the conditions in subparagraphs (2), (3), (4) and (5) below have been satisfied, but subject to the provisions of Section 402(c) and the last paragraph of Section 1003), as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of that series, with reference to this Section 403, cash or U.S. Government Obligations, or a combination thereof, which through the payment of interest and principal in respect thereof in accordance with their terms will provide not later than the opening of business on the due date of any payment referred to in clause (i) or (ii) of this subparagraph (1) money in an amount sufficient, without consideration of any reinvestment of such principal and interest, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge (i) the principal of (and premium, if any) and each installment of principal (and premium, if any) and interest on such Outstanding Securities of that series on each applicable Stated Maturity of such principal or installment of principal or interest and (ii) any mandatory sinking fund payments or analogous payments applicable to Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities; (2) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company is a party or by which it is bound; (3) no Event of Default or event which with the giving of notice or lapse of time, or both, would become an Event of Default with respect to the Securities of that series shall have occurred and be continuing on the date of such deposit and no Event of Default under Section 501(5) or Section 501(6) or event which with the giving of notice or lapse of time or both, would 29 become an Event of Default under Section 501(5) or Section 501(6) shall have occurred and be continuing on the 91st day after such date; (4) the Company has delivered to the Trustee an Opinion of Independent Counsel to the effect that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date first set forth herein above, there has been a change in the applicable United States federal income tax law or the judicial interpretation thereof, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, Holders of the Securities of that series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to United States federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred; (5) such defeasance or covenant defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act of 1940, as amended, unless such trust shall be registered under such Act or exempt from registration thereunder; (6) the Company shall have delivered to the Trustee an Opinion of Independent Counsel in the United States to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; and (7) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance and discharge of the entire indebtedness on all Outstanding Securities of any such series as contemplated by this Section have been complied with. Notwithstanding any other provisions of this Section, such defeasance shall be effected in compliance with any additional or substitute terms, conditions or limitations which may be established as contemplated by Section 301 in respect of the Securities of that series. Opinions required to be delivered under this Section may have qualifications customary for opinions of the type required. ARTICLE FIVE REMEDIES Section 501. Events of Default. "Event of Default", wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): 30 (1) default in the payment of any interest upon any Security of that series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or (2) default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or (3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or (4) default in the performance or breach of any covenant or warranty of the Company in this Indenture (other than any such default or breach which is elsewhere in this Section specifically dealt with or which is expressly not applicable to Securities of that series), and continuance of such default or breach for a period of 45 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (5) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or (6) the commencement by the Company of a voluntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the written consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable law, or the written consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or 31 (7) any other Event of Default established as contemplated by Section 301 with respect to Securities of that series. Upon receipt by the Trustee of any Notice of Default pursuant to this Section 501 with respect to Securities of a series all or part of which is represented by a Book-Entry Security, the Trustee shall establish a record date for determining Holders of Outstanding Securities of such series entitled to join in such Notice of Default, which record date shall be at the close of business on the day the Trustee receives such Notice of Default. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such Notice of Default, whether or not such Holders remain Holders after such record date; provided, that unless Holders of at least 25% in principal amount of the Outstanding Securities of such series, or their proxies, shall have joined in such Notice of Default prior to the applicable Expiration Date, such Notice of Default shall automatically and without further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such applicable Expiration Date, a new Notice of Default identical to a Notice of Default which has been cancelled pursuant tot the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 501. Section 502. Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount (or, if any of the Securities of that series are Original Issue Discount Securities or Indexed Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof) of all of the Securities of that series to be immediately due and payable by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (1) the Company has paid or deposited with the Trustee a sum sufficient in cash to pay: (A) all overdue interest on all Securities of that series, (B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities, (C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and 32 (D) all amounts owing the Trustee pursuant to Section 607 in respect of Securities of that series; and (2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal and premium, if any, of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513. No such rescission shall affect any subsequent default or impair any right consequent thereon. Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if (1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or (2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the amounts due the Trustee pursuant to Section 607 in respect of such Securities. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. Section 504. Trustee May File Proofs of Claim. 33 In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of any Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (1) to file and prove a claim for the whole amount, or such lesser amount as may be provided for in the Securities of any series, of principal, and premium, if any, and interest owing and unpaid in respect of such Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee pursuant to Section 607 and of the Holders allowed in such judicial proceeding, and (2) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or other similar official), 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 the Trustee any amount due it pursuant to Section 607. 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 Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 505. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the amounts due the Trustee pursuant to Section 607, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. Section 506. Application of Money Collected. Any money collected by the Trustee pursuant to this Article or otherwise on behalf of the Holders or the Trustee pursuant to this Article or through any proceeding or any arrangement or restructuring in anticipation or in lieu of any proceeding contemplated by this Article shall be applied, subject to applicable law, in the following order, at the date or dates fixed by the Trustee 34 and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 607; and SECOND: To the payment of the amounts then due and unpaid for principal of and any premium and interest payable on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively. Section 507. Limitation on Suits. No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver, assignee, trustee, liquidator or sequestrator (or other similar official), or for any other remedy hereunder, unless (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest. 35 Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 307) any interest on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. Section 509. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. Section 510. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 511. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 512. Control by Holders. The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that 36 (1) such direction shall not be in conflict with any rule of law or with this Indenture or be unduly prejudicial to Holders not joining therein, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Upon receipt by the Trustee of any such direction with respect to Securities of a series all or part of which is represented by a Book-Entry Security, the Trustee shall establish a record date for determining Holders of Outstanding Securities of such series entitled to join in such direction, which record date shall be at the close of business on the day the Trustee receives such direction. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such direction, whether or not such Holders remain Holders after such record date; provided, that unless such majority in principal amount shall have been obtained prior to the applicable Expiration Date, such direction shall automatically and without further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such applicable Expiration Date, a new direction identical to a direction which has been cancelled pursuant to the provisions to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 512. Section 513. Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default (1) in the payment of the principal of or any premium or interest on any Security of such series, or (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected. 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 514. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security of any series by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee in respect of the Securities of such series, the filing by any party litigant in such suit of an undertaking to pay the costs of 37 such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company or the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of such series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of, premium, if any, or interest on any Security on or after the respective Stated Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date). Section 515. Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury or other law wherever enacted, now or at any time hereafter in force, which would prohibit or forgive the Company from paying all or any portion of the principal of, premium, if any, or interest on the Securities contemplated herein or in the Securities or which 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 will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE SIX THE TRUSTEE Section 601. Certain Duties and Responsibilities. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act and this Indenture. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. Section 602. Notice of Defaults. Within 45 days after the occurrence of any default hereunder with respect to the Securities of any series, the Trustee shall transmit to all Holders of Securities of such series, in the manner and to the extent provided in Trust Indenture Act Section 313(c), notice of such default hereunder, unless such default shall have been cured or waived; PROVIDED, HOWEVER, that, except in the case of a default in the payment of the principal of (or premium, 38 if any) or interest on any Security of such series, or in the payment of any sinking fund installment with respect to the Securities of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a committee of Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Holders of the Securities of such series. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to the Securities of such series. Subject to Trust Indenture Act Section 315(b), the Trustee shall not be deemed to have, or be required to take, notice of any default or Event of Default (other than a default described in paragraph (1), (2), or (3) of Section 501) except upon (A) written notification from the Company or (B) written notification from a Holder and, in the absence of such notice, the Trustee may conclusively presume that there is no default or Event of Default except as aforesaid. Subject to Section 601 of this Indenture, such notification shall not be deemed to include receipt of information obtained in any report or other documents furnished under Section 704 of this Indenture, which reports and documents the Trustee shall have no duty to examine. Section 603. Certain Rights of Trustee. Subject to the provisions of Section 601: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon receipt by it of any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Independent Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) 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 pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity 39 against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (h) the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture other than any liabilities arising out of the negligence of the Trustee; (i) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers; (j) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and certificates of opinions furnished to it and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; (k) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (l) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any series, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and (m) no provision of this Indenture shall require the Trustee to determine the maximum interest rate permissible under applicable law. 40 Section 604. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities or any prospectus prepared in connection with the offering of the Securities, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Securities and perform its obligations hereunder and that the statements made by it in a Statement of Eligibility and Qualification on Form T-1 supplied to the Company are true and accurate subject to the qualifications set forth therein. The Trustee or any Authenticating Agent shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. Section 605. May Hold Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. Section 606. Money Held in Trust. 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 with the Company. Section 607. Compensation and Reimbursement. The Company agrees (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee and each predecessor Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel and the reasonable fees of in-house counsel in the regular employ of the Trustee which are allocable to this trust and the expenses and disbursements of such counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and 41 (3) to indemnify the Trustee and each predecessor Trustee and the officers, directors, employees and agents of the Trustee or any such predecessor Trustee (the Trustee, each predecessor Trustee and such officers, directors, employees and agents being hereinafter referred to in this Section collectively as the "Indemnified Parties" and individually as an "Indemnified Party") for, and to hold each Indemnified Party harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder; provided that any Indemnified Party shall promptly notify the Company of the commencement of any action, or proceeding for which it intends to seek indemnity hereunder, will permit the Company to conduct the defense thereof on its behalf and will not compromise or settle any such action, suit or proceeding without the prior approval of the Company. The Company's payment obligations pursuant to this Section 607 shall survive the discharge of this Indenture. When the Trustee incurs expenses after the occurrence of an Event of Default specified in Section 501(5) or (6), the expenses are intended to constitute expenses of administration under any bankruptcy law. Section 608. Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. Section 609. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $250,000,000. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 610. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611. 42 (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may, or any Holder who has been a bona fide Holder of a Security of the applicable series for at least one month may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder of a Security who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any Holder of a Security who has been a bona fide Holder of a Security for at least six months, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by or pursuant to Board Resolution may remove the Trustee with respect to all Securities or the Securities of any series, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security of any series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities of such series and the appointment of a successor Trustee or Trustees with respect thereto. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by or pursuant to a Company Request or Company Order, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within six months after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the 43 successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice of such appointment shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. Notices of resignation, removal and appointment may be combined into a single notice. Section 611. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one 44 Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. (c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraphs (a) and (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. Section 612. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. Section 613. Preferential Collection of Claims Against Company. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). Section 614. Appointment of Authenticating Agent. The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate 45 Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by federal or state authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee for such series and to the Company. The Trustee for any series of Securities may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee for such series may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. 46 The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section. ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY Section 701. Company to Furnish Trustee Names and Addresses of Holders. The Company will furnish or cause to be furnished to the Trustee (a) semi-annually, not later than 15 days after each Regular Record Date for Securities of each series at the time Outstanding, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date (or a date to be established as contemplated by Section 301 for Original Issue Discount Securities) and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar. Section 702. Preservation of Information; Communications to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. (b) The rights of the Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under the Trust Indenture Act. (d) If three or more Holders (herein referred to as "applicants") apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to 47 their rights under this Indenture or under the Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either (i) afford such applicants access to the information preserved at the time by the Trustee in accordance with Section 702(a), or (ii) inform such applicants as to the approximate number of Holders whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 702(a), and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder whose name and address appear in the information preserved at the time by the Trustee in accordance with Section 702(a) a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interest of the Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. Section 703. Reports by Trustee. (a) Within 60 days after each May 15, beginning with May 15, 1998, the Trustee shall transmit to the Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to Trust Indenture Act Section 313(a) in the manner provided pursuant thereto, and such other reports as may be required under the Trust Indenture Act in the manner and at the times provided pursuant thereto. (b) A copy of each such report shall, at the time of such transmission to the Holders, be filed by the Trustee with the Company and, to the extent required, with each stock exchange upon which any Securities are listed and with the Commission. The Company will notify the Trustee when any Securities are listed on any stock exchange. 48 Section 704. Reports by Company. The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; PROVIDED that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 801. Restrictions on Mergers, Consolidations and Transfers of Assets. The Company will not, and the Company will not permit any Subsidiary to, consolidate or merge into or sell, assign, transfer, lease or otherwise dispose of all or substantially all of its assets other than in the ordinary course of its business or any of the capital stock or other equity interests of any Subsidiary held by the Company or a Subsidiary to another person unless: (a) (i) the person is a corporation, trust or partnership organized under the laws of the United States of America or any state thereof or the District of Columbia; (ii) the person assumes by supplemental indenture all of the Company's obligations or the obligations of the Subsidiary, as the case may be, relating to the Securities or arising under this Indenture; and (iii) immediately after the transaction no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, exists; provided that this clause (iii) will not restrict or be applicable to a merger, consolidation or liquidation of a Subsidiary with or into the Company or with or into another Subsidiary that is wholly-owned, directly or indirectly, by the Company; or (b) in the case of the sale, assignment, transfer, lease or other disposition of all or substantially all of the assets or any capital stock or other equity interests of any Subsidiary, the Company or a Subsidiary (A) receives, upon the occurrence of such an event, cash consideration at least equal to the fair market value of the assets, stock or equity interests sold, as determined in good faith by the Board of Directors of the Company, and (B) applies within 180 days of such an action the proceeds received to (1) permanently repay Indebtedness of the Company or of a Subsidiary ranking pari passu with the Securities, (2) the purchase of property or assets (including the origination of consumer loans) of a business related to any business that the Company or any Subsidiary conducts at that time, (3) redemption of the Securities, or (4) any combination of clauses 1, 2 and 3. 49 The procedures to be followed by the Company in making an offer to purchase Securities from the holders under this section, and for the acceptance of the offer by the holders, will be the same as those set forth in Article Thirteen of this Indenture. Except as set forth in clause (b) of this Section 801, upon any such consolidation, merger, sale, assignment, transfer, lease or other disposition, the successor corporation will be substituted for the Company or the Subsidiary, as the case may be, under this Indenture. The successor corporation may then exercise every power and right of the Company or of the Subsidiary under the Indenture, and the Company or the Subsidiary, as the case may be, will be released from all of the Company's or the Subsidiary's liabilities and obligations relating to the Securities or arising under the Indenture. If the Company or any Subsidiary leases all or substantially all of the Company's or the Subsidiary's assets, the lessee corporation will be the successor to the Company or the Subsidiary and may exercise every power and right of the Company or of the Subsidiary, as the case may be, under the Indenture, but the Company or the Subsidiary, as the case may be, will not be released from the Company's or the Subsidiary's obligations to pay the principal of and premium, if any, and interest, if any, on the Securities. ARTICLE NINE SUPPLEMENTAL INDENTURES Section 901. Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Company, when authorized by a Board Resolution (which Board Resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to a Company Order), and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants, agreements and obligations of the Company herein and in the Securities; or (2) to add to the covenants of the Company for the benefit of the Holders of the Securities of all or any series (and if such covenants are to be for the benefit of the Securities of less than all series, stating that such covenants are expressly being included solely for the benefit of the Securities of such series) or to surrender any right or power herein conferred upon the Company; or (3) to add any additional Events of Default; or (4) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not 50 registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Securities in uncertificated form; or (5) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding; or (6) to establish the forms or terms of Securities of any series as contemplated by Sections 201 and 301; or (7) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee; or (8) to secure the Securities; or (9) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance, covenant defeasance or satisfaction and discharge of the Securities of any series pursuant to this Indenture; provided that any such action shall not adversely affect the interests of the Holders of Securities of such series or any other series of Securities; or (10) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this clause (10) shall not adversely affect the interests of the Holders of Securities of any series; (11) to add a guarantor or guarantors for any series or all series of the Securities; or (12) to comply with the requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act. Section 902. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by Board Resolution (which Board Resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Issuer Order), and the Trustee may enter into an indenture or indentures 51 supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of or waive a default in the payment of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where any Security or any premium or interest thereon is payable, change the currency in which any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date, or, in the case of repayment at the option of the Holder, on or after the date fixed for repayment), or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or (3) modify any of the provisions of this Section, Section 513 or Section 1010, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby, or (4) in the case of any series of subordinated Securities, modify any provisions hereof that relate to subordination or to the definition of "Senior Indebtedness" applicable to such series in a manner adverse to the Holders of such subordinated Securities. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of the Securities of one or more particular series, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 903. Execution of Supplemental Indentures. 52 In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 904. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 905. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act, as then in effect at the time of execution thereof. Section 906. Reference in Securities to Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. Section 907. Notice of Supplemental Indentures. Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of Section 902, the Company shall give notice thereof to the Holders of each Outstanding Security affected, in the manner provided for in Section 106, setting forth in general terms the substance of such supplemental indenture. 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 such supplemental indenture. ARTICLE TEN COVENANTS Section 1001. Payment of Principal, Premium and Interest. 53 The Company covenants and agrees for the benefit of the Securities of each series that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities of that series and this Indenture. Section 1002. Maintenance of Office or Agency. The Company will maintain in each Place of Payment for the Securities of any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will 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. The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; PROVIDED, HOWEVER, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will 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. Section 1003. Money for Securities Payments to Be Held in Trust. If the Company shall at any time act as its own Paying Agent with respect to the Securities of any series, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum in cash sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for the Securities of any series, it will, prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum in cash sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent for the Securities of any series, other than the Trustee, to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (i) 54 hold all sums held by it for the payment of the principal of or any premium or interest on Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (ii) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment of principal or any premium or interest on the Securities of that series; (iii) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, and upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series; and (iv) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. 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 or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general 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 a newspaper of general circulation in The City of New York or mailed to each Holder entitled to such money 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 publication, any unclaimed balance of such money then remaining will be repaid to the Company. Section 1004. Corporate Existence. Subject to Section 1014, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect the corporate existence and related rights and franchises (charter and statutory) of the Company and each Subsidiary; provided, however, that the Company shall not be required to preserve any such right or franchise or the corporate existence of any such Subsidiary if the Board of Directors of the Company shall determine that the preservation thereof is no longer necessary or desirable in the conduct of the business of the Company and its Subsidiaries as a whole; and provided, further, however, that the foregoing 55 shall not prohibit a sale, transfer or conveyance of a Subsidiary or any of its assets in compliance with the terms of this Indenture. Section 1005. Payment of Taxes and Other Claims. The Company shall pay or discharge or cause to be paid or discharged, on or before the date the same shall become due and payable, (a) all taxes, assessments and governmental charges levied or imposed upon the Company or any of its Subsidiaries shown to be due on any return of the Company or any of its Subsidiaries or otherwise assessed or upon the income, profits or property of the Company or any of its Subsidiaries if failure to pay or discharge the same could reasonably be expected to have a material adverse effect on the ability of the Company to perform its obligations hereunder and (b) all lawful claims for labor, materials and supplies, which, if unpaid, would by law become a lien upon the property of the Company or any of its Subsidiaries, if failure to pay or discharge the same could reasonably be expected to have a material adverse effect on the ability of the Company to perform its obligations hereunder; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings properly instituted and diligently conducted and in respect of which appropriate reserves (in the good faith judgment of management of the Company) are being maintained in accordance with GAAP. Section 1006. Maintenance of Properties. The Company shall cause all material properties owned by the Company or any of its Subsidiaries or used or held for use in the conduct of its business or the business of any of its Subsidiaries to be maintained and kept in good condition, repair and working order (ordinary wear and tear excepted) and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the reasonable judgment of the Company may be consistent with sound business practice and necessary so that the business carried on in connection therewith may be properly conducted at all times; provided, however, that nothing in this Section shall prevent the Company from discontinuing the maintenance of any of such properties if such discontinuance is, in the reasonable judgment of the Company, desirable in the conduct of its business or the business of any of its Subsidiaries; and provided, further, however, that the foregoing shall not prohibit a sale, transfer or conveyance of a Subsidiary or any of its properties or assets in compliance with the terms of this Indenture. Section 1007. Maintenance of Insurance. The Company shall at all times keep all of its and its Subsidiaries' properties which are of an insurable nature insured with insurers, believed by the Company in good faith to be financially sound and responsible, against loss or damage to the extent that property of similar character is usually so insured by corporations similarly situated and owning like properties in the same general geographic areas in which the Company and its Subsidiaries operate, except 56 where the failure to do so could not reasonably be expected to have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or prospects of the Company and its Subsidiaries, taken as a whole. Section 1008. Defeasance of Certain Obligations. To the extent that this Section 1008 is established as contemplated by Section 301 to be applicable to Securities of any series or any covenant applicable thereto, (i) the Company may omit to comply with any term, provision or condition of the covenants contained in Sections 1005 through 1007 hereof and any covenants established as contemplated by Section 301 and to which this Section 1008 is so established as applicable, and (ii) such omission shall be deemed not to be an Event of Default pursuant to Section 501(4), in each case with respect to the Securities of that series, provided that the following conditions have been satisfied: (1) the Company has deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 609) irrevocably (irrespective of whether the conditions in subparagraphs (2), (3), (4) and (5) below have been satisfied, but subject to the provisions of Section 402(c) and the last paragraph of Section 1003), as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of that series, with reference to this Section 1008, cash or U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide not later than the opening of business on the due date of any payment referred to in clause (i) or (ii) of this subparagraph (1) money in an amount sufficient, without consideration of any reinvestment of such principal and interest, in the opinion of a nationally recognized firm of independent certified public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge (i) the principal (and premium, if any) and each installment of principal (and premium, if any) and interest on such Outstanding Securities on the Stated Maturity of such principal or installment of principal or interest and (ii) any mandatory sinking fund payments or analogous payments applicable to Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities; (2) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company is a party or by which it is bound; (3) no Event of Default or event which with the giving of notice or lapse of time, or both, would become an Event of Default with respect to the Securities of that series shall have occurred and be continuing on the date of such deposit and no Event of Default under Section 501(5) or Section 501(6) or event which with the giving of notice or lapse of time, or both, would become an Event of Default under Section 501(5) or Section 501(6) shall have occurred and be continuing on the 91st day after such date; 57 (4) the Company has delivered to the Trustee an Opinion of Independent Counsel to the effect that Holders of the Securities of such series will not recognize income, gain or loss for United States federal income tax purposes as a result of such deposit and defeasance of certain obligations and will be subject to United States federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit and defeasance had not occurred; (5) such defeasance or covenant defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act of 1940, as amended, unless such trust shall be registered under such Act or exempt from registration thereunder; (6) the Company shall have delivered to the Trustee an Opinion of Independent Counsel in the United States to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; and (7) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance as contemplated by this Section have been complied with. Opinions required to be delivered under this Section may have qualifications customary for opinions of the types required. Section 1009. Statement as to Compliance. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in compliance with all conditions and covenants of this Indenture (without regard to any period of grace or requirement of notice provided hereunder); and if the Company shall not be in compliance, specifying such non-compliance and the nature and the status thereof as to which such signer may have knowledge. Such certificate shall contain a certification from the principal executive officer, principal financial officer or principal accounting officer of the Company as to his or her knowledge of the Company's compliance with all conditions and covenants under this Indenture (without regard to any period of grace or requirement of notice provided hereunder). Section 1010. Waiver of Certain Covenants. The Company may omit in any particular instance to comply with any term, provision or condition of the covenants established as contemplated by Section 301 with respect to the Securities of any series, except to the extent the terms of such Securities established as contemplated by Section 301 make this Section 1010 inapplicable to any such term, provision or condition of any such covenant if before the time for such compliance the Holders of at least a 58 majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. Section 1011. Restrictions on Secured Debt. So long as any Securities remain Outstanding, the Company will not issue, assume or guarantee, and will not permit any Subsidiary to issue, assume or guarantee, any Indebtedness secured by a Lien on or of any of the Company's or any Subsidiary's property, or on the shares of stock or debt of any Subsidiary now owned by the Company or acquired after the date hereof. This restriction will not apply if the Securities are secured by a Lien ranking ratably with and equal to (or at the Company's option, prior to) the secured Indebtedness. In any event, the foregoing restriction will not apply to the following: (i) Liens on Indebtedness outstanding or available to the Company or any Subsidiary under facilities existing on the date of original issuance of the Securities; (ii) Liens on Indebtedness secured by the stock of a Subsidiary and Indebtedness of a Subsidiary existing when the Subsidiary becomes a Subsidiary, other than Indebtedness created in connection with the transaction by which the Subsidiary becomes a Subsidiary; (iii) Liens on Indebtedness of the Company or any Subsidiary having a term of less than 365 days arising from any funding arrangement with one or more financial institutions or other lenders or purchasers exclusively to finance the purchase, origination or production of loans held or to be held for sale by the Company or by any Subsidiaries for the purpose of pooling those loans prior to securitization or sale of those loans in the ordinary course of the Company's or any Subsidiary's business; (iv) Liens on property at the time of its acquisition by the Company or a Subsidiary that secure obligations assumed by the Company or a Subsidiary, or on the property of an entity at the time it is merged into the Company or a Subsidiary (other than Indebtedness created in contemplation of the acquisition of the property or the consummation of such a merger); (v) Liens to secure the payment of some or all of the purchase price of property or loan portfolios upon the acquisition of that property or those loan portfolios by the Company or a Subsidiary; (vi) Liens on Indebtedness arising from conditional sales agreements or title retention agreements relating to property acquired by the Company or a Subsidiary; 59 (vii) Liens on Indebtedness owed by a Subsidiary to the Company or to another Subsidiary that is wholly-owned (directly or indirectly) by the Company; (viii) mechanics', materialmen's, carriers' or similar Liens arising in the ordinary course of business (including in the construction of facilities) relating to obligations not due or which are being contested; (ix) Liens for taxes not due or being contested, landlords' Liens, tenants' rights under leases, and similar Liens not impairing the use or value of the property involved; (x) Liens on any property to secure all or part of the cost of improvements or construction on the property or Indebtedness incurred to provide funds for that purpose in a principal amount not exceeding the cost of the improvements or construction; (xi) Liens incurred in connection with any amendment, restatement, supplement, renewal, replacement, extension, refinancing or refunding in whole or in part, of Indebtedness, provided that the principal amount of the Indebtedness secured by a Lien will not exceed the principal amount of Indebtedness secured at the time any such action is taken (other than with respect to the Company's $175.0 million revolving credit facility with First Union National Bank, as to which the principal amount of Indebtedness may be increased) and that any such action will be limited to the portion of assets that secured the Lien at the time any such action was taken. In addition, the Company and any Subsidiary may issue, assume or guarantee Indebtedness that would be subject to the foregoing restrictions without equally and ratably securing the Securities if immediately thereafter the sum of (i) the aggregate principal amount of all Indebtedness outstanding that would be subject to the foregoing restrictions (excluding Indebtedness permitted under the exceptions to the restriction set forth above), and (ii) all Attributable Debt from a Sale and Leaseback (excluding any sale and leaseback as to which the net proceeds of the property sold or transferred are applied to retire Indebtedness or to the purchase of property as described in Section 1013 as of the date of determination would not exceed 15% of Consolidated Net Tangible Assets. Section 1012. Restrictions on Debt of Subsidiaries. So long as any Securities remain Outstanding, the Company will not permit any Subsidiary to issue, assume or guarantee any Indebtedness. The foregoing restriction will not apply to the following: (i) any Indebtedness of any Subsidiary permitted under Section 1011 above; (ii) Indebtedness existing on the date of original issuance of the Securities; 60 (iii) Indebtedness of a Subsidiary existing when the Subsidiary becomes a Subsidiary, other than Indebtedness created in connection with the transaction by which the Subsidiary becomes a Subsidiary; (iv) Indebtedness owed by a Subsidiary to the Company or to another Subsidiary that is wholly-owned (directly or indirectly) by the Company; and (v) any amendment, restatement, supplement, renewal, replacement, extension or refunding in whole or in part, of Indebtedness permitted at the time of its original incurrence. In addition, any Subsidiary may issue, assume or guarantee Indebtedness if immediately thereafter the sum of (i) the aggregate principal amount of all Indebtedness outstanding (excluding Indebtedness permitted under this Section 1012 and under Section 1011), and (ii) all Attributable Debt from a Sale and Leaseback (excluding any Sale and Leaseback as to which the net proceeds of the property sold or transferred are applied to retire Indebtedness or to the purchase of property as described in Section 1013) as of the date of determination would not exceed 15% of Consolidated Net Tangible Assets. Section 1013. Restrictions on Sale and Leaseback Transactions. The Company will not, and the Company will not permit any Subsidiary to, sell or transfer, except to one another, any property if such a sale or transfer is made with the agreement, commitment or intention of leasing that property back to the Company or to a Subsidiary for a period of more than three years a "Sale and Leaseback"), unless: (i) notice is promptly given to the Trustee of the Sale and Leaseback; (ii) the Company or the Subsidiary receives fair value for the property sold (as promptly determined in good faith by the Board of Directors of the Company and a copy of the resolution setting forth that determination is promptly delivered to the Trustee); and (iii) the Company or a Subsidiary, within 180 days after completion of the Sale and Leaseback, applies an amount equal to the net proceeds from the Sale and Leaseback to either (A) the redemption or retirement of the Securities or the repayment of other Indebtedness ranking pari passu with the Securities, or (B) the purchase by the Company or the Subsidiary of property substantially similar to the property sold or transferred. In lieu of applying any or all of the net proceeds from a Sale or Leaseback to the redemption or retirement of Indebtedness, the Company may deliver Securities to the Trustee for cancellation and reduce the amount to be applied to the redemption of Securities by an amount equal to the aggregate principal amount of Securities delivered. In addition, the Company and any Subsidiary may enter into a Sale and Leaseback if immediately afterward the sum of (i) the aggregate amount of all Indebtedness outstanding (excluding Indebtedness permitted under Section 1011) and (ii) all Attributable Debt from a Sale 61 and Leaseback (excluding any Sale and Leaseback as to which the net proceeds of the property sold or transferred are applied to retire Indebtedness or to the purchase of property as described in clause (B) of the immediately preceding paragraph) as of the date of determination would not exceed 15% of Consolidated Net Tangible Assets. ARTICLE ELEVEN REDEMPTION OF SECURITIES Section 1101. Applicability of Article. Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms established as contemplated by Section 301 and (except as otherwise expressly established as contemplated by Section 301 in respect of Securities of such series) in accordance with this Article. Section 1102. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or by action taken pursuant to a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities of any series, the Company shall, at least 35 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. Section 1103. Selection by Trustee of Securities to Be Redeemed. If less than all the Securities of any series are to be redeemed (unless all of the Securities of such series and of a specified tenor are to be redeemed), the particular Securities to be redeemed shall be selected not less than 30 nor more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series. If less than all of the Securities of such series and of a specified tenor are to be redeemed, the particular Securities to be redeemed shall be selected not less than 30 nor more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence. 62 The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. Section 1104. Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption of any Securities, the principal amounts) of the particular Securities to be redeemed, (4) in the case of a Security to be redeemed in part, the principal amount of such Security to be redeemed and that after the Redemption Date upon surrender of such Security, new Security or Securities in the aggregate principal amount equal to the unredeemed portion thereof will be issued, (5) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (6) the place or places where such Securities are to be surrendered for payment of the Redemption Price, (7) that the redemption is for a sinking fund, if such is the case, and (8) the CUSIP number, if any, relating to the Securities. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. Section 1105. Deposit of Redemption Price. On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount in cash sufficient to pay the Redemption Price of, and 63 (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date. Section 1106. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 301, installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. Section 1107. Securities Redeemed in Part. Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. ARTICLE TWELVE SINKING FUNDS Section 1201. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 301 for Securities of such series. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any 64 payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment". If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series. Section 1202. Satisfaction of Sinking Fund Payments with Securities. The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. Section 1203. Redemption of Securities for Sinking Fund. Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash in the currency or currencies, currency unit or units or composite currency or currencies in which the Securities of such series are payable (except as otherwise specified pursuant to Section 301 for the Securities of such series) and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 and not more than 60 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107. ARTICLE THIRTEEN REPAYMENT AT THE OPTION OF THE HOLDERS Section 1301. Applicability of Article. Repayment of securities of any series before their Stated Maturity at the option of Holders thereof shall be made in accordance with the terms of such Securities and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with this Article. 65 Section 1302. Repayment of Securities. Securities of any series subject to repayment in whole or in part at the option of the Holders thereof will, unless otherwise provided in the terms of such Securities, be repaid at a price equal to the principal amount thereof, together with interest and/or premium, if any, thereon accrued to the Repayment Date specified in or pursuant to the terms of such Securities. The Company covenants that on or before the Repayment Date it will deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the principal (or, if so provided by the terms of the Securities of any series, a percentage of the principal) of, the premium, if any, and (except if the Repayment Date shall be an Interest Payment Date) accrued interest on, all the Securities or portions thereof, as the case may be, to be repaid on such date. Section 1303. Exercise of Option. Securities of any series subject to repayment at the option of the Holders thereof will contain an "Option to Elect Repayment" form on the reverse of such Securities. Except as otherwise may be provided by the terms of any Security providing for repayment at the option of the Holder thereof, to be repaid at the option of the Holder, any Security so providing for such repayment, with the "Option to Elect Repayment" form on the reverse of such Security duly completed by the Holder (or by the Holder's attorney duly authorized in writing), must be received by the Company at the Place of Payment therefor specified in the terms of such Security (or at such other place or places of which the Company shall from time to time notify the Holders of such Securities) not earlier than 45 days nor later than 30 days prior to the Repayment Date. If less than the entire principal amount of such Security is to be repaid in accordance with the terms of such Security, the principal amount of such Security to be repaid, in increments of the minimum denomination for Securities of such series, the premium, if any, to be paid, and the denomination or denominations of the Security or Securities to be issued to the Holder for the portion of the principal amount of such Security surrendered that is not to be repaid, must be specified. The principal amount of any Security providing for repayment at the option of the Holder thereof may not be repaid in part if, following such repayment, the unpaid principal amount of such Security would be less than the minimum authorized denomination of Securities of the series of which such Security to be repaid is a part. Except as otherwise may be provided by the terms of any Security providing for repayment at the option of the Holder thereof and as provided in Sections 308, exercise of the repayment option by the Holder shall be irrevocable unless waived by the Company. Section 1304. When Securities Presented for Repayment Become Due and Payable. If Securities of any series providing for repayment at the option of the Holders thereof shall have been surrendered as provided in this Article and as provided by or pursuant to the terms of such Securities, such Securities or the portions thereof, as the case may be, to be repaid shall become due and payable and shall be paid by the Company on the Repayment Date therein specified, and on and after such Repayment Date (unless the Company shall default in the payment of such Securities on such Repayment Date) such Securities shall, if the same were interest-bearing, cease to bear interest. Upon surrender of any such Security for repayment in accordance with such provisions, the principal amount of such Security so to be repaid (or, if so provided by the 66 terms of the Securities of any series, a percentage of the principal) shall be paid by the Company, together with accrued interest and/or premium, if any, to the Repayment Date; provided, however, that installments of interest, if any, whose Stated Maturity is on or prior to the Repayment Date shall be payable (but without interest thereon, unless the Company shall default in the payment thereof) to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307. If the principal amount of any Security surrendered for repayment shall not be so repaid upon surrender thereof, such principal amount (together with interest, if any, thereon accrued to such Repayment Date) shall, until paid, bear interest from the Repayment Date at the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) set forth in such Security. Section 1305. Securities Repaid in Part. Upon surrender of any Security which is to be repaid in part only, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge and at the expense of the Company, a new Security or Securities of the same series, of any authorized denomination specified by the Holder, in an aggregate principal amount equal to and in exchange for the portion of the principal of such Security so surrendered which is not to be repaid. ARTICLE FOURTEEN SUBORDINATION OF SECURITIES Section 1401. Securities Subordinate to Senior Indebtedness. The Company covenants and agrees, and each Holder of a Security of any series, by his acceptance thereof, likewise covenants and agrees, that to the extent and in the manner set forth pursuant to Section 301(17) hereof, the indebtedness represented by the Securities of such series and the payment of principal of (and premium, if any) and interest on each or all of the Securities of such series are hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness. ---------- This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. OAKWOOD HOMES CORPORATION 67 By: _______________________________ Name: Title: [CORPORATE SEAL] Attest: By: _____________________________ Name: Title: 68 THE FIRST NATIONAL BANK OF CHICAGO, Trustee By: _______________________________ Name: Title: [CORPORATE SEAL] Attest: By: _____________________________ Name: Title: 69 STATE OF NORTH CAROLINA ) ) ss.: COUNTY OF ___________________ ) On the _______ day of ______________, 1998, before me personally came ______________________________, to me known, who, being by me duly sworn, did depose and say that he is ___________________ of OAKWOOD HOMES CORPORATION, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority. ---------------------------------------- Name: Notary Public State of My Commission expires on 70 EX-12 4 EXHIBIT 12.1 EXHIBIT 12.1 OAKWOOD HOMES CORPORATION RATIO OF EARNINGS TO FIXED CHARGES (IN 000'S)
YEAR ENDED SEPTEMBER 30, -------------------------------------------------------------------- 1998 1997 1996 1995 1994 ------------- ------------- ------------- ------------- ------------ Net income ................................................. $ 55,353 $ 81,913 $ 68,255 $ 45,318 $ 35,655 Income taxes ............................................... 34,737 51,279 42,425 27,679 21,054 Interest expense ........................................... 24,549 19,817 22,370 24,897 24,409 Amortization of debt expense ............................... 829 784 999 1,171 1,153 Interest component of rent expense ......................... 6,957 4,295 3,679 2,692 1,837 Proportionate share of fixed charges of 50% owned person Interest expense ......................................... 4,884 2,296 -- -- -- Amortization of debt expense ............................. 124 16 -- -- -- --------- --------- --------- --------- -------- Adjusted earnings .......................................... $ 127,533 $ 161,030 $ 137,728 $ 101,757 $ 84,108 ========= ========= ========= ========= ======== FIXED CHARGES Interest expense ........................................... $ 24,549 $ 19,817 $ 22,370 $ 24,897 $ 24,409 Interest capitalized ....................................... 166 54 677 221 -- Amortization of debt expense ............................... 829 784 999 1,171 1,153 Interest component of rent expense ......................... 6,957 4,925 3,679 2,692 1,837 Proportionate share of fixed charges of 50% owned person Interest expense ......................................... 4,984 2,296 -- -- -- Amortization of debt expense ............................. 124 16 -- -- -- --------- --------- --------- --------- -------- Total fixed charges ........................................ $ 37,609 $ 27,892 $ 27,725 $ 28,891 $ 27,399 ========= ========= ========= ========= ======== Ratio of earnings to fixed charges ......................... 3.39 5.77 4.97 3.51 3.07 ========== ========== ========== ========== ========= QUARTER ENDED DECEMBER 31, --------------------------- 1998 1997 ------------- ------------- Net income ................................................. $ 11,459 $ 17,802 Income taxes ............................................... 7,326 10,911 Interest expense ........................................... 8,129 4,626 Amortization of debt expense ............................... 282 84 Interest component of rent expense ......................... 2,016 1,540 Proportionate share of fixed charges of 50% owned person Interest expense ......................................... -- 1,345 Amortization of debt expense ............................. -- 12 --------- --------- Adjusted earnings .......................................... $ 29,212 $ 36,320 ========= ========= FIXED CHARGES Interest expense ........................................... $ 8,129 $ 4,626 Interest capitalized ....................................... 1 1 Amortization of debt expense ............................... 282 84 Interest component of rent expense ......................... 2,016 1,540 Proportionate share of fixed charges of 50% owned person Interest expense ......................................... -- 1,345 Amortization of debt expense ............................. -- 12 --------- --------- Total fixed charges ........................................ $ 10,428 $ 7,608 ========= ========= Ratio of earnings to fixed charges ......................... 2.80 4.77 ========== ==========
PRO FORMA (1) --------------------------- YEAR ENDED QUARTER ENDED SEPTEMBER 30, DECEMBER 31, 1998 1998 ------------- ------------- Adjusted earnings, as above ................................ 127,533 29,212 ========= ========== Total fixed charges, as above .............................. 37,609 10,428 Adjustments: Estimated net increase in interest expense and amortization of debt expense from issuance of senior notes ........................................ 9,909 1,626 --------- --------- Total pro forma fixed charges .............................. 47,518 12,054 ========= ========= Pro forma ratio of earnings to fixed charges................ 2.68 2.42 ========= ========= (1) The pro forma ratio of earnings to fixed charges for the fiscal year ended September 30, 1998 and the three months ended December 31, 1998 assumes an offering of $300.0 million of Notes.
EX-23 5 EXHIBIT 23.1 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectus and Prospectus Supplement constituting part of this Registration Statement on Form S-3 of our report dated November 2, 1998, except as to the information presented in the first paragraph of Note 17 for which the date is November 25, 1998, appearing on page 35 of Oakwood Homes Corporation's Annual Report to Shareholders which is incorporated by reference in Oakwood Homes Corporation's Annual Report on Form 10-K for the year ended September 30, 1998. We also consent to the reference to us under the heading "Experts" in such Prospectus and Prospectus Supplement. /s/ PRICEWATERHOUSECOOPERS LLP _____________________________________ PRICEWATERHOUSECOOPERS LLP Greensboro, North Carolina February 22, 1999 EX-23 6 EXHIBIT 23.2 (to be inserted) EX-25 7 EXHIBIT 25.1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) THE FIRST NATIONAL BANK OF CHICAGO (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) A NATIONAL BANKING ASSOCIATION 36-0899825 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) THE FIRST NATIONAL BANK OF CHICAGO ONE FIRST NATIONAL PLAZA, SUITE 0286 CHICAGO, ILLINOIS 60670-0286 ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) OAKWOOD HOMES CORPORATION (EXACT NAME OF OBLIGORS AS SPECIFIED IN THEIR TRUST AGREEMENTS) NORTH CAROLINA 56-0985879 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 7800 MCCLOUD ROAD GREENSBORO, N.C. 27425-7081 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) SENIOR NOTES (TITLE OF INDENTURE SECURITIES) ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance Corporation, Washington, D.C.; The Board of Governors of the Federal Reserve System, Washington D.C.. (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. The trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. No such affiliation exists with the trustee. ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY. 1. A copy of the articles of association of the trustee now in effect.* 2. A copy of the certificates of authority of the trustee to commence business.* 3. A copy of the authorization of the trustee to exercise corporate trust powers.* 4. A copy of the existing by-laws of the trustee.* 5. Not Applicable. 6. The consent of the trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8. Not Applicable. 9. Not Applicable. Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, The First National Bank of Chicago, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago and State of Illinois, on the 19th day of February, 1999. THE FIRST NATIONAL BANK OF CHICAGO, TRUSTEE BY /s/ SANDRA L. CARUBA ___________________________________________ SANDRA L. CARUBA VICE PRESIDENT * EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF U S WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1998 (REGISTRATION NO. 333-51907-01). 3 EXHIBIT 6 THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT February 19, 1999 Securities and Exchange Commission Washington, D.C. 20549 Ladies and Gentlemen: In connection with the qualification of the Indenture of Oakwood Homes Corporation to The First National Bank of Chicago, as Trustee, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal or State authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Very truly yours, THE FIRST NATIONAL BANK OF CHICAGO BY: /s/ SANDRA L. CARUBA ______________________________________ SANDRA L. CARUBA VICE PRESIDENT 4 EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Ste 0460 Page RC-1 City, State Zip: Chicago, IL 60670 FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1998 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
DOLLAR AMOUNTS IN THOUSANDS C400 RCFD BIL MIL THOU ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD a. Noninterest-bearing balances and currency and coin(1) 0081 4,898,646 1.a b. Interest-bearing balances(2).................. 0071 4,612,143 1.b 2. Securities a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D) 1773 9,817,318 2.b 3. Federal funds sold and securities purchased under agreements to resell 1350 6,071,229 3. 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RCFD RC-C)............................................ 2122 26,327,215 4.a b. LESS: Allowance for loan and lease losses..... 3123 412,850 4.b c. LESS: Allocated transfer risk reserve......... 3128 0 4.c d. Loans and leases, net of unearned income, allowance, and RCFD reserve (item 4.a minus 4.b and 4.c).......... 2125 25,914,365 4.d 5. Trading assets (from Schedule RD-D)......... 3545 6,924,064 5. 6. Premises and fixed assets (including capitalized leases) 2145 731,747 6. 7. Other real estate owned (from Schedule RC-M) 2150 6,424 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)................... 2130 153,385 8. 9. Customers' liability to this bank on acceptances outstanding 2155 352,324 9. 10. Intangible assets (from Schedule RC-M)...... 2143 295,823 10. 11. Other assets (from Schedule RC-F)........... 2160 2,193,803 11. 12. Total assets (sum of items 1 through 11).... 2170 61,971,271 12. - ---------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading.
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Ste 0460 Page RC-2 City, State Zip: Chicago, IL 60670 FDIC Certificate No.: 0/3/6/1/8
SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN THOUSANDS LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C RCON from Schedule RC-E, part 1)................... 2200 20,965,124 13.a (1) Noninterest-bearing(1).................... 6631 9,191,662 13.a1 (2) Interest-bearing.......................... 6636 11,773,462 13.a2 b. In foreign offices, Edge and Agreement subsidiaries, and RCFN IBFs (from Schedule RC-E, part II)............ 2200 15,912,956 13.b (1) Noninterest bearing....................... 6631 475,182 13.b1 (2) Interest-bearing.......................... 6636 15,437,774 13.b2 14. Federal funds purchased and securities sold under agreements to repurchase: RCFD 2800 4,245,925 14 15. a. Demand notes issued to the U.S. Treasury RCON 2840 359,381 15.a b. Trading Liabilities(from Sechedule RC-D)..... RCFD 3548 5,614,049 15.b 16. Other borrowed money: RCFD a. With original maturity of one year or less.... 2332 4,603,402 16.a b. With original maturity of more than one year. A547 328,001 16.b c. With original maturity of more than three years A548 324,984 16.c 17. Not applicable 18. Bank's liability on acceptance executed and outstanding 2920 352,324 18. 19. Subordinated notes and debentures................ 3200 2,400,000 19. 20. Other liabilities (from Schedule RC-G)........... 2930 1,833,935 20. 21. Total liabilities (sum of items 13 through 20)... 2948 56,940,081 21. 22. Not applicable EQUITY CAPITAL 23. Perpetual preferred stock and related surplus.... 3838 0 23. 24. Common stock..................................... 3230 200,858 24. 25. Surplus (exclude all surplus related to preferred stock) 3839 3,192,857 25. 26. a. Undivided profits and capital reserves........ 3632 1,614,511 26.a b. Net unrealized holding gains (losses) on available-for-sale securities.................................... 8434 27,815 26.b 27. Cumulative foreign currency translation adjustments 3284 (4,851) 27. 28. Total equity capital (sum of items 23 through 27) 3210 5,031,190 28. 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28)............ 3300 61,971,271 29. Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external ---------- Number auditors as of any date during 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 6724 | N/A | M.1. ---------- 1 = Independent audit of the bank conducted in accordance 4. = Directors' examination of the bank performed by other with generally accepted auditing standards by a certified external auditors (may be required by state chartering public accounting firm which submits a report on the bank authority) 2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external conducted in accordance with generally accepted auditing auditors standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external submits a report on the consolidated holding company auditors (but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work) 3 = Directors' examination of the bank conducted in 8 = No external audit work accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) - ------------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits.
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