TOLL CORP., as Issuer
TOLL BROTHERS, INC., as Guarantor
Debt Securities
Indenture
Dated as of
BANK ONE TRUST COMPANY, NA,
as Trustee
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) 9.10
(a)(2) 9.10
(a)(3) N.A.
(a)(4) N.A.
(b). 9.08; 9.10; 13.02
(c). N.A.
311(a). 9.11
(b). 9.11
(c). N.A.
312(a). 2.07
(b). 13.03
(c). 13.03
313(a). 9.06
(b)(1) N.A.
(b)(2) 9.06
(c). 9.06; 13.02
(d). 9.06
314(a). 4.03; 13.02
(b). N.A.
(c)(1) 13.04
(c)(2) 13.04
(c)(3) N.A.
(d). N.A.
(e). 13.05
(f). N.A.
315(a). 9.01(b)
(b). 9.05; 13.02
(c). 9.01(a)
(d). 9.01(c)
(e). 8.11
316(a)(last sentence) 13.06
(a)(1)(A). 8.05
(a)(1)(B). 8.04
(a)(2) N.A.
(b). 8.07
317(a)(1) 8.08
(a)(2) 8.09
(b). 2.06
318(a). 13.01
N.A. means Not Applicable.
Note: This cross-reference table shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions 1
Section 1.02. Incorporation by Reference of Trust Indenture Act 6
Section 1.03. Incorporation by Reference of Provisions of Securities 6
Section 1.04. Rules of Construction 6
ARTICLE 2.
THE SECURITIES
Section 2.01. Forms Generally 7
Section 2.02. Form of Trustee's Certificate of Authentication 7
Section 2.03. Amount Unlimited, Issuable in Series 8
Section 2.04. Execution and Authentication 10
Section 2.05. Registrar and Paying Agent 10
Section 2.06. Paying Agent To Hold Money in Trust 11
Section 2.07. Securityholder Lists 11
Section 2.08. Transfer and Exchange 11
Section 2.09. Replacement Securities 12
Section 2.10. Outstanding Securities 12
Section 2.11. Temporary Securities 13
Section 2.12. Cancellation 13
Section 2.13. Defaulted Interest 13
Section 2.14. Global Securities 13
ARTICLE 3.
REDEMPTION
Section 3.01. Notices to Trustee 14
Section 3.02. Selection of Securities To Be Redeemed 14
Section 3.03. Notice of Redemption 15
Section 3.04. Effect of Notice of Redemption 15
Section 3.05. Deposit of Redemption Price 16
Section 3.06. Securities Redeemed in Part 16
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Securities 16
Section 4.02. SEC Reports 16
Section 4.03. Compliance Certificate 17
ARTICLE 5.
SUCCESSOR CORPORATION
Section 5.01. When the Company and the Guarantor May Merge, Etc 17
ARTICLE 6.
SUBORDINATION
Section 6.01. Agreement to Subordinate 17
Section 6.02. Company Not To Make Payments with Respect to
Securities in Certain Circumstances 18
Section 6.03. Securities Subordinated to Prior Payment of All Senior
Indebtedness of the Company on Dissolution,
Liquidation or Reorganization of the Company 18
Section 6.04. Securityholders To Be Subrogated to Rights of Holders
of Senior Indebtedness of the Company 20
Section 6.05. Obligation of the Company Unconditional 20
Section 6.06. Knowledge of Trustee 21
Section 6.07. Application by Trustee of Monies Deposited With It 21
Section 6.08. Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior
Indebtedness of the Company 21
Section 6.09. Securityholders Authorize Trustee To Effectuate
Subordination of Securities 22
Section 6.10. Right of Trustee To Hold Senior Indebtedness of the
Company 22
Section 6.11. Article Six Not To Prevent Events of Default 22
ARTICLE 7.
GUARANTEE
Section 7.01. Guarantee 22
Section 7.02. Agreement To Subordinate 24
Section 7.03. Guarantor Not To Make Payments with Respect to
Securities in Certain Circumstances 24
Section 7.04. Guarantee Subordinated to Prior Payment of All Senior
Indebtedness of the Guarantor on Dissolution,
Liquidation or Reorganization of the Guarantor 25
Section 7.05. Securityholders To Be Subrogated to Rights of Holders
of Senior Indebtedness of the Guarantor 26
Section 7.06. Obligation of the Guarantor Unconditional 27
Section 7.07. Knowledge of Trustee 27
Section 7.08. Application by Trustee of Monies Deposited With It 27
Section 7.09. Subordination Rights Not Impaired by Acts or
Omissions of Guarantor or Holders of Senior
Indebtedness of the Guarantor 28
Section 7.10. Securityholders Authorize Trustee To Effectuate
Subordination of Guarantee 28
Section 7.11. Right of Trustee To Hold Senior Indebtedness of the
Guarantor 28
Section 7.12. Article 7 Not To Prevent Events of Default 29
Section 7.13. Execution and Delivery of Guarantee 29
Section 7.14. Subordination of Indebtedness Owed by the Company
to the Guarantor 29
Section 7.15. Officers' Certificate 29
ARTICLE 8.
DEFAULTS AND REMEDIES
Section 8.01. Events of Default 30
Section 8.02. Acceleration 32
Section 8.03. Other Remedies 33
Section 8.04. Waiver of Past Defaults 33
Section 8.05. Control by Majority 33
Section 8.06. Limitation on Suits 33
Section 8.07. Rights of Holders To Receive Payment 34
Section 8.08. Collection Suit by Trustee 34
Section 8.09. Trustee May File Proofs of Claim 34
Section 8.10. Priorities 34
Section 8.11. Undertaking for Costs 35
ARTICLE 9.
TRUSTEE
Section 9.01. Duties of Trustee 35
Section 9.02. Rights of Trustee 36
Section 9.03. Individual Rights of Trustee 36
Section 9.04. Trustee Disclaimer 36
Section 9.05. Notice of Defaults 37
Section 9.06. Reports by Trustee to Holders 37
Section 9.07. Compensation and Indemnity 37
Section 9.08. Replacement of Trustee 38
Section 9.09. Successor Trustee by Merger, etc 39
Section 9.10. Eligibility; Disqualification 39
Section 9.11. Preferential Collection of Claims Against Company 39
ARTICLE 10.
CONVERSION OF SECURITIES
Section 10.01. Applicability of Article 39
Section 10.02. Conversion Privilege 39
Section 10.03. Manner of Exercise of Conversion Privilege 40
Section 10.04. Payment in Lieu of Fractional Shares 41
Section 10.05. Adjustment of Conversion Price 41
Section 10.06. Notice of Certain Corporate Action 44
Section 10.07. Guarantor To Provide Stock 44
Section 10.08. Taxes on Conversions 45
Section 10.09. Covenant as to Stock 45
Section 10.10. Consolidation or Merger 45
Section 10.11. Disclaimer of Responsibility for Certain Matters 46
ARTICLE 11.
DISCHARGE OF INDENTURE
Section 11.01. Termination of the Company's and the Guarantor's
Obligations 47
Section 11.02. Application of Trust Money 47
Section 11.03. Repayment to Company 48
ARTICLE 12.
AMENDMENTS, SUPPLEMENT AND WAIVERS
Section 12.01. Without Consent of Holders 48
Section 12.02. With Consent of Holders 48
Section 12.03. Compliance with Trust Indenture Act 49
Section 12.04. Revocation and Effect of Consents 49
Section 12.05. Notation on or Exchange of Securities 50
Section 12.06. Trustee To Sign Amendments, etc 50
ARTICLE 13.
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls 50
Section 13.02. Notices 50
Section 13.03. Communication by Holders with Other Holders 51
Section 13.04. Certificate and Opinion as to Conditions Precedent 51
Section 13.05. Statements Required in Certificate or Opinion 52
Section 13.06. When Treasury Securities Disregarded 52
Section 13.07. Rules by Trustee, Paying Agent, Registrar 52
Section 13.08. Legal Holidays 52
Section 13.09. Governing Law 52
Section 13.10. No Adverse Interpretation of Other Agreements 53
Section 13.11. No Recourse Against Others 53
Section 13.12. Successors 53
Section 13.13. Duplicate Originals 53
Section 13.14. Counterparts 53
INDENTURE dated as of January 25, 2001 among TOLL CORP., a Delaware
corporation (the "Company"), TOLL BROTHERS, INC., a Delaware corporation (the
"Guarantor"), and BANK ONE TRUST COMPANY, NA, a national banking association
(the "Trustee").
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its bonds, debentures, notes
and/or other evidences of indebtedness (herein called the "Securities"),
which may be senior secured, senior unsecured, senior subordinated or
subordinated, to be issued in one or more series as in this Indenture provided.
The Guarantor has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unconditional guarantee
of the Securities (herein called the "Guarantee"), which may be senior
secured, senior unsecured, senior subordinated or subordinated, as in this
Indenture provided.
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
ratable benefit of the Holders of the Securities or of each series thereof as
follows:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 8.02.
"Affiliate" has the meaning provided in Rule 405 promulgated under the
Securities Act of 1933, as amended and in effect on the date hereof.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board
delegation authorizing a Series of Securities. An Authorizing Resolution
shall be so adopted by both the Company and the Guarantor.
"Bankruptcy Law" has the meaning provided in Section 8.01.
"Board of Directors" means the Board of Directors of the Company or the
Guarantor, as the case may be, or any authorized committee of the Board.
"Board Resolution" means a copy of a resolution certified by the Secretary or
an Assistant Secretary of the Company or the Guarantor, as the case may be,
to have been duly adopted by the Board of Directors and to be in full force
and effect on the date of such certification and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means the classes of capital stock of a Person as they exist on
the date of this Indenture or as they may be constituted from time to time and
warrants, options and similar rights to acquire such capital stock.
"Common Stock" means the Common Stock ($.01 par value) of the Guarantor
as the same exists at the date of this Indenture as originally executed or as
such stock may be constituted from time to time.
"Company" means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor or any other obligor on the
Securities. "Company" shall also mean the Guarantor in the event the Company
fails to perform those duties required by Sections 312 through 317 of the TIA.
"Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, as determined in accordance with generally accepted
accounting principles.
"Conversion Price" means the initial conversion price of Securities of a Series
specified in the Authorizing Resolution establishing the terms of such Series
Security, as adjusted in accordance with the provisions of Article 10.
"Current Market Price" for any relevant date means, (a) except for purposes of
Section 10.04, the average of the last reported sale prices of the Common
Stock for the 30 consecutive Business Days commencing 45 Business Days before
the day in question and (b) for purposes of Section 10.04 only, the last
reported sale price of the Common Stock, in either such case as reported on
the composite tape, or similar reporting system, for issues listed on the New
York Stock Exchange (or if the Common Stock is not then listed on that
exchange, for issues listed on such other national securities exchange upon
which the Common Stock is listed as may be designated by the Board of
Directors for the purposes hereof) or, if there is no such reported sale on
the day or days in question, on the basis of the average of the closing bid
and asked quotations as so reported, or, if the Common Stock is not listed on
any national securities exchange, on the basis of the average of the high bid
and low asked quotations on the day or days in question in the
over-the-counter market as reported by the National Association of Securities
Dealers' Automated Quotations System, or if not so quoted, as reported by
National Quotation Bureau, Incorporated, or any similar organization, or if
not so reported as determined in good faith by the Board.
"Default" means any event which is, or after notice or passage of time or both
would be, an Event of Default.
"Designated Senior Debt of the Company" means any single issue of indebtedness
of the Company constituting Senior Indebtedness of the Company which at the
time of determination has an aggregate principal amount outstanding of at
least $25,000,000 and is specifically designated in the instrument or
instruments creating, governing or evidencing such Senior Indebtedness of the
Company as "Designated Senior Debt of Toll Corp." (it being understood that
the Company's guarantee of the Revolving Credit Agreement shall be considered
a single issue of indebtedness of the Company for purposes of this definition).
"Designated Senior Debt of the Guarantor" means any single issue of
indebtedness of the Guarantor constituting Senior Indebtedness of the
Guarantor which at the time of determination has an aggregate principal
amount outstanding of at least $25,000,000 and is specifically designated in
the instrument or instruments creating, governing or evidencing such Senior
Indebtedness of the Guarantor as "Designated Senior Debt of Toll Brothers,
Inc." (it being understood that the Guarantor's guarantee of the Revolving
Credit Agreement shall be considered a single issue of indebtedness of the
Guarantor for purposes of this definition).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Event of Default" has the meaning provided in Section 8.01.
"Guarantee" has the meaning provided in Section 7.01.
"Guarantor" means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time to time.
"Interest Payment Date," when used with respect to any installment of interest
payable on the Securities, has the meaning provided in Section 1 of the
Securities.
"Legal Holiday" has the meaning provided in Section 13.08.
"Non-Recourse Indebtedness" means indebtedness or other obligations secured
by a lien on property to the extent that the liability for such indebtedness
or other obligations is limited to the security of the property without
liability on the part of the Guarantor or any Subsidiary (other than the
Subsidiary which holds title to such property) for any deficiency.
"Non-Recourse Judgment" means a judgment in respect of indebtedness or
other obligations secured by a lien on property to the extent that the
liability for (i) such indebtedness or other obligations and (ii) such
judgment is limited to such property without liability on the part of the
Guarantor or any Subsidiary (other than the Subsidiary which holds title to
such property) for any deficiency.
"Officer" means the Chairman of the Board, the President, any Vice President,
the Chief Accounting Officer, the Controller, the Treasurer or the Secretary
of the Company or the Guarantor, as the case may be.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or any Vice President, and by the Chief Accounting
Officer, the Controller, the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company or the Guarantor, as the case may be.
See Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be counsel to, but not an
employee of, the Company or the Guarantor. See Sections 13.04 and 13.05.
"Original Issue Discount Security" means any Security which provides that an
amount less than its principal amount is due and payable upon acceleration
after an Event of Default.
"Paying Agent" has the meaning provided in Section 2.05.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"Principal" of a debt security means the principal of the security plus the
premium, if any, on the security.
"Record Date" for the interest payable on any Interest Payment Date on the
Securities has the meaning provided in Section 1 of the Securities.
"Registrar" has the meaning provided in Section 2.05.
"Restricted Subsidiary," if applicable, has the meaning provided in the
Authorizing Resolution.
"Revolving Credit Agreement" means the Credit Agreement dated as of February
25, 1998 among First Huntingdon Finance Corp., Toll Brothers, Inc., The First
National Bank of Chicago (now known as Bank One National Association)
(Administrative Agent); Bank of America National Trust and Savings
Association (Co-Agents); CoreStates Bank, N.A. (Co-Agent); Credit Lyonnais
New York Branch (Co-Agent); Comerica Bank; Nationsbank, National Association;
Fleet National Bank; Guaranty Federal Bank, F.S.B.; Mellon Bank, N.A.; Banque
Paribas; Bayerische Vereinsbank AG, New York Branch; Kredietbank N.V.;
Suntrust Bank, Atlanta; The Fuji Bank Limited; and Bank Hapoalim B.M.
Philadelphia Branch, as the same may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" means the securities as amended or supplemented from time to
time that are authenticated and issued under this Indenture.
"Senior Indebtedness of the Company," if applicable, has the meaning provided
in the Authorizing Resolution.
"Senior Indebtedness of the Guarantor," if applicable, has the meaning
provided in the Authorizing Resolution.
"Series" means a series of Securities or the Securities of a Series.
"Special Record Date" has the meaning provided in Section 2.13.
"Subsidiary" means any corporation of which at least a majority in interest of
the outstanding stock having by the terms thereof voting power under ordinary
circumstances to elect a majority of the directors of such corporation,
irrespective of whether or not at the time stock of any other class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency, is at the time, directly or indirectly,
owned or controlled by the Guarantor.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-
77bbbb) as in effect on the date of this Indenture and as it may be amended
from time to time.
"Trustee" means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor.
"Trust Officer" when used with respect to the Trustee means any officer within
the Corporate Trust Department (or any successor group) of the Trustee,
including any Vice President, Assistant Vice President, Trust Officer or any
other officer of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such 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.
Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder or Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor on the indenture securities" means the Company, the Guarantor or any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule have the meanings
assigned to them.
Section 1.03. Incorporation by Reference of Provisions of Securities.
Whenever this Indenture refers to a provision of the Securities, the
provision is incorporated by reference in and made a part of this Indenture.
Section 1.04. Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles at the
time of the relevant computation;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include the
singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2.
THE SECURITIES
Section 2.01. Forms Generally. The Securities and the Guarantee, respec-
tively, of each series shall be in such forms (including global form) as
shall be established by or pursuant to an Authorizing Resolution or in one or
more supplemental indentures hereto, in each case with such appropriate
provisions as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of
any securities exchange or depositary therefor or as may, consistent
herewith, be determined appropriate by the Officers executing such
Securities, as evidenced by their execution thereof. If the form of any
series of Securities is established by action taken pursuant to an
Authorizing Resolution, a copy of an appropriate record of such action shall
be certified by the Secretary or any Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of a written order
of the Company signed by two Officers or an Officer and an Assistant
Treasurer of the Company for the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, provided that such
method is permitted by the rules of any securities exchange on which such
Securities may be listed, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities.
The terms and provisions in the Securities shall constitute, and are hereby ex-
pressly made, a part of this Indenture.
Section 2.02. Form of Trustee's Certificate of Authentication. The Trus-
tee's certificate of authentication shall be in substantially the following
form:
This is one of the Securities of the series designated herein referred to
in the within mentioned Indenture.
BANK ONE TRUST COMPANY, NA
As Trustee
By:
Authorized Signatory
Section 2.03. Amount Unlimited, Issuable in Series. The aggregate princi-
pal amount of Securities that may be issued under this Indenture is
unlimited. The Securities may be issued from time to time in one or more
Series. Each Series shall be created by an Authorizing Resolution or a
supplemental indenture that establishes the terms of the Series, which may
include the following:
(1) the title of the Series;
(2) any limit upon the aggregate principal amount 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 which, pursuant to
Sections 2.08, 2.09, 2.11 or 10.05 and except for any Securities which,
pursuant to Section 2.04, are deemed never to have been authenticated
and delivered hereunder);
(3) the interest rate or method of calculation of the interest rate;
(4) the date from which interest will accrue;
(5) the Record Dates for interest payable on Securities of the Series;
(6) the dates when, places where and manner in which principal and interest
are payable;
(7) the Registrar and Paying Agent;
(8) the terms of any mandatory or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form and the
terms of any such forms of Securities;
(12) whether any Securities will be represented by a global Security and the
terms of any such global Security;
(13) the currencies (including any composite currency) in which principal or
interest or both may be paid;
(14) if payments of principal or interest may be made in a currency other
than that in which Securities are denominated, the manner for
determining such payments;
(15) provisions for electronic issuance of Securities or issuance of
Securities in uncertificated form;
(16) any Events of Default or covenants in addition to or in lieu of those set
forth in this Indenture;
(17) whether and upon what terms Securities may be defeased;
(18) the respective forms of the Securities and the Guarantees;
(19) whether the Securities of such Series will be convertible into Common
Stock of the Guarantor and the terms thereof (including without
limitation the Conversion Price, the conversion period and any other
provision in addition to or in lieu of those set forth in this
Indenture);
(20) whether the Securities and Guarantees of such Series shall be
subordinated to any obligations of the Company or the Guarantor, and the
obligations to which such subordination will apply;
(21) whether the Securities of such Series and/or the Guarantees of such
Series will be secured and, if applicable, any provisions for securing
all or any portion of the indebtedness evidenced by the Securities of
such Series and/or the Guarantees of such Series;
(22) any terms that may be required by or advisable under applicable law;
and
(23) any other terms not inconsistent with this Indenture.
All Securities of one Series need not be issued at the same time and, unless
otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and delivery
thereof are not subject to any conditions precedent.
Section 2.04. Execution and Authentication. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's
seal shall be reproduced on the Securities. Two Officers of the Guarantor
shall sign the notation of the Guarantee by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that office at
the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until the Trustee manually signs the certificate
of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon a written
order of the Company signed by two Officers or by an Officer and an Assistant
Treasurer of the Company. Each Security shall be dated the date of its
authentication. In authenticating Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to the TIA) shall be fully
protected in relying upon, an Opinion of Counsel stating that all conditions
precedent to the authentication and delivery of the Securities have been
complied with and that the Securities have been duly executed and, when the
Securities have been duly authenticated and delivered by the Trustee, will be
duly issued and delivered and will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms,
subject to any applicable bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and subject to the effect of general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether enforcement is considered in a
proceeding in equity or at law).
Section 2.05. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of
transfer, for exchange or, if applicable, for conversion (in the case of
conversion, as agent for the Guarantor) ("Registrar") and an office or agency
where Securities may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Securities and of their transfer. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to
such agent. The Company shall notify the Trustee of the name and address of
any such agent. If the Company fails to maintain a Registrar or Paying
Agent, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying Agent.
Section 2.06. Paying Agent To Hold Money in Trust. Each Paying Agent shall
hold in trust for the benefit of the Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal or interest on the
Securities, and shall notify the Trustee of any default by the Company (or
any other obligor on the Securities) in making any such payment. While any
such default continues, the Trustee shall require a Paying Agent to pay all
money held by it to the Trustee. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon doing so the Paying Agent shall have no
further liability for the money.
Section 2.07. Securityholder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of
the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee on or before each
Interest Payment Date and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
Section 2.08. Transfer and Exchange. Where a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the
Registrar shall register its transfer as requested if its reasonable
requirements are met. Where Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount
of Securities of other denominations, the Registrar shall make the exchange
as requested if the same requirements are met. To permit transfers and
exchanges, the Trustee shall authenticate Securities at the Registrar's
request. The Registrar need not transfer or exchange any Security selected
for redemption, except the unredeemed part thereof if the Security is
redeemed in part, or transfer or exchange any Securities for a period of 15
days before a selection of Securities to be redeemed. The Company may charge
a reasonable fee for any transfer or exchange (including the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such transfer or exchange and any other expenses in
connection therewith) but not for any exchange pursuant to Section 2.11, 3.06
or 12.05. This Section 2.08 is subject to the provisions of any series of
the Securities providing for the subordination or seniority of such series
and the related Guarantees of such series in right of payment to other
indebtedness of the Company and the Guarantor, respectively.
Section 2.09. Replacement Securities. If the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Security and the
Guarantor shall endorse the Guarantee thereon if the Trustee's reasonable
requirements are met. An indemnity bond must be sufficient in the judgment
of the Company, the Guarantor and the Trustee to protect the Company, the
Guarantor, the Trustee, the Paying Agent, the Registrar or any co-registrar
from any loss which any of them may suffer if a Security is replaced. The
Company may charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company and the
Guarantor.
Section 2.10. Outstanding Securities. Securities outstanding at any time are
all Securities authenticated by the Trustee except for those presented to it
by the Company or its designee for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding
because the Company, the Guarantor or one of their Affiliates holds the
Security.
If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced
Security is held by a bona fide purchaser.
If the Paying Agent holds on a redemption date or maturity date money
sufficient to pay Securities payable on that date, then on and after that
date such Securities cease to be outstanding and interest on them ceases to
accrue.
If a Security is called for redemption or if it matures in less than six months
and if the Company has satisfied its obligation to pay the Security, or if a
Security has been converted in accordance with the provisions of Article 10,
the Company and the Trustee need not treat the Security as outstanding in
determining whether Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent.
For each series of Original Issue Discount Securities, the principal amount of
such Securities that shall be deemed to be outstanding and used to determine
whether the necessary Holders have given any request, demand, authorization,
direction, notice, consent or waiver shall be the principal amount of such
Securities that could be declared to be due and payable upon acceleration
upon an Event of Default as of the date of such determination.
When requested by the Trustee, the Company will advise the Trustee of such
amount, showing its computations in reasonable detail.
Subject to the foregoing provisions of this Section, each Security delivered un-
der 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 2.11. Temporary Securities. Until definitive Securities are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Securities and the Guarantor shall endorse the Guarantee thereon. Temporary
Securities shall be substantially in the form of definitive Securities but
may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities and the Guarantor shall
endorse the Guarantee thereon in exchange for temporary Securities.
Section 2.12. Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange, conversion or payment. The Trustee and no one else shall cancel
and destroy all Securities surrendered for transfer, exchange, conversion,
payment or cancellation in accordance with its customary procedure. Unless
the Authorizing Resolution so provides, the Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation.
Section 2.13. Defaulted Interest. If the Company defaults in a payment of
interest on the Securities, it shall pay the defaulted interest in any lawful
manner. It may pay the defaulted interest, plus any interest payable on the
interest (to the extent lawful) if an Event of Default has occurred and is
continuing, to the Persons who are Securityholders on a subsequent special
record date (the "Special Record Date"). The Company shall fix the
subsequent Special Record Date and payment date. At least 15 days before
such Special Record Date, the Company shall give notice to the Trustee and
shall mail to each Securityholder a notice that states the subsequent Special
Record Date, the payment date, and the amount of defaulted interest to be paid.
Section 2.14. Global Securities. Unless the Authorizing Resolution provides
otherwise, the Company may issue some or all of the Securities of a Series in
temporary or permanent global form. A global Security shall represent that
amount of Securities of a Series as specified in the global Security or as
endorsed thereon from time to time. At the Company's request, the Registrar
shall endorse a global Security to reflect the amount of any increase or
decrease in the Securities represented thereby.
The Company may issue a global Security only to a depositary designated by
the Company. A depositary may transfer a global Security only as a whole to
its nominee or to a successor depositary.
The Authorizing Resolution may establish, among other things, the manner of
paying principal and interest on a global Security and whether and upon what
terms a beneficial owner of an interest in a global Security may exchange
such interest for definitive Securities.
The Company and the Trustee shall not be responsible for any acts or
omissions of a depositary, for any depositary records of beneficial ownership
interests or for any transactions between the depositary and beneficial owners.
ARTICLE 3.
REDEMPTION
Section 3.01. Notices to Trustee. Securities of a Series that are redeemable
prior to maturity shall be redeemable in accordance with their terms and,
unless the Authorizing Resolution provides otherwise, in accordance with this
Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the redemption date and
the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to
Holders. Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed, retired or
acquired against any redemption pursuant to Paragraph 6 of the Securities, it
shall notify the Trustee of the amount of the credit and it shall deliver any
Securities not previously delivered to the Trustee for cancellation with such
notice.
The Company shall give each notice provided for in this Section 3.01 at least
10 Business Days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities To Be Redeemed. If less than all the
Securities of a Series are to be redeemed, the Trustee shall select the
Securities to be redeemed, if the Securities of such Series are listed on a
national securities exchange, in accordance with the rules of such exchange,
or if the Securities of such Series are not so listed, on either a pro rata
basis or by lot or by such method as the Trustee shall deem fair and
appropriate. The Trustee shall make the selection from Securities outstanding
and not previously called for redemption. Securities in denominations of
$1,000 may only be redeemed in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal
of Securities that have denominations larger than $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
Section 3.03. Notice of Redemption. At least 30 days but not more than 60
days before a redemption date, the Company shall mail a notice of redemption
by first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) in the event that any Security is to be redeemed in part only, the
portion of the principal amount thereof to be redeemed and that on and
after the redemption date, upon surrender of such Security, a new
Security or Securities in principal amount equal to the unredeemed
portion thereof will be issued;
(5) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(6) that interest on Securities called for redemption ceases to accrue on and
after the redemption date;
(7) that the Securities are being redeemed pursuant to the mandatory
redemption or the optional redemption provisions, as applicable; and
(8) if applicable, the current Conversion Price and the date on which the
right to convert the Securities into Common Stock will expire.
At the Company's request, the Trustee shall give the notice of redemption in
the Company's name and at the Company's expense.
Section 3.04. Effect of Notice of Redemption. Once notice of redemption is
mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price. Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price, plus accrued
interest to the redemption date.
Section 3.05. Deposit of Redemption Price. Prior to the redemption date,
the Company or its designee shall deposit with the Paying Agent money
sufficient to pay the redemption price of and accrued and unpaid interest on
all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part . Upon surrender of a Security
that is redeemed in part, the Trustee shall authenticate for the Holder a new
Security and the Guarantor shall endorse the Guarantee thereon equal in
principal amount to the unredeemed portion of the Securities surrendered.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Securities. The Company shall pay the principal
of and interest on Securities of a Series on the dates and in the manner
provided in the Securities of the Series. An installment of principal or
interest shall be considered paid on the date due if the Trustee or Paying
Agent holds on that date immediately available legal tender funds designated
for, available and sufficient to pay the installment.
The Company shall pay interest on overdue principal at the rate borne by the
Series; it shall pay interest on overdue installments of interest at the same
rate to the extent lawful.
Section 4.02. SEC Reports. Within 15 days after each of the Guarantor and
the Company files with the SEC copies of its annual reports and other
information, documents and reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which they are
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act, the Guarantor and the Company shall file the same with the Trustee. If
the Guarantor shall cease to be subject to the requirements of Section 13 or
15(d) of the Exchange Act, the Guarantor shall file with the Trustee, within
15 days after the last date on which it would have been required to make such
a filing with the SEC, financial statements, including any notes thereto, and
a "Management's Discussion and Analysis of Financial Condition and Results of
Operations," each comparable to that which the Guarantor would have been
required to include in such annual reports, information, documents or other
reports, if the Guarantor were then subject to the requirements of Section 13
or 15(d) of the Exchange Act. The Company and the Guarantor also shall comply
with the other provisions of TIA Section 314(a).
Section 4.03. Compliance Certificate. The Company and the Guarantor each
shall deliver to the Trustee within 120 days after the end of their
respective fiscal year an Officers' Certificate satisfying the requirements
of Section 3.14(a)(4) of the TIA and stating whether or not the signers know
of any Default or Event of Default. If they do know of such a Default or
Event of Default, the certificate shall describe the Default or Event of
Default.
ARTICLE 5.
SUCCESSOR CORPORATION
Section 5.01. When the Company and the Guarantor May Merge, Etc.
Neither the Company nor the Guarantor shall consolidate with or merge into,
or transfer all or substantially all of its assets to, any other person
unless (i) such other Person is a corporation organized and existing under
the laws of the United States or a State thereof or the District of Columbia
and expressly assumes by supplemental indenture all the obligations of the
Company or the Guarantor under the Indenture and either the Securities or the
Guarantee, as the case may be; and (ii) immediately after giving effect to
such transaction no Default or Event of Default shall have occurred and be
continuing. Thereafter all such obligations of the predecessor corporation
shall terminate.
ARTICLE 6.
SUBORDINATION
Section 6.01. Agreement to Subordinate. The provisions of this Article 6
shall apply to the Securities of a Series to the extent specified in the
Authorizing Resolution relating to such Series. Each reference in this
Article 6 to "a Security" or "the Securities" refers to the Securities of
each such Series so designated.
The Company, for itself and its successors, and each Holder, by accepting
Securities, agrees that the payment of the principal of, interest on or any
other amounts due on the Securities are subordinated in right of payment, to
the extent and in the manner stated in this Article 6, to the prior payment
in full of all Senior Indebtedness of the Company. Each Holder by accepting
Securities authorizes and directs the Trustee on behalf of such Holder to
take such action as may be necessary or appropriate to effectuate, as between
the holders of Senior Indebtedness of the Company and such Holder, the
subordination provided in this Article 6 and appoints the Trustee
attorney-in-fact for such Holder for such purpose.
This Article 6 shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness of the Company, and such provisions are made for the benefit of
the holders of Senior Indebtedness of the Company and such holders are made
obligees hereunder and they and/or each of them may enforce such provisions.
Section 6.02. Company Not To Make Payments with Respect to Securities in
Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness of the Company by lapse
of time, acceleration (unless waived) or otherwise, all principal thereof
and interest thereon shall first be paid in full, or such payment duly
provided for in cash or in a manner satisfactory to the holders of such
Senior Indebtedness of the Company, before any payment is made on account
of the principal of or interest on the Securities or to acquire any of the
Securities.
(b) In the event that notwithstanding the provisions of this Section 6.02 the
Company shall make any payment to the Trustee on account of the principal
of or interest on the Securities after the happening of a default in
payment of the principal of or interest on Senior Indebtedness of the
Company, then, unless and until such default shall have been cured or
waived or shall have ceased to exist, such payment (subject to the
provisions of Sections 6.06 and 6.07) shall be held by the Trustee, in
trust for the benefit of, and shall be paid forthwith over and delivered
to, the holders of Senior Indebtedness of the Company (pro rata as to
each of such holders on the basis of the respective amounts of Senior
Indebtedness of the Company held by them) or their representative or the
trustee under the indenture or other agreement (if any) pursuant to which
Senior Indebtedness of the Company may have been issued, as their
respective interests may appear, for application to the payment of all
Senior Indebtedness of the Company remaining unpaid to the extent
necessary to pay all Senior Indebtedness of the Company in full in
accordance with its terms, after giving effect to any concurrent payment
or distribution to or for the holders of the Senior Indebtedness of the
Company.
The Company shall give prompt written notice to the Trustee of any default in
the payment of principal of or interest on any Senior Indebtedness of the
Company.
Section 6.03. Securities Subordinated to Prior Payment of All Senior
Indebtedness of the Company on Dissolution, Liquidation or Reorganization of
the Company. Upon any distribution of assets of the Company in any
dissolution, winding up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefits of creditors or otherwise):
(a) the holders of all Senior Indebtedness of the Company shall first be
entitled to receive payment in full of the principal thereof and interest
due thereon before the Holders of the Securities are entitled to receive
any payment on account of the principal of or interest on the Securities;
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holders
of the Securities or the Trustee on behalf of the Holders of the
Securities would be entitled except for the provisions of this Article 6,
including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the
Company being subordinated to the payment of the Securities, shall be
paid by the liquidating trustee or agent or other Person making such
payment or distribution directly to the holders of the Senior
Indebtedness of the Company or their representative, or to the trustee
under any indenture under which Senior Indebtedness of the Company may
have been issued (pro rata as to each such holder, representative or
trustee on the basis of the respective amounts of unpaid Senior
Indebtedness of the Company held or represented by each), to the extent
necessary to make payment in full of all Senior Indebtedness of the
Company remaining unpaid, after giving effect to any concurrent payment
or distribution or provision therefor to the holders of such Senior
Indebtedness of the Company, except that Holders of the Securities would
be entitled to receive securities that are subordinated to Senior
Indebtedness of the Company to at least the same extent as the
Securities; and
(c) in the event that notwithstanding the foregoing provisions of this
Section 6.03, any payment or distribution of assets of the Company of any
kind or character whether in cash, property or securities, including any
such payment or distribution which may be payable or deliverable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities, shall be received by the
Trustee or the Holders of the Securities on account of principal of or
interest on the Securities before all Senior Indebtedness of the Company
is paid in full, or effective provision made for its payment, such
payment or distribution (subject to the provisions of Sections 6.06 and
6.07) shall be received and held in trust for and shall be paid over to
the holders of the Senior Indebtedness of the Company remaining unpaid or
unprovided for or their representative, or to the trustee under any
indenture under which such Senior Indebtedness of the Company may have
been issued (pro rata as provided in subsection (b) above), for
application to the payment of such Senior Indebtedness of the Company
until all such Senior Indebtedness of the Company shall have been paid in
full, after giving effect to any concurrent payment or distribution or
provision therefor to the holders of such Senior Indebtedness of the
Company, except that Holders of the Securities would be entitled to
receive securities that are subordinated to Senior Indebtedness of the
Company to at least the same extent as the Securities.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company.
Section 6.04. Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness of the Company. Subject to the payment in full of all
Senior Indebtedness of the Company, the Holders of the Securities shall be
subrogated equally and ratably to the rights of the holders of the Senior
Indebtedness of the Company to receive payments or distributions of assets of
the Company applicable to the Senior Indebtedness of the Company until all
amounts owing on the Securities shall be paid in full, and for the purpose of
such subrogation no payments or distributions to the holders of the Senior
Indebtedness of the Company by or on behalf of the Company or by or on behalf
of the Holders of the Securities by virtue of this Article 6 which otherwise
would have been made to the Holders of the Securities shall, as among the
Company, its creditors other than holders of the Senior Indebtedness of the
Company and the Holders of the Securities, be deemed to be payment by the
Company to or on account of the Senior Indebtedness of the Company, it being
understood that the provisions of this Article 6 are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on
the one hand, and the holders of the Senior Indebtedness of the Company, on
the other hand.
Section 6.05. Obligation of the Company Unconditional. Nothing contained
in this Article 6 or elsewhere in this Indenture or in any Security is
intended to or shall impair, as between the Company and the Holders of the
Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders of the Securities and creditors of the Company
other than the holders of the Senior Indebtedness of the Company, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this
Article 6 of the holders of Senior Indebtedness of the Company in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy. Upon any distribution of assets of the Company referred to in
this Article 6, the Trustee, subject to the provisions of Sections 9.01 and
9.02, and the Holders of the Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of the liquidating trustee or agent or other Person
making any distribution to the Trustee or the Holders of the Securities, for
the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness of the Company and other
Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 6.
Nothing contained in this Article 6 or elsewhere in this Indenture or in any
Security is intended to or shall affect the obligation of the Company to
make, or prevent the Company from making, at any time except during the
pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and except during the continuance of any default specified in
Section 6.02 (not cured or waived), payments at any time of the principal of
or interest on the Securities.
Section 6.06. Knowledge of Trustee. Notwithstanding any provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of monies to or
by the Trustee until two Business Days after the Trustee shall have received
written notice thereof from the Company, any Securityholder or any Paying
Agent or the holder or representative of any class of Senior Indebtedness
of the Company.
Section 6.07. Application by Trustee of Monies Deposited With It. If at
least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may
become payable for any purpose (including, without limitation, the payment of
either the principal of or the interest on any Security) the Trustee shall
not have received with respect to such monies the notice provided for in
Section 6.06, then the Trustee shall have full power and authority to receive
such monies and to apply the same to the purpose for which they were received
and shall not be affected by any notice to the contrary which may be received
by it on or after such date. This Section shall be construed solely for the
benefit of the Trustee and such Paying Agent and shall not otherwise affect
the rights of holders of Senior Indebtedness of the Company.
Section 6.08. Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Indebtedness of the Company. No right of any
present or future holders of any Senior Indebtedness of the Company to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness of the Company
may extend, renew, modify or amend the terms of the Senior Indebtedness of
the Company or any security therefor and release, sell or exchange such
security and otherwise deal freely with the Company, all without affecting
the liabilities and obligations of the parties to this Indenture or the
Holders. No provision in any supplemental indenture which affects the
superior position of the holders of Senior Indebtedness of the Company shall
be effective against the holders of Senior Indebtedness of the Company who
have not consented thereto.
Section 6.09. Securityholders Authorize Trustee To Effectuate Subordination
of Securities. Each Holder of Securities by acceptance thereof authorizes
and expressly directs the Trustee on its, his or her behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article 6 and appoints the Trustee its, his or her
attorney-in-fact for such purpose, including, in the event of any
dissolution, winding up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company, the immediate filing
of a claim for the unpaid balance of its, his or her Securities in the form
required in said proceedings and cause said claim to be approved. If the
Trustee does not file a proper claim or proof of debt in the form required in
such proceedings prior to 30 days before the expiration of the time to file
such claim or claims, then the holders of Senior Indebtedness of the Company
have the right to file and are hereby authorized to file an appropriate claim
for and on behalf of the Holders of said Securities.
Section 6.10. Right of Trustee To Hold Senior Indebtedness of the Company.
The Trustee shall be entitled to all of the rights set forth in this Article
6 in respect of any Senior Indebtedness of the Company at any time held by it
to the same extent as any other holder of Senior Indebtedness of the Company
and nothing in this Indenture shall be construed to deprive the Trustee of
any of its rights as such holder.
Section 6.11. Article Six Not To Prevent Events of Default. The failure to
make a payment on account of principal or interest by reason of any provision
in this Article 6 shall not be construed as preventing the occurrence of an
Event of Default under Section 8.01.
ARTICLE 7.
GUARANTEE
Section 7.01. Guarantee. The Guarantor hereby unconditionally guarantees
(such guarantee to be referred to herein as the "Guarantee") to each Holder
of a Security authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Securities or the obligations of the
Company hereunder or thereunder, (i) the due and punctual payment of the
principal of and any interest on the Securities, whether at maturity or on an
Interest Payment Date, by acceleration or otherwise, and interest on the
overdue principal of and interest, if any, on the Securities, if lawful, and
all other obligations of the Company to the Holders or the Trustee hereunder
or under the Securities shall be promptly paid in full, all in accordance with
the terms hereof and thereof including all amounts payable to the Trustee
under Section 9.07 hereof, and (ii) in case of any extension of time of
payment or renewal of any Securities or any of such other obligations, that
the same shall be promptly paid in full when due or to be performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.
If the Company fails to make any payment when due of any amount so guaranteed
for whatever reason, the Guarantor shall be obligated to pay the same
immediately. The Guarantor hereby agrees that its obligations hereunder
shall be continuing, absolute and unconditional, irrespective of, and shall
be unaffected by, the validity, regularity or enforceability of the
Securities, this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities or the Trustee with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of the
Guarantor. The Guarantor hereby waives diligence, presentment, demand of
payment, demand of performance, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, the benefit of discussion, protest, notice and all
demand whatsoever and covenants that this Guarantee shall not be discharged
except by complete performance of the obligations contained in the
Securities, in this Indenture and in this Article 7. If any Securityholder
or the Trustee is required by any court or otherwise to return to the Company
or the Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or the Guarantor, any amount paid
by the Company or the Guarantor to the Trustee or such Securityholder, this
Article 7, to the extent theretofore discharged, shall be reinstated in full
force and effect. The Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Securityholders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. The Guarantor further agrees that, as between the
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article 8 for the purposes of the Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect
of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of such obligations as provided in Article 8 such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantor for the purpose of this Article 7. In addition,
without limiting the foregoing, upon the effectiveness of an acceleration
under Article 8, the Trustee may make a demand for payment on the Securities
under the Guarantee provided hereunder and not discharged.
The Guarantor shall be subrogated to all rights of the Holder of any Securities
against the Company in respect of any amounts paid to the Holder by the
Guarantor pursuant to the provisions of this Guarantee; provided that the
Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until the principal
of and interest on all the Securities shall have been paid in full.
The Guarantee set forth in this Section 7.01 shall not be valid or become
obligatory for any purpose with respect to a Security until the certificate
of authentication on such Security shall have been signed by the Trustee or
any duly appointed agent.
Section 7.02. Agreement To Subordinate. The provisions of this Article 7
shall apply to the Securities of a Series to the extent specified in the
Authorizing Resolution relating to such Series. Each reference in this
Article 7 to "a Security" or "the Securities" refers to the Securities of
each such Series so designated.
The Guarantor, for itself and its successors, and each Holder, by accepting
the Securities, agrees that the payment of the principal of, interest on and
any other amounts due on the Securities pursuant to the Guarantee are
subordinated in right of payment, to the extent and in the manner stated in
this Article 7, to the prior payment in full of all Senior Indebtedness of
the Guarantor. Each Holder by accepting Securities authorizes and directs
the Trustee on behalf of such Holder to take such action as may be necessary
or appropriate to effectuate, as between the holders of Senior Indebtedness
of the Guarantor and such Holder, the subordination provided in this Article
7 and appoints the Trustee attorney-in-fact for such Holder for such purpose.
This Article shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness of the Guarantor, and such provisions are made for the
benefit of the holders of Senior Indebtedness of the Guarantor, and such
holders are made obligees hereunder and they and/or each of them may enforce
such provisions.
Section 7.03. Guarantor Not To Make Payments with Respect to Securities
in Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness of the Guarantor by
lapse of time, acceleration (unless waived) or otherwise, all principal
thereof and interest thereon shall first be paid in full, or such payment
duly provided for in cash or in a manner satisfactory to the holders of
such Senior Indebtedness of the Guarantor, before any payment, pursuant
to the Guarantee, is made on account of the principal of or interest on
the Securities or to acquire any of the Securities.
(b) In the event that notwithstanding the provisions of this Section 7.03 the
Guarantor shall make any payment to the Trustee on account of the
principal of or interest on the Securities after the happening of a
default in payment of the principal of or interest on Senior Indebtedness
of the Guarantor, then, unless and until such default shall have been
cured or waived or shall have ceased to exist, such payment (subject to
the provisions of Sections 7.07 and 7.08) shall be held by the Trustee,
in trust for the benefit of, and shall be paid forthwith over and
delivered to, the holders of Senior Indebtedness of the Guarantor (pro rata
as to each of such holders on the basis of the respective amounts of
Senior Indebtedness of the Guarantor held by them) or their
representative or the trustee under the indenture or other agreement (if
any) pursuant to which Senior Indebtedness of the Guarantor may have been
issued, as their respective interests may appear, for application to the
payment of all Senior Indebtedness of the Guarantor remaining unpaid to
the extent necessary to pay all Senior Indebtedness of the Guarantor in
full in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness of
the Guarantor.
The Guarantor shall give prompt written notice to the Trustee of any default
in the payment of principal of or interest on any Senior Indebtedness of the
Guarantor.
Section 7.04. Guarantee Subordinated to Prior Payment of All Senior
Indebtedness of the Guarantor on Dissolution, Liquidation or Reorganization
of the Guarantor. Upon any distribution of assets of the Guarantor in any
dissolution, winding up, liquidation or reorganization of the Guarantor
(whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness of the Guarantor shall first be
entitled to receive payment in full of the principal thereof and interest
due thereon before the Holders of the Securities are entitled to receive
any payment on account of the principal of or interest on the Securities
pursuant to the Guarantee;
(b) any payment or distribution of assets of the Guarantor of any kind or
character, whether in cash, property or securities, to which the Holders
of the Securities or the Trustee on behalf of the Holders of the
Securities would be entitled except for the provisions of this Article 7,
including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the
Guarantor being subordinated to the payment of the Securities, shall be
paid by the liquidating trustee or agent or other Person making such
payment or distribution directly to the holders of the Senior
Indebtedness of the Guarantor or their representative, or to the trustee
under any indenture under which Senior Indebtedness of the Guarantor may
have been issued (pro rata as to each such holder, representative or
trustee on the basis of the respective amounts of unpaid Senior
Indebtedness of the Guarantor held or represented by each), to the extent
necessary to make payment in full of all Senior Indebtedness of the
Guarantor remaining unpaid, after giving effect to any concurrent payment
or distribution or provision therefor to the holders of such Senior
Indebtedness of the Guarantor, except that Holders of the Securities
would be entitled to receive securities that are subordinated to Senior
Indebtedness of the Guarantor to at least the same extent as the
Securities; and
(c) in the event that, notwithstanding the foregoing provisions of this
Section 7.04, any payment or distribution of assets of the Guarantor of
any kind or character, whether in cash, property or securities, including
any such payment or distribution which may be payable or deliverable by
reason of the payment of any other indebtedness of the Guarantor being
subordinated to the payment of the Securities, shall be received by the
Trustee or the Holders of the Securities on account of principal of or
interest on the Securities before all Senior Indebtedness of the
Guarantor is paid in full, or effective provision made for its payment,
such payment or distribution (subject to the provisions of Sections 7.07
and 7.08) shall be received and held in trust for and shall be paid over
to the holders of the Senior Indebtedness of the Guarantor remaining
unpaid or unprovided for or their representative, or to the trustee under
any indenture under which such Senior Indebtedness of the Guarantor may
have been issued (pro rata as provided in subsection (b) above), for
application to the payment of such Senior Indebtedness of the Guarantor
until all such Senior Indebtedness of the Guarantor shall have been paid
in full, after giving effect to any concurrent payment or distribution or
provision therefor to the holders of such Senior Indebtedness of the
Guarantor, except that Holders of the Securities would be entitled to
receive securities that are subordinated to Senior Indebtedness of the
Guarantor to at least the same extent as the Securities.
Upon any distribution of assets of the Guarantor referred to in this Article 7,
the Trustee, subject to the provisions of Sections 9.01 and 9.02, and the
Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating trustee or agent or other Person making any
distribution to the Trustee or the Holders of the Securities, for the purpose
of ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness of the Guarantor and other Indebtedness of
the Guarantor, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 7.
The Guarantor shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Guarantor.
Section 7.05. Securityholders To Be Subrogated to Rights of Holders of Senior
Indebtedness of the Guarantor. Subject to the payment in full of all Senior
Indebtedness of the Guarantor, the Holders of the Securities shall be
subrogated equally and ratably to the rights of the holders of the Senior
Indebtedness of the Guarantor to receive payments or distributions of assets
of the Guarantor applicable to the Senior Indebtedness of the Guarantor until
all amounts owing on the Securities shall be paid in full, and for the
purpose of such subrogation no payments or distributions to the holders of
the Senior Indebtedness of the Guarantor by or on behalf of the Guarantor or
by or on behalf of the Holders of the Securities by virtue of this Article 7
which otherwise would have been made to the Holders of the Securities shall,
as among the Guarantor, its creditors other than holders of Senior
Indebtedness of the Guarantor and the Holders of the Securities, be deemed to
be payment by the Guarantor to or on account of the Senior Indebtedness of
the Guarantor, it being understood that the provisions of this Article 7 are
intended solely for the purpose of defining the relative rights of the
Holders of the Securities, on the one hand, and the holders of the Senior
Indebtedness of the Guarantor, on the other hand.
Section 7.06. Obligation of the Guarantor Unconditional. Nothing contained
in this Article 7 or elsewhere in this Indenture or in any Security is
intended to or shall impair, as between the Guarantor and the Holders of the
Securities, the obligation of the Guarantor, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
interest on the Securities as and when the same shall become due and payable
in accordance with the terms of the Guarantee, or is intended to or shall
affect the relative rights of the Holders of the Securities and creditors of
the Guarantor other than the holders of the Senior Indebtedness of the
Guarantor, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon Default under this Indenture, subject to the rights, if
any, under this Article 7 of the holders of Senior Indebtedness of the
Guarantor in respect of cash, property or securities of the Guarantor
received upon the exercise of any such remedy.
Nothing contained in this Article 7 or elsewhere in this Indenture or in any
Security is intended to or shall affect the obligation of the Guarantor to
make, or prevent the Guarantor from making, at any time except during the
pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and except during the continuance of any default specified in
Section 7.03 (not cured or waived), payments at any time of the principal of
or interest on the Securities pursuant to the Guarantee.
Section 7.07. Knowledge of Trustee. Notwithstanding any provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of monies to or
by the Trustee until two Business Days after the Trustee shall have received
written notice thereof from the Guarantor, any Securityholder or any Paying
Agent or the holder or representative of any class of Senior Indebtedness of
the Guarantor.
Section 7.08. Application by Trustee of Monies Deposited With It. If at
least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may
become payable for any purpose (including, without limitation, the payment of
either the principal of or the interest on any Security) the Trustee shall
not have received with respect to such monies the notice provided for in
Section 7.07, then the Trustee shall have full power and authority to receive
such monies and to apply the same to the purpose for which they were received
and shall not be affected by any notice to the contrary which may be received
by it on or after such date. This Section shall be construed solely for the
benefit of the Trustee and such Paying Agent and shall not otherwise affect
the rights of holders of Senior Indebtedness of the Guarantor.
Section 7.09. Subordination Rights Not Impaired by Acts or Omissions of
Guarantor or Holders of Senior Indebtedness of the Guarantor. No right of
any present or future holders of any Senior Indebtedness of the Guarantor to
enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Guarantor or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Guarantor with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness of the Guarantor
may extend, renew, modify or amend the terms of the Senior Indebtedness of
the Guarantor, or any security therefor and release, sell or exchange such
security and otherwise deal freely with the Guarantor, all without affecting
the liabilities and obligations of the parties to the Indenture or the
Holders. No provision in any supplemental indenture which affects the
superior position of the holders of Senior Indebtedness of the Guarantor
shall be effective against the holders of Senior Indebtedness of the
Guarantor who have not consented thereto.
Section 7.10. Securityholders Authorize Trustee To Effectuate Subordination
of Guarantee. Each Holder of Securities by acceptance thereof authorizes and
expressly directs the Trustee on its, his or her behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided
in this Article 7 and appoints the Trustee its, his or her attorney-in-fact
for such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Guarantor (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or otherwise) tending towards liquidation of the business and
assets of the Guarantor, the immediate filing of a claim for the unpaid
balance, pursuant to the Guarantee, of its, his or her Securities, in the
form required in said proceedings and cause said claim to be approved. If
the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of Senior Indebtedness of
the Guarantor have the right to file and are hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Securities.
Section 7.11. Right of Trustee To Hold Senior Indebtedness of the Guarantor.
The Trustee shall be entitled to all of the rights set forth in this Article
7 in respect of any Senior Indebtedness of the Guarantor at any time held by
it to the same extent as any other holder of Senior Indebtedness of the
Guarantor, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
Section 7.12. Article 7 Not To Prevent Events of Default. The failure to
make a payment on account of principal or interest by reason of any provision
in this Article 7 shall not be construed as preventing the occurrence of an
Event of Default under Section 8.01.
Section 7.13. Execution and Delivery of Guarantee. To evidence the Guarantee
set forth in this Article 7, the Guarantor hereby agrees that a notation of
the Guarantee, substantially in the form established by or pursuant to an
Authorizing Resolution or in one or more supplemental indentures in
accordance with Section 2.01, shall be endorsed on each Security
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of the Guarantor by the Chairman of the Board, its
President or one of its Vice Presidents under a facsimile of its seal
reproduced thereon.
The Guarantor hereby agrees that its Guarantee shall remain in full force and
effect notwithstanding any failure to endorse on each Security a notation of
the Guarantee.
If an Officer whose signature is on this Indenture or on the Securities no
longer holds that office at the time the Trustee authenticates the Security
on which a notation of the Guarantee is endorsed, the Guarantee shall be
valid nevertheless.
The delivery of any Security by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Guarantee set forth in this
Indenture on behalf of the Guarantor.
Section 7.14. Subordination of Indebtedness Owed by the Company to the
Guarantor. Any indebtedness owed by the Company to the Guarantor shall be
subordinate to all obligations of the Company with respect to the Securities
and this Indenture to the same extent as the Securities are subordinated to
Senior Indebtedness of the Company.
Section 7.15. Officers' Certificate. If there occurs an event referred to in
the first sentence of Section 7.04(c) or the first sentence of Section 7.04,
the Guarantor shall promptly give to the Trustee an Officers' Certificate (on
which the Trustee may conclusively rely) identifying all holders of Senior
Indebtedness of the Guarantor and the principal amount of Senior Indebtedness
of the Guarantor then outstanding held by each such holder and stating the
reasons why such Officers' Certificate is being delivered to the Trustee.
ARTICLE 8.
DEFAULTS AND REMEDIES
Section 8.01. Events of Default. An "Event of Default" on a Series occurs if:
(1) the Company or the Guarantor defaults in the payment of interest on
any Security of the Series when the same becomes due and payable and the
default continues for a period of 30 days whether or not such payment
shall be prohibited by the provisions of Article 6 or Article 7; or
(2) the Company or the Guarantor defaults in the payment of the principal
of any Security of the Series when the same becomes due and payable at
maturity or upon redemption, whether or not such payment shall be
prohibited by the provisions of Article 6 or Article 7; or
(3) the Company or the Guarantor fails to comply with any of its other
agreements in the Securities, the Guarantee or this Indenture applicable
to the Series and such failure continues for the period and after the
notice specified below; or
(4) there occurs a default in the payment of indebtedness of the Company,
the Guarantor or any Subsidiary under the terms of the instrument
evidencing or securing such indebtedness permitting the holder thereof
to accelerate the payment of in excess of an aggregate of $5,000,000 in
principal amount of such indebtedness (after the lapse of applicable
grace periods) or, in the case of non-payment defaults, there occurs an
acceleration of any such indebtedness if such acceleration is not
rescinded or annulled within 10 days after such acceleration; provided,
the term "indebtedness" as used in this Section 8.01(4) shall not
include an acceleration of or default on Non-Recourse Indebtedness
(a) if the Guarantor would be able to declare a dividend pursuant to the
terms of such Series in the amount of the excess of the aggregate book
value of all property (net of any previous write-downs or reserves in
respect of such property) subject to the Non-Recourse Indebtedness being
accelerated or in default over such Non-Recourse Indebtedness or (b)
which consists of a purchase money obligation, provided such purchase
money obligation does not exceed $5,000,000 in aggregate principal
amount, whether or not the Guarantor is so diligently contesting); or
(5) a final judgment for the payment of money in an amount in excess of
$5,000,000 shall be entered against the Company, the Guarantor or any
Subsidiary, and shall remain undischarged for a period (during which
execution shall not be effectively stayed) of 60 days after the date on
which the right to appeal has expired; provided the term "final
judgment" shall not include a Non-Recourse Judgment unless the book
value of all property (net of any previous write-downs or reserves in
respect of such property) subject to such Non-Recourse Judgment exceeds
the amount of such Non-Recourse Judgment by more than $10,000,000;
(6) there occurs an "Event of Default," as that term is defined in the
indenture relating to the 8-3/4% Senior Subordinated Notes due 2006
issued by Toll Corp., a Delaware corporation ("Toll Corp."), the 7-3/4%
Senior Subordinated Notes due 2007 issued by Toll Corp., the 8-1/8%
Senior Subordinated Notes due 2009 issued by Toll Corp., or the 8%
Senior Subordinated Notes due 2009 issued by Toll Corp. (each such
series being hereinafter referred to as a "Previously Issued Series");
provided that on the date of the occurrence, the outstanding principal
amount of at least one Previously Issued Series to which the occurrence
relates exceeds $5,000,000; or
(7) the Company and the Guarantor pursuant to or within the meaning of
any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors; or
(8) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) provides for relief against the Company and the Guarantor in an
involuntary case,
(B) appoints a Custodian of the Company and the Guarantor for all
or substantially all of its property, or
(C) orders the liquidation of the Company and the Guarantor and
the order or decree remains unstayed and in effect for 90 days; or
(9) the Guarantee shall for any reason (other than pursuant to its terms)
cease to be in full force and effect.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A default under clause (3) is not an Event of Default until the Trustee or the
Holders of at least 25% in principal amount of the Securities of the Series
affected notify the Company of the default and the Company does not cure the
default within 60 days after receipt of the notice. The notice must specify
the default, demand that it be remedied and state that the notice is a
"Notice of Default."
Section 8.02. Acceleration. If an Event of Default (other than an Event of
Default under Section 8.01(7) or 8.01(8)) on a Series occurs and is
continuing, the Trustee by notice to the Company and the Person or Persons
designated to receive notices for the Agent (or other Person acting on behalf
of the banks) under the Revolving Credit Agreement, or the Holders of at
least 25% in principal amount of the outstanding Securities of the Series by
notice to the Company, the Trustee and such Person or Persons (either such
notice is referred to herein as an "Acceleration Notice") may declare the
unpaid principal of and accrued and unpaid interest on all the Securities of
the Series to be due and payable if, with respect to such Series, (i)(a) no
Designated Senior Debt of the Company or the Guarantor is outstanding, or (b)
if the Securities of the Series are not subordinated to other indebtedness of
the Company, immediately, or (ii) if Designated Senior Debt of the Company or
the Guarantor is outstanding and the Securities of the Series are
subordinated to other indebtedness of the Company, upon the earlier of (A)
ten days after such Acceleration Notice is received by the Company and (B)
the acceleration of any Senior Indebtedness of the Company or the Guarantor.
If an Event of Default specified in Section 8.01(7) or 8.01(8) occurs, the
unpaid principal of and accrued and unpaid interest on the Securities then
outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Securityholder. The Holders of a majority in principal amount of the
Securities of the Series by notice to the Trustee may rescind such
declaration or acceleration and its consequences if all existing Events of
Default have been cured or waived (except nonpayment of principal or interest
that has become due solely because of the acceleration) and if the rescission
would not conflict with any judgment or decree.
The Company and the Guarantor (i) agree, promptly after execution of this
Indenture, to notify the Trustee in writing of the Person or Persons referred
to in the first sentence of this Section 8.02 and (ii) agree, promptly after
any change thereof, to so notify the Trustee. Any failure by the Trustee or
holders of Securities to give an Acceleration Notice to such Person or
Persons will not affect the substance or validity of the Acceleration Notice
provided that it is otherwise given in accordance with the first paragraph of
this Section 8.02.
Section 8.03. Other Remedies. If an Event of Default on a Series occurs and
is continuing, the Trustee may pursue any available remedy by proceeding at
law or in equity to collect the payment of principal or interest on the
Series or to enforce the performance of any provisions of the Securities or
this Indenture and applicable to the Series.
The Trustee may maintain a proceeding even if it does not possess any of the
Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy
is exclusive of any other remedy. All available remedies are cumulative to
the extent permitted by law.
Section 8.04. Waiver of Past Defaults. Subject to Section 12.02, the Holders
of a majority in principal amount of the Securities of a Series by notice to
the Trustee may waive on behalf of all Holders of Securities of the Series an
existing Default and its consequences. When a Default is waived, it is cured
and stops continuing, but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 8.05. Control by Majority. The Holders of a majority in principal
amount of the Securities of a Series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it with respect to such Series. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that is unduly prejudicial to the rights of another
Securityholder, or that would involve the Trustee in personal liability.
Section 8.06. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing Event of
Default;
(2) the Holders of at least 25% in principal amount of the Securities of the
Series make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after re-
ceipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the Securities do not give the Trustee a direction
inconsistent with such request.
A Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or to obtain a preference or priority over another
Securityholder.
Section 8.07. Rights of Holders To Receive Payment. Notwithstanding any
other provisions of this Indenture, the right of any Holder of a Security to
receive payment of principal of and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder.
Section 8.08. Collection Suit by Trustee. If an Event of Default in payment
of interest or principal specified in Section 8.01(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company, the Guarantor or any other obligor
on the Securities for the whole amount of principal and interest remaining
unpaid.
Section 8.09. Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Securities, including the Guarantor), its creditors or its
property.
Section 8.10. Priorities. If the Trustee collects any money pursuant to this
Article 8, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 9.07;
Second: to the holders of Senior Indebtedness of the Company as required by
Article 6 and to the holders of Senior Indebtedness of the Guarantor as
required by Article 7;
Third: to Securityholders of the Series for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Series
for principal and interest, respectively; and
Fourth: to the Company, or its designee.
The Trustee may fix a record date and payment date for any payment to
Securityholders.
Section 8.11. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made
by the party litigant. This Section does not apply to a suit by the Trustee,
a suit by a Holder pursuant to Section 8.07, or a suit by Holders of more
than 10% in principal amount of the Securities of the Series.
ARTICLE 9.
TRUSTEE
Section 9.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically set
forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section.
(2) The Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by
it pursuant to Section 8.05.
(d) Every provision of this Indenture that in any way relates to the Trustee
is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree with the Company or the Guarantor, as the
case may be.
(g) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
Section 9.02. Rights of Trustee. Subject to Section 9.01:
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on the Certificate or Opinion.
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or
powers.
Section 9.03. Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Registrar or
co-registrar may do the same with like rights. However, the Trustee must
comply with Sections 9.10 and 9.11.
Section 9.04. Trustee Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities, and
it shall not be responsible for any statement in the Securities other than
its certificate of authentication.
Section 9.05. Notice of Defaults. If a Default on a Series occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except
in the case of a default in payment of principal or interest on a Series, the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders of the Series.
Section 9.06. Reports by Trustee to Holders. Within 60 days after each May
15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder, if required by TIA Section 313(a),
a brief report dated as of such May 15 that complies with TIA Section 313(a).
The Trustee also shall comply with TIA Section 313(b) and Section 313(c).
A copy of each report at the time of its mailing to Securityholders shall be
filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities have been
listed on any securities exchange.
Section 9.07. Compensation and Indemnity. The Company and the Guarantor
shall pay to the Trustee from time to time reasonable compensation for its
services. The Trustee's compensation hereunder shall not be limited by any
law on compensation relating to the trustee of an express trust. The Company
and the Guarantor shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel. The
Company and the Guarantor shall indemnify and hold harmless the Trustee against
any loss or liability incurred by it in the acceptance or administration of
this trust or the performance of its duties hereunder. The Trustee shall
notify the Company and the Guarantor promptly of any claim for which it may
seek indemnity. The Company and the Guarantor shall defend the claim and the
Trustee shall cooperate in the defense. In the event that counsel to the
Trustee shall advise counsel to the Company and the Guarantor that there may
be defenses reasonably available to the Trustee different than or additional
to those available to the Company and the Guarantor, then in such event the
Trustee shall be permitted to employ counsel of its choosing at the expense
of the Company and the Guarantor. The Company and the Guarantor need not pay
for any settlement made without their consent. The Company and the Guarantor
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee through negligence, bad faith or with willful
misconduct. The indemnity contained in this Section 9.07 shall survive the
resignation or removal of the Trustee and the termination of this Indenture.
To ensure the Company's and the Guarantor's payment obligations in this
Section, the Trustee shall have a claim prior to the Securities on all money
or property held or collected by the Trustee, except that held in trust to
pay principal and interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of Default
specified in Section 8.01(7) or (8) occurs, the expenses and the compensation
for the services are intended to constitute expenses of administration under
any Bankruptcy Law.
Section 9.08. Replacement of Trustee. The Trustee may resign by so notifying
the Company. The Holders of a majority in principal amount of the Securities
may remove the Trustee by so notifying the Trustee to be removed and may
appoint a successor Trustee with the Company's and the Guarantor's consent.
The Company or the Guarantor may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee (subject to the prior claim provided by Section 9.07). Any
resignation or removal of the Trustee and any appointment of a successor
Trustee shall become effective upon acceptance of appointment by the
successor Trustee. The successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Securityholder.
If a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee (at the expense of the
Company), the Company or the Holders of a majority in principal amount of the
Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10, any Securityholder may,
subject to Section 8.11, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Section 9.09. Successor Trustee by Merger, etc. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust assets to, another corporation, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
Section 9.10. Eligibility; Disqualification. This Indenture shall always have
a Trustee who satisfies the requirements of TIA Section 310(a)(1). The
Trustee shall have a combined capital and surplus of at least $15,000,000 as
set forth in the most recent published annual report of condition. The
Trustee shall comply with TIA Section 310(b).
Section 9.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 10.
CONVERSION OF SECURITIES
Section 10.01. Applicability of Article. Securities of any Series which are
convertible into Common Stock at the option of the Holder shall be
convertible in accordance with their terms and unless the Authorizing
Resolution provides otherwise, in accordance with this Article. Each
reference in this Article 10 to "a Security" or "the Securities" refers to the
Securities of the particular Series that is convertible into Common Stock.
If more than one Series of Securities with conversion privileges are
outstanding at any time, the provisions of this Article 10 shall be applied
separately to each such Series.
Section 10.02. Conversion Privilege. Subject to and upon compliance with
the provisions of this Article 10, the Holder of any Security so designated
shall have the right, at its, his or her option, at any time prior to the
close of business on the date specified in the Securities of such Series (or
if such Security or portion thereof is called for redemption prior to such
date, then in respect of such Security or portion thereof to and including
but not after the close of business on the second day (or, if such day is not
a Business Day, then on the next following Business Day) preceding the date
fixed for such redemption) to convert the principal amount of any such
Security, or any portion of such principal amount which is $1,000 or an
integral multiple thereof, into that number of fully paid and non-assessable
shares of the Guarantor's Common Stock (calculated as to each conversion to
the nearest 1/100th of a share) obtained by dividing the principal amount of
the Security or portion thereof to be converted by the Conversion Price and
by surrender of the Security so to be converted in whole or in part, such
surrender to be made in the manner provided in Section 10.03. Notwithstanding
the previous sentence, if the Company shall fail to redeem a Security which has
been called for redemption, the Holder of such Security shall retain the right
to convert such Security as provided in this Article 10.
Section 10.03. Manner of Exercise of Conversion Privilege. In order to
exercise a conversion privilege, the Holder of any Security to be converted
in whole or in part shall surrender such Security at any of the offices or
agencies to be maintained for such purpose by the Company pursuant to Section
2.03, and shall give notice to the Company and the Guarantor in the form
provided in the Security, duly executed, at such office or agency that the
Holder elects to convert such Security or the portion thereof specified in
said notice. Such notice shall also state the name or names, together with
the address or addresses, in which the certificate or certificates for shares
of Common Stock which shall be issuable on such conversion shall be issued.
Each Security surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the same name as the name in which such
Security is registered, be accompanied by instruments of transfer, in form
satisfactory to the Guarantor, duly executed by the Holder or its, his or her
duly authorized attorney. Securities so surrendered during the period from
the close of business on a Record Date, or the next preceding Business Day if
such Record Date is not a Business Day, preceding any Interest Payment Date to
the opening of business on such Interest Payment Date (excluding Securities or
portions thereof called for redemption during such period) shall also be
accompanied by payment in next-day funds or other funds acceptable to the
Guarantor of an amount equal to the interest payable on such Interest Payment
Date on the principal amount of such Security then being converted; provided,
however, that, if the Company shall default on the payment of said interest,
said funds shall be returnable to the payor thereof. As promptly as
practicable after the surrender of such Security, as aforesaid, the Guarantor
shall issue and shall deliver at such office or agency to such Holder, or on
its, his or her written order, a certificate or certificates for the number
of full shares of Common Stock issuable upon the conversion of such Security
or portion thereof in accordance with the provisions of this Article 10 and
any fractional interest in respect of a share of Common Stock arising upon
such conversion shall be settled as provided in Section 10.04. In case any
Security of a denomination greater than $1,000 shall be surrendered for
partial conversion, the Company and the Guarantor shall execute and the
Trustee shall authenticate and deliver to or upon the order of the Holder of
the Security so surrendered, at the expense of the Company, a new Security or
Securities and Guarantee or Guarantees in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the
surrendered Security. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such Security
shall have been surrendered and such notice received by the Company and the
Guarantor as aforesaid, and the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of
record of the shares represented thereby at such time and such conversion
shall be at the Conversion Price in effect at such time, unless the stock
transfer books of the Guarantor shall be closed on that date, in which event
such Person or Persons shall be deemed to have become such holder or holders
of record at the close of business on the next succeeding day on which such
stock transfer books are open, but such conversion shall be at the Conversion
Price in effect on the date upon which such Security shall have been
surrendered and such notice received by the Company and the Guarantor.
Subject to the aforesaid requirement for a payment in the event of conversion
after the close of business on a Record Date preceding an Interest Payment
Date, no payment or adjustment shall be made on conversion for interest
accrued on the Securities surrendered for conversion or for dividends on the
Common Stock delivered on such conversion.
Section 10.04. Payment in Lieu of Fractional Shares . No fractional shares of
Common Stock shall be issued upon conversion of the Securities. Instead of
any fractional interest in a share of Common Stock which would otherwise be
deliverable upon the conversion of any Security or Securities, the Company
and/or the Guarantor shall make an adjustment therefor to the nearest 1/100th
of a share in cash at the Current Market Price thereof at the close of
business on the Business Day next preceding the day of conversion. If more
than one Security shall be surrendered for conversion at one time by the same
Holder, the number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate principal amount of the Securities, or
specified portions thereof to be converted, so surrendered.
Section 10.05. Adjustment of Conversion Price. The Conversion Price shall
be adjusted from time to time as follows:
(a) In case the Guarantor shall hereafter (i) pay a dividend or make a
distribution on its Common Stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its Common Stock any shares of Capital
Stock of the Guarantor, the Conversion Price in effect immediately prior to
such action shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive the number of shares
of Common Stock or other Capital Stock of the Guarantor which he would have
owned immediately following such action had such Security been converted
immediately prior thereto. An adjustment made pursuant to this subsection
(a) shall become effective immediately after the record date in the case of a
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, as a result of an adjustment made pursuant to this subsection (a), the
Holder of any Security thereafter surrendered for conversion shall become
entitled to receive shares of two or more classes of Capital Stock or shares
of Common Stock and other Capital Stock of the Guarantor, the Board of
Directors (whose determination shall be conclusive and shall be described in
a statement filed with the Trustee and with the Registrar) shall determine in
an equitable manner the allocation of the adjusted Conversion Price between
or among shares of such classes of Capital Stock or shares of Common Stock
and other Capital Stock.
(b) In case the Guarantor shall hereafter issue rights or warrants to holders
of its outstanding shares of Common Stock generally entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase shares of Common Stock at a price per share less
than the Current Market Price per share of the Common Stock on the record
date mentioned below, the Conversion Price of the shares of Common Stock
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered would
purchase at such Current Market Price, and of which the denominator shall be
the number of shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of additional shares of Common Stock
offered for subscription or purchase. Such adjustment shall become effective
immediately after the record date for the determination of shareholders
entitled to receive such rights or warrants.
(c) In case the Guarantor shall hereafter distribute to holders of its out-
standing Common Stock generally evidences of its indebtedness or assets
(excluding any cash dividend paid from retained earnings of the Guarantor and
dividends or distributions payable in stock for which adjustment is made
pursuant to subsection (a) of this Section 10.05) or rights or warrants to
subscribe to securities of the Guarantor (excluding those referred to in
subsection (b) of this Section 10.05), then in each such case the Conversion
Price of the shares of Common Stock shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock on
the record date mentioned below less the then fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and shall be described in a statement filed with the Trustee and with the
Registrar) of the portion of the evidences of indebtedness or assets so
distributed to the holder of one share of Common Stock or of such
subscription rights or warrants applicable to one share of Common Stock, and
of which the denominator shall be such Current Market Price per share of
Common Stock. Such adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
distribution.
(d) In any case in which this Section 10.05 shall require that an adjustment
be made immediately following a record date, the Guarantor may elect to defer
(but only until five Business Days following the filing by the Company with the
Trustee and the Registrar of the certificate of independent public
accountants described in subsection (f) of this Section 10.05) issuing to the
Holder of any Security converted after such record date the shares of Common
Stock issuable upon such conversion over and above the shares of Common Stock
issuable upon such conversion on the basis of the Conversion Price prior to
adjustment.
(e) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% of such
price; provided, however, that any adjustments which by reason of this
subsection (e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment, and provided further that
adjustment shall be required and made in accordance with the provisions of
this Article 10 (other than this subsection (e)), not later than such time as
may be required in order to preserve the tax-free nature of a distribution to
the holders of Securities or Common Stock. All calculations under this
Section 10.05 shall be made to the nearest cent or to the nearest 1/100th of
a share, as the case may be. Anything in this Section 10.05 to the contrary
notwithstanding, the Guarantor shall be entitled to make such reductions in
the Conversion Price, in addition to those required by this Section 10.05, as
it in its discretion shall determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of rights to purchase stock or
securities, or distribution of securities convertible into or exchangeable for
stock hereafter made by the Guarantor to its shareholders shall not be
taxable.
(f) Whenever the Conversion Price is adjusted as herein provided, (i) the
Company and the Guarantor shall promptly file with the Trustee and the
Registrar a certificate of a firm of independent public accountants setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment and the manner of computing
the same, which certificate shall be conclusive evidence of the correctness
of such adjustment and (ii) a notice stating that the Conversion Price has
been adjusted and setting forth the adjusted Conversion Price shall forthwith
be given by the Company and the Guarantor to the Holders in the manner
provided in Section 13.02. Subject to TIA Section 315(a), (c) and (d), the
Trustee and any conversion agent shall be under no duty or responsibility
with respect to any such certificate or the certificate provided for in
Section 10.10 except to exhibit the same from time to time to any Holder of a
Security desiring an inspection of such certificate.
(g) In the event that at any time as a result of an adjustment made pursuant
to subsection (a) of this Section 10.05, the Holder of any Security
thereafter surrendered for conversion shall become entitled to receive any
shares of the Guarantor other than shares of Common Stock, thereafter the
Conversion Price of such other shares so receivable upon conversion of any
Security shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Common Stock contained in this Article 10.
Section 10.06. Notice of Certain Corporate Action. In the event:
(a) the Guarantor shall take any action which would require an adjustment
in the Conversion Price pursuant to Section 10.05(c); or
(b) the Guarantor shall authorize the granting to the holders of its Common
Stock (as a class) of rights or warrants to subscribe for or purchase any
shares of stock of any class or of any other rights; or
(c) there shall be any capital reorganization or reclassification of the
Common Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in the par value of the Common Stock),
or any consolidation or merger to which the Guarantor is a party or any
statutory exchange of securities with another corporation and for which
approval of any shareholders of the Guarantor is required, or any sale or
transfer of all or substantially all of the assets of the Guarantor; or
(d) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Guarantor; then the Company and the Guarantor shall
cause to be filed with the Trustee and the Registrar, and shall cause to
be given to the Holders, in the manner provided in Section 13.02, at
least 14 days prior to the applicable date hereinafter specified, a
notice stating (i) the date on which a record is to be taken for the
purpose of such distribution or rights, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be
entitled to such distribution or rights are to be determined, or (ii) the
date on which such reorganization, reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. Failure to give such notice or
any defect therein shall not affect the legality or validity of the
proceedings described in subsection (a), (b), (c) or (d) of this Section
10.06.
Section 10.07. Guarantor to Provide Stock. The Guarantor covenants that it
will at all times reserve and keep available, free from preemptive rights,
out of the aggregate of its authorized but unissued shares of Common Stock or
its issued shares of Common Stock held in its treasury, or both, for the
purpose of effecting conversions of Securities, the full number of shares of
Common Stock deliverable upon the conversion of all outstanding Securities
not theretofore converted. For purposes of this Section 10.07, the number of
shares of Common Stock which shall be deliverable upon the conversion of all
outstanding Securities shall be computed as if at the time of computation all
outstanding Securities were held by a single Holder.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Common
Stock deliverable upon conversions of the Securities, the Guarantor will take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Guarantor may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
The Guarantor will endeavor to list the shares of Common Stock required to be
delivered upon conversion of Securities prior to such delivery upon each
national securities exchange, if any, upon which the outstanding Common Stock
is listed at the time of such delivery.
Prior to the delivery of any securities which the Guarantor shall be obligated
to deliver upon conversion of the Securities, the Guarantor will endeavor to
comply with all federal and state laws and regulations thereunder requiring
the registration of such securities with, or any approval of or consent to
the delivery thereof by, any governmental authority.
Section 10.08. Taxes on Conversions. The Company and/or the Guarantor
will pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares of Common Stock on
conversions of Securities pursuant hereto; provided, however, that neither
the Company nor the Guarantor shall be required to pay any tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock in a name other than that of the Holder of the Securities to
be converted and no such issue or delivery shall be made unless and until the
person requesting such issue or delivery has paid to the Company and/or the
Guarantor the amount of any such tax or has established, to the satisfaction
of the Company and the Guarantor, that such tax has been paid.
Section 10.09. Covenant as to Stock. The Guarantor covenants that all shares
of Common Stock which may be delivered upon conversions of Securities will
upon delivery be duly and validly issued and fully paid and non-assessable,
free of all liens and charges and not subject to any preemptive rights.
Section 10.10. Consolidation or Merger. Notwithstanding any other
provision herein to the contrary, in case of any consolidation or merger to
which the Guarantor is a party other than a merger or consolidation in which
the Guarantor is the continuing corporation, or in case of any sale or
conveyance to another corporation of the property of the Guarantor as an
entirety or substantially as an entirety, or in the case of any statutory
exchange of securities with another corporation (including any exchange
effected in connection with a merger of a third corporation into the
Guarantor), there shall be no adjustments under Section 10.05 but the Holder
of each Security then outstanding shall have the right thereafter to convert
such Security into the kind and amount of securities, cash or other property
which he would have owned or have been entitled to receive immediately after
such consolidation, merger, statutory exchange, sale or conveyance had such
Security been converted immediately prior to the effective date of such
consolidation, merger, statutory exchange, sale or conveyance and in any such
case, if necessary, appropriate adjustment shall be made in the application
of the provisions set forth in this Article 10 with respect to the rights and
interests thereafter of the Holders of the Securities, to the end that the
provisions set forth in this Article 10 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the
conversion of the Securities. Any such adjustment shall be made by and set
forth in a supplemental indenture executed by the Company, the Guarantor and
the Trustee and approved by a firm of independent public accountants,
evidenced by a certificate to that effect; and any adjustment so approved
shall for all purposes hereof conclusively be deemed to be an appropriate
adjustment.
The above provisions of this Section 10.10 shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.
The Company shall give notice of the execution of such a supplemental
indenture to the Holders of Securities in the manner provided in Section
13.02 within 30 days after the execution thereof.
The Trustee shall not be under any responsibility to determine the correctness
of any provisions contained in such supplemental indenture relating either to
the kind or amount of shares of stock or securities or property receivable by
Holders upon the conversion of their Securities after any such consolidation,
merger, statutory exchange, sale or conveyance, or to any adjustment to be
made with respect thereto.
Section 10.11. Disclaimer of Responsibility for Certain Matters. Neither the
Trustee nor the Registrar shall at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts
exist which may require any adjustment of the Conversion Price, or with
respect to the nature or extent of any such adjustment when made, or
with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee
nor the Registrar shall be accountable with respect to the listing or
registration referred to in Section 10.07 or the validity or value (or the
kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Security; and neither the Trustee nor the Registrar makes any
representation with respect thereto. Neither the Trustee nor the Registrar
shall be responsible for any failure of the Guarantor to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities
or property or to make any cash payment upon the surrender of any Security
for the purpose of conversion or, subject to TIA Section 315(a), (c) and (d),
to comply with any of the covenants contained in this Article 10.
ARTICLE 11.
DISCHARGE OF INDENTURE
Section 11.01. Termination of the Company's and the Guarantor's Obligations.
Securities of a Series may be defeased in accordance with their terms and,
unless the Authorizing Resolution provides otherwise, in accordance with this
Article.
The Company may terminate all of its obligations under the Securities of a
Series and this Indenture, to the extent its obligations under this Indenture
relate to that Series, and the obligations of the Guarantor shall terminate if
all Securities of a Series previously authenticated and delivered (other than
destroyed, lost or stolen Securities which have been replaced or paid) have
been delivered to the Trustee for cancellation or if:
(1) the Securities mature within one year or all of them are to be called for
redemption within one year under arrangements satisfactory to the
Trustee for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the Trustee money
sufficient to pay principal of and interest on the outstanding
Securities to maturity or redemption, as the case may be. The Company
may make the deposit only if Article 6 permits it. Immediately after
making the deposit, the Company shall give notice of such event and
proposed date of payment to each Securityholder.
The Company's obligations and, to the extent applicable, the Guarantor's
obligations, in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 9.07, 9.08 and
11.03 and Article 10, however, shall survive until the Securities are no
longer outstanding. Thereafter, the Company's obligations and, to the extent
applicable, the Guarantor's obligations, in Sections 9.07 and 11.03 shall
survive.
After a deposit, the Trustee upon request shall acknowledge in writing the
discharge of the Company's obligations under the Securities, the Guarantor's
obligations under the Guarantee and their obligations under the Indenture
except for those surviving obligations specified above.
Section 11.02. Application of Trust Money. The Trustee shall hold in trust
money deposited with it pursuant to Section 11.01. It shall apply the
deposited money through the Paying Agent and in accordance with this
Indenture to the payment of principal and interest on the Securities.
Section 11.03. Repayment to Company. The Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess money held by them
at any time. The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or interest
(including interest, if any, earned on such money) that remains unclaimed for
two years; 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 mail to each Holder 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 or mailing, any unclaimed
balance of such money then remaining will be repaid to the Company. After
payment to the Company, Securityholders entitled to any of such money must
look to the Company or, if applicable, the Guarantor for payment as general
creditors unless applicable abandoned property law designates another person
and all liability of the Trustee or Paying Agent with respect to such money
shall thereupon cease.
ARTICLE 12.
AMENDMENTS, SUPPLEMENT AND WAIVERS
Section 12.01. Without Consent of Holders. The Company may amend or
supplement this Indenture or the Securities without notice to or consent of
any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in place of
certificated Securities; or
(4) to make any change that does not adversely affect the rights of any
Securityholder.
Section 12.02. With Consent of Holders. The Company may amend or supplement
this Indenture or the Securities without notice to any Securityholder but
with the written consent of the Holders of at least a majority in principal
amount of the Securities of all Series affected by the amendment voting as a
class. The Holders of a majority in principal amount of the Securities may
waive compliance by the Company with any provision of this Indenture or the
Securities without notice to any Securityholder. However, without the
consent of each Securityholder affected, an amendment, supplement or waiver,
including a waiver pursuant to Section 8.04, may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest on any
Security;
(3) reduce the principal of or extend the fixed maturity of any Security or
alter the redemption provisions with respect thereto;
(4) waive a default in the payment of the principal of or interest on any
Security;
(5) modify the provisions of Article 6 (subordination) or Article 7
(guarantee) in a manner adverse to the Holders;
(6) make any security payable in money other than that stated in the Security;
(7) if applicable, make any change that adversely affects the right to
convert or the Conversion Price for any Security; or
(8) make any change in Section 8.04 or 8.07 or this Section 12.02.
After an amendment under this Section 12.02 becomes effective, the Company
shall mail to the Holders a notice briefly describing the amendment.
Section 12.03. Compliance with Trust Indenture Act. Every amendment to or
supplement of this Indenture or the Securities shall comply with the TIA as
then in effect.
Section 12.04. Revocation and Effect of Consents. A consent to an amendment,
supplement or waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security, even if notation of the
consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to the Security or portion of a Security of
such Holder. The Trustee must receive the notice of revocation before the
date the amendment, supplement or waiver becomes effective.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder unless it makes a change described in clauses (1)
through (8) of Section 12.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security.
Section 12.05. Notation on or Exchange of Securities. If an amendment,
supplement or waiver changes the terms of a Security, the Trustee may require
the Holder of the Security to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Security about the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determine, the Company in exchange for the Security shall issue and the
Trustee shall authenticate, a new Security that reflects the changed terms.
Section 12.06. Trustee to Sign Amendments, etc. The Trustee shall sign any
amendment, supplement or waiver authorized pursuant to this Article if the
amendment, supplement or waiver does not adversely affect the rights or
duties of the Trustee. If it does, the Trustee may but need not sign it. In
signing any amendment, supplement or waiver, the Trustee may rely on an
Opinion of Counsel which shall state that such amendment, supplement or
waiver is permitted under this Article 12.
ARTICLE 13.
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA or the TIA as amended
after the date hereof, the required provision shall control.
Section 13.02. Notices. Any notice or communication shall be sufficiently
given if in writing and delivered in person or mailed by first-class mail
addressed as follows: if to the Company or the Guarantor:
Toll Brothers, Inc., 3103 Philmont Avenue, Huntingdon Valley,
Pennsylvania 19006 Attention: Chief Financial Officer
with a copy to:
Mark K. Kessler, Esquire
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street, 22nd Floor
Philadelphia, PA 19103-2097
if to the Trustee:
Bank One Trust Company, NA
611 Woodward Avenue, 11th Floor
Detroit, Michigan 48226
Attention: Corporate Trust Securities Division
The Company, the Guarantor or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be mailed to
him at his address as it appears on the registration books of the Registrar
and shall be sufficiently given to him if so mailed within the time
prescribed. In addition, a copy of each such notice or communication shall
be mailed to the Trustee at the address specified above.
Failure to mail a notice or communication to a Securityholder or any defect in
it shall not affect its sufficiency with respect to other Securityholders.
If a notice or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it. If the Company or the
Guarantor mails a notice or communication to Securityholders, it shall mail a
copy of such notice to the Trustee and each agent at the same time.
Section 13.03. Communication by Holders with Other Holders. Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company,
the Guarantor, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
Section 13.04. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.
Section 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Section 13.06. When Treasury Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities of a Series have
concurred in any direction, waiver or consent, Securities of the Series owned
by the Company or the Guarantor or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or the guarantor shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Securities of the Series which
the Trustee knows are so owned shall be so disregarded.
Section 13.07. Rules by Trustee, Paying Agent, Registrar. The Trustee may
make reasonable rules for action by or a meeting of Securityholders. The
Paying Agent or Registrar each may make reasonable rules for its functions.
Section 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday, a
legal holiday or a day on which banking institutions are not required to be
open. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
Section 13.09. Governing Law. The laws of the State of New York shall
govern this Indenture, the Securities and the Guarantee without regard to
principles of conflicts of law.
Section 13.10. No Adverse Interpretation of Other Agreements. This Indenture
may not be used to interpret another indenture, loan or debt agreement of the
Company, the Guarantor or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 13.11. No Recourse Against Others. All liability described in
paragraph 20 of the Securities of any director, officer, employee or
shareholder, as such, of the Company or the Guarantor is waived and released.
Section 13.12. Successors. All agreements of the Company or the Guarantor
in this Indenture and the Securities shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.
Section 13.13. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
Section 13.14. Counterparts. This Indenture may be executed in any number
of counterparts, all of which shall together constitute one and the same
instrument. This Indenture shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
SIGNATURES
Dated: TOLL CORP.,
as Issuer
By:
Name:
(SEAL) Title:
Attest:
Name:
Title:
Dated: TOLL BROTHERS, INC.,
as Guarantor
By:
Name:
(SEAL) Title:
Attest:
Name:
Title:
Dated: BANK ONE TRUST COMPANY, NA,
as Trustee
By:
Name:
(SEAL) Title:
Attest:
Name:
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