EXHIBIT 4.1
MERITAGE CORPORATION
AND
WELLS FARGO BANK, NATIONAL ASSOCIATION
AS TRUSTEE
GUARANTEED TO THE EXTENT SET FORTH THEREIN BY THE GUARANTORS NAMED HEREIN.
FORM OF
INDENTURE
DATED AS OF _______________, 2002
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE .................... 1
Section 1.01 Certain Definitions ..................................... 1
Section 1.02 Other Definitions ....................................... 4
Section 1.03 Incorporation by Reference of Trust Indenture Act ....... 5
Section 1.04 Rules of Construction ................................... 5
ARTICLE 2 THE SECURITIES ................................................ 5
Section 2.01 Unlimited in Amount, Issuable in Series,
Form and Dating ........................................ 5
Section 2.02 Execution and Authentication ............................ 8
Section 2.03 Registrar and Paying Agent .............................. 8
Section 2.04 Paying Agent to Hold Money in Trust ..................... 9
Section 2.05 Securityholder Lists .................................... 9
Section 2.06 Transfer and Exchange ................................... 10
Section 2.07 Replacement Securities .................................. 10
Section 2.08 Outstanding Securities .................................. 10
Section 2.09 Temporary Securities .................................... 11
Section 2.10 Cancellation ............................................ 11
Section 2.11 Defaulted Interest ...................................... 11
Section 2.12 Special Record Dates .................................... 12
Section 2.13 Global Securities ....................................... 12
Section 2.14 CUSIP Numbers ........................................... 13
ARTICLE 3 REDEMPTION .................................................... 14
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 .......................... 16
Section 3.05 Deposit of Redemption Price ............................. 16
Section 3.06 Securities Redeemed or Purchased in Part ................ 16
ARTICLE 4 COVENANTS ..................................................... 16
Section 4.01 Payment of Securities ................................... 16
Section 4.02 Maintenance of Office or Agency ......................... 17
Section 4.03 Reports ................................................. 17
Section 4.04 Compliance Certificate .................................. 17
Section 4.05 Taxes ................................................... 18
Section 4.06 Stay, Extension and Usury Laws .......................... 18
Section 4.07 Calculation of Original Issue Discount .................. 19
ARTICLE 5 SUCCESSORS .................................................... 19
Section 5.01 When Company May Merge, Etc. ............................ 19
Section 5.02 Successor Person Substituted ............................ 20
ARTICLE 6 DEFAULTS AND REMEDIES ......................................... 20
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 6.01 Events of Default ....................................... 20
Section 6.02 Acceleration ............................................ 21
Section 6.03 Other Remedies .......................................... 22
Section 6.04 Waiver of Past Defaults ................................. 22
Section 6.05 Control by Majority ..................................... 22
Section 6.06 Limitation on Suits ..................................... 23
Section 6.07 Rights of Holders to Receive Payment .................... 23
Section 6.08 Collection Suit by Trustee .............................. 23
Section 6.09 Trustee May File Proofs of Claim ........................ 24
Section 6.10 Priorities .............................................. 24
Section 6.11 Undertaking for Costs ................................... 25
ARTICLE 7 TRUSTEE ....................................................... 25
Section 7.01 Duties of Trustee ....................................... 25
Section 7.02 Rights of Trustee ....................................... 26
Section 7.03 Individual Rights of Trustee ............................ 27
Section 7.04 Trustee's Disclaimer .................................... 27
Section 7.05 Notice of Defaults ...................................... 27
Section 7.06 Reports by Trustee to Holders ........................... 27
Section 7.07 Compensation and Indemnity .............................. 28
Section 7.08 Replacement of Trustee .................................. 28
Section 7.09 Successor Trustee by Merger, Etc. ....................... 30
Section 7.10 Eligibility; Disqualification ........................... 30
Section 7.11 Preferential Collection of Claims Against Company ....... 30
ARTICLE 8 SATISFACTION AND DISCHARGE; DEFEASANCE ........................ 30
Section 8.01 Satisfaction and Discharge .............................. 30
Section 8.02 Option to Effect Legal Defeasance or
Covenant Defeasance .................................... 31
Section 8.03 Legal Defeasance and Discharge .......................... 31
Section 8.04 Covenant Defeasance ..................................... 32
Section 8.05 Conditions to Legal or Covenant Defeasance .............. 32
Section 8.06 Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions .......... 33
Section 8.07 Repayment to Company .................................... 34
Section 8.08 Reinstatement ........................................... 34
ARTICLE 9 SUPPLEMENTS, AMENDMENTS AND WAIVERS ........................... 35
Section 9.01 Without Consent of Holders .............................. 35
Section 9.02 With Consent of Holders ................................. 35
Section 9.03 Revocation and Effect of Consents ....................... 36
Section 9.04 Notation on or Exchange of Securities ................... 37
Section 9.05 Trustee to Sign Amendments, Etc. ........................ 37
ARTICLE 10 GUARANTEES .................................................... 37
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 10.01 Guarantee ............................................... 37
ARTICLE 11 MISCELLANEOUS ................................................. 37
Section 11.01 Indenture Subject to Trust Indenture Act ................ 37
Section 11.02 Notices ................................................. 38
Section 11.03 Communication by Holders With Other Holders ............. 39
Section 11.04 Certificate and Opinion as to Conditions Precedent ...... 39
Section 11.05 Statements Required in Certificate or Opinion ........... 39
Section 11.06 Rules by Trustee and Agents ............................. 40
Section 11.07 Legal Holidays .......................................... 40
Section 11.08 No Recourse Against Others .............................. 40
Section 11.09 Counterparts ............................................ 40
Section 11.10 Governing Law ........................................... 40
Section 11.11 Submission to Jurisdiction; Service of Process;
Waiver of Jury Trial ................................... 40
Section 11.12 Severability ............................................ 41
Section 11.13 Effect of Headings, Table of Contents, Etc. ............. 41
Section 11.14 Successors and Assigns .................................. 41
Section 11.15 No Interpretation of Other Agreements ................... 41
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CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
----------- -----------------
310 (a) (1) ........................................... 7.10
(a) (2) ........................................... 7.10
(a) (3) ........................................... N.A.
(a) (4) ........................................... N.A.
(a) (5) ........................................... 7.10
(b) ............................................... 7.03; 7.08; 7.10
(c) ............................................... N.A.
311 (a) ........................................... 7.11
(b) ............................................... 7.11
(c) ............................................... N.A.
312 (a) ........................................... 2.05
(b) ............................................... 11.03
(c) ............................................... 11.03
313 (a) ........................................... 7.06
(b) (1) ........................................... N.A.
(b) (2) ........................................... 7.06
(c) ............................................... 7.06; 11.02
(d) ............................................... 7.06
314 (a) ........................................... 4.03; 10.02; 11.05
(b) ............................................... N.A.
(c) (1) ........................................... 11.04
(c) (2) ........................................... 11.04
(c) (3) ........................................... N.A.
(d) ............................................... N.A.
(e) ............................................... 11.05
(f) ............................................... N.A.
315 (a) ........................................... 7.01(b)(ii), 7.02
(b) ............................................... 7.02, 7.05; 10.02
(c) ............................................... 7.01(a), 7.02
(d) ............................................... 7.01(d), 7.02
(e) ............................................... 6.11
316 (a) (last sentence) ........................... 2.13(f)
(a) (1) (A) ....................................... 6.05
(a) (1) (B) ....................................... 6.04
(a) (2) ........................................... N.A.
(b) ............................................... 6.07
(c) ............................................... 2.12; 9.03
317 (a) (1) ....................................... 6.08
(a) (2) ........................................... 6.09
(b) ............................................... 2.04
318 (a) ........................................... 11.01
(b) ............................................... N.A.
(c) ............................................... 11.01*
- ----------
N.A. means not applicable.
* THIS CROSS-REFERENCE TABLE IS NOT PART OF THE INDENTURE.
INDENTURE dated as of _______________, 2002 by and among Meritage
Corporation, a Maryland corporation, (the "Company"), the guarantors listed on
Schedule 1 hereto (herein called the "Guarantors") and Wells Fargo Bank,
National Association as Trustee (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 debentures, notes
or other evidences of indebtedness to be issued in one or more series (the
"Securities"), as herein provided, up to such principal amount as may from time
to time be authorized in or pursuant to one or more resolutions of the Board of
Directors or by supplemental indenture.
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of each series of the
Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 Certain Definitions.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided, however, that beneficial ownership of 10% or
more of the Voting Securities of a Person shall be deemed to be a controlling
interest in such Person. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.
"Agent" means any Registrar, Paying Agent, authenticating agent or
co-Registrar.
"Board of Directors" means, with respect to any Person, the board of
directors of such Person (or, if such Person is a limited liability company, the
board of managers of such Person) or similar governing body or any authorized
committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or pursuant to authorization by the Board of Directors
and to be in full force and effect on the date of such certification (and
delivered to the Trustee, if appropriate).
"Business Day" means any day other than a Legal Holiday.
"Closing Date" means the date on which the Securities of a
particular series were originally issued under this Indenture.
"Commission" means the Securities and Exchange Commission.
"Company" means the party named as such above until a successor
replaces it pursuant to this Indenture and thereafter means the successor.
"Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer and
delivered to the Trustee.
"Company Request" means a written request signed in the name of the
Company by a Chairman of the Board, a Chief Executive Officer, a President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" shall mean the corporate trust office of
the Trustee, which shall initially be Wells Fargo Bank, National Association,
707 Wilshire Blvd., 17th Floor, Los Angeles, CA 90017.
"Default" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depositary for such series by the Company,
which Depositary shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depositary" as used with
respect to the Securities of any series shall mean the Depositary with respect
to the Securities of such series.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are applicable to the circumstances as of
the Closing Date.
"Global Security" shall mean a Security issued to evidence all or a
part of any series of Securities that is executed by the Company and
authenticated and delivered by the Trustee to a Depositary or pursuant to such
Depositary's instructions, all in accordance with this Indenture and pursuant to
Section 2.01, which shall be registered as to principal and interest in the name
of such Depositary or its nominee.
"Guarantee" means the guarantee by any Guarantor of the obligations
under this Indenture.
"Holder" or "Securityholder" means a Person in whose name a Security
is registered in the register of Securities kept by the Registrar.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
2
"Interest" when used with respect to an Original Issue Discount
Security that by its terms bears interest only after maturity, means interest
payable after maturity.
"maturity" when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at stated maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officer" means, with respect to any Person, a Chairman of the
Board, a Chief Executive Officer, a President, the Chief Financial Officer, any
Vice-President, the Treasurer, the Controller, the Secretary, any Assistant
Treasurer or any Assistant Secretary of such Person.
"Officers' Certificate" means a certificate signed by two or more
Officers, one of whom must be the principal executive officer, principal
financial officer or principal accounting officer of the Company that meets the
requirements of Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company or the
Trustee.
"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.
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"principal" of a Security means the principal amount due on the
stated maturity of the Security plus the premium, if any, on the Security.
"Securities" means the Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"stated maturity" when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means, with respect to any specified Person: (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees of the corporation, association or other business entity is at the time
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and (ii) any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such
3
Person or (b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA provided, however, that in the event the TIA; is amended after
such date, "TIA" means, to the extent required by such amendment, the Trust
Indenture Act, as amended.
"Trust Officer" when used with respect to the Trustee, means any
officer with direct responsibility for the administration of this Indenture and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Trustee" means the party named as such above until a successor
becomes such pursuant to this Indenture and thereafter means or includes each
party who is then a trustee hereunder, and if at any time there is more than one
such party, "Trustee" as used with respect to the Securities of any series means
the Trustee with respect to Securities of that series. If Trustees with respect
to different series of Securities are trustees under this Indenture, nothing
herein shall constitute the Trustees co-trustees of the same trust, and each
Trustee shall be the trustee of a trust separate and apart from any trust
administered by any other Trustee with respect to a different series of
Securities.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that is not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation evidenced by such
depository receipt.
SECTION 1.02 Other Definitions.
Term Defined in Section
---- ------------------
"Bankruptcy Law"........................................... 6.01
"Custodian"................................................ 6.01
"Event of Default"......................................... 6.01
"Legal Holiday"............................................ 11.07
"Paying Agent"............................................. 2.03
"Place of Payment"......................................... 2.01
"redemption price"......................................... 3.03
"Registrar"................................................ 2.03
4
SECTION 1.03 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:
"indenture securities" means the Securities.
"indenture securityholder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Securities means the Company and any Guarantor and
any successor obligor on the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in
the plural include the singular;
(v) provisions apply to successive events and
transactions; and
(vi) references to sections of or rules under the
Securities Act shall be deemed to include
substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2
THE SECURITIES
SECTION 2.01 Unlimited in Amount, Issuable in Series, Form and Dating.
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more series.
5
There shall be established in or pursuant to a Board Resolution or an Officers'
Certificate pursuant to authority granted under a Board Resolution or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:
(a) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(b) any limit upon the aggregate principal amount of
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to this Article 2);
(c) the price or prices (expressed as a percentage of the
aggregate principal amount thereof) at which the Securities of the series will
be issued;
(d) the date or dates on which the principal of the Securities
of the series is payable;
(e) the rate or rates that may be fixed or variable at which
the Securities of the series shall bear interest, if any, or the manner in which
such rate or rates shall be determined, the date or dates from which such
interest shall accrue, the interest payment dates on which such interest shall
be payable and the record dates for the determination of Holders to whom
interest is payable;
(f) the place or places where the principal of, premium, if
any, and any interest, if any, on Securities of the series shall be payable or
the method of such payment, if by wire transfer, mail or by other means, if
other than as provided herein;
(g) the price or prices at which (if any), the period or
periods within which (if any) and the terms and conditions upon which (if other
than as provided herein) Securities of the series may be redeemed, in whole or
in part, at the option, or as an obligation, of the Company;
(h) the obligation, if any, of the Company to redeem, purchase
or repay Securities of the series, in whole or in part, pursuant to any sinking
fund or analogous provisions or at the option of a Holder thereof and the price
or prices at which and the period and periods within which and the terms and
conditions upon which Securities of the series shall be redeemed, purchased or
repaid pursuant to such obligation;
(i) the dates, if any, on which, and the price or prices at
which, the Securities of the series will be repurchased by the Company at the
option of the Holders thereof and other detailed terms and provisions of such
repurchase obligations;
(j) if other than denominations of $1,000 and any multiple
thereof, the denominations in which Securities of the series shall be issuable;
6
(k) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.02
hereof;
(l) any addition to, change in or deletion from the covenants
set forth in Articles 4 or 5 that applies to Securities of the series;
(m) any addition to, changes in or deletion from the Events of
Default with respect to the Securities of a particular series and any change in
the right of the Trustee or the requisite Holders of such Securities to declare
the principal amount thereof due and payable pursuant to Section 6.02 hereof;
(n) the Trustee for the series of Securities;
(o) the forms of the Securities of the series in bearer or
fully registered form (and, if in fully registered form, whether the Securities
will be issuable, in whole or in part, as Global Securities);
(p) the terms and conditions, if any, upon which such Global
Security or Securities may be exchanged in whole or in part for other individual
Securities, and the Depositary for such Global Security and Securities;
(q) the provisions, if any, relating to any security provided
for the Securities of the series;
(r) any other terms of the series (which terms may modify,
supplement or delete any provision of this Indenture with respect to
such series; provided, however, that no such term may modify or delete any
provision hereof if imposed by the TIA; and provided, further, that any
modification or deletion of the rights, duties or immunities of the Trustee
hereunder shall have been consented to in writing by the Trustee).
(s) the terms and conditions, if any, upon which the
Securities of the series shall be exchanged for or converted into other
securities of the Company or securities of another person;
(t) any depositories, interest rate calculation agents or
other agents with respect to Securities of such series if other than those
appointed herein;
(u) whether the Securities rank as senior Securities, senior
subordinated Securities or subordinated Securities or any combination thereof
and the terms of any such subordination;
(v) the form and terms of any guarantee of any Securities of
the series.
All Securities of any series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
such Board Resolution or Officers' Certificate or in any such indenture
supplemental hereto.
7
The principal of and any interest on the Securities shall be payable
at the office or agency of the Company designated in the form of Security for
the series (each such place herein called the "Place of Payment"); provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the address of the Person entitled thereto as such address shall
appear in the register of Securities referred to in Section 2.03 hereof.
Each Security shall be in one of the forms approved from time to
time by or pursuant to a Board Resolution or Officers' Certificate, or
established in one or more indentures supplemental hereto. Prior to the delivery
of a Security to the Trustee for authentication in any form approved by or
pursuant to a Board Resolution or Officers' Certificate, the Company shall
deliver to the Trustee the Board Resolution or Officers' Certificate by or
pursuant to which such form of Security has been approved, which Board
Resolution or Officers' Certificate shall have attached thereto a true and
correct copy of the form of Security that has been approved by or pursuant
thereto.
The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Security shall be dated the date of
its authentication.
SECTION 2.02 Execution and Authentication.
One or more Officers shall sign the Securities for the Company by
manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon
receipt of a Company Order.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
SECTION 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities of a
particular series may be presented for registration of transfer or for exchange
(the "Registrar") and an office or agency where Securities of that series may be
presented for payment (a "Paying Agent"). The Registrar for a particular series
of Securities shall keep a register of the Securities of that series and of
their registration of transfer and exchange. The Company may appoint one or more
co-Registrars and one or more additional paying agents for each series of
Securities. The term "Paying Agent" includes any additional paying agent. The
Company may change any
8
Paying Agent, Registrar or co-Registrar without prior notice to any
Securityholder. The Company shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture.
If the Company fails to maintain a Registrar or Paying Agent for any
series of Securities, the Trustee shall act as such. The Company or any of its
Affiliates may act as Paying Agent, Registrar or co-Registrar.
The Company hereby appoints the Trustee the initial Registrar and
Paying Agent for each series of Securities unless another Registrar or Paying
Agent, as the case may be, is appointed prior to the time Securities of that
series are first issued.
SECTION 2.04 Paying Agent to Hold Money in Trust.
Whenever the Company has one or more Paying Agents it will, prior to
each due date of the principal of or interest on, any Securities, deposit with a
Paying Agent a sum sufficient to pay the principal or interest so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal or interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to act.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that such Paying Agent will hold in trust for the benefit of
the Securityholders of the particular series for which it is acting, or the
Trustee, all money held by the Paying Agent for the payment of principal or
interest on the Securities of such series, and that such Paying Agent will
notify the Trustee of any Default by the Company or any other obligor of the
series of Securities in making any such payment and at any time during the
continuance of any such Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent. If
the Company or an Affiliate acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the Securityholders of the particular
series for which it is acting all money held by it as Paying Agent. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon so doing, the Paying Agent (if other than the Company or an
Affiliate of the Company) shall have no further liability for such money. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Securities.
SECTION 2.05 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, separately by series, and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least seven Business Days before each interest payment date
and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders, separately by series, relating to such interest
payment date or request, as the case may be.
9
SECTION 2.06 Transfer and Exchange.
Where Securities of a series are presented to the Registrar or a
co-Registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same series of other authorized
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Company shall issue and the Trustee shall
authenticate Securities at the Registrar's request.
No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.09, 2.13, 3.06 or 9.04).
The Company need not issue, and the Registrar or co-Registrar need
not register the transfer or exchange of, (i) any Security of a particular
series during a period beginning at the opening of business 15 days before the
day of any selection of Securities of that series for redemption under Section
3.02 and ending at the close of business on the day of selection, or (ii) any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security of that series being redeemed in part.
SECTION 2.07 Replacement Securities.
If a mutilated Security is surrendered to the Trustee or 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 of same series if the Company's and the Trustee's
requirements are met. The Trustee or the Company may require an indemnity bond
to be furnished which is sufficient in the judgment of both to protect the
Company, the Trustee, and any Agent from any loss which any of them may suffer
if a Security is replaced. The Company or the Trustee may charge such Holder for
its expenses in replacing a Security.
Every replacement Security is an obligation of the Company and shall
be entitled to all the benefit of the Indenture equally and proportionately with
any and all other Securities of the same series.
SECTION 2.08 Outstanding Securities.
The Securities of any series outstanding at any time are all the
Securities of that series authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation, and those described in this
Section as not outstanding.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.
If Securities are considered paid under Section 4.01, they cease to
be outstanding and interest on them ceases to accrue.
10
Except as set forth in Section 2.09 hereof, a Security does not
cease to be outstanding because the Company or an Affiliate holds the Security.
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 shall advise the Trustee of such amount,
showing its computations in reasonable detail.
SECTION 2.09 Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon a Company
Order. 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 in exchange for temporary
Securities.
Holders of temporary Securities shall be entitled to all of the
benefits of this Indenture.
SECTION 2.10 Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall return such
canceled Securities to the Company at the Company's written request. The Company
may not issue new Securities to replace Securities that it has paid or that have
been delivered to the Trustee for cancellation.
SECTION 2.11 Defaulted Interest.
If the Company fails to make a payment of interest on any series of
Securities, the Company shall pay such defaulted interest plus (to the extent
lawful) any interest payable on the defaulted interest, in any lawful manner. It
may elect to pay such defaulted interest, plus any such interest payable on it,
to the Persons who are Holders of such Securities on which the interest is due
on a subsequent special record date. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each such
Security and the date of the proposed payment. The Company shall fix or cause to
be fixed any such record date and payment date for such payment; provided,
however, that no such special record date shall be less than 10 days prior to
the related payment date for such defaulted interest. At least 15 days before
any such record date, the Company shall mail to Securityholders affected thereby
a notice that states the record date, payment date, and amount of such interest
to be paid.
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SECTION 2.12 Special Record Dates.
(a) The Company may, but shall not be obligated to, set a
record date for the purpose of determining the identity of Holders entitled to
consent to any supplement, amendment or waiver permitted by this Indenture. If a
record date is fixed, the Holders of Securities of that series outstanding on
such record date, and no other Holders, shall be entitled to consent to such
supplement, amendment or waiver or revoke any consent previously given, whether
or not such Holders remain Holders after such record date. No consent shall be
valid or effective for more than 90 days after such record date unless consents
from Holders of the principal amount of Securities of that series required
hereunder for such amendment or waiver to be effective shall have also been
given and not revoked within such 90-day period.
(b) The Company may, but shall not be obligated to, fix any
day as a record date for the purpose of determining the Holders of any series of
Securities entitled to join in the giving or making of any notice of Default,
any declaration of acceleration, any request to institute proceedings or any
other similar direction. If a record date is fixed, the Holders of Securities of
that series outstanding on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided, however, that
no such action shall be effective hereunder unless taken on or prior to the date
90 days after such record date.
SECTION 2.13 Global Securities.
(a) Terms of Securities. A Board Resolution, a supplemental
indenture hereto or an Officers' Certificate shall establish whether the
Securities of a series shall be issued in whole or in part in the form of one or
more Global Securities and the Depositary for such Global Security or
Securities.
(b) Transfer and Exchange. Notwithstanding any provisions to
the contrary contained in Section 2.06 of this Indenture and in addition
thereto, any Global Security shall be exchangeable pursuant to Section 2.06 of
this Indenture for securities registered in the names of Holders other than the
Depositary for such Security or its nominee only if (i) such Depositary notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time such Depositary ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depositary within 90 days of such event or (ii) the Company
executes and delivers to the Trustee an Officers' Certificate to the effect that
such Global Security shall be so exchangeable. Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
Securities registered in such names as the Depositary shall direct in writing in
an aggregate principal amount equal to the principal amount of the Global
Security with like tenor and terms.
Except as provided in this paragraph (b) of this Section, a Global
Security may not be transferred except as a whole by the Depositary with respect
to such Global Security to a nominee of such Depositary, by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such a
successor Depositary.
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(c) Legend. Any Global Security issued hereunder shall bear a
legend in substantially the following form:
"Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), New York, New York, to the issuer or its agent
for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such
other name as may be requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or such other entity as
may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co. has an interest herein."
"Transfer of this Global Security shall be limited to
transfers in whole, but not in part, to nominees of DTC or to a
successor thereof or such successor's nominee and limited to
transfers made in accordance with the restrictions set forth in the
Indenture referred to herein."
(d) Acts of Holders. The Depositary, as a Holder, may appoint
agents and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under this Indenture.
(e) Payments. Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.01 hereof,
payment of the principal of and interest, if any, on any Global Security shall
be made to the Person specified therein.
(f) Consents, Declaration and Directions. Except as provided
in paragraph (e) of this Section, the Company, the Trustee and any Agent shall
treat a Person as the Holder of such principal amount of outstanding Securities
of such series represented by a Global Security as shall be specified in a
written statement of the Depositary with respect to such Global Security, for
purposes of obtaining any consents, declarations or directions required to be
given by the Holders pursuant to this Indenture.
SECTION 2.14 CUSIP Numbers.
The Company in issuing any series of Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on such Securities or as contained in any notice and
that reliance may be placed only on the other identification numbers printed on
such Securities, and any such action relating to such notice shall not be
affected by any defect in or
13
omission of such numbers in such notice. The Company shall promptly notify the
Trustee of any change in the "CUSIP" numbers.
ARTICLE 3
REDEMPTION
SECTION 3.01 Notices to Trustee.
If the Company elects to redeem Securities of any series pursuant to
any optional redemption provisions thereof, it shall furnish to the Trustee at
least 30 days, but not more than 60 days before a redemption date, an Officer's
Certificate which shall specify (i) the provisions of such Security or this
Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of Securities of that series to be redeemed and
(iv) the redemption price.
If the Company elects to reduce the principal amount of Securities
of any series to be redeemed pursuant to mandatory redemption provisions
thereof, it shall notify the Trustee of the amount of, and the basis for, any
such reduction. If the Company elects to credit against any such mandatory
redemption Securities it has not previously delivered to the Trustee for
cancellation, it shall deliver such Securities with such notice.
SECTION 3.02 Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, or
purchased in an offer to purchase at any time, the Trustee shall select the
Securities of that series to be redeemed or purchased as follows: (1) if the
Securities of such series are listed on any national securities exchange, in
compliance with the requirements of the principal national securities exchange
on which the Securities of that series are listed, or, (2) if the Securities of
that series are not listed on a national securities exchange, on a pro rata
basis, by lot or by such other method as the Trustee deems fair and appropriate.
In the event of a partial redemption or purchase by lot, the particular
Securities to be redeemed or purchased will be selected not less than 30 nor
more than 60 days prior to the redemption or purchase date by the Trustee from
Securities of that series outstanding and not previously called for redemption.
The Trustee shall notify the Company promptly in writing of the
Securities or portions of Securities to be called for redemption or purchase
and, in the case of any Securities selected for partial redemption or purchase,
the principal amount thereof to be redeemed or purchased. Except as otherwise
provided as to any particular series of Securities, Securities and portions
thereof that the Trustee selects shall be in amounts equal to the minimum
authorized denomination for Securities of the series to be redeemed or purchased
or any integral multiple thereof, except that if all of the Securities of the
series are to be redeemed or purchased, the entire outstanding amount of the
Securities of the series held by such Holder, even if not equal to the minimum
authorized denomination for the Securities of that series, shall be redeemed or
purchased. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
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SECTION 3.03 Notice of Redemption.
Except as otherwise provided as to any particular series of
Securities, at least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder whose Securities
are to be redeemed.
The notice shall identify the Securities of the series to be
redeemed and shall state:
(1) the redemption date;
(2) the redemption price fixed in accordance with the
terms of the Securities of the series to be redeemed, plus accrued
interest, if any, to the date fixed for redemption (the "redemption
price");
(3) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed and that,
after the redemption date, upon surrender of such Security, a new Security
or Securities in principal amount equal to the unredeemed portion will be
issued upon cancellation of the original Securities;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in payment of the
redemption price, interest on Securities called for redemption ceases to
accrue on and after the redemption date;
(7) the CUSIP number, if any, of the Securities to be
redeemed;
(8) the paragraph of the Securities and/or the section
of the Indenture pursuant to which the Securities called for redemption
are being redeemed; and
(9) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense, provided, however, that the
Company shall have delivered to the Trustee, at least 6 Business Days prior to
the date on which notice is to be given, an Officers' Certificate requesting
that the Trustee give such notice and setting forth the information to be stated
in such notice as provided in the preceding paragraph. The notice mailed in the
manner herein provided shall be conclusively presumed to have been duly given
whether or not the Holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice of the Holder of any Security
shall not affect the validity of the proceeding for the redemption of any other
Security.
15
SECTION 3.04 Effect of Notice of Redemption.
Subject to the subordination provisions of any series of Securities,
once notice of redemption is mailed in accordance with Section 3.03 hereof,
Securities called for redemption become due and payable on the redemption date
for the redemption price. Upon surrender to the Paying Agent, such Securities
will be paid at the Redemption Price.
SECTION 3.05 Deposit of Redemption Price.
On or before 10:00 a.m., New York City time, on the redemption or
purchase date, the Company shall deposit with the Trustee or Paying Agent (or,
if the Company or any Affiliate is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the redemption or purchase price of all
Securities called for redemption on that date other than Securities that have
previously been delivered by the Company to the Trustee for cancellation. The
Paying Agent shall return to the Company any money not required for that
purpose.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption or purchase date, interest shall cease to
accrue on the Securities (or the portions thereof) called for redemption or
purchase. If a Security is redeemed or purchased on or after an interest record
date but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Securities were
registered at the close of business on such record date. If any Securities
called for redemption or purchase shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
or purchase date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
accordance with the terms of the Securities of the series to be redeemed.
SECTION 3.06 Securities Redeemed or Purchased in Part.
Upon surrender of a Security that is redeemed or purchased in part,
the Company shall issue and the Trustee shall authenticate for the Holder at the
expense of the Company a new Security of same series equal in principal amount
to the unredeemed or unpurchased portion of the Security surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Securities on the dates and in the manner provided
in this Indenture and the Securities. Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or an Affiliate, holds as of 10:00 a.m., New York City time, on that
date immediately available funds designated for and sufficient to pay all
principal, premium, if any, and interest then due.
16
To the extent lawful, the Company shall pay interest on overdue
principal and overdue installments of interest at the rate per annum borne by
the applicable series of Securities.
SECTION 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee or Registrar) where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Division Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Division Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
SECTION 4.03 Reports.
The Company shall deliver to the Trustee within 15 days after it
files them with the Commission copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) that the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act; provided, however, the Company shall not be required to
deliver to the Trustee any materials for which the Company has sought and
received confidential treatment by the Commission. The Company also shall comply
with the other provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.04 Compliance Certificate.
(a) The Company or any Guarantors shall deliver to the
Trustee, within 90 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding fiscal
17
year has been made under the supervision of the signing Officers (one of whom
shall be the principal executive officer, principal financial officer or
principal accounting officer of the Company) with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Securities
is prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05 Taxes.
The Company shall pay prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good faith
by appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of any Securities.
SECTION 4.06 Stay, Extension and Usury Laws.
The Company and any Guarantors covenant (to the extent that it may
lawfully do so) that they shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each Guarantor (to the extent that they may lawfully do so) hereby expressly
waive all benefits or advantages of any such law, and covenant that they shall
not, by resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee,
18
but shall suffer and permit the execution of every such power as though no such
law has been enacted.
SECTION 4.07 Calculation of Original Issue Discount.
If, as of the end of any fiscal year of the Company, the Company has
any outstanding Original Issue Discount Securities under the Indenture, the
Company shall file with the Trustee promptly following the end of such fiscal
year (i) a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on such Original Issue
Discount Securities as of the end of such year and (ii) such other specific
information relating to such original issue discount as may then be required
under the Internal Revenue Code of 1986, as amended from time to time.
ARTICLE 5
SUCCESSORS
SECTION 5.01 When Company May Merge, Etc.
In addition to provisions applicable to a particular series of
Securities, the Company shall not directly or indirectly: (i) consolidate or
merge with or into another Person (whether or not the Company is the surviving
Person), or (ii) sell, lease, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties or assets of the Company and its
Subsidiaries in one or more related transactions to any Person unless:
(1) either (x) the Company is the surviving Person; or
(y) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, lease, assignment,
transfer, conveyance or other disposition shall have been made is a Person
organized or existing under the laws of the United States, any state
thereof or the District of Columbia;
(2) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to which
such sale, lease, assignment, transfer, conveyance or other disposition
shall have been made assumes (by supplemental indenture reasonably
satisfactory to the Trustee) all the obligations of the Company under the
Securities and this Indenture; and
(3) immediately after the transaction no Default or
Event of Default exists.
The Company shall deliver to the Trustee on or prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
19
SECTION 5.02 Successor Person Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
conveyance or other disposition (other than by lease) of all or substantially
all of the assets of the Company in accordance with Section 5.01 hereof, the
successor Person formed by such consolidation or into which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor Person and not to the Company), and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor Person had been named as the Company herein; provided,
however, that the predecessor Company shall not be relieved from the obligation
to pay principal of, and interest on, any Securities except in the case of a
sale, assignment, transfer, conveyance or other disposition of all of the
Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
An "Event of Default" occurs with respect to Securities of any
particular series if, unless as otherwise provided in the establishing Board
Resolution, Officers' Certificate or supplemental indenture hereto:
(1) the Company defaults in the payment of interest on
any Security of that series when the same becomes due and payable and the
Default continues for a period of 30 days;
(2) the Company defaults in the payment, when due, of
the principal of, or premium, if any, on any Security of that series when
the same becomes due and payable at maturity, upon redemption (including
in connection with any offer to purchase under the terms of such
Securities) or otherwise;
(3) an Event of Default, as defined in the Securities of
that series, occurs and is continuing, or the Company fails to comply with
any of its other agreements in the Securities of that series or in this
Indenture with respect to that series and the Default continues for the
period and after the notice specified below;
(4) the Company 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;
20
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property;
(D) makes a general assignment for the benefit of
its creditors; or
(E) admits in writing its inability generally to
pay its debts as the same become due.
(5) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case;
(B) appoints a Custodian of the Company or for all
or substantially all of its property; or
(C) orders the liquidation of the Company; and the
order or decree remains unstayed and in effect for 60 days.
(6) any other Event of Default provided with respect to
Securities of that series which is specified in a Board Resolution,
Officers' Certificate or supplemental indenture establishing that series
of Securities.
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) above is not an Event of Default with
respect to a particular series of Securities until the Trustee or the Holders of
at least 50% in principal amount of the then outstanding Securities of that
series 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." Such notice shall be given by the Trustee if so requested in writing
by the Holders of 50% of the principal amount of the then outstanding Securities
of that series.
SECTION 6.02 Acceleration.
If an Event of Default with respect to Securities of any series
(other than an Event of Default specified in clauses (4) and (5) of Section
6.01) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 50% in principal amount of the then outstanding Securities
of that series by notice to the Company and the Trustee, may, subject to any
prior notice requirements set forth in any supplemental indenture, declare the
unpaid principal (or, in the case of Original Issue Discount Securities, such
lesser amount as may be provided for in such Securities) of and any accrued
interest on all the Securities of that series to be due and payable on the
Securities of that series. Upon such declaration the principal (or such lesser
amount) and interest shall be due and payable immediately. If an Event of
Default
21
specified in clause (4) or (5) of Section 6.01 occurs, all of such amount shall
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. The Holders of a majority in principal
amount of the then outstanding Securities of that series by notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
with respect to that series have been cured or waived except nonpayment of
principal (or such lesser amount) or interest that has become due solely because
of the acceleration.
SECTION 6.03 Other Remedies.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may pursue any available remedy to collect
the payment of principal or interest on the Securities of that series or to
enforce the performance of any provision of the Securities of that series or
this Indenture.
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. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04 Waiver of Past Defaults.
Subject to Section 6.02, the Holders of not less than a majority in
aggregate principal amount of the then outstanding Securities of any series, by
notice to the Trustee, may on behalf of the Holders of the Securities of that
series, waive an existing Default or Event of Default with respect to that
series and its consequences except a continuing Default or Event of Default in
the payment of the principal (including any mandatory sinking fund or like
payment) of, premium, if any, or interest on any Security of that series
(including in connection with an offer to purchase); provided, however, that the
Holders of a majority in aggregate principal amount of the outstanding
Securities of any series may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration and
its consequences. Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05 Control by Majority.
The Holders of a majority in principal amount of the then
outstanding Securities of any series may direct the time, method and place of
conducting any proceeding for exercising any remedy with respect to that series
available to the Trustee or exercising any trust or power conferred on it.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of other Holders of Securities of that series, or that may involve the
Trustee in personal liability. The Trustee may take any other action which it
deems proper that is not inconsistent with any such direction. Notwithstanding
any provision to the contrary in this Indenture, the Trustee shall not
22
be obligated to take any action with respect to the provisions of the Section
6.02 unless directed to do so pursuant to this Section 6.05.
SECTION 6.06 Limitation on Suits.
A Holder of Securities of any series may not pursue a remedy with
respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default with respect to that series;
(2) the Holders of at least 25% in principal amount of
the then outstanding Securities of that series make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer, and, if requested,
provide 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 receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Securities of that series do
not give the Trustee a direction inconsistent with the request.
No Holder of any series of Securities may use this Indenture to prejudice the
rights of another Holder of Securities of that series or to obtain a preference
or priority over another Holder of Securities of that series.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal, premium, if any, and
interest on the Security, on or after the respective due dates expressed in the
Security (including in connection with any offer to purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not, except as provided in the subordination provisions, if any, applicable to
such Security, be impaired or affected without the consent of the Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) hereof
occurs and is continuing with respect to Securities of any series, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount of principal (or such portion of the principal
as may be specified as due upon acceleration at that time in the terms of that
series of Securities), premium, if any, and interest, remaining unpaid on the
Securities of that series then outstanding, together with (to the extent lawful)
interest on overdue principal and interest, and such further amount as shall be
sufficient to cover the costs and, to the
23
extent lawful, expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 7.07 hereof.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any other
amounts due to the Trustee under Section 7.07 hereof) and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor on the Securities), its creditors or its property and shall be entitled
to and empowered to collect, receive and distribute any money or other property
payable or deliverable on any such claims, and any custodian in any such
judicial proceedings is hereby authorized by each Holder to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money with respect to Securities of any
series pursuant to this Article, it shall pay out the money in the following
order:
First: to the Trustee, its agents and attorneys for
amounts due under Section 7.07 hereof,
including payment of all compensation,
expense and liabilities incurred, and all
advances made, by the Trustee and the costs
and expenses of collection;
Second: in accordance with the subordination
provisions, if any, of the Securities of
such series;
Third: to Securityholders for amounts due and
unpaid on the Securities of such series for
principal, premium, if any, and interest,
ratably, without preference or priority of
any kind, according to the amounts due and
payable on the Securities of such series for
principal, premium, if any, and interest,
respectively; and
Fourth: to the Company or to such party as a court
of competent jurisdiction shall direct.
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The Trustee may fix a record date and payment date for any payment
to Holders of Securities of any series pursuant to this Section. The Trustee
shall notify the Company in writing reasonably in advance of any such record
date and payment date.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defense made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities of any series.
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their 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 known
to the Trustee:
(i) the duties of the Trustee shall be determined
solely by the express provisions of this Indenture
or the TIA and the Trustee need perform only those
duties that are specifically set forth in this
Indenture or the TIA and no others, and no implied
covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the
case of any certificates or opinions which by any
provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall
examine the certificates and opinions to determine
whether or not they conform to the requirements of
this Indenture (but need not confirm or
investigate the accuracy of mathematical
calculations or other facts stated therein).
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(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a responsible
officer of the Trustee, unless it is proved that
the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith
in accordance with a direction received by it
pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, 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) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee may refuse
to perform any duty or exercise any right or power, including without
limitation, the provisions of Section 6.05 hereof, unless it receives security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Absent written instruction from the Company, the Trustee shall not be required
to invest any such money. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
SECTION 7.02 Rights of Trustee.
Subject to TIA Section 315(a) through (d):
(a) The Trustee may conclusively rely on any document believed
by it to be genuine and to have been signed or presented by the proper person.
The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
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(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 under the Indenture, unless the Trustee's conduct constitutes
negligence.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee may consult with counsel of its selection and
may rely upon the advice of such counsel or any Opinion of Counsel.
(g) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless written notice of any event that is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities generally or the Securities of a
particular series, as the case may be, and this Indenture.
(h) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as duties.
SECTION 7.03 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 an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to TIA
Sections 310(b) and 311.
SECTION 7.04 Trustee's 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 7.05 Notice of Defaults.
If a Default or Event of Default with respect to the Securities of
any series occurs and is continuing and if it is known to the Trustee, the
Trustee shall mail to all Holders of Securities of that series a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any such Security, 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 such
Securityholders.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after May 15 in each year, the Trustee with respect
to any series of Securities shall mail to Holders of Securities of that series
as provided in TIA Section 313(c) a
27
brief report dated as of such May 15 that complies with TIA Section 313(a) (if
such report is required by TIA Section 313(a)). The Trustee shall also comply
with TIA Section 313(b)(2).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the Commission and each stock
exchange on which any of the Securities are listed, as required by TIA Section
313(d). The Company shall notify the Trustee when the Securities are listed on
any stock exchange, and of any delisting thereof.
SECTION 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation as shall be agreed upon in writing for its services hereunder. The
Company shall reimburse the Trustee upon written request for all reasonable
out-of-pocket expenses incurred by it. Such expenses shall include the
reasonable compensation and out-of-pocket expenses of the Trustee's agents and
counsel.
The Company shall indemnify each of the Trustee or any predecessor
Trustee for any loss, liability, damage, claims or expenses, including taxes
(other than taxes based upon, measured by or determined by the income of the
Trustee) incurred by it, without negligence or bad faith on its part, in
connection with the acceptance or administration of this Indenture and its
duties hereunder. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee in its capacity as Trustee, except money or property
held in trust to pay principal and interest on particular Securities. Such lien
will survive the satisfaction and discharge of this Indenture. If the Trustee
incurs expenses or renders services after an Event of Default specified in
Section 6.01(4) or (5) hereof occurs, the expenses and the compensation for the
services will be intended to constitute expenses of administration under any
applicable Bankruptcy Law.
This Section 7.07 shall survive the resignation or renewal of the
Trustee and the termination of this Indenture.
SECTION 7.08 Replacement of Trustee.
A resignation or removal of the Trustee with respect to one or more
or all series of Securities and appointment of a successor Trustee shall become
effective only upon the successor Trustee's acceptance of appointment as
provided in this Section.
The Trustee may resign with respect to one or more or all series of
Securities by so notifying the Company in writing. The Holders of a majority in
principal amount of the then outstanding Securities of any series may remove the
Trustee as to that series by so notifying the Trustee in writing and may appoint
a successor Trustee with the Company's consent. The Company may remove the
Trustee with respect to one or more or all series of Securities if:
28
(1) the Trustee fails to comply with Section 7.10
hereof;
(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, as to any series of Securities, 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 for that series. Within one
year after the successor Trustee with respect to any series takes office, the
Holders of a majority in principal amount of the then outstanding Securities of
that series may appoint a successor Trustee to replace the successor Trustee
appointed by the Company. If a successor Trustee as to a particular series does
not take office within 60 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of at least 10% in principal
amount of the then outstanding Securities of that series may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof with respect
to any series, any Holder of Securities of that series who satisfies the
requirements of TIA Section 310(b) may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee for that series.
A successor Trustee as to any series of Securities shall deliver a
written acceptance of its appointment to the retiring Trustee and to the
Company. Immediately after that, the retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee (subject to the lien
provided for in Section 7.07 hereof), the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture as to that series.
The successor Trustee shall mail a notice of its succession to the Holders of
Securities of that series.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring trustee.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and that (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
shall contain such provisions as shall be necessary or desirable to confirm that
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be necessary
or desirable to provide for or facilitate the administration of the
29
trusts hereunder by more than one Trustee; provided, however, that nothing
herein or in such supplemental Indenture shall constitute such Trustee
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust hereunder separate and apart from any trust hereunder administered by any
other such Trustee.
Upon the execution and delivery of such supplemental Indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates.
SECTION 7.09 Successor Trustee by Merger, Etc.
If the Trustee as to any series of Securities consolidates, merges
or converts into, or transfers all or substantially all of its corporate trust
business to, another corporation, the successor corporation without any further
act shall be the successor Trustee as to that series.
SECTION 7.10 Eligibility; Disqualification.
Each series of Securities shall always have a Trustee who satisfies
the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee as to any
series of Securities shall always have a combined capital and surplus of at
least $25,000,000 as set forth in its most recent published annual report of
condition. The Trustee is subject to TIA Section 310(b).
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect with respect to any series of Securities issued hereunder, when:
(1) either:
(a) all Securities of such series that have been
authenticated (except lost, stolen or destroyed Securities
that have been replaced or paid and Securities for whose
payment money has theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered to the
Trustee for cancellation; or
(b) all Securities of such series that have not
been delivered to the Trustee for cancellation have become due
and payable by
30
reason of the making of a notice of redemption or otherwise or
will become due and payable within one year and the Company or
any Guarantor has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders, cash in U.S. dollars, non-callable
U.S. Government Obligations, or a combination thereof, in such
amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire
indebtedness on the Securities not delivered to the Trustee
for cancellation for principal, premium and accrued interest
to the date of maturity or redemption:
(2) no Default or Event of Default with respect to such
series of Securities shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit and such deposit
will not result in a breach or violation of, or constitute a default
under, any other material instrument to which the Company or any Guarantor
is a party to or by which the Company or any Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to
be paid all sums payable by it under this Indenture with respect to such
series of Securities; and
(4) the Company has delivered irrevocable instructions
to the Trustee under this Indenture to apply the deposited money toward
the payment of the Securities of such series at maturity or the redemption
date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding, the satisfaction and discharge of this Indenture
with respect to a series of Securities, if money shall have been deposited with
the Trustee pursuant to subclause (b) of clause (1) of this Section, the
provisions of Section 8.06 shall survive.
SECTION 8.02 Option to Effect Legal Defeasance or Covenant Defeasance.
Unless Section 8.03 or 8.04 is otherwise specified to be
inapplicable to Securities of a series, the Company may, at the option of its
Board of Directors evidenced by a resolution set forth in an Officers'
Certificate, at any time, elect to have either Section 8.03 or 8.04 hereof be
applied to all outstanding Securities of any such series upon compliance with
the conditions set forth below in this Article Eight.
SECTION 8.03 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.02 hereof of the option
applicable to this Section 8.03, the Company and any Guarantor shall, subject to
the satisfaction of the conditions set forth in Section 8.05 hereof, be deemed
to have been discharged from their respective obligations with respect to all
outstanding Securities of any series on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company and any Guarantor shall be deemed to have paid
and discharged the entire Indebtedness represented by the outstanding Securities
of a series, which
31
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.06 hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Securities and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in Section 8.05 hereof, and as more
fully set forth in such Section, payments in respect of the principal of,
premium and interest on such Securities when such payments are due, (b) the
Company's obligations with respect to such Securities under Article 2 and
Section 4.03 hereof, (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's or any Guarantors' obligations in
connection therewith and (d) this Article Eight. Subject to compliance with this
Article Eight, the Company may exercise its option under this Section 8.03
notwithstanding the prior exercise of its option under Section 8.04 hereof.
SECTION 8.04 Covenant Defeasance.
Upon the Company's exercise under Section 8.02 hereof of the option
applicable to this Section 8.04, the Company or any Guarantors shall, subject to
the satisfaction of the conditions set forth in Section 8.05 hereof, be released
from their respective obligations under the covenants contained in Sections
4.03, 4.04, 4.05, 4.06, 4.07 and 4.08, and Section 5.01 hereof with respect to
the outstanding Securities of any series on and after the date the conditions
set forth in Section 8.05 are satisfied (hereinafter, "Covenant Defeasance"),
and the Securities of such series shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder
(it being understood that such Securities shall not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Securities of any series, the Company or any
Guarantors may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 6.01 hereof, but, except as
specified above, the remainder of this Indenture and such Securities shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.02
hereof of the option applicable to this Section 8.04 hereof, subject to the
satisfaction of the conditions set forth in Section 8.05 hereof, Sections
6.01(3) through 6.01(6) hereof shall not constitute Events of Default.
SECTION 8.05 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.03 or 8.04 hereof to the outstanding Securities of any series. In
order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable U.S. Government Obligations, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a
32
nationally recognized firm of independent public accountants, to pay the
principal of, premium and interest on the outstanding Securities on the stated
date for payment thereof or on the applicable redemption date, as the case may
be;
(b) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.04 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Securities pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(4) or 6.01(5)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company; and
(g) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.06 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.07 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying
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trustee, collectively for purposes of this Section 8.06, the "Trustee") pursuant
to Section 8.01 or Section 8.05 hereof in respect of the outstanding Securities
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Trustee may determine, to the Holders of such Securities of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable U.S.
Government Obligations deposited pursuant to Section 8.05 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Securities.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable U.S. Government Obligations held by it
as provided in Section 8.05 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.05(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.07 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Securities and remaining unclaimed for two years after
such principal, and premium, if any, or interest has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Securities shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 8.08 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable U.S. Government Securities in accordance with Section
8.01, 8.03 or 8.04 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.03 or 8.04 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.03 or 8.04 hereof, as the case
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may be; provided, however, that, if the Company makes any payment of principal
of, premium, if any, or interest on any Securities following the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE 9
SUPPLEMENTS, AMENDMENTS AND WAIVERS
SECTION 9.01 Without Consent of Holders.
The Company and the Trustee as to any series of Securities may
supplement or amend this Indenture or the Securities without notice to or the
consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article 5;
(3) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
(4) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(5) to add to, change or eliminate any of the provisions
of this Indenture in respect of one or more series of Securities;
provided, however, that any such addition, change or elimination (A) shall
neither (i) apply to any Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit of
such provision nor (ii) modify the rights of the Holder of any such
Security with respect to such provision or (B) shall become effective only
when there is no outstanding Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit of
such provision;
(6) to make any change that does not adversely affect in
any material respect the interests of the Securityholders of any series;
or
(7) to establish additional series of Securities as
permitted by Section 2.01 hereof.
SECTION 9.02 With Consent of Holders.
Subject to Section 6.07, the Company and the Trustee as to any
series of Securities may amend this Indenture or the Securities of that series
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities of each series affected by the amendment, with each
such series voting as a separate class. The Holders of a majority in principal
amount of the then outstanding Securities of any series may also waive
compliance in a particular instance by the Company with any provision of this
Indenture with respect to that series or the Securities of that series;
provided, however, that without the consent of each Securityholder affected, an
amendment or waiver may not:
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(1) reduce the percentage of the principal amount of
Securities whose Holders must consent to an amendment or waiver;
(2) reduce the amount of, or postpone the date fixed
for, the payment of any sinking fund or analogous provision;
(3) reduce the rate of, or change the time for payment
of interest on, any Security;
(4) reduce the principal of or change the fixed maturity
of any Security or waive a redemption payment or alter the redemption
provisions with respect thereto;
(5) make any Security payable in money other than that
stated in the Security (including defaulted interest);
(6) reduce the principal amount of Original Issue
Discount Securities payable upon acceleration of the maturity thereof;
(7) make any change in Section 6.04, 6.07 or this
Section 9.02; or
(8) waive a default in the payment of the principal of,
or interest on, any Security, except to the extent otherwise provided for
in Section 6.02 hereof.
An amendment or waiver under this Section that waives, changes or
eliminates any covenant or other provision of this Indenture that has expressly
been included solely for the benefit of one or more particular series of
Securities, or that modifies the rights of the Holders of Securities of such
series with respect to such covenant or other provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Securities of any other
series.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.
The Company shall mail supplemental indentures to Holders upon
request. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture or waiver.
SECTION 9.03 Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by 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; provided, however, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of a Security if the Trustee receives
the written notice of revocation before the date on which the amendment,
36
supplement or waiver becomes effective. An amendment, supplement or waiver shall
become effective in accordance with its terms and thereafter shall bind every
Holder of Securities of that series.
SECTION 9.04 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security: (a) the Trustee may require the Holder of the Security to deliver it
to the Trustee, the Trustee may, at the written direction of the Company and at
the Company's expense, place an appropriate notation on the Security about the
changed terms and return it to the Holder and the Trustee may place an
appropriate notation on any Security thereafter authenticated; or (b) if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.05 Trustee to Sign Amendments, Etc.
Subject to the preceding sentence, the Trustee shall sign any
amendment of supplement Indenture if the same does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. The Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver that
affects the Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise. The Company may not sign an amendment or supplemental
Indenture until the Board of Directors approves it. In executing any amended or
supplemental Indenture, the Trustee shall be entitled to receive and (subject to
Section 7.01) shall be fully protected in relying upon, in addition to the
documents required by Section 11.04 hereof, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
Indenture is authorized or permitted by this Indenture.
ARTICLE 10
GUARANTEES
SECTION 10.01 Guarantee.
Any series of Securities may be guaranteed by one or more of the
Guarantors. The terms and the form of any such Guarantee will be established in
the manner contemplated by Section 2.01 for that particular series of
Securities.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 Indenture Subject to Trust Indenture Act.
This Indenture is subject to the provisions of the TIA that are
required to be part of this Indenture, and shall, to the extent applicable, be
governed by such provisions.
37
SECTION 11.02 Notices.
Any notice or communication is duly given if in writing and
delivered in person or sent by first-class mail (registered or certified, return
receipt requested), telecopier or overnight air courier guaranteeing next-day
delivery, addressed as follows:
If to the Company and/or any Guarantor:
Meritage Corporation
6613 North Scottsdale Road, Suite 200
Scottsdale, Arizona 85250
Attention: Larry W. Seay
Telephone: (480) 998-8700
Facsimile: (480) 998-9178
with a copy to:
Snell & Wilmer L.L.P.
One Arizona Center
400 E. Van Buren Street
Phoenix, Arizona 85004
Attention: Steven D. Pidgeon, Esq.
Telephone: (602) 382-6000
Facsimile: (602) 382-6070
If to the Trustee:
Wells Fargo Bank, National Association
707 Wilshire Blvd., l7th Floor
Los Angeles, CA 90017
Attention: Corporate Trust Division
Telephone: (213) 614-3349
Facsimile: (213) 614-3355
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next-day delivery.
Any notice or communication to a Securityholder shall be mailed by
first-class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to his address shown on the
register kept by the Registrar. Failure to mail a notice or communication to a
Security holder or any defect in it shall not affect its sufficiency with
respect to other Securityholders. If the Company mails a notice or communication
to
38
Securityholders, it shall mail a copy to the Trustee at the same time. Any
notice or communication shall also be mailed to any Person described in TIA
Section 313(c), to the extent required by the TIA.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
SECTION 11.03 Communication by Holders With Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 11.04 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:
(a) an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel, in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, such action
is authorized or permitted by this Indenture and that all such conditions
precedent have been complied with.
SECTION 11.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the certificate
provided pursuant to TIA Section 314(a)(4) 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
or she has made such examination or investigation as is necessary to
enable him or her 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; provided,
however, that with
39
respect to matters of fact an Opinion of Counsel may rely on an officer's
certificate or certificates of public officials.
SECTION 11.06 Rules by Trustee and Agents.
The Trustee as to Securities of any series may make reasonable rules
for action by or at a meeting of Holders of Securities of that series. The
Registrar and any Paying Agent or Authenticating Agent may make reasonable rules
and set reasonable requirements for their functions.
SECTION 11.07 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the City of New York, New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
SECTION 11.08 No Recourse Against Others.
No past, present or future director, officer, employee, manager,
securityholder or incorporator, as such, of the Company or any successor Person
shall have any liability for any obligations of the Company or any Guarantor
under any series of Securities, any guarantees thereof, or the Indenture or for
any claim based on, in respect of, or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration of issuance
of the Securities.
SECTION 11.09 Counterparts.
This Indenture may be executed by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
SECTION 11.10 Governing Law.
The internal laws of the State of New York shall govern and be used
to construe this Indenture and the Securities (including any guarantees
thereof), without giving effect to the applicable principles of conflicts of
laws to the extent that the application of the laws of another jurisdiction
would be required thereby.
SECTION 11.11 Submission to Jurisdiction; Service of Process; Waiver of Jury
Trial.
Each party hereto hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Indenture, the Securities
(including any guarantee thereof) or the transactions contemplated hereby and
thereby. Each party hereto irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of the
venue of any such
40
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. Process in
any such suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the State of New York. Without limiting the
foregoing, the parties agree that service of process upon such party at the
address referred to in Section 11.02, together with written notice of such
service to such party, shall be deemed effective service of process upon such
party. Each of the parties hereto irrevocably waives any and all rights to trial
by jury in any legal proceeding arising out of or relating to this Indenture,
the Securities (including any guarantee thereof) or the transactions
contemplated hereby and thereby.
SECTION 11.12 Severability.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 11.13 Effect of Headings, Table of Contents, Etc.
The Article and Section headings herein and the table of contents
are for convenience only and shall not affect the construction hereof.
SECTION 11.14 Successors and Assigns.
All covenants and agreements of the Company in this Indenture and
the Securities shall bind its successors and assigns. All agreements of the
Trustee in this Indenture shall bind its successor. All agreements of any
Guarantor in this Indenture shall bind its successors, except as otherwise
provided by the terms hereof.
SECTION 11.15 No Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or any Subsidiary or of any Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first above written.
MERITAGE CORPORATION
BY:
------------------------------------
Name:
Title:
WELLS FARGO BANK, National Association,
as Trustee
By:
------------------------------------
Name:
Title:
[GUARANTOR]
BY:
------------------------------------
Name:
Title:
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