EXHIBIT 4.1
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PHH CORPORATION
Issuer
to
BANK ONE TRUST COMPANY, N.A.
Trustee
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Supplemental Indenture No. 2
Dated as of January 30, 2001
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SENIOR DEBT SECURITIES
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SUPPLEMENTAL INDENTURE NO. 2
SUPPLEMENTAL INDENTURE NO. 2, dated as of January 30, 2001, between
PHH Corporation, a corporation duly organized and existing under the laws
of the State of Maryland (the "Company"), and Bank One Trust Company, N.A.,
a national banking association duly organized and existing under the laws
of the United States of America (the "Trustee"), as trustee under the
Senior Debt Securities Indenture hereinafter mentioned.
WITNESSETH:
WHEREAS, the Company duly authorized the execution and delivery of a
Senior Debt Securities Indenture, dated as of November 6, 2000 (the "Senior
Indenture"), providing for the issuance from time to time of Securities of
the Company, unlimited as to principal amount, to bear such rates of
interest, to mature at such time or times, to be issued in one or more
series; and
WHEREAS, Section 901 of the Senior Indenture permits the Company and
the Trustee to enter into one or more indentures supplemental to the Senior
Indenture to, among other things, add any additional covenants of the
Company for the holders of a particular series of Securities and to change
or eliminate any provision of the Senior Indenture so long as such change
or elimination shall not become effective with respect to any particular
series entitled to the benefit of such provision until such time as no
Securities of such series are outstanding;
WHEREAS, the Company is entering into this Supplemental Indenture No.
2 to establish the form and terms of its 81/8% Notes Due 2003 (the
"Notes").
WHEREAS, the Company desires to supplement or amend the Senior
Indenture only with respect to the Notes;
WHEREAS, the supplements or amendments to the Senior Indenture set
forth herein shall have no effect upon any series of Securities Outstanding
on the date hereof;
WHEREAS, all conditions necessary to authorize the execution and
delivery of this Supplemental Indenture No. 2 and to make this Supplemental
Indenture No. 2 valid and binding have been complied with or have been done
or performed.
NOW, THEREFORE, in consideration of the premises set forth above, the
Company hereby requests that the Trustee join with it in this Supplemental
Indenture No. 2 to add to the covenants of the Company in the Senior
Indenture as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. For all purposes of the Senior Indenture and this
Supplemental Indenture No. 2, except as otherwise expressly provided or
unless the context otherwise requires:
(a) unless indicated otherwise, "herein," "hereof" and other words of
similar import refer to this Supplemental Indenture No. 2 as a whole and
not to any particular Article, Section or other subdivision; and
(b) all capitalized terms used in this Supplemental Indenture No. 2
but not defined herein shall have the meanings assigned such terms in the
Senior Indenture.
ARTICLE TWO
RESTRICTIVE COVENANTS
Section 2.01. Significant Asset Sale Triggering Event.
If a Significant Asset Sale Triggering Event shall occur, each holder
of Notes shall have the right, at the holder's option, to require PHH
Corporation to purchase all or any part of the holder's notes on the
Purchase Date at a purchase price of 100% of the principal amount of the
notes plus any interest accrued and unpaid on the notes through the
Purchase Date.
"Significant Asset Sale Triggering Event" means the occurrence of
both a Significant Asset Sale and a Rating Decline.
"Enumerated Business Segments" means the fleet, relocation or
mortgage business segments as described in the Company's most recent Annual
Report on Form 10-K, dated March 10, 2000.
"Purchase Date" means the date that is 60 business days after the
occurrence of a Significant Asset Sale Triggering Event.
"Rating Agencies" means Standard & Poor's Rating Services and Xxxxx'x
Investors Services, Inc.,or, if either Standard & Poor's or Moody's are not
publicly rating the notes, then another nationally recognized securities
rating agency shall be selected by PHH Corporation and substituted for
whichever agency is not publicly rating the notes.
"Rating Decline" means a decrease in the rating of the notes by
either of the Rating Agencies by one or more gradations (including
gradations within rating categories as well as between rating categories);
provided that such reduction or decrease must occur upon or
within 30 days after the occurrence of a Significant Asset Sale, provided
however, that such 30-day period shall be extended as long as the rating of
the notes is under publicly announced consideration by either of the Rating
Agencies (i) where the rating of the notes is under publicly announced
consideration for possible downgrading, or (ii) where the rating of the
notes is under publicly announced consideration, but where no direction of
grading is initially indicated by the Rating Agency, including
classifications such as "Credit Watch Developing" or such other similar
classifications used by the Rating Agencies,
provided further, that a Rating Decline shall not have occurred
if, after a decrease in rating, the notes are rated at least Baa1 by
Moody's and A- by Standard & Poor's.
"Significant Asset Sale" means (1) any sale by PHH Corporation or its
subsidiaries of assets with a fair market value greater than $500 million,
or (2) the sale of 331/3 % or more of the assets or capital stock, as the
case may be, of any one of the Enumerated Business Segments, provided
however, that a Significant Asset Sale shall not include transactions in
the ordinary course of business of PHH Corporation or its subsidiaries,
including, but not limited to, asset securitization and similar
transactions or the Avis-Rent- A-Car transaction described in PHH
Corporation's Report on Form 8-K, dated November 20, 2000.
Section 2.02. Interest Rate Adjustment.
PHH Corporation's current senior unsecured long-term debt rating (the
"Debt Rating") by Xxxxx'x is Baa1 and the Debt Rating by Standard & Poor's
Rating Service is A-.
The interest rate on the notes will be subject to adjustment until
maturity. In the event of a downgrade in the Debt Rating to or below Baa2
by Moody's or to or below BBB by Standard &Poor's, the interest rate on the
notes will be adjusted in accordance with the table below.
If either Moody's or Standard & Poor's changes the Debt Rating
subsequent to an adjustment in the interest rate as a result of a previous
Debt Rating change, the interest rate on the notes will be readjusted up or
down in accordance with the table, except that no adjustment will cause the
interest rate to be lower than the initial interest rate.
The notes will bear interest at their initial rate from the closing
date until the last interest payment date of the notes occurring prior to a
downgrade requiring an adjustment. Beginning with the first day of the
first Interest Period for the notes during which a Debt Rating change
requires an adjustment in the interest rate, the notes will bear interest
at the adjusted rate. Subsequent interest rate adjustments up or down will
also become effective on the first day of the Interest Period in which the
Debt Rating change occurs requiring such adjustment.
The adjusted interest rate per annum for the notes will be the
initial interest rate thereon increased by the sum of the Moody's and
Standard & Poor's adjustment amount set forth below.
Moody's Adjustment S&P Adjustment
Xxxxx'x Rating Amount S&P Rating Amount
Baa1 0.00% A- to BBB+ 0.00%
Baa2 0.50% BBB 0.50%
Baa3 1.00% BBB- 1.00%
Ba1 or lower 1.50% BB+ or lower 1.50%
ARTICLE THREE
SUPPLEMENTAL INDENTURES
WITH CONSENT OF HOLDER
Section 3.01. Subject to Section 901 of the Indenture, with the
consent of the Holders of not less than 662/3% of the aggregate in
principal amount of the outstanding securities (each such series voting as
the same class) affected by such supplemental indenture, by Act of said
Holder delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating Sections 2.01 or
2.02 hereof.
ARTICLE FOUR
MISCELLANEOUS
Section 4.01. All of the terms and conditions of the Senior Indenture
shall remain in full force and effect.
Section 4.02. The Trustee assumes no responsibility for the
correctness of the recitals herein contained, which shall be taken as the
statements of the Company. The Trustee makes no representation and shall
have no responsibility as to the validity of this Supplemental Indenture
No. 2.
Section 4.03. In case of any provision in this Supplemental Indenture
No. 2 shall be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this Supplemental Indenture
No.2 or the Senior Indenture shall not in any way be affected of impaired
thereby.
Section 4.04. This Supplemental Indenture No.2 shall be governed by
and construed in accordance with the laws of the State of New York. This
Supplemental Indenture No. 2 is subject to the provisions of the Trust
Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions.
Section 4.05. This Supplement Indenture No. 2 may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Supplemental Indenture No. 2 to be duly executed by their respective
officers thereunto duly authorized all as of the day and the year first
above written.
PHH CORPORATION
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Senior Vice President - Law
& Corporate Secretary
BANK ONE TRUST COMPANY, N.A.,
as Trustee
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
