EXHIBIT 4.1
TOLL CORP., as Issuer
TOLL BROTHERS, INC., as Guarantor
Debt Securities
Indenture
Dated as of ___________________
BANK ONE TRUST COMPANY, NA,
as Trustee
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -------
310(a)(1).................................................. 9.10
(a)(2)..................................................... 9.10
(a)(3)..................................................... N.A.
(a)(4)..................................................... N.A.
(b)........................................................ 9.08; 9.10; 13.02
(c)........................................................ N.A.
311(a)..................................................... 9.11
(b)........................................................ 9.11
(c)........................................................ N.A.
312(a)..................................................... 2.07
(b)........................................................ 13.03
(c)........................................................ 13.03
313(a)..................................................... 9.06
(b)(1)..................................................... N.A.
(b)(2)..................................................... 9.06
(c)........................................................ 9.06; 13.02
(d)........................................................ 9.06
314(a)..................................................... 4.03; 13.02
(b)........................................................ N.A.
(c)(1)..................................................... 13.04
(c)(2)..................................................... 13.04
(c)(3)..................................................... N.A.
(d)........................................................ N.A.
(e)........................................................ 13.05
(f)........................................................ N.A.
315(a)..................................................... 9.01(b)
(b)........................................................ 9.05; 13.02
(c)........................................................ 9.01(a)
(d)........................................................ 9.01(c)
(e)........................................................ 8.11
316(a)(last sentence)...................................... 13.06
(a)(1)(A).................................................. 8.05
(a)(1)(B).................................................. 8.04
(a)(2)..................................................... N.A.
(b)........................................................ 8.07
317(a)(1).................................................. 8.08
(a)(2)..................................................... 8.09
(b)........................................................ 2.06
318(a)..................................................... 13.01
N.A. means Not Applicable.
Note: This cross-reference table shall not, for any purpose, be deemed to be
a part of the Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions............................................................................1
Section 1.02 Incorporation by Reference of Trust Indenture Act......................................5
Section 1.03 Incorporation by Reference of Provisions of Securities.................................6
Section 1.04 Rules of Construction..................................................................6
ARTICLE 2.
THE SECURITIES
Section 2.01 Forms Generally........................................................................6
Section 2.02 Form of Trustee's Certificate of Authentication........................................6
Section 2.03 Amount Unlimited, Issuable in Series...................................................7
Section 2.04 Execution and Authentication...........................................................8
Section 2.05 Registrar and Paying Agent.............................................................9
Section 2.06 Paying Agent To Hold Money in Trust....................................................9
Section 2.07 Securityholder Lists..................................................................10
Section 2.08 Transfer and Exchange.................................................................10
Section 2.09 Replacement Securities................................................................10
Section 2.10 Outstanding Securities................................................................10
Section 2.11 Temporary Securities..................................................................11
Section 2.12 Cancellation..........................................................................11
Section 2.13 Defaulted Interest....................................................................11
Section 2.14 Global Securities.....................................................................12
ARTICLE 3.
REDEMPTION
Section 3.01 Notices to Trustee....................................................................12
Section 3.02 Selection of Securities To Be Redeemed................................................13
Section 3.03 Notice of Redemption..................................................................13
Section 3.04 Effect of Notice of Redemption........................................................13
Section 3.05 Deposit of Redemption Price...........................................................14
Section 3.06 Securities Redeemed in Part...........................................................14
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ARTICLE 4.
COVENANTS
Section 4.01 Payment of Securities.................................................................14
Section 4.02 SEC Reports...........................................................................14
Section 4.03 Compliance Certificate................................................................14
ARTICLE 5.
SUCCESSOR CORPORATION
Section 5.01 When the Company and the Guarantor May Merge, etc.....................................15
ARTICLE 6.
SUBORDINATION
Section 6.01 Agreement To Subordinate..............................................................15
Section 6.02 Company Not To Make Payments with Respect to
Securities in Certain Circumstances...................................................15
Section 6.03 Securities Subordinated to Prior Payment of All
Senior Indebtedness of the Company on Dissolution,
Liquidation or Reorganization of the Company..........................................16
Section 6.04 Securityholders To Be Subrogated to Rights of Holders
of Senior Indebtedness of the Company.................................................17
Section 6.05 Obligation of the Company Unconditional...............................................17
Section 6.06 Knowledge of Trustee..................................................................18
Section 6.07 Application by Trustee of Monies Deposited With It....................................18
Section 6.08 Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior
Indebtedness of the Company...........................................................18
Section 6.09 Securityholders Authorize Trustee To Effectuate
Subordination of Securities...........................................................19
Section 6.10 Right of Trustee To Hold Senior Indebtedness of the
Company ..............................................................................19
Section 6.11 Article Six Not To Prevent Events of Default..........................................19
ARTICLE 7.
GUARANTEE
Section 7.01 Guarantee.............................................................................19
Section 7.02 Agreement To Subordinate..............................................................20
Section 7.03 Guarantor Not To Make Payments with Respect to
Securities in Certain Circumstances...................................................21
Section 7.04 Guarantee Subordinated to Prior Payment of All Senior
Indebtedness of the Guarantor on Dissolution,
Liquidation or Reorganization of the Guarantor........................................22
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Section 7.05 Securityholders To Be Subrogated to Rights of Holders
of Senior Indebtedness of the Guarantor...............................................23
Section 7.06 Obligation of the Guarantor Unconditional.............................................23
Section 7.07 Knowledge of Trustee..................................................................24
Section 7.08 Application by Trustee of Monies Deposited With It....................................24
Section 7.09 Subordination Rights Not Impaired by Acts or
Omissions of Guarantor or Holders of Senior
Indebtedness of the Guarantor.........................................................24
Section 7.10 Securityholders Authorize Trustee To Effectuate
Subordination of Guarantee............................................................24
Section 7.11 Right of Trustee To Hold Senior Indebtedness of the
Guarantor.............................................................................25
Section 7.12 Article 7 Not To Prevent Events of Default............................................25
Section 7.13 Execution and Delivery of Guarantee...................................................25
Section 7.14 Subordination of Indebtedness Owed by the Company to
the Guarantor.........................................................................25
Section 7.15 Officers' Certificate.................................................................25
ARTICLE 8.
DEFAULTS AND REMEDIES
Section 8.01 Events of Default.....................................................................26
Section 8.02 Acceleration..........................................................................27
Section 8.03 Other Remedies........................................................................28
Section 8.04 Waiver of Past Defaults...............................................................28
Section 8.05 Control by Majority...................................................................28
Section 8.06 Limitation on Suits...................................................................28
Section 8.07 Rights of Holders To Receive Payment..................................................29
Section 8.08 Collection Suit by Trustee............................................................29
Section 8.09 Trustee May File Proofs of Claim......................................................29
Section 8.10 Priorities............................................................................29
Section 8.11 Undertaking for Costs.................................................................30
ARTICLE 9.
TRUSTEE
Section 9.01 Duties of Trustee.....................................................................30
Section 9.02 Rights of Trustee.....................................................................31
Section 9.03 Individual Rights of Trustee..........................................................31
Section 9.04 Trustee Disclaimer....................................................................31
Section 9.05 Notice of Defaults....................................................................31
Section 9.06 Reports by Trustee to Holders.........................................................31
Section 9.07 Compensation and Indemnity............................................................32
Section 9.08 Replacement of Trustee................................................................32
Section 9.09 Successor Trustee by Merger, etc......................................................33
Section 9.10 Eligibility; Disqualification.........................................................33
Section 9.11 Preferential Collection of Claims Against Company.....................................33
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ARTICLE 10.
CONVERSION OF SECURITIES
Section 10.01 Applicability of Article..............................................................33
Section 10.02 Conversion Privilege..................................................................34
Section 10.03 Manner of Exercise of Conversion Privilege............................................34
Section 10.04 Payment in Lieu of Fractional Shares..................................................35
Section 10.05 Adjustment of Conversion Price........................................................35
Section 10.06 Notice of Certain Corporate Action....................................................37
Section 10.07 Guarantor To Provide Stock............................................................38
Section 10.08 Taxes on Conversions..................................................................38
Section 10.09 Covenant as to Stock..................................................................39
Section 10.10 Consolidation or Merger...............................................................39
Section 10.11 Disclaimer of Responsibility for Certain Matters......................................39
ARTICLE 11.
DISCHARGE OF INDENTURE
Section 11.01 Termination of the Company's and the Guarantor's
Obligations...........................................................................40
Section 11.02 Application of Trust Money............................................................41
Section 11.03 Repayment to Company..................................................................41
ARTICLE 12.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 12.01 Without Consent of Holders............................................................41
Section 12.02 With Consent of Holders...............................................................41
Section 12.03 Compliance with Trust Indenture Act...................................................42
Section 12.04 Revocation and Effect of Consents.....................................................42
Section 12.05 Notation on or Exchange of Securities.................................................42
Section 12.06 Trustee To Sign Amendments, etc.......................................................43
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls..........................................................43
Section 13.02 Notices...............................................................................43
Section 13.03 Communication by Holders with Other Holders...........................................44
Section 13.04 Certificate and Opinion as to Conditions Precedent....................................44
Section 13.05 Statements Required in Certificate or Opinion.........................................44
Section 13.06 When Treasury Securities Disregarded..................................................44
Section 13.07 Rules by Trustee, Paying Agent, Registrar.............................................45
Section 13.08 Legal Holidays........................................................................45
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Section 13.09 Governing Law.........................................................................45
Section 13.10 No Adverse Interpretation of Other Agreements.........................................45
Section 13.11 No Recourse Against Others............................................................45
Section 13.12 Successors............................................................................45
Section 13.13 Duplicate Originals...................................................................45
Section 13.14 Counterparts..........................................................................45
SIGNATURES..............................................................................................S-1
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INDENTURE dated as of ____________________ among TOLL CORP., a Delaware
corporation (the "Company"), TOLL BROTHERS, INC., a Delaware corporation (the
"Guarantor"), and BANK ONE TRUST COMPANY, NA, a national banking association
(the "Trustee").
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its bonds,
debentures, notes and/or other evidences of indebtedness (herein called the
"Securities"), which may be senior secured, senior unsecured, senior
subordinated or subordinated, to be issued in one or more series as in this
Indenture provided.
The Guarantor has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unconditional
guarantee of the Securities (herein called the "Guarantee"), which may be senior
secured, senior unsecured, senior subordinated or subordinated, as in this
Indenture provided.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and ratable benefit of the Holders of the Securities or of each series
thereof as follows:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"Acceleration Notice" has the meaning provided in Section 8.02.
"Affiliate" has the meaning provided in Rule 405 promulgated under the
Securities Act of 1933, as amended and in effect on the date hereof.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities. An Authorizing Resolution shall be so
adopted by both the Company and the Guarantor.
"Bankruptcy Law" has the meaning provided in Section 8.01.
"Board of Directors" means the Board of Directors of the Company or the
Guarantor, as the case may be, or any authorized committee of the Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or the Guarantor, as the case
may be, to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means the classes of capital stock of a Person as they
exist on the date of this Indenture or as they may be constituted from time to
time and warrants, options and similar rights to acquire such capital stock.
"Common Stock" means the Common Stock ($.01 par value) of the Guarantor
as the same exists at the date of this Indenture as originally executed or as
such stock may be constituted from time to time.
"Company" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor or any other obligor on
the Securities. "Company" shall also mean the Guarantor in the event the Company
fails to perform those duties required by Sections 312 through 317 of the TIA.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, as determined in accordance with generally
accepted accounting principles.
"Conversion Price" means the initial conversion price of Securities of
a Series specified in the Authorizing Resolution establishing the terms of such
Series Security, as adjusted in accordance with the provisions of Article 10.
"Current Market Price" for any relevant date means, (a) except for
purposes of Section 10.04, the average of the last reported sale prices of the
Common Stock for the 30 consecutive Business Days commencing 45 Business Days
before the day in question and (b) for purposes of Section 10.04 only, the last
reported sale price of the Common Stock, in either such case as reported on the
composite tape, or similar reporting system, for issues listed on the New York
Stock Exchange (or if the Common Stock is not then listed on that exchange, for
issues listed on such other national securities exchange upon which the Common
Stock is listed as may be designated by the Board of Directors for the purposes
hereof) or, if there is no such reported sale on the day or days in question, on
the basis of the average of the closing bid and asked quotations as so reported,
or, if the Common Stock is not listed on any national securities exchange, on
the basis of the average of the high bid and low asked quotations on the day or
days in question in the over-the-counter market as reported by the National
Association of Securities Dealers' Automated Quotations System, or if not so
quoted, as reported by National Quotation Bureau, Incorporated, or any similar
organization, or if not so reported as determined in good faith by the Board.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Designated Senior Debt of the Company" means any single issue of
indebtedness of the Company constituting Senior Indebtedness of the Company
which at the time of determination has an aggregate principal amount outstanding
of at least $25,000,000 and is specifically designated in the instrument or
instruments creating, governing or evidencing such Senior Indebtedness of the
Company as "Designated Senior Debt of Toll Corp." (it being understood that the
Company's guarantee of the Revolving Credit Agreement shall be considered a
single issue of indebtedness of the Company for purposes of this definition).
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"Designated Senior Debt of the Guarantor" means any single issue of
indebtedness of the Guarantor constituting Senior Indebtedness of the Guarantor
which at the time of determination has an aggregate principal amount outstanding
of at least $25,000,000 and is specifically designated in the instrument or
instruments creating, governing or evidencing such Senior Indebtedness of the
Guarantor as "Designated Senior Debt of Toll Brothers, Inc." (it being
understood that the Guarantor's guarantee of the Revolving Credit Agreement
shall be considered a single issue of indebtedness of the Guarantor for purposes
of this definition).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Event of Default" has the meaning provided in Section 8.01.
"Guarantee" has the meaning provided in Section 7.01.
"Guarantor" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Interest Payment Date," when used with respect to any installment of
interest payable on the Securities, has the meaning provided in Section 1 of the
Securities.
"Legal Holiday" has the meaning provided in Section 13.08.
"Non-Recourse Indebtedness" means indebtedness or other obligations
secured by a lien on property to the extent that the liability for such
indebtedness or other obligations is limited to the security of the property
without liability on the part of the Guarantor or any Subsidiary (other than the
Subsidiary which holds title to such property) for any deficiency.
"Non-Recourse Judgment" means a judgment in respect of indebtedness or
other obligations secured by a lien on property to the extent that the liability
for (i) such indebtedness or other obligations and (ii) such judgment is limited
to such property without liability on the part of the Guarantor or any
Subsidiary (other than the Subsidiary which holds title to such property) for
any deficiency.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Chief Accounting Officer, the Controller, the Treasurer or the
Secretary of the Company or the Guarantor, as the case may be.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or any Vice President, and by the Chief Accounting
Officer, the Controller, the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary of the Company or the Guarantor, as the case may be. See
Sections 13.04 and 13.05.
3
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be counsel to, but not an employee
of, the Company or the Guarantor. See Sections 13.04 and 13.05.
"Original Issue Discount Security" means any Security which provides
that an amount less than its principal amount is due and payable upon
acceleration after an Event of Default.
"Paying Agent" has the meaning provided in Section 2.05.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"Principal" of a debt security means the principal of the security plus
the premium, if any, on the security.
"Record Date" for the interest payable on any Interest Payment Date on
the Securities has the meaning provided in Section 1 of the Securities.
"Registrar" has the meaning provided in Section 2.05.
"Restricted Subsidiary," if applicable, has the meaning provided in the
Authorizing Resolution.
"Revolving Credit Agreement" means the Amended and Restated Credit
Agreement dated as of May 18, 2001 among First Huntingdon Finance Corp., Toll
Brothers, Inc., certain lenders and Bank One, NA, as Administrative Agent,
together with all other agreements, instruments and documents executed or
delivered pursuant thereto or in connection therewith (including, without
limitation, any guarantee agreements and security documents), in each case as
such ageements, instruments or documents may be amended (including any amendment
and restatement thereof), supplemented, extended, renewed, refinanced, replaced,
increased, restructured or otherwise modified from time to time (including (i)
through execution of a new facility with one or more different lenders or (ii)
through increasing the amount of available borrowings thereunder.
"SEC" means the Securities and Exchange Commission.
"Securities" means the securities as amended or supplemented from time
to time that are authenticated and issued under this Indenture.
"Senior Indebtedness of the Company," if applicable, has the meaning
provided in the Authorizing Resolution.
"Senior Indebtedness of the Guarantor," if applicable, has the meaning
provided in the Authorizing Resolution.
"Series" means a series of Securities or the Securities of a Series.
"Special Record Date" has the meaning provided in Section 2.13.
4
"Subsidiary" means any corporation of which at least a majority in
interest of the outstanding stock having by the terms thereof voting power under
ordinary circumstances to elect a majority of the directors of such corporation,
irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency, is at the time, directly or indirectly, owned or
controlled by the Guarantor.
"Term Loan Agreement" means the Term Loan Agreement dated as of July
25, 2000, as amended, between First Huntingdon Finance Corp., Toll Brothers,
Inc., certain lenders and Bank One, NA, as Administrative Agent, together with
all other agreements, instruments and documents executed or delivered pursuant
thereto or in connection therewith (including, without limitation, any guarantee
agreements and security documents), in each case as such ageements, instruments
or documents may be amended (including any amendment and restatement thereof),
supplemented, extended, renewed, refinanced, replaced, increased, restructured
or otherwise modified from time to time (including (i) through execution of a
new facility with one or more different lenders or (ii) through increasing the
amount of available borrowings thereunder.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture and as it may be
amended from time to time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
"Trust Officer" when used with respect to the Trustee means any officer
within the Corporate Trust Department (or any successor group) of the Trustee,
including any Vice President, Assistant Vice President, Trust Officer or any
other officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
Section 1.02 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder or Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor on the indenture securities" means the Company, the Guarantor
or any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them.
-------------------
* If applicable.
5
Section 1.03 Incorporation by Reference of Provisions of Securities.
Whenever this Indenture refers to a provision of the Securities, the provision
is incorporated by reference in and made a part of this Indenture.
Section 1.04 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles at
the time of the relevant computation;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2.
THE SECURITIES
Section 2.01 Forms Generally. The Securities and the Guarantee,
respectively, of each series shall be in such forms (including global form) as
shall be established by or pursuant to an Authorizing Resolution or in one or
more supplemental indentures hereto, in each case with such appropriate
provisions as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or depositary therefor or as may, consistent herewith, be
determined appropriate by the Officers executing such Securities, as evidenced
by their execution thereof. If the form of any series of Securities is
established by action taken pursuant to an Authorizing Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of a written order of the Company signed by two Officers or an
Officer and an Assistant Treasurer of the Company for the authentication and
delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, provided that
such method is permitted by the rules of any securities exchange on which such
Securities may be listed, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities.
The terms and provisions in the Securities shall constitute, and are
hereby expressly made, a part of this Indenture.
Section 2.02 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
6
This is one of the Securities of the series designated herein referred
to in the within mentioned Indenture.
BANK ONE TRUST COMPANY, NA
As Trustee
By:_________________________________
Authorized Signatory
Section 2.03 Amount Unlimited, Issuable in Series. The aggregate
principal amount of Securities that may be issued under this Indenture is
unlimited. The Securities may be issued from time to time in one or more Series.
Each Series shall be created by an Authorizing Resolution or a supplemental
indenture that establishes the terms of the Series, which may include the
following:
(1) the title of the Series;
(2) any limit upon the aggregate principal amount of the
Series which may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of other Securities which, pursuant to Sections 2.08,
2.09, 2.11 or 10.05 and except for any Securities which, pursuant to Section
2.04, are deemed never to have been authenticated and delivered hereunder);
(3) the interest rate or method of calculation of the interest
rate;
(4) the date from which interest will accrue;
(5) the Record Dates for interest payable on Securities of the
Series;
(6) the dates when, places where and manner in which principal
and interest are payable;
(7) the Registrar and Paying Agent;
(8) the terms of any mandatory or optional redemption by the
Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer
form and the terms of any such forms of Securities;
(12) whether any Securities will be represented by a global
Security and the terms of any such global Security;
7
(13) the currencies (including any composite currency) in
which principal or interest or both may be paid;
(14) if payments of principal or interest may be made in a
currency other than that in which Securities are denominated, the manner for
determining such payments;
(15) provisions for electronic issuance of Securities or
issuance of Securities in uncertificated form;
(16) any Events of Default or covenants in addition to or in
lieu of those set forth in this Indenture;
(17) whether and upon what terms Securities may be defeased;
(18) the respective forms of the Securities and the
Guarantees;
(19) whether the Securities of such Series will be convertible
into Common Stock of the Guarantor and the terms thereof (including without
limitation the Conversion Price, the conversion period and any other provision
in addition to or in lieu of those set forth in this Indenture);
(20) whether the Securities and Guarantees of such Series
shall be subordinated to any obligations of the Company or the Guarantor, and
the obligations to which such subordination will apply;
(21) whether the Securities of such Series and/or the
Guarantees of such Series will be secured and, if applicable, any provisions for
securing all or any portion of the indebtedness evidenced by the Securities of
such Series and/or the Guarantees of such Series;
(22) any terms that may be required by or advisable under
applicable law; and
(23) any other terms not inconsistent with this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and
delivery thereof are not subject to any conditions precedent.
Section 2.04 Execution and Authentication. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be reproduced on the Securities. Two Officers of the Guarantor shall sign
the notation of the Guarantee by manual or facsimile signature.
8
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until the Trustee manually signs
the certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue upon a
written order of the Company signed by two Officers or by an Officer and an
Assistant Treasurer of the Company. Each Security shall be dated the date of its
authentication. In authenticating Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to the TIA) shall be fully
protected in relying upon, an Opinion of Counsel stating that all conditions
precedent to the authentication and delivery of the Securities have been
complied with and that the Securities have been duly executed and, when the
Securities have been duly authenticated and delivered by the Trustee, will be
duly issued and delivered and will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to any applicable bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and subject to the
effect of general principles of equity, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing (regardless of
whether enforcement is considered in a proceeding in equity or at law).
Section 2.05 Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer,
for exchange or, if applicable, for conversion (in the case of conversion, as
agent for the Guarantor) ("Registrar") and an office or agency where Securities
may be presented for payment ("Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
Section 2.06 Paying Agent To Hold Money in Trust. Each Paying Agent
shall hold in trust for the benefit of the Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal or interest on the
Securities, and shall notify the Trustee of any default by the Company (or any
other obligor on the Securities) in making any such payment. While any such
default continues, the Trustee shall require a Paying Agent to pay all money
held by it to the Trustee. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate the money and hold it as a separate trust fund. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon doing so the Paying Agent shall have no further liability for the
money.
9
Section 2.07 Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee on or before each Interest
Payment Date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
Section 2.08 Transfer and Exchange. Where a Security is presented to
the Registrar or a co-registrar with a request to register a transfer, the
Registrar shall register its transfer as requested if its reasonable
requirements are met. Where Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. The Company may charge a reasonable fee for any
transfer or exchange (including the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any such
transfer or exchange and any other expenses in connection therewith) but not for
any exchange pursuant to Section 2.11, 3.06 or 12.05. This Section 2.08 is
subject to the provisions of any series of the Securities providing for the
subordination or seniority of such series and the related Guarantees of such
series in right of payment to other indebtedness of the Company and the
Guarantor, respectively.
Section 2.09 Replacement Securities. If the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Security and the
Guarantor shall endorse the Guarantee thereon if the Trustee's reasonable
requirements are met. An indemnity bond must be sufficient in the judgment of
the Company, the Guarantor and the Trustee to protect the Company, the
Guarantor, the Trustee, the Paying Agent, the Registrar or any co-registrar from
any loss which any of them may suffer if a Security is replaced. The Company may
charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company
and the Guarantor.
Section 2.10 Outstanding Securities. Securities outstanding at any time
are all Securities authenticated by the Trustee except for those presented to it
by the Company or its designee for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company, the Guarantor or one of their Affiliates holds the Security.
10
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a redemption date or maturity date money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
If a Security is called for redemption or if it matures in less than
six months and if the Company has satisfied its obligation to pay the Security,
or if a Security has been converted in accordance with the provisions of Article
10, the Company and the Trustee need not treat the Security as outstanding in
determining whether Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent.
For each series of Original Issue Discount Securities, the principal
amount of such Securities that shall be deemed to be outstanding and used to
determine whether the necessary Holders have given any request, demand,
authorization, direction, notice, consent or waiver shall be the principal
amount of such Securities that could be declared to be due and payable upon
acceleration upon an Event of Default as of the date of such determination. When
requested by the Trustee, the Company will advise the Trustee of such amount,
showing its computations in reasonable detail.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.11 Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities and the Guarantor shall endorse the Guarantee thereon.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities and the Guarantor shall endorse
the Guarantee thereon in exchange for temporary Securities.
Section 2.12 Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for transfer,
exchange, conversion or payment. The Trustee and no one else shall cancel and
destroy all Securities surrendered for transfer, exchange, conversion, payment
or cancellation in accordance with its customary procedure. Unless the
Authorizing Resolution so provides, the Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation.
Section 2.13 Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, it shall pay the defaulted interest in any lawful
manner. It may pay the defaulted interest, plus any interest payable on the
interest (to the extent lawful) if an Event of Default has occurred and is
continuing, to the Persons who are Securityholders on a subsequent special
record date (the "Special Record Date"). The Company shall fix the subsequent
Special Record Date and payment date. At least 15 days before such Special
Record Date, the Company shall give notice to the Trustee and shall mail to each
Securityholder a notice that states the subsequent Special Record Date, the
payment date, and the amount of defaulted interest to be paid.
11
Section 2.14 Global Securities. Unless the Authorizing Resolution
provides otherwise, the Company may issue some or all of the Securities of a
Series in temporary or permanent global form. A global Security shall represent
that amount of Securities of a Series as specified in the global Security or as
endorsed thereon from time to time. At the Company's request, the Registrar
shall endorse a global Security to reflect the amount of any increase or
decrease in the Securities represented thereby.
The Company may issue a global Security only to a depositary designated
by the Company. A depositary may transfer a global Security only as a whole to
its nominee or to a successor depositary.
The Authorizing Resolution may establish, among other things, the
manner of paying principal and interest on a global Security and whether and
upon what terms a beneficial owner of an interest in a global Security may
exchange such interest for definitive Securities.
The Company and the Trustee shall not be responsible for any acts or
omissions of a depositary, for any depositary records of beneficial ownership
interests or for any transactions between the depositary and beneficial owners.
ARTICLE 3.
REDEMPTION
Section 3.01 Notices to Trustee. Securities of a Series that are
redeemable prior to maturity shall be redeemable in accordance with their terms
and, unless the Authorizing Resolution provides otherwise, in accordance with
this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the redemption date
and the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed,
retired or acquired against any redemption pursuant to Paragraph 6 of the
Securities, it shall notify the Trustee of the amount of the credit and it shall
deliver any Securities not previously delivered to the Trustee for cancellation
with such notice.
The Company shall give each notice provided for in this Section 3.01 at
least 10 Business Days before the notice of any such redemption is to be mailed
to Holders (unless a shorter notice shall be satisfactory to the Trustee).
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Section 3.02 Selection of Securities To Be Redeemed. If less than all
the Securities of a Series are to be redeemed, the Trustee shall select the
Securities to be redeemed, if the Securities of such Series are listed on a
national securities exchange, in accordance with the rules of such exchange, or
if the Securities of such Series are not so listed, on either a pro rata basis
or by lot or by such method as the Trustee shall deem fair and appropriate. The
Trustee shall make the selection from Securities outstanding and not previously
called for redemption. Securities in denominations of $1,000 may only be
redeemed in whole. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
Section 3.03 Notice of Redemption. At least 30 days but not more than
60 days before a redemption date, the Company shall mail a notice of redemption
by first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) in the event that any Security is to be redeemed in part
only, the portion of the principal amount thereof to be redeemed and that on and
after the redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will be
issued;
(5) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(6) that interest on Securities called for redemption ceases
to accrue on and after the redemption date;
(7) that the Securities are being redeemed pursuant to the
mandatory redemption or the optional redemption provisions, as applicable; and
(8) if applicable, the current Conversion Price and the date
on which the right to convert the Securities into Common Stock will expire.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
Section 3.04 Effect of Notice of Redemption. Once notice of redemption
is mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price. Upon surrender to the Paying Agent,
such Securities shall be paid at the redemption price, plus accrued interest to
the redemption date.
13
Section 3.05 Deposit of Redemption Price. Prior to the redemption date,
the Company or its designee shall deposit with the Paying Agent money sufficient
to pay the redemption price of and accrued and unpaid interest on all Securities
to be redeemed on that date.
Section 3.06 Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Trustee shall authenticate for the Holder a new
Security and the Guarantor shall endorse the Guarantee thereon equal in
principal amount to the unredeemed portion of the Securities surrendered.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Securities. The Company shall pay the principal
of and interest on Securities of a Series on the dates and in the manner
provided in the Securities of the Series. An installment of principal or
interest shall be considered paid on the date due if the Trustee or Paying Agent
holds on that date immediately available legal tender funds designated for,
available and sufficient to pay the installment.
The Company shall pay interest on overdue principal at the rate borne
by the Series; it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
Section 4.02 SEC Reports. Within 15 days after each of the Guarantor
and the Company files with the SEC copies of its annual reports and other
information, documents and reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which they are
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act, the Guarantor and the Company shall file the same with the Trustee. If the
Guarantor shall cease to be subject to the requirements of Section 13 or 15(d)
of the Exchange Act, the Guarantor shall file with the Trustee, within 15 days
after the last date on which it would have been required to make such a filing
with the SEC, financial statements, including any notes thereto, and a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," each comparable to that which the Guarantor would have been
required to include in such annual reports, information, documents or other
reports, if the Guarantor were then subject to the requirements of Section 13 or
15(d) of the Exchange Act. The Company and the Guarantor also shall comply with
the other provisions of TIA Section 314(a).
Section 4.03 Compliance Certificate. The Company and the Guarantor each
shall deliver to the Trustee within 120 days after the end of their respective
fiscal year an Officers' Certificate satisfying the requirements of Section
3.14(a)(4) of the TIA and stating whether or not the signers know of any Default
or Event of Default. If they do know of such a Default or Event of Default, the
certificate shall describe the Default or Event of Default.
14
ARTICLE 5.
SUCCESSOR CORPORATION
Section 5.01 When the Company and the Guarantor May Merge, etc. Neither
the Company nor the Guarantor shall consolidate with or merge into, or transfer
all or substantially all of its assets to, any other person unless (i) such
other Person is a corporation organized and existing under the laws of the
United States or a State thereof or the District of Columbia and expressly
assumes by supplemental indenture all the obligations of the Company or the
Guarantor under the Indenture and either the Securities or the Guarantee, as the
case may be; and (ii) immediately after giving effect to such transaction no
Default or Event of Default shall have occurred and be continuing. Thereafter
all such obligations of the predecessor corporation shall terminate.
ARTICLE 6.
SUBORDINATION
Section 6.01 Agreement To Subordinate. The provisions of this Article 6
shall apply to the Securities of a Series to the extent specified in the
Authorizing Resolution relating to such Series. Each reference in this Article 6
to "a Security" or "the Securities" refers to the Securities of each such Series
so designated.
The Company, for itself and its successors, and each Holder, by
accepting Securities, agrees that the payment of the principal of, interest on
or any other amounts due on the Securities are subordinated in right of payment,
to the extent and in the manner stated in this Article 6, to the prior payment
in full of all Senior Indebtedness of the Company. Each Holder by accepting
Securities authorizes and directs the Trustee on behalf of such Holder to take
such action as may be necessary or appropriate to effectuate, as between the
holders of Senior Indebtedness of the Company and such Holder, the subordination
provided in this Article 6 and appoints the Trustee attorney-in-fact for such
Holder for such purpose.
This Article 6 shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness of the Company, and such provisions are made for the benefit of the
holders of Senior Indebtedness of the Company and such holders are made obligees
hereunder and they and/or each of them may enforce such provisions.
Section 6.02 Company Not To Make Payments with Respect to Securities in
Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness of the Company by
lapse of time, acceleration (unless waived) or otherwise, all principal thereof
and interest thereon shall first be paid in full, or such payment duly provided
for in cash or in a manner satisfactory to the holders of such Senior
Indebtedness of the Company, before any payment is made on account of the
principal of or interest on the Securities or to acquire any of the Securities.
15
(b) In the event that notwithstanding the provisions of this Section
6.02 the Company shall make any payment to the Trustee on account of the
principal of or interest on the Securities after the happening of a default in
payment of the principal of or interest on Senior Indebtedness of the Company,
then, unless and until such default shall have been cured or waived or shall
have ceased to exist, such payment (subject to the provisions of Sections 6.06
and 6.07) shall be held by the Trustee, in trust for the benefit of, and shall
be paid forthwith over and delivered to, the holders of Senior Indebtedness of
the Company (pro rata as to each of such holders on the basis of the respective
amounts of Senior Indebtedness of the Company held by them) or their
representative or the trustee under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness of the Company may have been issued, as
their respective interests may appear, for application to the payment of all
Senior Indebtedness of the Company remaining unpaid to the extent necessary to
pay all Senior Indebtedness of the Company in full in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
holders of the Senior Indebtedness of the Company.
The Company shall give prompt written notice to the Trustee of any
default in the payment of principal of or interest on any Senior Indebtedness of
the Company.
Section 6.03 Securities Subordinated to Prior Payment of All Senior
Indebtedness of the Company on Dissolution, Liquidation or Reorganization of the
Company. Upon any distribution of assets of the Company in any dissolution,
winding up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefits of
creditors or otherwise):
(a) the holders of all Senior Indebtedness of the Company shall first
be entitled to receive payment in full of the principal thereof and interest due
thereon before the Holders of the Securities are entitled to receive any payment
on account of the principal of or interest on the Securities;
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee on behalf of the Holders of the Securities would be
entitled except for the provisions of this Article 6, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the
Securities, shall be paid by the liquidating trustee or agent or other Person
making such payment or distribution directly to the holders of the Senior
Indebtedness of the Company or their representative, or to the trustee under any
indenture under which Senior Indebtedness of the Company may have been issued
(pro rata as to each such holder, representative or trustee on the basis of the
respective amounts of unpaid Senior Indebtedness of the Company held or
represented by each), to the extent necessary to make payment in full of all
Senior Indebtedness of the Company remaining unpaid, after giving effect to any
concurrent payment or distribution or provision therefor to the holders of such
Senior Indebtedness of the Company, except that Holders of the Securities would
be entitled to receive securities that are subordinated to Senior Indebtedness
of the Company to at least the same extent as the Securities; and
16
(c) in the event that notwithstanding the foregoing provisions of this
Section 6.03, any payment or distribution of assets of the Company of any kind
or character whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the
Securities, shall be received by the Trustee or the Holders of the Securities on
account of principal of or interest on the Securities before all Senior
Indebtedness of the Company is paid in full, or effective provision made for its
payment, such payment or distribution (subject to the provisions of Sections
6.06 and 6.07) shall be received and held in trust for and shall be paid over to
the holders of the Senior Indebtedness of the Company remaining unpaid or
unprovided for or their representative, or to the trustee under any indenture
under which such Senior Indebtedness of the Company may have been issued (pro
rata as provided in subsection (b) above), for application to the payment of
such Senior Indebtedness of the Company until all such Senior Indebtedness of
the Company shall have been paid in full, after giving effect to any concurrent
payment or distribution or provision therefor to the holders of such Senior
Indebtedness of the Company, except that Holders of the Securities would be
entitled to receive securities that are subordinated to Senior Indebtedness of
the Company to at least the same extent as the Securities.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company.
Section 6.04 Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness of the Company. Subject to the payment in full of all Senior
Indebtedness of the Company, the Holders of the Securities shall be subrogated
equally and ratably to the rights of the holders of the Senior Indebtedness of
the Company to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness of the Company until all amounts owing on
the Securities shall be paid in full, and for the purpose of such subrogation no
payments or distributions to the holders of the Senior Indebtedness of the
Company by or on behalf of the Company or by or on behalf of the Holders of the
Securities by virtue of this Article 6 which otherwise would have been made to
the Holders of the Securities shall, as among the Company, its creditors other
than holders of the Senior Indebtedness of the Company and the Holders of the
Securities, be deemed to be payment by the Company to or on account of the
Senior Indebtedness of the Company, it being understood that the provisions of
this Article 6 are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of the
Senior Indebtedness of the Company, on the other hand.
Section 6.05 Obligation of the Company Unconditional. Nothing contained
in this Article 6 or elsewhere in this Indenture or in any Security is intended
to or shall impair, as between the Company and the Holders of the Securities,
the obligation of the Company, which is absolute and unconditional, to pay to
the Holders of the Securities the principal of and interest on the Securities as
and when the same shall become due and payable in accordance with their terms,
or is intended to or shall affect the relative rights of the Holders of the
Securities and creditors of the Company other than the holders of the Senior
Indebtedness of the Company, nor shall anything herein or therein prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 6 of the holders of Senior Indebtedness of
the Company in respect of cash, property or securities of the Company received
upon the exercise of any such remedy. Upon any distribution of assets of the
Company referred to in this Article 6, the Trustee, subject to the provisions of
Sections 9.01 and 9.02, and the Holders of the Securities shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding up, liquidation or reorganization proceedings
are pending, or a certificate of the liquidating trustee or agent or other
Person making any distribution to the Trustee or the Holders of the Securities,
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness of the Company and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 6.
17
Nothing contained in this Article 6 or elsewhere in this Indenture or
in any Security is intended to or shall affect the obligation of the Company to
make, or prevent the Company from making, at any time except during the pendency
of any dissolution, winding up, liquidation or reorganization proceeding, and
except during the continuance of any default specified in Section 6.02 (not
cured or waived), payments at any time of the principal of or interest on the
Securities.
Section 6.06 Knowledge of Trustee. Notwithstanding any provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of monies to or by
the Trustee until two Business Days after the Trustee shall have received
written notice thereof from the Company, any Securityholder or any Paying Agent
or the holder or representative of any class of Senior Indebtedness of the
Company.
Section 6.07 Application by Trustee of Monies Deposited With It. If at
least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may become
payable for any purpose (including, without limitation, the payment of either
the principal of or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 6.06,
then the Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section shall be construed solely for the benefit of the Trustee
and such Paying Agent and shall not otherwise affect the rights of holders of
Senior Indebtedness of the Company.
Section 6.08 Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Indebtedness of the Company. No right of any
present or future holders of any Senior Indebtedness of the Company to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The holders
of Senior Indebtedness of the Company may extend, renew, modify or amend the
terms of the Senior Indebtedness of the Company or any security therefor and
release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders. No provision in any supplemental indenture which
affects the superior position of the holders of Senior Indebtedness of the
Company shall be effective against the holders of Senior Indebtedness of the
Company who have not consented thereto.
18
Section 6.09 Securityholders Authorize Trustee To Effectuate
Subordination of Securities. Each Holder of Securities by acceptance thereof
authorizes and expressly directs the Trustee on its, his or her behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article 6 and appoints the Trustee its, his or her
attorney-in-fact for such purpose, including, in the event of any dissolution,
winding up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the immediate filing of a claim for the unpaid balance of its,
his or her Securities in the form required in said proceedings and cause said
claim to be approved. If the Trustee does not file a proper claim or proof of
debt in the form required in such proceedings prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of Senior
Indebtedness of the Company have the right to file and are hereby authorized to
file an appropriate claim for and on behalf of the Holders of said Securities.
Section 6.10 Right of Trustee To Hold Senior Indebtedness of the
Company. The Trustee shall be entitled to all of the rights set forth in this
Article 6 in respect of any Senior Indebtedness of the Company at any time held
by it to the same extent as any other holder of Senior Indebtedness of the
Company and nothing in this Indenture shall be construed to deprive the Trustee
of any of its rights as such holder.
Section 6.11 Article Six Not To Prevent Events of Default. The failure
to make a payment on account of principal or interest by reason of any provision
in this Article 6 shall not be construed as preventing the occurrence of an
Event of Default under Section 8.01.
ARTICLE 7.
GUARANTEE
Section 7.01 Guarantee. The Guarantor hereby unconditionally guarantees
(such guarantee to be referred to herein as the "Guarantee") to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Securities or the obligations of the Company hereunder or
thereunder, (i) the due and punctual payment of the principal of and any
interest on the Securities, whether at maturity or on an Interest Payment Date,
by acceleration or otherwise, and interest on the overdue principal of and
interest, if any, on the Securities, if lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or under the Securities shall be
promptly paid in full, all in accordance with the terms hereof and thereof
including all amounts payable to the Trustee under Section 9.07 hereof, and (ii)
in case of any extension of time of payment or renewal of any Securities or any
of such other obligations, that the same shall be promptly paid in full when due
or to be performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise.
19
If the Company fails to make any payment when due of any amount so
guaranteed for whatever reason, the Guarantor shall be obligated to pay the same
immediately. The Guarantor hereby agrees that its obligations hereunder shall be
continuing, absolute and unconditional, irrespective of, and shall be unaffected
by, the validity, regularity or enforceability of the Securities, this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Securities or the Trustee with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of the Guarantor. The Guarantor hereby
waives diligence, presentment, demand of payment, demand of performance, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, the benefit of
discussion, protest, notice and all demand whatsoever and covenants that this
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Securities, in this Indenture and in this Article
7. If any Securityholder or the Trustee is required by any court or otherwise to
return to the Company or the Guarantor, or any custodian, trustee, liquidator or
other similar official acting in relation to the Company or the Guarantor, any
amount paid by the Company or the Guarantor to the Trustee or such
Securityholder, this Article 7, to the extent theretofore discharged, shall be
reinstated in full force and effect. The Guarantor agrees that it shall not be
entitled to any right of subrogation in relation to the Securityholders in
respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. The Guarantor further agrees that, as between the
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article 8 for the purposes of the Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of such obligations as provided in Article 8 such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantor for the purpose of this Article 7. In addition, without limiting the
foregoing, upon the effectiveness of an acceleration under Article 8, the
Trustee may make a demand for payment on the Securities under the Guarantee
provided hereunder and not discharged.
The Guarantor shall be subrogated to all rights of the Holder of any
Securities against the Company in respect of any amounts paid to the Holder by
the Guarantor pursuant to the provisions of this Guarantee; provided that the
Guarantor shall not be entitled to enforce, or to receive any payments arising
out of or based upon, such right of subrogation until the principal of and
interest on all the Securities shall have been paid in full.
The Guarantee set forth in this Section 7.01 shall not be valid or
become obligatory for any purpose with respect to a Security until the
certificate of authentication on such Security shall have been signed by the
Trustee or any duly appointed agent.
Section 7.02 Agreement To Subordinate. The provisions of this Article 7
shall apply to the Securities of a Series to the extent specified in the
Authorizing Resolution relating to such Series. Each reference in this Article 7
to "a Security" or "the Securities" refers to the Securities of each such Series
so designated.
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The Guarantor, for itself and its successors, and each Holder, by
accepting the Securities, agrees that the payment of the principal of, interest
on and any other amounts due on the Securities pursuant to the Guarantee are
subordinated in right of payment, to the extent and in the manner stated in this
Article 7, to the prior payment in full of all Senior Indebtedness of the
Guarantor. Each Holder by accepting Securities authorizes and directs the
Trustee on behalf of such Holder to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Indebtedness of the
Guarantor and such Holder, the subordination provided in this Article 7 and
appoints the Trustee attorney-in-fact for such Holder for such purpose.
This Article shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness of the Guarantor, and such provisions are made for the benefit of
the holders of Senior Indebtedness of the Guarantor, and such holders are made
obligees hereunder and they and/or each of them may enforce such provisions.
Section 7.03 Guarantor Not To Make Payments with Respect to Securities
in Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness of the Guarantor by
lapse of time, acceleration (unless waived) or otherwise, all principal thereof
and interest thereon shall first be paid in full, or such payment duly provided
for in cash or in a manner satisfactory to the holders of such Senior
Indebtedness of the Guarantor, before any payment, pursuant to the Guarantee, is
made on account of the principal of or interest on the Securities or to acquire
any of the Securities.
(b) In the event that notwithstanding the provisions of this Section
7.03 the Guarantor shall make any payment to the Trustee on account of the
principal of or interest on the Securities after the happening of a default in
payment of the principal of or interest on Senior Indebtedness of the Guarantor,
then, unless and until such default shall have been cured or waived or shall
have ceased to exist, such payment (subject to the provisions of Sections 7.07
and 7.08) shall be held by the Trustee, in trust for the benefit of, and shall
be paid forthwith over and delivered to, the holders of Senior Indebtedness of
the Guarantor (pro rata as to each of such holders on the basis of the
respective amounts of Senior Indebtedness of the Guarantor held by them) or
their representative or the trustee under the indenture or other agreement (if
any) pursuant to which Senior Indebtedness of the Guarantor may have been
issued, as their respective interests may appear, for application to the payment
of all Senior Indebtedness of the Guarantor remaining unpaid to the extent
necessary to pay all Senior Indebtedness of the Guarantor in full in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness of the Guarantor.
The Guarantor shall give prompt written notice to the Trustee of any
default in the payment of principal of or interest on any Senior Indebtedness of
the Guarantor.
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Section 7.04 Guarantee Subordinated to Prior Payment of All Senior
Indebtedness of the Guarantor on Dissolution, Liquidation or Reorganization of
the Guarantor. Upon any distribution of assets of the Guarantor in any
dissolution, winding up, liquidation or reorganization of the Guarantor (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness of the Guarantor shall first
be entitled to receive payment in full of the principal thereof and interest due
thereon before the Holders of the Securities are entitled to receive any payment
on account of the principal of or interest on the Securities pursuant to the
Guarantee;
(b) any payment or distribution of assets of the Guarantor of any kind
or character, whether in cash, property or securities, to which the Holders of
the Securities or the Trustee on behalf of the Holders of the Securities would
be entitled except for the provisions of this Article 7, including any such
payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Guarantor being subordinated to the
payment of the Securities, shall be paid by the liquidating trustee or agent or
other Person making such payment or distribution directly to the holders of the
Senior Indebtedness of the Guarantor or their representative, or to the trustee
under any indenture under which Senior Indebtedness of the Guarantor may have
been issued (pro rata as to each such holder, representative or trustee on the
basis of the respective amounts of unpaid Senior Indebtedness of the Guarantor
held or represented by each), to the extent necessary to make payment in full of
all Senior Indebtedness of the Guarantor remaining unpaid, after giving effect
to any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness of the Guarantor, except that Holders of the
Securities would be entitled to receive securities that are subordinated to
Senior Indebtedness of the Guarantor to at least the same extent as the
Securities; and
(c) in the event that, notwithstanding the foregoing provisions of this
Section 7.04, any payment or distribution of assets of the Guarantor of any kind
or character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Guarantor being subordinated to the
payment of the Securities, shall be received by the Trustee or the Holders of
the Securities on account of principal of or interest on the Securities before
all Senior Indebtedness of the Guarantor is paid in full, or effective provision
made for its payment, such payment or distribution (subject to the provisions of
Sections 7.07 and 7.08) shall be received and held in trust for and shall be
paid over to the holders of the Senior Indebtedness of the Guarantor remaining
unpaid or unprovided for or their representative, or to the trustee under any
indenture under which such Senior Indebtedness of the Guarantor may have been
issued (pro rata as provided in subsection (b) above), for application to the
payment of such Senior Indebtedness of the Guarantor until all such Senior
Indebtedness of the Guarantor shall have been paid in full, after giving effect
to any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness of the Guarantor, except that Holders of the
Securities would be entitled to receive securities that are subordinated to
Senior Indebtedness of the Guarantor to at least the same extent as the
Securities.
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Upon any distribution of assets of the Guarantor referred to in this
Article 7, the Trustee, subject to the provisions of Sections 9.01 and 9.02, and
the Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution, winding
up, liquidation or reorganization proceedings are pending, or a certificate of
the liquidating trustee or agent or other Person making any distribution to the
Trustee or the Holders of the Securities, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Indebtedness of the Guarantor and other Indebtedness of the Guarantor, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 7.
The Guarantor shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Guarantor.
Section 7.05 Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness of the Guarantor. Subject to the payment in full of all
Senior Indebtedness of the Guarantor, the Holders of the Securities shall be
subrogated equally and ratably to the rights of the holders of the Senior
Indebtedness of the Guarantor to receive payments or distributions of assets of
the Guarantor applicable to the Senior Indebtedness of the Guarantor until all
amounts owing on the Securities shall be paid in full, and for the purpose of
such subrogation no payments or distributions to the holders of the Senior
Indebtedness of the Guarantor by or on behalf of the Guarantor or by or on
behalf of the Holders of the Securities by virtue of this Article 7 which
otherwise would have been made to the Holders of the Securities shall, as among
the Guarantor, its creditors other than holders of Senior Indebtedness of the
Guarantor and the Holders of the Securities, be deemed to be payment by the
Guarantor to or on account of the Senior Indebtedness of the Guarantor, it being
understood that the provisions of this Article 7 are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on the
one hand, and the holders of the Senior Indebtedness of the Guarantor, on the
other hand.
Section 7.06 Obligation of the Guarantor Unconditional. Nothing
contained in this Article 7 or elsewhere in this Indenture or in any Security is
intended to or shall impair, as between the Guarantor and the Holders of the
Securities, the obligation of the Guarantor, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
interest on the Securities as and when the same shall become due and payable in
accordance with the terms of the Guarantee, or is intended to or shall affect
the relative rights of the Holders of the Securities and creditors of the
Guarantor other than the holders of the Senior Indebtedness of the Guarantor,
nor shall anything herein or therein prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
Default under this Indenture, subject to the rights, if any, under this Article
7 of the holders of Senior Indebtedness of the Guarantor in respect of cash,
property or securities of the Guarantor received upon the exercise of any such
remedy.
Nothing contained in this Article 7 or elsewhere in this Indenture or
in any Security is intended to or shall affect the obligation of the Guarantor
to make, or prevent the Guarantor from making, at any time except during the
pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and except during the continuance of any default specified in
Section 7.03 (not cured or waived), payments at any time of the principal of or
interest on the Securities pursuant to the Guarantee.
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Section 7.07 Knowledge of Trustee. Notwithstanding any provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of monies to or by
the Trustee until two Business Days after the Trustee shall have received
written notice thereof from the Guarantor, any Securityholder or any Paying
Agent or the holder or representative of any class of Senior Indebtedness of the
Guarantor.
Section 7.08 Application by Trustee of Monies Deposited With It. If at
least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may become
payable for any purpose (including, without limitation, the payment of either
the principal of or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 7.07,
then the Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section shall be construed solely for the benefit of the Trustee
and such Paying Agent and shall not otherwise affect the rights of holders of
Senior Indebtedness of the Guarantor.
Section 7.09 Subordination Rights Not Impaired by Acts or Omissions of
Guarantor or Holders of Senior Indebtedness of the Guarantor. No right of any
present or future holders of any Senior Indebtedness of the Guarantor to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Guarantor with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The holders
of Senior Indebtedness of the Guarantor may extend, renew, modify or amend the
terms of the Senior Indebtedness of the Guarantor, or any security therefor and
release, sell or exchange such security and otherwise deal freely with the
Guarantor, all without affecting the liabilities and obligations of the parties
to the Indenture or the Holders. No provision in any supplemental indenture
which affects the superior position of the holders of Senior Indebtedness of the
Guarantor shall be effective against the holders of Senior Indebtedness of the
Guarantor who have not consented thereto.
Section 7.10 Securityholders Authorize Trustee To Effectuate
Subordination of Guarantee. Each Holder of Securities by acceptance thereof
authorizes and expressly directs the Trustee on its, his or her behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article 7 and appoints the Trustee its, his or her
attorney-in-fact for such purpose, including, in the event of any dissolution,
winding up, liquidation or reorganization of the Guarantor (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or otherwise) tending towards liquidation of the business
and assets of the Guarantor, the immediate filing of a claim for the unpaid
balance, pursuant to the Guarantee, of its, his or her Securities, in the form
required in said proceedings and cause said claim to be approved. If the Trustee
does not file a proper claim or proof of debt in the form required in such
proceeding prior to 30 days before the expiration of the time to file such claim
or claims, then the holders of Senior Indebtedness of the Guarantor have the
right to file and are hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Securities.
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Section 7.11 Right of Trustee To Hold Senior Indebtedness of the
Guarantor. The Trustee shall be entitled to all of the rights set forth in this
Article 7 in respect of any Senior Indebtedness of the Guarantor at any time
held by it to the same extent as any other holder of Senior Indebtedness of the
Guarantor, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
Section 7.12 Article 7 Not To Prevent Events of Default. The failure to
make a payment on account of principal or interest by reason of any provision in
this Article 7 shall not be construed as preventing the occurrence of an Event
of Default under Section 8.01.
Section 7.13 Execution and Delivery of Guarantee. To evidence the
Guarantee set forth in this Article 7, the Guarantor hereby agrees that a
notation of the Guarantee, substantially in the form established by or pursuant
to an Authorizing Resolution or in one or more supplemental indentures in
accordance with Section 2.01, shall be endorsed on each Security authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of the Guarantor by the Chairman of the Board, its President or one of its Vice
Presidents under a facsimile of its seal reproduced thereon.
The Guarantor hereby agrees that its Guarantee shall remain in full
force and effect notwithstanding any failure to endorse on each Security a
notation of the Guarantee.
If an Officer whose signature is on this Indenture or on the Securities
no longer holds that office at the time the Trustee authenticates the Security
on which a notation of the Guarantee is endorsed, the Guarantee shall be valid
nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantor.
Section 7.14 Subordination of Indebtedness Owed by the Company to the
Guarantor. Any indebtedness owed by the Company to the Guarantor shall be
subordinate to all obligations of the Company with respect to the Securities and
this Indenture to the same extent as the Securities are subordinated to Senior
Indebtedness of the Company.
Section 7.15 Officers' Certificate. If there occurs an event referred
to in the first sentence of Section 7.04(c) or the first sentence of Section
7.04, the Guarantor shall promptly give to the Trustee an Officers' Certificate
(on which the Trustee may conclusively rely) identifying all holders of Senior
Indebtedness of the Guarantor and the principal amount of Senior Indebtedness of
the Guarantor then outstanding held by each such holder and stating the reasons
why such Officers' Certificate is being delivered to the Trustee.
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ARTICLE 8.
DEFAULTS AND REMEDIES
Section 8.01 Events of Default. An "Event of Default" on a Series
occurs if:
(1) the Company or the Guarantor defaults in the payment of
interest on any Security of the Series when the same becomes due and payable and
the default continues for a period of 30 days whether or not such payment shall
be prohibited by the provisions of Article 6 or Article 7; or
(2) the Company or the Guarantor defaults in the payment of
the principal of any Security of the Series when the same becomes due and
payable at maturity or upon redemption, whether or not such payment shall be
prohibited by the provisions of Article 6 or Article 7; or
(3) the Company or the Guarantor fails to comply with any of
its other agreements in the Securities, the Guarantee or this Indenture
applicable to the Series and such failure continues for the period and after the
notice specified below; or
(4) there occurs a default in the payment of indebtedness of
the Company, the Guarantor or any Subsidiary under the terms of the instrument
evidencing or securing such indebtedness permitting the holder thereof to
accelerate the payment of in excess of an aggregate of $10,000,000 in principal
amount of such indebtedness (after the lapse of applicable grace periods) or, in
the case of defaults other than payment defaults, there occurs an acceleration
of any such indebtedness if such acceleration is not rescinded or annulled
within 10 days after such acceleration; provided, the term "indebtedness" as
used in this Section 8.01(4) shall not include an acceleration of or default on
Non-Recourse Indebtedness (a) if the Guarantor would be able to declare a
dividend pursuant to the terms of such Series in the amount of the excess of the
aggregate book value of all property (net of any previous write-downs or
reserves in respect of such property) subject to the Non-Recourse Indebtedness
being accelerated or in default over such Non-Recourse Indebtedness or (b) which
consists of a purchase money obligation, provided such purchase money obligation
does not exceed $10,000,000 in aggregate principal amount, whether or not the
Guarantor is so diligently contesting); or
(5) a final judgment for the payment of money in an amount in
excess of $10,000,000 shall be entered against the Company, the Guarantor or any
Subsidiary, and shall remain undischarged for a period (during which execution
shall not be effectively stayed) of 60 days after the date on which the right to
appeal has expired; provided the term "final judgment" shall not include a
Non-Recourse Judgment unless the book value of all property (net of any previous
write-downs or reserves in respect of such property) subject to such
Non-Recourse Judgment exceeds the amount of such Non-Recourse Judgment by more
than $10,000,000; or
(6) there occurs as "Event of Default," as that term is
defined in the indenture relating to the 8-3/4% Senior Subordinated Notes due
2006 issued by Toll Corp., a Delaware corporation ("Toll Corp."), the 7-3/4%
Senior Subordinated Notes due 2007 issued by Toll Corp., the 8-1/8% Senior
Subordinated Notes due 2009 issued by Toll Corp., the 8% Senior Subordinated
Notes due 2009 issued by Toll Corp. or the 8-1/4% Senior Subordinated Notes due
2011 issued by Toll Corp. (each such series being hereinafter referred to as a
"Previously Issued Series"); provided that on the date of the occurrence, the
outstanding principal amount of at least one Previously Issued Series to which
the occurrence relates exceeds $5,000,000, or
(7) the Company and the Guarantor pursuant to or within the
meaning of any Bankruptcy Law:
26
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) provides for relief against the Company and the Guarantor
in an involuntary case,
(B) appoints a Custodian of the Company and the Guarantor for
all or substantially all of its property, or
(C) orders the liquidation of the Company and the Guarantor
and the order or decree remains unstayed and in effect for 90 days; or
(9) the Guarantee shall for any reason (other than pursuant to
its terms) cease to be in full force and effect.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
A default under clause (3) is not an Event of Default until the Trustee
or the Holders of at least 25% in principal amount of the Securities of the
Series affected notify the Company of the default and the Company does not cure
the default within 60 days after receipt of the notice. The notice must specify
the default, demand that it be remedied and state that the notice is a "Notice
of Default."
Section 8.02 Acceleration. If an Event of Default (other than an Event
of Default under Section 8.01(7) or 8.01(8)) on a Series occurs and is
continuing, the Trustee by notice to the Company and the Person or Persons
designated to receive notices for the Administrative Agent (or other Person
acting on behalf of the banks) under the Revolving Credit Agreement and/or the
Term Loan Agreement, or the Holders of at least 25% in principal amount of the
outstanding Securities of the Series by notice to the Company, the Trustee and
such Person or Persons (either such notice is referred to herein as an
"Acceleration Notice") may declare the unpaid principal of and accrued and
unpaid interest on all the Securities of the Series to be due and payable if,
with respect to such Series, (i)(a) no Designated Senior Debt of the Company or
the Guarantor is outstanding, or (b) if the Securities of the Series are not
subordinated to other indebtedness of the Company, immediately, or (ii) if
Designated Senior Debt of the Company or the Guarantor is outstanding and the
Securities of the Series are subordinated to other indebtedness of the Company,
upon the earlier of (A) ten days after such Acceleration Notice is received by
the Company and (B) the acceleration of any Senior Indebtedness of the Company
or the Guarantor. If an Event of Default specified in Section 8.01(7) or 8.01(8)
occurs, the unpaid principal of and accrued and unpaid interest on the
Securities then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Securityholder. The Holders of a majority in principal amount of the Securities
of the Series by notice to the Trustee may rescind such declaration or
acceleration and its consequences if all existing Events of Default have been
cured or waived (except nonpayment of principal or interest that has become due
solely because of the acceleration) and if the rescission would not conflict
with any judgment or decree.
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The Company and the Guarantor (i) agree, promptly after execution of
this Indenture, to notify the Trustee in writing of the Person or Persons
referred to in the first sentence of this Section 8.02 and (ii) agree, promptly
after any change thereof, to so notify the Trustee. Any failure by the Trustee
or holders of Securities to give an Acceleration Notice to such Person or
Persons will not affect the substance or validity of the Acceleration Notice
provided that it is otherwise given in accordance with the first paragraph of
this Section 8.02.
Section 8.03 Other Remedies. If an Event of Default on a Series occurs
and is continuing, the Trustee may pursue any available remedy by proceeding at
law or in equity to collect the payment of principal or interest on the Series
or to enforce the performance of any provisions of the Securities or this
Indenture and applicable to the Series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 8.04 Waiver of Past Defaults. Subject to Section 12.02, the
Holders of a majority in principal amount of the Securities of a Series by
notice to the Trustee may waive on behalf of all Holders of Securities of the
Series an existing Default and its consequences. When a Default is waived, it is
cured and stops continuing, but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 8.05 Control by Majority. The Holders of a majority in
principal amount of the Securities of a Series may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it with respect to such Series.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, that is unduly prejudicial to the rights of another
Securityholder, or that would involve the Trustee in personal liability.
Section 8.06 Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Series unless:
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(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the
Securities of the Series make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the Securities do not give the Trustee a direction
inconsistent with such request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 8.07 Rights of Holders To Receive Payment. Notwithstanding any
other provisions of this Indenture, the right of any Holder of a Security to
receive payment of principal of and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
Section 8.08 Collection Suit by Trustee. If an Event of Default in
payment of interest or principal specified in Section 8.01(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company, the Guarantor or any other obligor on
the Securities for the whole amount of principal and interest remaining unpaid.
Section 8.09 Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Securities, including the Guarantor), its creditors or its
property.
Section 8.10 Priorities. If the Trustee collects any money pursuant to
this Article 8, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 9.07;
Second: to the holders of Senior Indebtedness of the Company as
required by Article 6 and to the holders of Senior Indebtedness of the Guarantor
as required by Article 7;
Third: to Securityholders of the Series for amounts due and unpaid on
the Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Series for
principal and interest, respectively; and
29
Fourth: to the Company, or its designee.
The Trustee may fix a record date and payment date for any payment to
Securityholders.
Section 8.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including attorneys' fees, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section does not apply to a suit by the Trustee, a suit by
a Holder pursuant to Section 8.07, or a suit by Holders of more than 10% in
principal amount of the Securities of the Series.
ARTICLE 9.
TRUSTEE
Section 9.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 8.05.
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(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company or the Guarantor, as the
case may be.
(g) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
Section 9.02 Rights of Trustee. Subject to Section 9.01:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Certificate or Opinion.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
Section 9.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 9.10 and 9.11.
Section 9.04 Trustee Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement in the Securities other than its
certificate of authentication.
Section 9.05 Notice of Defaults. If a Default on a Series occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a default in payment of principal or interest on a Series, the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders of the Series.
Section 9.06 Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder, if required by TIA Section 313(a), a
brief report dated as of such May 15 that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b) and Section 313(c).
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A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities have been
listed on any securities exchange.
Section 9.07 Compensation and Indemnity. The Company and the Guarantor
shall pay to the Trustee from time to time reasonable compensation for its
services. The Trustee's compensation hereunder shall not be limited by any law
on compensation relating to the trustee of an express trust. The Company and the
Guarantor shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel. The
Company and the Guarantor shall indemnify and hold harmless the Trustee against
any loss or liability incurred by it in the acceptance or administration of this
trust or the performance of its duties hereunder. The Trustee shall notify the
Company and the Guarantor promptly of any claim for which it may seek indemnity.
The Company and the Guarantor shall defend the claim and the Trustee shall
cooperate in the defense. In the event that counsel to the Trustee shall advise
counsel to the Company and the Guarantor that there may be defenses reasonably
available to the Trustee different than or additional to those available to the
Company and the Guarantor, then in such event the Trustee shall be permitted to
employ counsel of its choosing at the expense of the Company and the Guarantor.
The Company and the Guarantor need not pay for any settlement made without their
consent. The Company and the Guarantor need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence, bad faith or with willful misconduct. The indemnity contained in
this Section 9.07 shall survive the resignation or removal of the Trustee and
the termination of this Indenture.
To ensure the Company's and the Guarantor's payment obligations in this
Section, the Trustee shall have a claim prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 8.01(7) or (8) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 9.08 Replacement of Trustee. The Trustee may resign by so
notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee to be removed and
may appoint a successor Trustee with the Company's and the Guarantor's consent.
The Company or the Guarantor may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
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(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee (subject to the prior claim provided by Section 9.07). Any
resignation or removal of the Trustee and any appointment of a successor Trustee
shall become effective upon acceptance of appointment by the successor Trustee.
The successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the expense of
the Company), the Company or the Holders of a majority in principal amount of
the Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10, any Securityholder
may, subject to Section 8.11, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
Section 9.09 Successor Trustee by Merger, etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
Section 9.10 Eligibility; Disqualification. This Indenture shall always
have a Trustee who satisfies the requirements of TIA Section 310(a)(1). The
Trustee shall have a combined capital and surplus of at least $15,000,000 as set
forth in the most recent published annual report of condition. The Trustee shall
comply with TIA Section 310(b).
Section 9.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 10.
CONVERSION OF SECURITIES
Section 10.01 Applicability of Article. Securities of any Series which
are convertible into Common Stock at the option of the Holder shall be
convertible in accordance with their terms and unless the Authorizing Resolution
provides otherwise, in accordance with this Article. Each reference in this
Article 10 to "a Security" or "the Securities" refers to the Securities of the
particular Series that is convertible into Common Stock. If more than one Series
of Securities with conversion privileges are outstanding at any time, the
provisions of this Article 10 shall be applied separately to each such Series.
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Section 10.02 Conversion Privilege. Subject to and upon compliance with
the provisions of this Article 10, the Holder of any Security so designated
shall have the right, at its, his or her option, at any time prior to the close
of business on the date specified in the Securities of such Series (or if such
Security or portion thereof is called for redemption prior to such date, then in
respect of such Security or portion thereof to and including but not after the
close of business on the second day (or, if such day is not a Business Day, then
on the next following Business Day) preceding the date fixed for such
redemption) to convert the principal amount of any such Security, or any portion
of such principal amount which is $1,000 or an integral multiple thereof, into
that number of fully paid and non-assessable shares of the Guarantor's Common
Stock (calculated as to each conversion to the nearest 1/100th of a share)
obtained by dividing the principal amount of the Security or portion thereof to
be converted by the Conversion Price and by surrender of the Security so to be
converted in whole or in part, such surrender to be made in the manner provided
in Section 10.03. Notwithstanding the previous sentence, if the Company shall
fail to redeem a Security which has been called for redemption, the Holder of
such Security shall retain the right to convert such Security as provided in
this Article 10.
Section 10.03 Manner of Exercise of Conversion Privilege. In order to
exercise a conversion privilege, the Holder of any Security to be converted in
whole or in part shall surrender such Security at any of the offices or agencies
to be maintained for such purpose by the Company pursuant to Section 2.03, and
shall give notice to the Company and the Guarantor in the form provided in the
Security, duly executed, at such office or agency that the Holder elects to
convert such Security or the portion thereof specified in said notice. Such
notice shall also state the name or names, together with the address or
addresses, in which the certificate or certificates for shares of Common Stock
which shall be issuable on such conversion shall be issued. Each Security
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the name in which such Security is registered,
be accompanied by instruments of transfer, in form satisfactory to the
Guarantor, duly executed by the Holder or its, his or her duly authorized
attorney. Securities so surrendered during the period from the close of business
on a Record Date, or the next preceding Business Day if such Record Date is not
a Business Day, preceding any Interest Payment Date to the opening of business
on such Interest Payment Date (excluding Securities or portions thereof called
for redemption during such period) shall also be accompanied by payment in
next-day funds or other funds acceptable to the Guarantor of an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
such Security then being converted; provided, however, that, if the Company
shall default on the payment of said interest, said funds shall be returnable to
the payor thereof. As promptly as practicable after the surrender of such
Security, as aforesaid, the Guarantor shall issue and shall deliver at such
office or agency to such Holder, or on its, his or her written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Security or portion thereof in accordance
with the provisions of this Article 10 and any fractional interest in respect of
a share of Common Stock arising upon such conversion shall be settled as
provided in Section 10.04. In case any Security of a denomination greater than
$1,000 shall be surrendered for partial conversion, the Company and the
Guarantor shall execute and the Trustee shall authenticate and deliver to or
upon the order of the Holder of the Security so surrendered, at the expense of
the Company, a new Security or Securities and Guarantee or Guarantees in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Security. Such conversion shall be deemed
to have been effected immediately prior to the close of business on the date on
which such Security shall have been surrendered and such notice received by the
Company and the Guarantor as aforesaid, and the Person or Persons in whose name
or names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time and such
conversion shall be at the Conversion Price in effect at such time, unless the
stock transfer books of the Guarantor shall be closed on that date, in which
event such Person or Persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date upon which such Security shall have been
surrendered and such notice received by the Company and the Guarantor. Subject
to the aforesaid requirement for a payment in the event of conversion after the
close of business on a Record Date preceding an Interest Payment Date, no
payment or adjustment shall be made on conversion for interest accrued on the
Securities surrendered for conversion or for dividends on the Common Stock
delivered on such conversion.
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Section 10.04 Payment in Lieu of Fractional Shares. No fractional
shares of Common Stock shall be issued upon conversion of the Securities.
Instead of any fractional interest in a share of Common Stock which would
otherwise be deliverable upon the conversion of any Security or Securities, the
Company and/or the Guarantor shall make an adjustment therefor to the nearest
1/100th of a share in cash at the Current Market Price thereof at the close of
business on the Business Day next preceding the day of conversion. If more than
one Security shall be surrendered for conversion at one time by the same Holder,
the number of full shares issuable upon conversion thereof shall be computed on
the basis of the aggregate principal amount of the Securities, or specified
portions thereof to be converted, so surrendered.
Section 10.05 Adjustment of Conversion Price. The Conversion Price
shall be adjusted from time to time as follows:
(a) In case the Guarantor shall hereafter (i) pay a dividend or make a
distribution on its Common Stock in shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by reclassification of its Common Stock any shares of Capital
Stock of the Guarantor, the Conversion Price in effect immediately prior to such
action shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock or other Capital Stock of the Guarantor which he would have owned
immediately following such action had such Security been converted immediately
prior thereto. An adjustment made pursuant to this subsection (a) shall become
effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification. If, as a result of
an adjustment made pursuant to this subsection (a), the Holder of any Security
thereafter surrendered for conversion shall become entitled to receive shares of
two or more classes of Capital Stock or shares of Common Stock and other Capital
Stock of the Guarantor, the Board of Directors (whose determination shall be
conclusive and shall be described in a statement filed with the Trustee and with
the Registrar) shall determine in an equitable manner the allocation of the
adjusted Conversion Price between or among shares of such classes of Capital
Stock or shares of Common Stock and other Capital Stock.
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(b) In case the Guarantor shall hereafter issue rights or warrants to
holders of its outstanding shares of Common Stock generally entitling them (for
a period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase shares of Common Stock at a price per share less than
the Current Market Price per share of the Common Stock on the record date
mentioned below, the Conversion Price of the shares of Common Stock shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of issuance of such
rights or warrants by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered would purchase at such Current Market Price,
and of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase. Such
adjustment shall become effective immediately after the record date for the
determination of shareholders entitled to receive such rights or warrants.
(c) In case the Guarantor shall hereafter distribute to holders of its
outstanding Common Stock generally evidences of its indebtedness or assets
(excluding any cash dividend paid from retained earnings of the Guarantor and
dividends or distributions payable in stock for which adjustment is made
pursuant to subsection (a) of this Section 10.05) or rights or warrants to
subscribe to securities of the Guarantor (excluding those referred to in
subsection (b) of this Section 10.05), then in each such case the Conversion
Price of the shares of Common Stock shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock on the
record date mentioned below less the then fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and shall be
described in a statement filed with the Trustee and with the Registrar) of the
portion of the evidences of indebtedness or assets so distributed to the holder
of one share of Common Stock or of such subscription rights or warrants
applicable to one share of Common Stock, and of which the denominator shall be
such Current Market Price per share of Common Stock. Such adjustment shall
become effective immediately after the record date for the determination of
shareholders entitled to receive such distribution.
(d) In any case in which this Section 10.05 shall require that an
adjustment be made immediately following a record date, the Guarantor may elect
to defer (but only until five Business Days following the filing by the Company
with the Trustee and the Registrar of the certificate of independent public
accountants described in subsection (f) of this Section 10.05) issuing to the
Holder of any Security converted after such record date the shares of Common
Stock issuable upon such conversion over and above the shares of Common Stock
issuable upon such conversion on the basis of the Conversion Price prior to
adjustment.
(e) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% of such price;
provided, however, that any adjustments which by reason of this subsection (e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment, and provided further that adjustment shall be
required and made in accordance with the provisions of this Article 10 (other
than this subsection (e)), not later than such time as may be required in order
to preserve the tax-free nature of a distribution to the holders of Securities
or Common Stock. All calculations under this Section 10.05 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be. Anything
in this Section 10.05 to the contrary notwithstanding, the Guarantor shall be
entitled to make such reductions in the Conversion Price, in addition to those
required by this Section 10.05, as it in its discretion shall determine to be
advisable in order that any stock dividend, subdivision of shares, distribution
of rights to purchase stock or securities, or distribution of securities
convertible into or exchangeable for stock hereafter made by the Guarantor to
its shareholders shall not be taxable.
36
(f) Whenever the Conversion Price is adjusted as herein provided, (i)
the Company and the Guarantor shall promptly file with the Trustee and the
Registrar a certificate of a firm of independent public accountants setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment and the manner of computing the
same, which certificate shall be conclusive evidence of the correctness of such
adjustment and (ii) a notice stating that the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall forthwith be given by the
Company and the Guarantor to the Holders in the manner provided in Section
13.02. Subject to TIA Section 315(a), (c) and (d), the Trustee and any
conversion agent shall be under no duty or responsibility with respect to any
such certificate or the certificate provided for in Section 10.10 except to
exhibit the same from time to time to any Holder of a Security desiring an
inspection of such certificate.
(g) In the event that at any time as a result of an adjustment made
pursuant to subsection (a) of this Section 10.05, the Holder of any Security
thereafter surrendered for conversion shall become entitled to receive any
shares of the Guarantor other than shares of Common Stock, thereafter the
Conversion Price of such other shares so receivable upon conversion of any
Security shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Common Stock contained in this Article 10.
Section 10.06 Notice of Certain Corporate Action. In the event:
(a) the Guarantor shall take any action which would require an
adjustment in the Conversion Price pursuant to Section 10.05(c); or
(b) the Guarantor shall authorize the granting to the holders of its
Common Stock (as a class) of rights or warrants to subscribe for or purchase any
shares of stock of any class or of any other rights; or
(c) there shall be any capital reorganization or reclassification of
the Common Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in the par value of the Common Stock), or
any consolidation or merger to which the Guarantor is a party or any statutory
exchange of securities with another corporation and for which approval of any
shareholders of the Guarantor is required, or any sale or transfer of all or
substantially all of the assets of the Guarantor; or
37
(d) there shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Guarantor; then the Company and the Guarantor shall cause
to be filed with the Trustee and the Registrar, and shall cause to be given to
the Holders, in the manner provided in Section 13.02, at least 14 days prior to
the applicable date hereinafter specified, a notice stating (i) the date on
which a record is to be taken for the purpose of such distribution or rights,
or, if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such distribution or rights are to be
determined, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. Failure to give such notice or any
defect therein shall not affect the legality or validity of the proceedings
described in subsection (a), (b), (c) or (d) of this Section 10.06.
Section 10.07 Guarantor To Provide Stock. The Guarantor covenants that
it will at all times reserve and keep available, free from preemptive rights,
out of the aggregate of its authorized but unissued shares of Common Stock or
its issued shares of Common Stock held in its treasury, or both, for the purpose
of effecting conversions of Securities, the full number of shares of Common
Stock deliverable upon the conversion of all outstanding Securities not
theretofore converted. For purposes of this Section 10.07, the number of shares
of Common Stock which shall be deliverable upon the conversion of all
outstanding Securities shall be computed as if at the time of computation all
outstanding Securities were held by a single Holder.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Common Stock
deliverable upon conversions of the Securities, the Guarantor will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Guarantor may validly and legally issue fully paid and non-assessable
shares of Common Stock at such adjusted Conversion Price.
The Guarantor will endeavor to list the shares of Common Stock required
to be delivered upon conversion of Securities prior to such delivery upon each
national securities exchange, if any, upon which the outstanding Common Stock is
listed at the time of such delivery.
Prior to the delivery of any securities which the Guarantor shall be
obligated to deliver upon conversion of the Securities, the Guarantor will
endeavor to comply with all federal and state laws and regulations thereunder
requiring the registration of such securities with, or any approval of or
consent to the delivery thereof by, any governmental authority.
Section 10.08 Taxes on Conversions. The Company and/or the Guarantor
will pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares of Common Stock on
conversions of Securities pursuant hereto; provided, however, that neither the
Company nor the Guarantor shall be required to pay any tax which may be payable
in respect of any transfer involved in the issue or delivery of shares of Common
Stock in a name other than that of the Holder of the Securities to be converted
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Company and/or the Guarantor
the amount of any such tax or has established, to the satisfaction of the
Company and the Guarantor, that such tax has been paid.
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Section 10.09 Covenant as to Stock. The Guarantor covenants that all
shares of Common Stock which may be delivered upon conversions of Securities
will upon delivery be duly and validly issued and fully paid and non-assessable,
free of all liens and charges and not subject to any preemptive rights.
Section 10.10 Consolidation or Merger. Notwithstanding any other
provision herein to the contrary, in case of any consolidation or merger to
which the Guarantor is a party other than a merger or consolidation in which the
Guarantor is the continuing corporation, or in case of any sale or conveyance to
another corporation of the property of the Guarantor as an entirety or
substantially as an entirety, or in the case of any statutory exchange of
securities with another corporation (including any exchange effected in
connection with a merger of a third corporation into the Guarantor), there shall
be no adjustments under Section 10.05 but the Holder of each Security then
outstanding shall have the right thereafter to convert such Security into the
kind and amount of securities, cash or other property which he would have owned
or have been entitled to receive immediately after such consolidation, merger,
statutory exchange, sale or conveyance had such Security been converted
immediately prior to the effective date of such consolidation, merger, statutory
exchange, sale or conveyance and in any such case, if necessary, appropriate
adjustment shall be made in the application of the provisions set forth in this
Article 10 with respect to the rights and interests thereafter of the Holders of
the Securities, to the end that the provisions set forth in this Article 10
shall thereafter correspondingly be made applicable, as nearly as may reasonably
be, in relation to any shares of stock or other securities or property
thereafter deliverable on the conversion of the Securities. Any such adjustment
shall be made by and set forth in a supplemental indenture executed by the
Company, the Guarantor and the Trustee and approved by a firm of independent
public accountants, evidenced by a certificate to that effect; and any
adjustment so approved shall for all purposes hereof conclusively be deemed to
be an appropriate adjustment.
The above provisions of this Section 10.10 shall similarly apply to
successive consolidations, mergers, statutory exchanges, sales or conveyances.
The Company shall give notice of the execution of such a supplemental
indenture to the Holders of Securities in the manner provided in Section 13.02
within 30 days after the execution thereof.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in such supplemental indenture relating
either to the kind or amount of shares of stock or securities or property
receivable by Holders upon the conversion of their Securities after any such
consolidation, merger, statutory exchange, sale or conveyance, or to any
adjustment to be made with respect thereto.
39
Section 10.11 Disclaimer of Responsibility for Certain Matters. Neither
the Trustee nor the Registrar shall at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. Neither the Trustee nor the Registrar shall be accountable with
respect to the listing or registration referred to in Section 10.07 or the
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Security; and neither the Trustee nor the Registrar makes
any representation with respect thereto. Neither the Trustee nor the Registrar
shall be responsible for any failure of the Guarantor to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or to make any cash payment upon the surrender of any Security for the
purpose of conversion or, subject to TIA Section 315(a), (c) and (d), to comply
with any of the covenants contained in this Article 10.
ARTICLE 11.
DISCHARGE OF INDENTURE
Section 11.01 Termination of the Company's and the Guarantor's
Obligations. Securities of a Series may be defeased in accordance with their
terms and, unless the Authorizing Resolution provides otherwise, in accordance
with this Article.
The Company may terminate all of its obligations under the Securities
of a Series and this Indenture, to the extent its obligations under this
Indenture relate to that Series, and the obligations of the Guarantor shall
terminate if all Securities of a Series previously authenticated and delivered
(other than destroyed, lost or stolen Securities which have been replaced or
paid) have been delivered to the Trustee for cancellation or if:
(1) the Securities mature within one year or all of them are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the Trustee
money sufficient to pay principal of and interest on the outstanding Securities
to maturity or redemption, as the case may be. The Company may make the deposit
only if Article 6 permits it. Immediately after making the deposit, the Company
shall give notice of such event and proposed date of payment to each
Securityholder.
The Company's obligations and, to the extent applicable, the
Guarantor's obligations, in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 9.07,
9.08 and 11.03 and Article 10, however, shall survive until the Securities are
no longer outstanding. Thereafter, the Company's obligations and, to the extent
applicable, the Guarantor's obligations, in Sections 9.07 and 11.03 shall
survive.
After a deposit, the Trustee upon request shall acknowledge in writing
the discharge of the Company's obligations under the Securities, the Guarantor's
obligations under the Guarantee and their obligations under the Indenture except
for those surviving obligations specified above.
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Section 11.02 Application of Trust Money. The Trustee shall hold in
trust money deposited with it pursuant to Section 11.01. It shall apply the
deposited money through the Paying Agent and in accordance with this Indenture
to the payment of principal and interest on the Securities.
Section 11.03 Repayment to Company. The Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess money held by them at
any time. The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal or interest (including
interest, if any, earned on such money) that remains unclaimed for two years;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in The City of New York or
mail to each Holder notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Company. After payment to the Company, Securityholders
entitled to any of such money must look to the Company or, if applicable, the
Guarantor for payment as general creditors unless applicable abandoned property
law designates another person and all liability of the Trustee or Paying Agent
with respect to such money shall thereupon cease.
ARTICLE 12.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 12.01 Without Consent of Holders. The Company may amend or
supplement this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to
or in place of certificated Securities; or
(4) to make any change that does not adversely affect the
rights of any Securityholder.
Section 12.02 With Consent of Holders. The Company may amend or
supplement this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities of all Series affected by the amendment voting as a
class. The Holders of a majority in principal amount of the Securities may waive
compliance by the Company with any provision of this Indenture or the Securities
without notice to any Securityholder. However, without the consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 8.04, may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
41
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal of or extend the fixed maturity of
any Security or alter the redemption provisions with respect thereto;
(4) waive a default in the payment of the principal of or
interest on any Security;
(5) modify the provisions of Article 6 (subordination) or
Article 7 (guarantee) in a manner adverse to the Holders;
(6) make any security payable in money other than that stated
in the Security;
(7) if applicable, make any change that adversely affects the
right to convert or the Conversion Price for any Security; or
(8) make any change in Section 8.04 or 8.07 or this Section
12.02.
After an amendment under this Section 12.02 becomes effective, the
Company shall mail to the Holders a notice briefly describing the amendment.
Section 12.03 Compliance with Trust Indenture Act. Every amendment to
or supplement of this Indenture or the Securities shall comply with the TIA as
then in effect.
Section 12.04 Revocation and Effect of Consents. A consent to an
amendment, supplement or waiver by a Holder of a Security shall bind the Holder
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to the Security or portion of a Security of
such Holder. The Trustee must receive the notice of revocation before the date
the amendment, supplement or waiver becomes effective.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder unless it makes a change described in clauses (1)
through (8) of Section 12.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
Section 12.05 Notation on or Exchange of Securities. If an amendment,
supplement or waiver changes the terms of a Security, the Trustee may require
the Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security about the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so determine, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate, a new Security that reflects the changed terms.
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Section 12.06 Trustee To Sign Amendments, etc. The Trustee shall sign
any amendment, supplement or waiver authorized pursuant to this Article if the
amendment, supplement or waiver does not adversely affect the rights or duties
of the Trustee. If it does, the Trustee may but need not sign it. In signing any
amendment, supplement or waiver, the trustee may rely on an Opinion of Counsel
which shall state that such amendment, supplement or waiver is permitted under
this Article 12.
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA or the TIA as amended after
the date hereof, the required provision shall control.
Section 13.02 Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by
first-class mail addressed as follows: if to the Company or the Guarantor:
Toll Brothers, Inc., 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx Xxxxxx,
Xxxxxxxxxxxx 00000 Attention: Chief Financial Officer
with a copy to:
Xxxx X. Xxxxxxx, Esquire
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
if to the Trustee:
Bank One Trust Company, NA
0000 Xxxxxxx Xxxxxxx, Xxxxx 0X
Xxxxxxxx, XX 00000
Attention: Corporate Trust Securities Division
The Company, the Guarantor or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be mailed
to him at his address as it appears on the registration books of the Registrar
and shall be sufficiently given to him if so mailed within the time prescribed.
In addition, a copy of each such notice or communication shall be mailed to the
Trustee at the address specified above.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it. If the
Company or the Guarantor mails a notice or communication to Securityholders, it
shall mail a copy of such notice to the Trustee and each agent at the same time.
43
Section 13.03 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantor, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 13.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 13.06 When Treasury Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities of a Series
have concurred in any direction, waiver or consent, Securities of the Series
owned by the Company or the Guarantor or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or the guarantor shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities of the Series which the Trustee
knows are so owned shall be so disregarded.
44
Section 13.07 Rules by Trustee, Paying Agent, Registrar. The Trustee
may make reasonable rules for action by or a meeting of Securityholders. The
Paying Agent or Registrar each may make reasonable rules for its functions.
Section 13.08 Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday, a legal holiday or a day on which banking institutions are not required
to be open. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
Section 13.09 Governing Law. The laws of the State of New York shall
govern this Indenture, the Securities and the Guarantee without regard to
principles of conflicts of law.
Section 13.10 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company, the Guarantor or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 13.11 No Recourse Against Others. All liability described in
paragraph 20 of the Securities of any director, officer, employee or
shareholder, as such, of the Company or the Guarantor is waived and released.
Section 13.12 Successors. All agreements of the Company or the
Guarantor in this Indenture and the Securities shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.
Section 13.13 Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
Section 13.14 Counterparts. This Indenture may be executed in any
number of counterparts, all of which shall together constitute one and the same
instrument. This Indenture shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.
45
SIGNATURES
Dated: TOLL CORP., as Issuer
By:
------------------------------
Name:
(SEAL) Title:
Attest:
--------------------------------
Name:
Title:
Dated: TOLL BROTHERS, INC., as
Guarantor
By:
------------------------------
Name:
(SEAL) Title:
Attest:
--------------------------------
Name:
Title:
Dated: BANK ONE TRUST COMPANY, NA,
as Trustee
By:
------------------------------
Name:
(SEAL) Title:
Attest:
--------------------------------
Name:
Title:
S-1
