EXHIBIT 4.1
__________________________________________________
PHH CORPORATION
Issuer
to
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
__________
Supplemental Indenture No. 1
Dated as of July 10, 1998
__________
SENIOR DEBT SECURITIES
_________________________________________________
SUPPLEMENTAL INDENTURE NO. 1
SUPPLEMENTAL INDENTURE NO. 1, dated as of July 10, 1998, between PHH
Corporation, a corporation duly organized and existing under the laws of the
State of Maryland (the "Company"), and The First National Bank of Chicago, a
national banking association duly organized and existing under the laws of the
United States of America (the "Trustee"), as trustee under the Senior Indenture
hereinafter mentioned.
WITNESSETH:
WHEREAS, the Company duly authorized the execution and delivery of a Senior
Indenture, dated as of June 5, 1997, providing for the issuance from time to
time of Securities of the Company (the "Senior Indenture") and the execution and
delivery of this Supplemental Indenture No. 1;
WHEREAS, PHH desires in and by this Supplemental Indenture No. 1 to add to
the covenants of the Company in the Senior Indenture for the benefit of the
Holders of all or any series of Securities as provided in Section 901(2) of the
Senior Indenture; and
WHEREAS, all conditions necessary to authorize the execution and delivery
of this Supplemental Indenture No. 1 and to make this Supplemental Indenture No.
1 valid and binding have been complied with or have been done or performed.
NOW, THEREFORE, THIS INDENTURE WITNESSETH :
ARTICLE ONE
DEFINITIONS
Section 1.01. For all purposes of the Senior Indenture and this
Supplemental Indenture No. 1, except as otherwise expressly provided or unless
the context otherwise requires:
(a) unless indicated otherwise, "herein," "hereof" and other words of
similar import refer to this Supplemental Indenture No. 1 as a whole and not to
any particular
Article, Section or other subdivision; and
(b) all capitalized terms used in this Supplemental Indenture No. 1 but not
defined herein shall have the meanings assigned such terms in the Senior
Indenture.
ARTICLE TWO
RESTRICTIVE COVENANT
Section 2.01. Limitation on Restricted Payments.
The Company, (i) shall not, directly or indirectly, declare or pay any
dividend, or make any distributions on account of the Capital Stock of the
Company, and (ii) shall not make, or permit any Subsidiary of the Company to
make, loan, advance to or investment in Cendant and its subsidiaries (excluding
the Subsidiaries of the Company) (the transactions described in clauses (i) and
(ii) being referred to herein as "Restricted Payments"), if at the time thereof,
upon giving effect to such Restricted Payment, (x) the aggregate of all
Restricted Payments from the date of the Senior Indenture exceeds the sum of,
(a) 40% of Consolidated Net Income of the Company for each fiscal year (or, in
the case Consolidated Net Income of the Company shall be negative for any fiscal
year, less 100% of such deficit) since July 1, 1997 (treating the partial year
in which the Senior Indenture was entered into and the partial year in which the
calculation is made as, respectively, separate fiscal years, and taking the year
in which the calculation is made into effect through the end of the immediately
preceding quarter in which the payment is to be made) less such extraordinary
gains and such gains on sales not in the ordinary course of business; plus (b)
100% of any extraordinary gains and any gains on sales not in the ordinary
course of business of assets of the Company and its Subsidiaries for such fiscal
year, in each case on an after-tax basis, plus (c) 100% of any aggregate
increase in the Company's paid-in capital resulting from sales of its Capital
Stock or contributions to its capital during such fiscal year or (y) the
Debt/Equity Ratio of the Company exceeds 8 to 1.
"Consolidated Net Income" of any Person means for any period the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period plus all one-time non-cash charges that reduce consolidated net income of
such Person and its Subsidiaries for such period, all as determined in
accordance with generally accepted accounting principles.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person and its consolidated subsidiaries, as
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Capital Stock" means any and all shares, interests, participations, rights
or other equivalents (however designated) of corporate stock or similar
interests in any other form of entity, including, without limitation, with
respect to partnerships, partnership interests (whether general or limited) and
any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
such partnership.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person, (i) every
obligation of such Person for money borrowed, (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses, which in the case of (i) and (ii) above, at the date as of
which such Debt is to be determined, is includable in a consolidated balance
sheet of the Company and its Subsidiaries.
"Debt/Equity Ratio" means the ratio of (x) the principal amount of Debt to
(y) the Consolidated Net Worth of the Company.
ARTICLE THREE
SUPPLEMENTAL INDENTURES
WITH CONSENT OF HOLDER
Section 3.01 Subject to Section 901 of the Indenture, with the consent of
the Holders of not less than 66-2/3% of the aggregate in principal amount of the
outstanding securities (each such series voting as the same class) affected by
such supplemental indenture, by Act of said Holder delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating Section 2.01
hereof.
ARTICLE FOUR
MISCELLANEOUS
Section 4.01. All of the terms and conditions of the Senior Indenture shall
remain in full force and effect.
Section 4.02. The Trustee assumes no responsibility for the correctness of
the recitals herein contained, which shall be taken as the statements of the
Company. The Trustee makes no representation and shall have no responsibility as
to the validity of this Supplemental Indenture No. 1.
Section 4.03. In case of any provision in this Supplemental Indenture No. 1
shall be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this Supplemental Indenture No.1
or the Senior Indenture shall not in any way be affected of impaired thereby.
Section 4.04. This Supplemental Indenture No.1 shall be governed by and
construed in accordance with the laws of the State of New York. This
Supplemental Indenture No.1 is subject to the provisions of the Trust Indenture
Act of 1939, as amended, and shall, to the extent applicable, be governed by
such provisions.
Section 4.05. This Supplement Indenture No. 1 may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Supplemental Indenture No. 1 to be duly executed by their respective officers
thereunto duly authorized all as of the day and the year first above written.
PHH CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Executive Vice President and General Counsel
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Trust Officer
