EXHIBIT 4.5
==============================================================================
HOVNANIAN ENTERPRISES, INC.
Issuer
and
SUBSIDIARY GUARANTORS OF HOVNANIAN
Guarantors
and
FIRST UNION NATIONAL BANK,
as Trustee
----------------------------
INDENTURE
Dated as of ___________ ___, 2001
FORM OF SUBORDINATED INDENTURE
==============================================================================
CROSS REFERENCE SHEET*
-----------
Provisions of Trust Indenture Act of 1939 and Indenture to be dated
as of _____ among HOVNANIAN ENTERPRISES, INC., SUBSIDIARY GUARANTORS OF
HOVNANIAN and FIRST UNION NATIONAL BANK, as Trustee:
Section of the Act Section of Indenture
------------------ --------------------
310(a)(1), (2) and (5) 6.9
310(a)(3) and (4) Inapplicable
310(b) 6.8 and 6.10(a), (b) and (d)
310(c) Inapplicable
311(a) 6.13
311(b) 6.13
311(c) Inapplicable
312(a) 4.1 and 4.2(a)
312(b) 4.2(a) and (b)(i) and (ii)
312(c) 4.2(c)
313(a) 4.4(a)(i), (ii), (iii), (iv),
(v), (vi) and (vii)
313(a)(5) Inapplicable
313(b)(1) Inapplicable
313(b)(2) 4.4(b)
313(c) 4.4(c)
313(d) 4.4(d)
314(a) 4.3
314(b) Inapplicable
314(c)(1) and (2) 11.5
314(c)(3) Inapplicable
314(d) Inapplicable
314(e) 11.5
314(f) Inapplicable
315(a), (c) and (d) 6.1
315(b) 5.8
315(e) 5.9
316(a)(1) 5.7
316(a)(2) Not required
316(a)(last sentence) 7.4
316(b) 5.4
317(a) 5.2
317(b) 3.5(a)
318(a) 11.7
---------------------
* This Cross Reference Sheet is not part of the Indenture.
Table of Contents
ARTICLE ONE DEFINITIONS.......................................................1
ARTICLE TWO SECURITIES........................................................8
SECTION 2.1. Forms Generally.............................................8
SECTION 2.2. Form of Trustee's Certificate of Authentication.............8
SECTION 2.3. Amount Unlimited Issuable in Series.........................9
SECTION 2.4. Authentication and Delivery of Securities..................12
SECTION 2.5. Execution of Securities....................................14
SECTION 2.6. Certificate of Authentication..............................15
SECTION 2.7. Denomination and Date of Securities;
Payments of Interest.....................................15
SECTION 2.8. Registration, Transfer and Exchange........................16
SECTION 2.9. Mutilated, Defaced, Destroyed, Lost and
Stolen Securities........................................18
SECTION 2.10. Cancellation of Securities; Disposition Thereof............19
SECTION 2.11. Temporary Securities.......................................19
SECTION 2.12. CUSIP Numbers..............................................20
ARTICLE THREE COVENANTS......................................................20
SECTION 3.1. Payment of Principal and Interest..........................20
SECTION 3.2. Offices for Notices and Payments, etc......................20
SECTION 3.3. No Interest Extension......................................20
SECTION 3.4. Appointments to Fill Vacancies in Trustee's Office.........20
SECTION 3.5. Provision as to Paying Agent...............................20
ARTICLE FOUR SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE..........................................21
SECTION 4.1. Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders...................21
SECTION 4.2. Preservation and Disclosure of Securityholders Lists.......22
SECTION 4.3. Reports by the Issuer. The Issuer covenants:..............23
SECTION 4.4. Reports by the Trustee.....................................24
ARTICLE FIVE REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT.............................................24
SECTION 5.1. Events of Default..........................................24
SECTION 5.2. Payment of Securities on Default; Suit Therefor............26
SECTION 5.3. Application of Moneys Collected by Trustee.................28
SECTION 5.4. Proceedings by Securityholders.............................29
SECTION 5.5. Proceedings by Trustee.....................................29
SECTION 5.6. Remedies Cumulative and Continuing.........................29
SECTION 5.7. Direction of Proceedings; Waiver of Defaults
by Majority of Securityholders...........................30
SECTION 5.8. Notice of Defaults.........................................30
i
SECTION 5.9. Undertaking to Pay Costs...................................30
ARTICLE SIX CONCERNING THE TRUSTEE...........................................31
SECTION 6.1. Duties and Responsibilities of the Trustee;
During Default; Prior to Default.........................31
SECTION 6.2. Certain Rights of the Trustee..............................32
SECTION 6.3. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof 33
SECTION 6.4. Trustee and Agents May Hold Securities; Collections, etc...33
SECTION 6.5. Moneys Held by Trustee.....................................33
SECTION 6.6. Compensation and Indemnification of Trustee
and Its Prior Claim......................................33
SECTION 6.7. Right of Trustee to Rely on Officers' Certificate, etc.....34
SECTION 6.8. Qualification of Trustee; Conflicting Interests............34
SECTION 6.9. Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series..................34
SECTION 6.10. Resignation and Removal; Appointment of Successor Trustee..35
SECTION 6.11. Acceptance of Appointment by Successor Trustee.............36
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business of Trustee........................37
SECTION 6.13. Preferential Collection of Claims Against the Issuer.......38
SECTION 6.14. Appointment of Authenticating Agent........................38
ARTICLE SEVEN CONCERNING THE SECURITYHOLDERS.................................39
SECTION 7.1. Evidence of Action Taken by Securityholders................39
SECTION 7.2. Proof of Execution of Instruments and
of Holding of Securities.................................39
SECTION 7.3. Holders to be Treated as Owners............................39
SECTION 7.4. Securities Owned by Issuer Deemed Not Outstanding..........39
SECTION 7.5. Right of Revocation of Action Taken........................40
SECTION 7.6. Record Date for Consents and Waivers.......................40
ARTICLE EIGHT SUPPLEMENTAL INDENTURES........................................41
SECTION 8.1. Supplemental Indentures Without
Consent of Securityholders...............................41
SECTION 8.2. Supplemental Indentures with Consent of
Securityholders..........................................43
SECTION 8.3. Effect of Supplemental Indenture...........................44
SECTION 8.4. Documents to Be Given to Trustee...........................44
SECTION 8.5. Notation on Securities in Respect of
Supplemental Indentures..................................44
ARTICLE NINE CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE
OR OTHER DISPOSITION............................................44
SECTION 9.1. Consolidate Permitted, etc., on Certain Terms..............44
SECTION 9.2. Successor Corporation to be Substituted....................45
SECTION 9.3. Opinion of Counsel to be Given Trustee.....................46
ARTICLE TEN LEGAL DEFEASANCE AND COVENANT DEFEASANCE.........................46
ii
SECTION 10.1. Applicability of Article..................................46
SECTION 10.2. Legal Defeasance And Discharge............................46
SECTION 10.3. Covenant Defeasance.......................................46
SECTION 10.4. Conditions To Legal Or Covenant Defeasance................47
SECTION 10.5. Deposited Money And Government Securities To Be
Held In Trust; Other Miscellaneous Provisions...........48
SECTION 10.6. Repayment To Issuer.......................................48
SECTION 10.7. Reinstatement.............................................49
SECTION 10.8. Survival..................................................49
SECTION 10.9. Satisfaction and Discharge of Indenture...................49
ARTICLE ELEVEN MISCELLANEOUS PROVISIONS......................................49
SECTION 11.1. Partners, Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability....49
SECTION 11.2. Provisions of Indenture for the Sole Benefit of
Parties and Holders of Securities.......................50
SECTION 11.3. Successors and Assigns of Issuer Bound by Indenture.......50
SECTION 11.4. Notices and Demands on Issuer, Trustee and
Holders of Securities...................................50
SECTION 11.5. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein......................51
SECTION 11.6. Payments Due on Saturdays, Sundays and Holidays...........52
SECTION 11.7. Conflict of Any Provision of Indenture
with Trust Indenture Act of 1939........................52
SECTION 11.8. GOVERNING LAW.............................................52
SECTION 11.9. Counterparts..............................................52
SECTION 11.10. Effect of Headings........................................52
ARTICLE TWELVE REDEMPTION OF SECURITIES AND SINKING FUNDS....................52
SECTION 12.1. Applicability of Article..................................52
SECTION 12.2. Notice of Redemption; Partial Redemptions.................52
SECTION 12.3. Payment of Securities Called for Redemption...............53
SECTION 12.4. Exclusion of Certain Securities from Eligibility
for Selection for Redemption............................54
SECTION 12.5. Mandatory and Optional Sinking Funds......................54
ARTICLE THIRTEEN SUBORDINATION...............................................56
SECTION 13.1. Securities Subordinated to Senior Indebtedness............56
SECTION 13.2. Reliance on Certificate of Liquidating Agent;
Further Evidence as to Ownership of
Senior Indebtedness.....................................59
SECTION 13.3. Payment Permitted If No Default...........................60
SECTION 13.4. Disputes with Holders of Certain Senior Indebtedness......60
SECTION 13.5. Trustee Not Charged with Knowledge of Prohibition.........60
SECTION 13.6. Trustee to Effectuate Subordination.......................61
SECTION 13.7. Rights of Trustee as Holder of Senior Indebtedness........61
SECTION 13.8. Article Applicable to Paying Agents.......................61
iii
SECTION 13.9. Subordination Rights Not Impaired by Acts or Omissions
of the Issuer or Holders of Senior Indebtedness.........61
SECTION 13.10. Trustee Not Fiduciary for Holders of
Senior Indebtedness.....................................61
ARTICLE FOURTEEN SUBORDINATED GUARANTEE......................................62
SECTION 14.1. Applicability of Article..................................62
SECTION 14.2. Guarantee.................................................62
SECTION 14.3. Guarantee Subordinated to Senior Debt of the Guarantor....63
SECTION 14.4. Guarantors Not to Make Payments With Respect to
Securities in Certain Circumstances.....................65
SECTION 14.5. Guarantee Subordinated to Prior Payment of All Senior
Debt of a Guarantor on Dissolution, Winding Up,
Liquidation or Reorganization of the Guarantor..........66
SECTION 14.6. Holders to be Subrogated to Rights of Holders of
Senior Debt of each Guarantor...........................68
SECTION 14.7. Obligations of Each Guarantor Unconditional...............68
SECTION 14.8. Trustee Entitled to Assume Payments Not Prohibited
in Absence of Notice....................................69
SECTION 14.9. Application by Trustee of Monies Deposited with It........69
SECTION 14.10. Subordination Rights Not Impaired by Acts or Omissions
of a Guarantor or Holders of Senior Debt of such
Guarantor...............................................70
SECTION 14.11. Holders Authorize Trustee to Effectuate
Subordination of Securities.............................70
SECTION 14.12. Right of Trustee to Hold Senior Debt of a Guarantor.......70
SECTION 14.13. Trustee Not Fiduciary for Holders of Senior Debt
of a Guarantor..........................................71
SECTION 14.14. Article 14 Not To Prevent Events of Default...............71
SECTION 14.15. Execution and Delivery of Guarantee.......................71
SECTION 14.16. Subordination of Indebtedness Owed by the
Company to a Guarantor..................................71
SECTION 14.17. Officers' Certificate.....................................71
iv
FORM OF SUBORDINATED INDENTURE
SUBORDINATED INDENTURE, dated as of ____ ___, 2001 among Hovnanian
Enterprises, Inc., a Delaware corporation (the "Issuer" or "Hovnanian"),
Subsidiary Guarantors of Hovnanian and FIRST UNION NATIONAL BANK, as trustee
(the "Trustee").
RECITALS OF THE ISSUER:
-------- -- --- ------
WHEREAS, the Issuer has duly authorized the issuance from time to
time of its unsecured subordinated debentures, notes or other evidences of
indebtedness to be issued in one or more series (the "Securities") up to such
principal amount or amounts as may from time to time be authorized in
accordance with the terms of this Indenture; and
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication,
delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been undertaken and
completed.
RECITALS OF GUARANTORS:
-------- -- ----------
WHEREAS, each Guarantor desires to make the Guarantees provided for
herein; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of each of the Guarantors, in accordance with its terms, have been
done and the Guarantor will do all things necessary to make the Guarantees,
when executed by each of the Guarantors and endorsed on the Securities
authenticated and delivered hereunder, the valid obligations of each Guarantor
as hereinafter provided.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
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 proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE ONE
DEFINITIONS
For all purposes of this Indenture and of any indenture supplemental
hereto the following terms shall have the respective meanings specified in
this Section 1.1 (except as otherwise expressly provided herein or in any
indenture supplemental hereto or unless the context otherwise clearly
requires). All other terms used in this Indenture that are defined in the
Trust Indenture Act of 1939, including terms defined therein by reference to
the Securities Act of 1933, as amended (the "Securities Act"), shall have the
meanings assigned to such terms in said Trust Indenture Act of 1939 and in the
Securities Act as in force at the date of this Indenture (except as otherwise
expressly provided herein or in any indenture supplemental hereto or unless
the context otherwise clearly requires).
1
All accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted on the date of this
Indenture.
The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision. The expressions "date of this
Indenture", "date hereof", "date as of which this Indenture is dated" and
"date of execution and delivery of this Indenture" and other expressions of
similar import refer to the effective date of the original execution and
delivery of this Indenture, viz. as of _____________________.
The terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
Stated Code " 101 et seq., or any successor statute thereto.
"Board of Directors" means the board of directors of the Issuer or
any duly authorized committee of that board or any director or directors
and/or officer or officers to whom that board or committee shall have duly
delegated its authority.
"Board Resolution" means (1) one or more resolutions, certified by
the secretary or an assistant secretary of the Issuer to have been duly
adopted or consented to by the Board of Directors of the Issuer and to be in
full force and effect, or (2) a certificate signed by the director or
directors and/or officer or officers to whom the Board of Directors or any
duly authorized committee of that Board shall have duly delegated its
authority, in each case delivered to the Trustee for the Securities of any
series.
"Business Day" means, with respect to any Security, unless otherwise
specified in a Board Resolution and an Officers' Certificate with respect to a
particular series of Securities, a day that (a) in the Place of Payment (or in
any of the Places of Payment, if more than one) in which amounts are payable,
as specified in the form of such Security, and (b) in the city in which the
Corporate Trust Office is located, is not a day on which banking institutions
are authorized or required by law or regulation to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
as amended, or, if at any time after the execution and delivery of this
Indenture such Commission is not existing and
2
performing the duties now assigned to it under the Trust Indenture Act of
1939, then the body performing such duties on such date.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets included on the most recent consolidated balance sheet of the Issuer
and its Restricted Subsidiaries, less applicable reserves and other properly
deductible items and after deducting therefrom (a) all current liabilities and
(b) all goodwill, trade names, trademarks, patents, unamortized debt discount
and expense and other like intangibles, all in accordance with generally
accepted accounting principles consistently applied.
"Corporate Trust Office" means the office of the Trustee of a series
of Securities at which the trust created by this Indenture shall, at any
particular time, be principally administered, which office is, at the date as
of which this Indenture is dated, located at [address].
"Covenant Defeasance" has the meaning set forth in Section 10.3.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or
include each Person who is then a Depositary hereunder, and, if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with respect to the
Global Securities of such series.
"Dollars" and the sign "$" means the coin and currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts.
"Eligible Guarantors" means each of the entities listed on Exhibit B
hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Global Security" means a Security evidencing all or a part of a
series of Securities issued to the Depositary for such series in accordance
with Section 2.3 and bearing the legend prescribed in Section 2.4.
"Guarantee" has the meaning specified in Section 14.2.
"Guarantor" has the meaning specified in Section 2.3.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean, in the case of any Security, the Person in whose name such
Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof.
"Hovnanian" means Hovnanian Enterprises, Inc., a Delaware
corporation.
3
"Indebtedness" with respect to any Person, means, without
duplication:
(a) (i) the principal of and premium, if any, and interest, if any,
on indebtedness for money borrowed of such Person, indebtedness of
such Person evidenced by bonds, notes, debentures or similar
obligations, and any guaranty by such Person of any indebtedness for
money borrowed or indebtedness evidenced by bonds, notes, debentures
or similar obligations of any other Person, whether any such
indebtedness or guaranty is outstanding on the date of this
Indenture or is thereafter created, assumed or incurred, (ii)
obligations of such Person for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit
transaction; (iii) the principal of and premium, if any, and
interest, if any, on indebtedness incurred, assumed or guaranteed by
such Person in connection with the acquisition by it or any of its
subsidiaries of any other businesses, properties or other assets;
(iv) lease obligations which such Person capitalized in accordance
with Statement of Financial Accounting Standards No. 13 promulgated
by the Financial Accounting Standards Board or such other generally
accepted accounting principles as may be from time to time in
effect; (v) any indebtedness of such Person representing the balance
deferred and unpaid of the purchase price of any property or
interest therein (except any such balance that constitutes an
accrued expense or trade payable) and any guaranty, endorsement or
other contingent obligation of such Person in respect of any
indebtedness of another that is outstanding on the date of this
Indenture or is thereafter created, assumed or incurred by such
Person; and (vi) obligations of such Person under interest rate,
commodity or currency swaps, caps, collars, options and similar
arrangements; and
(b) any amendments, modifications, refundings, renewals or
extensions of any indebtedness or obligation described as
Indebtedness in clause (a) above.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, including, for all purposes of this instrument and any
such supplement, the provisions of the Trust Indenture Act of 1939 that are
deemed to be a part of and govern this instrument and any such supplement,
respectively, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
"interest" means, when used with respect to non-interest bearing
Securities (including, without limitation, any Original Issue Discount
Security that by its terms bears interest only after maturity or upon default
in any other payment due on such Security), interest payable after maturity
(whether at stated maturity, upon acceleration or redemption or otherwise) or
after the date, if any, on which the Issuer becomes obligated to acquire a
Security, whether upon conversion, by purchase or otherwise.
"Issuer" means Hovnanian Enterprises, Inc., a New Jersey corporation,
and, subject to Article Nine, its successors and assigns.
4
"Issuer Order" means a written statement, request or order of the
Issuer which is signed in its name by the chairman of the Board of Directors,
the president or any vice president of the Issuer, and delivered to the
Trustee.
"Legal Defeasance" has the meaning specified in Section 10.2.
"Officers' Certificate", means a certificate signed by the chairman
of the Board of Directors, the president, or any vice president and by the
treasurer, any assistant treasurer, the controller, any assistant controller,
the secretary or any assistant secretary of the Issuer. Each such certificate
shall include the statements provided for in Section 11.5 if and to the extent
required by the provisions of such Section 11.5. One of the officers signing
an Officers' Certificate given pursuant to Section 4.3 shall be the principal
executive, financial or accounting officer of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by the chief
counsel of the Issuer or by such other legal counsel who may be an employee of
or counsel to the Issuer and who shall be reasonably satisfactory to the
Trustee. Each such opinion shall include the statements provided for in
Section 11.5, if and to the extent required by the provisions of such Section
11.5.
"original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly)
on registration of transfer, exchange or substitution.
"original issue discount" of any debt security, including any
Original Issue Discount Security, means the difference between the principal
amount of such debt security and the initial issue price of such debt security
(as set forth in the case of an Original Issue Discount Security on the face
of such Security).
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the maturity thereof pursuant to Article
Five.
"Outstanding" when used with reference to Securities, shall, subject
to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities (other than Securities of any series as to which the
provisions of Article Ten hereof shall not be applicable), or portions
thereof, for the payment or redemption of which moneys or U.S. Government
Obligations (as provided for in Section 10.1) in the necessary amount
shall have been deposited in trust with the Trustee or with any paying
agent (other than the Issuer) or shall have been set aside, segregated
and held in trust by the Issuer for the Holders of such Securities (if
the Issuer shall act as its own paying agent), provided that, if such
Securities, or portions thereof, are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as herein
5
provided, or provision satisfactory to the Trustee shall have been made
for giving such notice; and
(c) Securities which shall have been paid or in substitution for
which other Securities shall have been authenticated and delivered
pursuant to the terms of Section 2.9 (except with respect to any such
Security as to which proof satisfactory to the Trustee is presented that
such Security is held by a Person in whose hands such Security is a
legal, valid and binding obligation of the Issuer).
In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding for such purposes shall be the portion of
the principal amount thereof that would be due and payable as of the date of
such determination (as certified by the Issuer to the Trustee) upon a
declaration of acceleration of the maturity thereof pursuant to Article Five.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Issuer or its agents upon the
issuance of such Securities.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
estate, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and interest, if any,
on the Securities of such series are payable as determined in accordance with
Section 2.3.
"principal" of a debt security, including any Security, means the
amount (including, without limitation, if and to the extent applicable, any
premium and, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect
to such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, if any, upon any redemption
at the option of the Issuer, upon any purchase or exchange at the option of
the Issuer or the holder of such debt security and upon any acceleration of
the maturity of such debt security).
"principal amount" of a debt security, including any Security, means
the principal amount as set forth on the face of such debt security.
"record date" shall have the meaning set forth in Section 2.7.
"Responsible Officer", when used with respect to the Trustee of a
series of Securities, means any officer of the Trustee with direct
responsibility for the administration of the trust created by this Indenture.
6
"Restricted Subsidiary" means (a) any Subsidiary of the Issuer other
than an Unrestricted Subsidiary, and (b) any Subsidiary of the Issuer which
was an Unrestricted Subsidiary but which, subsequent to the date hereof, is
designated by the Issuer (by Board Resolution) to be a Restricted Subsidiary;
provided, however, that the Issuer may not designate any such Subsidiary to be
a Restricted Subsidiary if the Issuer would thereby breach any covenant or
agreement herein contained (on the assumptions that any outstanding
Indebtedness of such Subsidiary was incurred at the time of such designation).
"Securities Act" shall have the meaning set forth in Section 1.1.
"Security" or "Securities"has the meaning stated in the first recital
of this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture; provided, however that if at any time there is
more than one Person acting as Trustee under this Instrument, "Securities"
with respect to the Indenture as to which such Person is Trustee shall have
the meaning stated in the first recital of this instrument and shall more
particularly mean Securities authenticated and delivered under this
instrument, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"Senior Indebtedness" means Indebtedness of the Issuer outstanding at
any time (other than the Indebtedness evidenced by the Securities of any
series) except (a) any Indebtedness as to which, by the terms of the
instrument creating or evidencing such Indebtedness, it is provided that such
Indebtedness is not senior or prior in right of payment to the Securities or
is pari passu or subordinate by its terms in right of payment to the
Securities, (b) renewals, extensions and modifications of any such
Indebtedness, (c) any Indebtedness of the Issuer to a wholly-owned Subsidiary
of the Issuer, (d) interest accruing after the filing of a petition initiating
any proceeding referred to in Sections 5.1(e) and 5.1(f) unless such interest
is an allowed claim enforceable against the Issuer in a proceeding under
federal or state bankruptcy laws and (e) trade payables.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Issuer within the meaning of Rule 1.02(w) of Regulation S-X
promulgated by the Commission as in effect on the date of this Indenture.
"Subsidiary" of any specified Person means any corporation of which
such Person, or such Person and one or more Subsidiaries of such Person, or
any one or more Subsidiaries of such Person, directly or indirectly own voting
securities entitling any one or more of such Persons and its Subsidiaries to
elect a majority of the directors, either at all times or, so long as there is
no default or contingency which permits the holders of any other class or
classes of securities to vote for the election of one or more directors.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990, as in force at the date as of which this
Indenture is originally executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each
Person who is then a trustee hereunder and, if at any time there is
7
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the trustee with respect to the Securities of such
series.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Issuer
acquired or organized after the date hereof, provided, however, that such
Subsidiary of the Issuer shall not be a successor, directly or indirectly, to
any Restricted Subsidiary, and (b) any Subsidiary of the Issuer substantially
all the assets of which consist of stock or other securities of a Subsidiary
or Subsidiaries of the Issuer of the character described in clause (a) of this
paragraph, unless and until such Subsidiary shall have been designated to be a
Restricted Subsidiary pursuant to clause (b) of the definition of "Restricted
Subsidiary".
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(B).
"vice president," when used with respect to the Issuer or the
Trustee, means any vice president, regardless of whether designated by a
number or a word or words added before or after the title "vice president."
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
ARTICLE TWO
SECURITIES
SECTION 2.1. Forms Generally. The Securities of each series shall be
substantially in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as set forth in a
Board Resolution or, to the extent established pursuant to rather than set
forth in a Board Resolution, an Officers' Certificate detailing such
establishment) or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have
imprinted or otherwise reproduced thereon such legend or legends or
endorsements, not inconsistent with the provisions of this Indenture, as may
be required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to general
usage, all as may be determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 2.2. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be
substantially as follows:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
8
________________________, as Trustee
By_______________________________
Authorized Signatory
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Securities of such series shall
bear, in addition to the Trustee's certificate of authentication, an alternate
Certificate of Authentication which shall be substantially as follows:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
________________________, as Trustee
By_______________________________
Authorized Signatory
________________________, as Trustee
By_______________________________
Authorized Signatory
SECTION 2.3. Amount Unlimited Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series and the Securities
of each such series shall rank equally and pari passu with the Securities of
each other series, but all Securities issued hereunder shall be subordinate
and junior in right of payment, to the extent and in the manner set forth in
Article Thirteen, to all Senior Indebtedness of the Issuer. There shall be
established in or pursuant to one or more Board Resolutions (and, to the
extent established pursuant to rather than set forth in a Board Resolution, in
an Officers' Certificate detailing such establishment) or established in one
or more indentures supplemental hereto, prior to the initial issuance of
Securities of any series:
(1) the designation of the Securities of the series, which shall
distinguish the Securities of such series from the Securities of all
other series;
(2) any limit upon the aggregate principal amount of the Securities
of the series that may be authenticated and delivered under this
Indenture (except for Securities
9
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to
Section 2.8, 2.9, 2.11, 8.5 or 12.3);
(3) the date or dates on which the principal of the Securities of
the series is payable;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which any such interest
shall accrue, on which any such interest shall be payable and on which a
record shall be taken for the determination of Holders to whom any such
interest is payable or the method by which such rate or rates or date or
dates shall be determined or both;
(5) the place or places where and the manner in which the principal
of, premium, if any, and interest, if any, on Securities of the series
shall be payable (if other than as provided in Section 3.2) and the
office or agency for the Securities of the series maintained by the
Issuer pursuant to Section 3.2;
(6) the right, if any, of the Issuer to redeem, purchase or repay
Securities of the series, in whole or in part, at its option and the
period or periods within which, the price or prices (or the method by
which such price or prices shall be determined or both) at which, the
form or method of payment therefor if other than in cash and any terms
and conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series may be so
redeemed, purchased or repaid, in whole or in part pursuant to any
sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series in whole or in part pursuant to any
mandatory redemption, sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which the
price or prices (or the method by which such price or prices shall be
determined or both) at which, the form or method of payment therefor if
other than in cash and any terms and conditions upon which and the manner
in which (if different from the provisions of Article Twelve) Securities
of the series shall be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
acceleration of the maturity thereof;
(10) whether Securities of the series will be issuable as Global
Securities;
(11) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, the
form and terms of such certificates, documents or conditions;
10
(12) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the
Securities of such series;
(13) any deleted, modified or additional events of default or
remedies or any deleted, modified or additional covenants with respect to
the Securities of such series;
(14) whether the provisions of Article Ten will not be applicable to
Securities of such series;
(15) any provision relating to the issuance of Securities of such
series at an original issue discount (including, without limitation, the
issue price thereof, the rate or rates at which such original issue
discount shall accrete, if any, and the date or dates from or to which or
period or periods during which such original issue discount shall accrete
at such rate or rates);
(16) if other than Dollars, the foreign currency in which payment of
the principal of, premium, if any, and interest, if any, on the
Securities of such series shall be payable;
(17) if other than First Union National Bank is to act as Trustee
for the Securities of such series, the name and Corporate Trust Office of
such Trustee;
(18) if the amounts of payments of principal of, premium, if any,
and interest, if any, on the Securities of such series are to be
determined with reference to an index, the manner in which such amounts
shall be determined;
(19) the terms for conversion or exchange, if any, with respect to
the Securities of such series;
(20) which, if any, of the Eligible Guarantors, shall guarantee the
Securities on the terms set forth in Article Fourteen (each of the other
Eligible Guarantors that guarantee the Securities set forth in Article
Fourteen, if any, a "Guarantor"); and
(21) any other terms of the series.
All Securities of any one series shall be substantially identical,
except as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above or
as set forth in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or
pursuant to such Board Resolution, such Officers' Certificate or in any such
indenture supplemental hereto.
Any such Board Resolution or Officers' Certificate referred to above
with respect to Securities of any series filed with the Trustee on or before
the initial issuance of the Securities of such series shall be incorporated
herein by reference with respect to Securities of such series and shall
thereafter be deemed to be a part of the Indenture for all purposes relating
to Securities of such series as fully as if such Board Resolution or Officers'
Certificate were set forth herein in full.
11
SECTION 2.4. Authentication and Delivery of Securities. The Issuer
may deliver Securities of any series executed by the Issuer to the Trustee for
authentication together with the applicable documents referred to below in
this Section 2.4, and the Trustee shall thereupon authenticate and deliver
such Securities to, or upon the order of the Issuer (contained in the Issuer
Order referred to below in this Section 2.4) or pursuant to such procedures
acceptable to the Trustee and to such recipients as may be specified from time
to time by an Issuer Order. The maturity date, original issue date, interest
rate, if any, and any other terms of the Securities of such series shall be
determined by or pursuant to such Issuer Order and procedures. If provided for
in such procedures and agreed to by the Trustee, such Issuer Order may
authorize authentication and delivery pursuant to oral instructions from the
Issuer or its duly authorized agent, which instructions shall be promptly
confirmed in writing. In authenticating the Securities of such series and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive (in the case of
subparagraphs (2), (3) and (4) below only at or before the time of the first
request of the Issuer to the Trustee to authenticate Securities of such
series) and (subject to Section 6.1) shall be fully protected in relying upon,
unless and until such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and setting forth
delivery instructions provided that, with respect to Securities of a
series subject to a Periodic Offering, (a) such Issuer Order may be
delivered by the Issuer to the Trustee prior to the delivery to the
Trustee of such Securities for authentication and delivery, (b) the
Trustee shall authenticate and deliver Securities of such series for
original issue from time to time, in an aggregate principal amount not
exceeding the aggregate principal amount established for such series,
pursuant to an Issuer Order or pursuant to procedures acceptable to the
Trustee as may be specified from time to time by an Issuer Order, (c) the
maturity date or dates, original issue date or dates, interest rate or
rates, if any, and any other terms of Securities of such series shall be
determined by an Issuer Order or pursuant to such procedures, (d) if
provided for in such procedures, such Issuer Order may authorize
authentication and delivery pursuant to oral or electronic instructions
from the Issuer or its duly authorized agent or agents, which oral
instructions shall be promptly confirmed in writing and (e) after the
original issuance of the first Security of such series to be issued, any
separate request by the Issuer that the Trustee authenticate Securities
of such series for original issuance will be deemed to be a certification
by the Issuer that it is in compliance with all conditions precedent
provided for in this Indenture relating to the authentication and
delivery of such Securities;
(2) the Board Resolution, Officers' Certificate or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant
to which the forms and terms of the Securities of such series were
established;
(3) an Officers' Certificate setting forth the form or forms and
terms of the Securities stating that the form or forms and terms of the
Securities have been established pursuant to Sections 2.1 and 2.3 and
comply with this Indenture and covering such other matters as the Trustee
may reasonably request; and
12
(4) at the option of the Issuer, either an Opinion of Counsel, or a
letter from legal counsel addressed to the Trustee permitting it to rely
on an Opinion of Counsel, substantially to the effect that:
(a) the form or forms of the Securities of such series have been
duly authorized and established in conformity with the provisions of this
Indenture;
(b) in the case of an underwritten offering, the terms of the
Securities of such series have been duly authorized and established in
conformity with the provisions of this Indenture, and, in the case of an
offering that is not underwritten, certain terms of the Securities of
such series have been established pursuant to a Board Resolution, an
Officers' Certificate or a supplemental indenture in accordance with this
Indenture, and when such other terms as are to be established pursuant to
procedures set forth in an Issuer Order shall have been established, all
such terms will have been duly authorized by the Issuer and will have
been established in conformity with the provisions of this Indenture;
(c) when the Securities of such series have been executed by the
Issuer and the Securities of such series have been authenticated by the
Trustee in accordance with the provisions of this Indenture and delivered
to and duly paid for by the purchasers thereof, they will have been duly
issued under this Indenture and will be valid and legally binding
obligations of the Issuer, enforceable in accordance with their
respective terms, and will be entitled to the benefits of this Indenture;
and
(d) the execution and delivery by the Issuer of, and the performance
by the Issuer of its obligations under, the Securities of such series
will not contravene any provision of applicable law or the articles of
incorporation or bylaws of the Issuer or any agreement or other
instrument binding upon the Issuer or any of its Subsidiaries that is
material to the Issuer and its Subsidiaries, considered as one
enterprise, or, to such counsel's knowledge after the inquiry indicated
therein (which shall be reasonable), any judgment, order or decree of any
governmental agency or any court having jurisdiction over the Issuer or
any Subsidiary of the Issuer, and no consent, approval or authorization
of any governmental body or agency is required for the performance by the
Issuer of its obligations under the Securities, except such as are
specified and have been obtained and such as may be required by the
securities or blue sky laws of the various states in connection with the
offer and sale of the Securities.
In addition, if the authentication and delivery relates to a new
series of Securities created by an indenture supplemental hereto, such Opinion
of Counsel shall also state that all laws and requirements with respect to the
form and execution by the Issuer of the supplemental indenture with respect to
the series of Securities have been complied with, the Issuer has corporate
power to execute and deliver any such supplemental indenture and has taken all
necessary corporate action for those purposes and any such supplemental
indenture has been executed and delivered and constitutes the legal, valid and
binding obligation of the Issuer enforceable in accordance with its terms.
13
In rendering such opinions, such counsel may qualify any opinions as
to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the State of New
Jersey and the federal law of the United States, upon opinions of other
counsel (copies of which shall be delivered to the Trustee), who shall be
counsel reasonably satisfactory to the Trustee, in which case the opinion
shall state that such counsel believes that both such counsel and the Trustee
are entitled so to rely. Such counsel may also state that, insofar as such
opinion involves factual matters, such counsel has relied, to the extent such
counsel deems proper, upon certificates of officers of the Issuer and its
Subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of any series under this Section 2.4 if the Trustee,
being advised by counsel, determines that such action may not lawfully be
taken by the Issuer, or if the Trustee in good faith by its board of directors
or board of trustees, executive committee or a trust committee of directors or
trustees or Responsible Officers shall determine that such action would expose
the Trustee to personal liability to existing Holders or would adversely
affect the Trustee's own rights, duties or immunities under the Securities,
this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in accordance
with this Section 2.4 and the Issuer Order with respect to such series,
authenticate and deliver one or more Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series to be issued in the
form of Global Securities and not yet cancelled, (ii) shall be registered in
the name of the Depositary for such Global Security or Securities or the
nominee of such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instructions, and (iv) shall bear
a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for Securities in definitive registered form,
this Security may not be transferred except as a whole by the Depositary to
the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time
of its designation and at all times while it serves as Depositary, be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and any other applicable statute or regulation.
Reference is made to Section 14.15 concerning execution and delivery
of the Guarantees.
SECTION 2.5. Execution of Securities. The Securities shall be signed
on behalf of the Issuer by the chairman of the Board of Directors, the
president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one of
its assistant secretaries. Such signatures may be the manual or facsimile
14
signatures of the present or any future such officers. The seal of the Issuer
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of a seal or any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall
be authenticated and delivered by the Trustee or disposed of by the Issuer,
such Security nevertheless may be authenticated and delivered or disposed of
as though the person who signed such Security had not ceased to be such
officer of the Issuer; and any Security may be signed on behalf of the Issuer
by such persons as, at the actual date of the execution of such Security,
shall be the proper officers of the Issuer, although at the date of the
execution and delivery of this Indenture any such person was not such an
officer.
Reference is made to Section 14.15 concerning execution and delivery
of the Guarantees.
SECTION 2.6. Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one
of its authorized signatories, or its Authenticating Agent, shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
The execution of such certificate by the Trustee or its Authenticating Agent
upon any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture. Each
reference in this Indenture to authentication by the Trustee includes
authentication by an agent appointed pursuant to Section 6.14.
Reference is made to Section 14.15 concerning execution and delivery
of the Guarantees.
SECTION 2.7. Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable in registered form
in denominations established as contemplated by Section 2.3 or, with respect
to the Securities of any series, if not so established, in denominations of
$1,000 and any integral multiple thereof. The Securities of each series shall
be numbered, lettered or otherwise distinguished in such manner or in
accordance with such plan as the officers of the Issuer executing the same may
determine with the approval of the Trustee, as evidenced by the execution and
authentication thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and such
interest, if any, shall be payable on the dates, established as contemplated
by Section 2.3.
The Person in whose name any Security of any series is registered at
the close of business on any record date applicable to a particular series
with respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record
15
date and prior to such interest payment date, except if and to the extent the
Issuer shall default in the payment of the interest due on such interest
payment date for such series, in which case such defaulted interest shall be
paid to the Persons in whose names Outstanding Securities for such series are
registered (a) at the close of business on a subsequent record date (which
shall be not less than five Business Days prior to the date of payment of such
defaulted interest) established by notice given by mail by or on behalf of the
Issuer to the Holders of Securities not less than 15 days preceding such
subsequent record date or (b) as determined by such other procedure as is
mutually acceptable to the Issuer and the Trustee. The term "record date" as
used with respect to any interest payment date (except a date for payment of
defaulted interest) for the Securities of any series shall mean the date
specified as such in the terms of the Securities of such series established as
contemplated by Section 2.3, or, if no such date is so established, if such
interest payment date is the first day of a calendar month, the fifteenth day
of the next preceding calendar month or, if such interest payment date is the
fifteenth day of a calendar month, the first day of such calendar month,
whether or not such record date is a Business Day.
SECTION 2.8. Registration, Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register or registers in which,
subject to such reasonable regulations as it may prescribe, it will provide
for the registration of Securities of each series and the registration of
transfer of Securities of such series. Each such register shall be in written
form in the English language or in any other form capable of being converted
into such form within a reasonable time. At all reasonable times such register
or registers shall be open for inspection and available for copying by the
Trustee.
Upon due presentation for registration of transfer of any Security of
any series at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities of the same series, maturity date, interest rate, if
any, and original issue date in authorized denominations for a like aggregate
principal amount.
All Securities presented for registration of transfer shall (if so
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
At the option of the Holder thereof, Securities of any series (other
than a Global Security, except as set forth below) may be exchanged for a
Security or Securities of such series having authorized denominations and an
equal aggregate principal amount, upon surrender of such Securities to be
exchanged at the agency of the Issuer that shall be maintained for such
purpose in accordance with Section 3.2.
The Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
registration of transfer of Securities. No service charge shall be made for
any such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
16
The Issuer shall not be required to exchange or register a transfer
of (a) any Securities of any series for a period of 15 days next preceding the
first mailing or publication of notice of redemption of Securities of such
series to be redeemed, (b) any Securities selected, called or being called for
redemption, in whole or in part, except, in the case of any Security to be
redeemed in part, the portion thereof not so to be redeemed or (c) any
Security if the Holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Security in whole or in part, except the portion of
such Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a part of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series
or a nominee of such successor Depositary.
If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Issuer that it is
unwilling or unable to continue as Depositary for such Securities or if at any
time the Depositary for such Securities shall no longer be eligible under
Section 2.4, the Issuer shall appoint a successor Depositary with respect to
such Securities. If a successor Depositary for such Securities is not
appointed by the Issuer within 90 days after the Issuer receives such notice
or becomes aware of such ineligibility, the Issuer's election pursuant to
Section 2.3 that such Securities be represented by one or more Global
Securities shall no longer be effective and the Issuer shall execute, and the
Trustee, upon receipt of an Issuer Order for the authentication and delivery
of definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount
of the Global Security or Securities representing such Securities in exchange
for such Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Securities.
In such event, the Issuer shall execute, and the Trustee, upon receipt of an
Issuer Order for the authentication and delivery of definitive Securities of
such series, shall authenticate and deliver, Securities of such series in
definitive registered form, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such Securities, in exchange for such Global Security
or Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part
for Securities of the same series in definitive registered form on such terms
as are acceptable to the Issuer and such Depositary. Thereupon, the Issuer
shall execute, and the Trustee shall authenticate and deliver, without service
charge,
(i) to the Person specified by such Depositary, a new Security or
Securities of the same series, of any authorized denominations as
requested by such Person, in an
17
aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a denomination
equal to the difference, if any, between the principal amount of the
surrendered Global Security and the aggregate principal amount of
Securities authenticated and delivered pursuant to clause (i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
cancelled by the Trustee or an agent of the Trustee. Securities in definitive
registered form issued in exchange for a Global Security pursuant to this
Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of
the Issuer. The Trustee or such agent shall deliver at its office such
Securities to or as directed by the Persons in whose names such Securities are
so registered.
All Securities issued upon any registration of transfer or exchange
of Securities shall be valid and legally binding obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
SECTION 2.9. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of the Issuer, the
Trustee shall authenticate and deliver a new Security of the same series,
maturity date, interest rate, if any, and original issue date, bearing a
number or other distinguishing symbol not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Security, or in lieu of
and in substitution for the Security so destroyed, lost or stolen. In every
case the applicant for a substitute Security shall furnish to the Issuer and
to the Trustee and any agent of the Issuer or the Trustee such security or
indemnity as may be required by the Trustee or the Issuer or any such agent to
indemnify and defend and to save each of the Trustee and the Issuer and any
such agent harmless and, in every case of destruction, loss or theft, evidence
to their satisfaction of the destruction, loss or theft of such Security and
of the ownership thereof and in the case of mutilation or defacement, shall
surrender the Security to the Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee or its agent) connected therewith. In case
any Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the
case of a mutilated or defaced Security), if the applicant for such payment
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as any of them may require to hold each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the
18
Issuer and the Trustee and any agent of the Issuer or the Trustee evidence to
the Trustee's satisfaction of the destruction, loss or theft of such Security
and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and all other
Securities of such series duly authenticated and delivered hereunder. All
Securities shall be held and owned upon the express condition that, to the
extent permitted by law, the foregoing provisions are exclusive with respect
to the replacement or payment of mutilated, defaced, destroyed, lost or stolen
Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.10. Cancellation of Securities; Disposition Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or
analogous fund, if surrendered to the Issuer or any agent of the Issuer or the
Trustee or any agent of the Trustee, shall be delivered to the Trustee or its
agent for cancellation or, if surrendered to the Trustee, shall be cancelled
by it; and no Securities shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee shall
dispose of all cancelled Securities in accordance with its standard procedures
and shall deliver a certificate of such disposition to the Company. If the
Issuer or its agent shall acquire any of the Securities, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are delivered to the
Trustee or its agent for cancellation.
SECTION 2.11. Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable in any authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by
the execution and authentication thereof. Temporary Securities may contain
such references to any provisions of this Indenture as may be appropriate.
Every temporary Security shall be executed by the Issuer and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish definitive Securities of such
series and thereupon temporary Securities of such series may be surrendered in
exchange therefor without charge at each office or agency to be maintained by
the Issuer for that purpose pursuant to Section 3.2 and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the
same series having authorized denominations. Until so exchanged, the temporary
Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series, unless otherwise
established pursuant to Section 2.3.
19
SECTION 2.12. CUSIP Numbers. The Issuer in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only
on the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE THREE
COVENANTS
SECTION 3.1. Payment of Principal and Interest. The Issuer covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of, premium, if any, and interest, if any, on each of the Securities
at the place, at the respective times and in the manner provided in the
Securities.
SECTION 3.2. Offices for Notices and Payments, etc. So long as any of
the Securities are Outstanding, the Issuer will maintain in each Place of
Payment, an office or agency where the Securities may be presented for
payment, an office or agency where the Securities may be presented for
registration of transfer and for exchange as provided in this Indenture, and
an office or agency where notices and demands to or upon the Issuer in respect
of the Securities or of this Indenture may be served. In case the Issuer shall
at any time fail to maintain any such office or agency, or shall fail to give
notice to the Trustee of any change in the location thereof, presentation may
be made and notice and demand may be served in respect of the Securities or of
this Indenture at the Corporate Trust Office. The Issuer hereby initially
designates the Corporate Trust Office for each such purpose and appoints the
Trustee as registrar and paying agent and as the agent upon whom notices and
demands may be served with respect to the Securities.
SECTION 3.3. No Interest Extension. In order to prevent any
accumulation of claims for interest after maturity thereof, the Issuer will
not directly or indirectly extend or consent to the extension of the time for
the payment of any claim for interest on any of the Securities and will not
directly or indirectly be a party to or approve any such arrangement by the
purchase or funding of said claims or in any other manner; provided, however,
that this Section 3.3 shall not apply in any case where an extension shall be
made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding.
SECTION 3.4. Appointments to Fill Vacancies in Trustee's Office. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 3.5. Provision as to Paying Agent. (a) If the Issuer shall
appoint a paying agent other than the Trustee, it will cause such paying agent
to execute and deliver to the Trustee an instrument in which such paying agent
shall agree with the Trustee, subject to the provisions of this Section 3.5,
20
(1) that it will hold all sums held by it as such paying agent for
the payment of the principal of or interest, if any, on the Securities
(whether such sums have been paid to it by the Issuer or by any other
obligor on the Securities) in trust for the benefit of the Holders of the
Securities and the Trustee; and
(2) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities) to make any payment of
the principal of, premium, if any, or interest, if any, on the Securities
when the same shall be due and payable; and
(3) that it will, at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent.
(b) If the Issuer shall act as its own paying agent, it will, on or
before each due date of the principal of or interest, if any, on the
Securities, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities a sum sufficient to pay such principal, premium, if
any, or interest, if any, so becoming due and will notify the Trustee of any
failure to take such action and of any failure by the Issuer (or by any other
obligor under the Securities) to make any payment of the principal of,
premium, if any, or interest, if any, on the Securities when the same shall
become due and payable.
(c) Anything in this Section 3.5 to the contrary notwithstanding, the
Issuer may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid
to the Trustee all sums held in trust by it, or any paying agent hereunder, as
required by this Section 3.5, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 3.5 to the contrary notwithstanding, any
agreement of the Trustee or any paying agent to hold sums in trust as provided
in this Section 3.5 is subject to Sections 10.3 and 10.4.
(e) Whenever the Issuer shall have one or more paying agents, it
will, on or before each due date of the principal of or interest, if any, on
any Securities, deposit with a paying agent a sum sufficient to pay the
principal, premium, if any, or interest, if any, so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal,
premium, if any, or interest, if any, and (unless such paying agent is the
Trustee) the Issuer will promptly notify the Trustee of its action or failure
so to act.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1. Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the
Securities covenant and agree that they will furnish or cause to be furnished
to the Trustee a list in such form as the Trustee may reasonably require of
the names and addresses of the Holders of the Securities of each series:
21
(a) semiannually and not more than 15 days after each January 1 and
July 1, and
(b) at such other times as the Trustee may request in writing,
within 15 days after receipt by the Issuer of any such request,
provided that if and so long as the Trustee shall be the registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2. Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Securities (i) contained in the most recent list furnished to
it as provided in Section 4.1, and (ii) received by it in the capacity of
registrar or paying agent for such series, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 4.1 upon receipt of a
new list so furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to
the Trustee reasonable proof that each such applicant has owned a Security for
a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders of Securities of a particular series (in which case the applicants
must all hold Securities of such series) or with Holders of all Securities
with respect to their rights under this Indenture or under such Securities and
such application is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application, at its
election, either
(i) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection
(a) of this Section 4.2, or
(ii) inform such applicants as to the approximate number of Holders
of Securities of such series or of all Securities, as the case may be,
whose names and addresses appear in the information preserved at the time
by the Trustee, in accordance with the provisions of subsection (a) of
this Section 4.2, and as to the approximate cost of mailing to such
Securityholders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford to such applicants access
to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy
or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders
of Securities of such series or of all Securities, as the case may be, or
would be in violation of applicable law. Such written statement shall specify
22
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter
an order refusing to sustain any of such objections or if, after the entry of
an order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met, and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Securityholders with reasonable promptness
after the entry of such order and the renewal of such tender; otherwise the
Trustee shall be relieved of any obligation or duty to such applicants
respecting their application.
(c) Each and every Holder of Securities, by receiving and holding the
same, agrees with the Issuer and the Trustee that neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be held accountable
by reason of the disclosure of any such information as to the names and
addresses of the Holders of Securities in accordance with the provisions of
subsection (b) of this Section 4.2, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under such
subsection (b).
SECTION 4.3. Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer, is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe), if any, which the Issuer may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Issuer is not required to file information, documents
or reports pursuant to either of such Sections, then to file with the Trustee
and the Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section
13 of the Exchange Act in respect of a debt security listed and registered on
a national securities exchange as may be prescribed from time to time in such
rules and regulations;
(b) to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Issuer with the conditions and covenants provided for in this Indenture as
may be required from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 4.4(c), such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to subsections (a) and (b)
of this Section 4.3 as may be required to be transmitted to such Holders by
rules and regulations prescribed from time to time by the Commission; and
(d) to furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his knowledge of the Issuer's compliance
with all conditions and covenants under this Indenture.
23
For purposes of this subsection (d), such compliance shall be determined
without regard to any period of grace or requirement of notice provided under
this Indenture.
SECTION 4.4. Reports by the Trustee. (a) The Trustee shall transmit
to Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act of 1939 at
the times and in the manner provided pursuant thereto. To the extent that any
such report is required by the Trust Indenture Act of 1939 with respect to any
12 month period, such report shall cover the 12 month period ending July 15
and shall be transmitted by the next succeeding September 15.
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by
the Trustee with each stock exchange upon which the Securities of any
applicable series are listed and also with the Commission. The Issuer agrees
to promptly notify the Trustee with respect to any series when and as the
Securities of such series become admitted to trading on any national
securities exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1. Events of Default. "Event of Default", wherever used
herein with respect to Securities of any series, means any one or more of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Thirteen or otherwise),
unless it is either inapplicable to a particular series or it is specifically
deleted or modified in or pursuant to the Board Resolution or supplemental
indenture establishing such series of Securities or in the form of Security,
for such series:
(a) default in the payment of the principal of or premium, if any, of
the Securities of such series as and when the same shall become due and
payable either at maturity, upon redemption, by declaration or otherwise; or
(b) default in the payment of any installment of interest on any of
the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(c) default in the payment or satisfaction of any sinking fund or
other purchase obligation with respect to Securities of such series, as and
when such obligation shall become due and payable; or
(d) failure on the part of the Issuer or a Guarantor duly to observe
or perform any other of the covenants or agreements on the part of the Issuer
in the Securities of such series or in, or a Guarantor of, this Indenture
continued for a period of 90 days after the date on which written notice of
such failure, requiring the Issuer or a Guarantor to remedy the same, shall
have been given by certified or registered mail to the Issuer or a Guarantor
by the Trustee, or to the Issuer or a Guarantor and the Trustee by the Holders
of at least 25% in aggregate principal amount of the Securities of such series
then Outstanding; or
24
(e) without the consent of the Issuer a court having jurisdiction
shall enter an order for relief with respect to the Issuer or any of their
Significant Subsidiaries under any applicable bankruptcy, insolvency or other
similar law of the United States of America, any state thereof or the District
of Columbia, or without the consent of the Issuer a court having jurisdiction
shall enter a judgment, order or decree adjudging the Issuer or any of its
Significant Subsidiaries bankrupt or insolvent, or enter an order for relief
for reorganization, arrangement, adjustment or composition of or in respect of
the Issuer or any of its Significant Subsidiaries under any applicable
bankruptcy, insolvency or other similar law of the United States of America,
any state thereof or the District of Columbia, and the continuance of any such
judgment, order or decree is unstayed and in effect for a period of 60
consecutive days; or
(f) the Issuer or any of its Significant Subsidiaries shall institute
proceedings for entry of an order for relief with respect to the Issuer or any
of its Significant Subsidiaries under any applicable bankruptcy, insolvency or
other similar law of the United States of America, any state thereof or the
District of Columbia, or for an adjudication of insolvency, or shall consent
to the institution of bankruptcy or insolvency proceedings against it, or
shall file a petition seeking, or seek or consent to reorganization,
arrangement, composition or relief under any applicable bankruptcy, insolvency
or other similar law of the United States of America, any state thereof or the
District of Columbia, or shall consent to the filing of such petition or to
the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator or similar official of the Issuer or of substantially all of its
property, or the Issuer or any of its Significant Subsidiaries shall make a
general assignment for the benefit of creditors as recognized under any
applicable bankruptcy, insolvency or other similar law of the United States of
America, any state thereof or the District of Columbia; or
(g) any other Event of Default provided with respect to the
Securities of such series; or
(h) a Guarantee ceases to be in full force and effect (other than in
accordance with the terms of any Guarantee) or a Guarantor denies or
disaffirms its obligations under the Guarantee.
If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given
by Securityholders), may declare the principal (or, if the Securities of such
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all the Securities
of such series and the interest, if any, accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, notwithstanding anything to the contrary
contained in this Indenture or in the Securities of such series. This
provision, however, is subject to the condition that, if at any time after the
unpaid principal amount (or such specified amount) of the Securities of such
series shall have been so declared due and payable and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered
as hereinafter provided, the Issuer shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest, if any,
25
upon all of the Securities of such series and the principal of any and all
Securities of such series which shall have become due otherwise than by
acceleration (with interest on overdue installments of interest, if any, to
the extent that payment of such interest is enforceable under applicable law
and on such principal at the rate borne by the Securities of such series to
the date of such payment or deposit) and the reasonable compensation,
disbursements, expenses and advances of the Trustee and all other amounts due
the Trustee under Section 6.6, and any and all defaults under this Indenture,
other than the nonpayment of such portion of the principal amount of and
accrued interest, if any, on Securities of such series which shall have become
due by acceleration, shall have been cured or shall have been waived in
accordance with Section 5.7 or provision deemed by the Trustee to be adequate
shall have been made therefor, then and in every such case the Holders of a
majority in aggregate principal amount of the Securities of such series then
Outstanding, by written notice to the Issuer and to the Trustee, may rescind
and annul such declaration and its consequences; but no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon. Notwithstanding the previous sentence, no
waiver shall be effective against any Holder for any Event of Default or event
which with notice or lapse of time or both would be an Event of Default with
respect to any covenant or provision which cannot be modified or amended
without the consent of the Holder of each outstanding Security affected
thereby, unless all such affected Holders agree, in writing, to waive such
Event of Default or other event.
If any Event of Default with respect to the Issuer specified in
Section 5.1(e) or 5.1(f) occurs, all unpaid principal amount (or, if the
Securities of any series then Outstanding are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of each such series) and accrued interest on all Securities of each
series then Outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act by the Trustee or any
Securityholder.
If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Issuer, the Trustee and the Securityholders shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall continue as
though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to Section 5.1
(a), (b) or (c), the Trustee shall not be charged with knowledge of any Event
of Default unless written notice thereof shall have been given to a
Responsible Officer by the Issuer, a paying agent or any Securityholder.
SECTION 5.2. Payment of Securities on Default; Suit Therefor. The
Issuer covenants that (a) if default shall be made in the payment of any
installment of interest upon any of the Securities of any series then
Outstanding as and when the same shall become due and payable, and such
default shall have continued for a period of 30 days, or (b) if default shall
be made in the payment of the principal of any of the Securities of such
series as and when the same shall have become due and payable, whether at
maturity of the Securities of such series or upon redemption or by declaration
or otherwise, then, upon demand of the Trustee, the Issuer will pay
26
to the Trustee, for the benefit of the Holders of the Securities, the whole
amount that then shall have become due and payable on all such Securities of
such series for principal or interest, if any, or both, as the case may be,
with interest upon the overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) upon the overdue
installments of interest, if any, at the rate borne by the Securities of such
series; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any
expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Issuer or any other obligor on the
Securities of such series and collect in the manner provided by law out of the
property of the Issuer or any other obligor on the Securities of such series,
wherever situated, the moneys adjudged or decreed to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Issuer or any other obligor on the Securities of any
series then Outstanding under any bankruptcy, insolvency or other similar law
now or hereafter in effect, or if a receiver or trustee or similar official
shall have been appointed for the property of the Issuer or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Issuer or other obligor upon the Securities of such series, or to the
creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of the Securities of such series shall
then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand pursuant to
the provisions of this Section 5.2, shall be entitled and empowered by
intervention in such proceedings or otherwise to file and prove a claim or
claims for the whole amount of principal and interest, if any, owing and
unpaid in respect of the Securities of such series, and, in case of any
judicial proceedings, to 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 of the Securityholders allowed in such judicial proceedings
relative to the Issuer or any other obligor on the Securities of such series,
its or their creditors, or its or their property, and to collect and receive
any moneys or other property payable or deliverable on any such claims, and to
distribute the same after the deduction of its charges and expenses, and any
receiver, assignee or trustee or similar official in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, if the Trustee shall consent to the making
of such payments directly to the Securityholders, to pay to the Trustee any
amount due it for compensation and expenses or otherwise pursuant to Section
6.6, including counsel fees and expenses incurred by it up to the date of such
distribution. To the extent that such payment of reasonable compensation,
expenses and counsel fees and expenses out of the estate in any such
proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
27
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall be for the ratable benefit of the
Holders of the Securities of the series in respect of which such judgment has
been recovered.
SECTION 5.3. Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to Section 5.2 with respect to Securities of
any series then Outstanding shall be applied in the order following, at the
date or dates fixed by the Trustee for the distribution of such moneys, upon
presentation of the several Securities of such series, and stamping thereon
the payment, if only partially paid, and upon surrender thereof, if fully
paid:
FIRST: To the payment of costs and expenses of collection and
reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and liabilities incurred, and all
advances made, by the Trustee pursuant to Section 6.6 except as a result
of its negligence or bad faith;
SECOND: If the principal of the Outstanding Securities of such
series shall not have become due and be unpaid, to the payment of
interest, if any, on the Securities of such series, in the order of the
maturity of the installments of such interest, if any, with interest (to
the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest, if any, at the rate borne by the
Securities of such series, such payment to be made ratably to the Persons
entitled thereto;
THIRD: If the principal of the Outstanding Securities of such series
shall have become due, by declaration or otherwise, to the payment of the
whole amount then owing and unpaid upon the Securities of such series for
principal and interest, if any, with interest on the overdue principal
and (to the extent that such interest has been collected by the Trustee)
upon overdue installments of interest, if any, at the rate borne by the
Securities of such series; and in case such moneys shall be insufficient
to pay in full the whole amounts so due and unpaid upon the Securities of
such series, then to the payment of such principal and interest, if any,
without preference or priority of principal over interest or of interest
over principal, or of any installment of interest over any other
installment of interest, or of any Security over any other Security,
ratably to the aggregate of such principal and accrued and unpaid
interest; and
FOURTH: To the payment of any surplus then remaining to the Issuer,
its successors or assigns, or to whomsoever may be lawfully entitled to
receive the same.
No claim for interest which in any manner at or after maturity shall
have been transferred or pledged separate or apart from the Securities to
which it relates, or which in any manner shall have been kept alive after
maturity by an extension (otherwise than pursuant to an extension made
pursuant to a plan proposed by the Issuer to the Holders of all Securities of
any series then Outstanding), purchase, funding or otherwise by or on behalf
or with the consent or approval of the Issuer shall be entitled, in case of a
default hereunder, to any benefit of this Indenture, except after prior
payment in full of the principal of all Securities of any series then
28
Outstanding and of all claims for interest not so transferred, pledged, kept
alive, extended, purchased or funded.
SECTION 5.4. Proceedings by Securityholders. No Holder of any
Securities of any series then Outstanding shall have any right by virtue of or
by availing of any provision of this Indenture to institute any suit, action
or proceeding in equity or at law upon or under or with respect to this
Indenture or for the appointment of a receiver or trustee or similar official,
or for any other remedy hereunder, unless such Holder previously shall have
given to the Trustee written notice of default and of the continuance thereof,
as hereinbefore provided, and unless the Holders of not less than 25% in
aggregate principal amount of the Securities of such series then Outstanding
shall have made written request to the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to
the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee
for 60 days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding, it being understood and intended, and being expressly covenanted
by the Holder of every Security of such series with every other Holder and the
Trustee, that no one or more Holders of Securities of such series shall have
any right in any manner whatever by virtue of or by availing of any provision
of this Indenture or of the Securities to affect, disturb or prejudice the
rights of any other Holder of such Securities of such series, or to obtain or
seek to obtain priority over or preference as to any other such Holder, or to
enforce any right under this Indenture or the Securities, except in the manner
herein provided and for the equal, ratable and common benefit of all Holders
of Securities of such series.
Notwithstanding any other provisions in this Indenture, but subject
to Article Thirteen, the right of any Holder of any Security to receive
payment of the principal of, premium, if any, and interest, if any, on such
Security, on or after the respective due dates expressed in such Security, or
to institute suit for the enforcement of any such payment on or after such
respective dates shall not be impaired or affected without the consent of such
Holder.
SECTION 5.5. Proceedings by Trustee. In case of an Event of Default
hereunder, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any of such rights, either by suit in equity or by action at law or by
proceedings in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other legal
or equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.6. Remedies Cumulative and Continuing. All powers and
remedies given by this Article Five to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any thereof or of any other powers and remedies available to the Trustee or
the Securityholders, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and,
29
subject to the provisions of Section 5.4, every power and remedy given by this
Article Five or by law to the Trustee or to the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Securityholders.
SECTION 5.7. Direction of Proceedings; Waiver of Defaults by Majority
of Securityholders. The Holders of a majority in aggregate principal amount of
the Securities of any series then Outstanding shall have the right to 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 the
Trustee with respect to Securities of such series; provided, however, that
(subject to the provisions of Section 6.1) the Trustee shall have the right to
decline to follow any such direction if the Trustee shall determine upon
advice of counsel that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith by its board of directors, its
executive committee, or a trust committee of directors or Responsible Officers
or both shall determine that the action or proceeding so directed would
involve the Trustee in personal liability. The Holders of a majority in
aggregate principal amount of the Securities of any series then Outstanding
may on behalf of the Holders of all of the Securities of such series waive any
past default or Event of Default hereunder and its consequences except a
default in the payment of interest, if any, on, or the principal of, the
Securities of such series. Upon any such waiver the Issuer, the Trustee and
the Holders of the Securities of such series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default hereunder shall
have been waived as permitted by this Section 5.7, said default or Event of
Default shall for all purposes of the Securities and this Indenture be deemed
to have been cured and to be not continuing.
SECTION 5.8. Notice of Defaults. The Trustee shall, within 30 days
after the occurrence of a default, with respect to Securities of any series
then Outstanding, mail to all Holders of Securities of such series, as the
names and the addresses of such Holders appear upon the Securities register,
notice of all defaults known to the Trustee with respect to such series,
unless such defaults shall have been cured before the giving of such notice
(the term "defaults" for the purpose of this Section 5.8 being hereby defined
to be the events specified in clauses (a), (b), (c), (d), (e), (f), (g) and
(h) of Section 5.1, not including periods of grace, if any, provided for
therein and irrespective of the giving of the written notice specified in said
clause (d) but in the case of any default of the character specified in said
clause (d) no such notice to Securityholders shall be given until at least 60
days after the giving of written notice thereof to the Issuer pursuant to said
clause (d)); provided, however, that, except in the case of default in the
payment of the principal of or interest, if any, on any of the Securities, or
in the payment or satisfaction of any sinking fund or other purchase
obligation, the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a trust
committee of directors or Responsible Officers or both, of the Trustee in good
faith determines that the withholding of such notice is in the best interests
of the Securityholders.
SECTION 5.9. Undertaking to Pay Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, 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,
the filing by any party litigant in such suit of an undertaking to pay the
cost of such suit,
30
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section 5.9 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding in the aggregate more
than 10% in principal amount of the Securities of any series then Outstanding,
or to any suit instituted by any Securityholders for the enforcement of the
payment of the principal of or interest, if any, on any Security against the
Issuer on or after the due date expressed in such Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1. Duties and Responsibilities of the Trustee; During
Default; Prior to Default. In case an Event of Default with respect to the
Securities of a series has occurred (which has not been cured or waived) the
Trustee shall exercise with respect to such series of Securities such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events of
Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to the
Securities of any series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable except
for the performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the Holders pursuant to Section 5.7 relating to the time, method and place of
conducting any proceeding for any remedy
31
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that
the repayment of such funds or adequate indemnity against such liability is
not reasonably assured to it.
SECTION 6.2. Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture, note, coupon, security or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officers' Certificate or Issuer
Order (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a Board Resolution;
(c) the Trustee may consult with counsel of its selection and any
advice of such counsel promptly confirmed in writing shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted to be taken by it hereunder in good faith and in reliance thereon
in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture (including, without limitation, pursuant to Section 5.7), unless
such Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Securities of all series affected then Outstanding; provided that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
32
condition to proceeding; the reasonable expenses of every such investigation
shall be paid by the Issuer or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder;
(h) the Trustee shall not be charged with knowledge of any default or
Event of Default with respect to a series of Securities unless either (i) a
Responsible Officer of the Trustee assigned to the Corporate Trust Office of
the Trustee (or any successor division or department of the Trustee) shall
have actual knowledge of such default or Event of Default or (ii) written
notice of such default or Event of Default shall have been given to the
Trustee by the Issuer or any other obligor on such series of Securities or by
any Holder of Securities of such series; and
(i) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.3. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture, of the
Securities or of any prospectus used to sell the Securities. The Trustee shall
not be accountable for the use or application by the Issuer of any of the
Securities or of the proceeds thereof.
SECTION 6.4. Trustee and Agents May Hold Securities; Collections,
etc. The Trustee or any agent of the Issuer or the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not the Trustee or such agent and,
subject to Sections 6.8 and 6.13, may otherwise deal with the Issuer and
receive, collect, hold and retain collections from the Issuer with the same
rights it would have if it were not the Trustee or such agent.
SECTION 6.5. Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the
extent required by mandatory provisions of law. Neither the Trustee nor any
agent of the Issuer or the Trustee shall be under any liability for interest
on any moneys received by it hereunder.
SECTION 6.6. Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as shall be
agreed to in writing between the Issuer and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee
33
and each predecessor Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad
faith. The Issuer also covenants to indemnify the Trustee and each predecessor
Trustee for, and to hold it harmless against, any and all loss, liability,
damage, claim or expense, including taxes (other than taxes based on the
income of the Trustee), incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the
costs and expenses of defending itself against or investigating any claim or
liability in the premises. The obligations of the Issuer under this Section
6.6 to compensate and indemnify the Trustee and each predecessor Trustee and
to pay or reimburse the Trustee and each predecessor Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture or the
resignation or removal of the Trustee and shall not be subordinate to the
payment of Senior Indebtedness pursuant to Article Thirteen. Such additional
indebtedness shall be a senior claim to that of the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the Holders of particular Securities. When the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 5.1 or in connection with Section 5.9 hereof, the
expenses (including the reasonable fees and expenses of its counsel) and the
compensation for the service in connection therewith are intended to
constitute expenses of administration under any bankruptcy law. The provisions
of this Section 6.6 shall survive the resignation or removal of the Trustee
and the termination of this Indenture.
SECTION 6.7. Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered
or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 6.8. Qualification of Trustee; Conflicting Interests. This
Indenture shall always have a Trustee who satisfies the requirements of
Section 310(a)(1) of the Trust Indenture Act of 1939. The Trustee shall have a
combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with
Section 310(b) of the Trust Indenture Act of 1939 regarding disqualification
of a trustee upon acquiring a conflicting interest.
SECTION 6.9. Persons Eligible for Appointment as Trustee; Different
Trustees for Different Series. The Trustee for each series of Securities
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or of any state or the District
of Columbia having a combined capital and surplus of at least $25,000,000, and
which is authorized under such laws to exercise corporate trust powers and is
34
subject to supervision or examination by federal, state or District of
Columbia authority, or a corporation or other Person permitted to act as
trustee by the Commission. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. No obligor upon the Securities or any Affiliate of
such obligor shall serve as trustee upon the Securities. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section 6.9, the Trustee shall resign immediately in the manner and with
the effect specified in Section 6.10.
A different Trustee may be appointed by the Issuer for any series of
Securities prior to the issuance of such Securities. If the initial Trustee
for any series of Securities is to be a trustee other than First Union
National Bank, the Issuer and such Trustee shall, prior to the issuance of
such Securities, execute and deliver an indenture supplemental hereto, which
shall provide for the appointment of such Trustee as Trustee for the
Securities of such series and shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee.
SECTION 6.10. Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer. Upon receiving such notice
of resignation, the Issuer shall promptly appoint a successor trustee or
trustees with respect to the applicable series by written instrument in
duplicate, executed by authority of the Board of Directors, one copy of which
instrument shall be delivered to the resigning trustee and one copy to the
successor trustee or trustees. If no successor trustee shall have been so
appointed with respect to any series and have accepted appointment within 30
days after the mailing of such notice of resignation, the resigning trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable series for at least six months may,
subject to the provisions of Article Five, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section
6.8 with respect to any series of Securities after written request
therefor by the Issuer or by any Securityholder who has been a bona fide
Holder of a Security or Securities of such series for at least six
months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.9 and shall fail to resign after written request
therefor by the Issuer or by any such Securityholder; or
35
(iii) the Trustee shall become incapable of acting with respect to
any series of Securities, or shall be adjudged a bankrupt or insolvent,
or a receiver or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the Board of
Directors one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions
of Article Five, any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months may on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee with respect to such series. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series then Outstanding may at any time remove the Trustee
with respect to Securities of such series and appoint a successor trustee with
respect to the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.1 of the action in that regard taken by the
Securityholders. If no successor trustee shall have been so appointed with
respect to any series and have accepted appointment within 30 days after the
delivery of such evidence of removal, the Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Article Five, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.11.
SECTION 6.11. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and
obligations with respect to such series of its predecessor hereunder, with
like effect as if originally named as trustee for such series hereunder; but,
nevertheless, on the written request of the Issuer or of the successor
trustee, upon payment of its charges then unpaid, the trustee ceasing to act
shall, subject to Section 10.4, pay over to the successor trustee all moneys
at the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Issuer shall
36
execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the Securities of any applicable series
shall execute and deliver an indenture supplemental hereto which shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the predecessor Trustee with respect
to the Securities of any series as to which the predecessor Trustee is not
retiring shall continue to be vested in the predecessor Trustee, and shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such trustees co-trustees of the same
trust and that each such trustee shall be trustee of a trust or trusts under
separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided
in this Section 6.11, the Issuer shall give notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the Issuer
fails to give such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
given at the expense of the Issuer.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee (including the trust created by this
Indenture), shall be the successor of the Trustee hereunder, provided that
such corporation shall be qualified under the provisions of Section 6.8 and
eligible under the provisions of Section 6.9, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities of any series shall
have been authenticated but not delivered, any such successor to the Trustee
may adopt the certificate of authentication of any predecessor Trustee and
deliver such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
Securities of such series or in this Indenture provided that the certificate
of the
37
Trustee shall have; provided, that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of any
series in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
SECTION 6.13. Preferential Collection of Claims Against the Issuer.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act of
1939, excluding any creditor relationship listed in Section 311(b) of the
Trust Indenture Act of 1939. A Trustee who has resigned or been removed shall
be subject to Section 311(a) of the Trust Indenture Act of 1939 to the extent
indicated therein.
SECTION 6.14. Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument
in writing, appoint with the approval of the Issuer an authenticating agent
(the "Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee. Whenever
reference is made in this Indenture to the authentication and delivery of
Securities of any series by the Trustee or to the Trustee's Certificate of
Authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent for such series
and a Certificate of Authentication executed on behalf of the Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States
of America or of any state or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $25,000,000 (determined as provided in Section 6.9 with respect to
the Trustee) and subject to supervision or examination by federal or state
authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency
business (including the authenticating agency contemplated by this Indenture)
of any Authenticating Agent, shall continue to be the Authenticating Agent
with respect to all series of Securities for which it served as Authenticating
Agent without the execution or filing of any paper or any further act on the
part of the Trustee or such Authenticating Agent. Any Authenticating Agent may
at any time, and if it shall cease to be eligible shall, resign by giving
written notice of resignation to the Trustee and to the Issuer. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14 with respect
to one or more series of Securities, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Issuer and the Issuer
shall provide notice of such appointment to all Holders of Securities of such
series in the manner and to the extent provided in Section 11.4. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all rights, powers, duties and responsibilities
38
of its predecessor hereunder, with like effect as if originally named as
Authenticating Agent. The Issuer agrees to pay to the Authenticating Agent for
such series from time to time reasonable compensation. The Authenticating
Agent for the Securities of any series shall have no responsibility or
liability for any action taken by it as such at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1. Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose
of this Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of
the Trustee and the Issuer, if made in the manner provided in this Article
Seven.
SECTION 7.2. Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following
manner:
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments acknowledged to
him the execution thereof, or by an affidavit of a witness to such execution
sworn to before any such notary or other such officer. Where such execution is
by or on behalf of any legal entity other than an individual, such certificate
or affidavit shall also constitute sufficient proof of the authority of the
person executing the same.
(b) The ownership of Securities shall be proved by the Security
register or by a certificate of the Security registrar.
SECTION 7.3. Holders to be Treated as Owners. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the Person in
whose name any Security shall be registered upon the Security register for
such series as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on account
of the principal of and, subject to the provisions of this Indenture,
interest, if any, on such Security and for all other purposes; and neither the
Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be
affected by any notice to the contrary.
SECTION 7.4. Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding
39
Securities of any or all series have concurred in any direction, consent or
waiver under this Indenture, Securities which are owned by the Issuer or by
any other obligor on the Securities with respect to which such determination
is being made or by any Affiliate of the Issuer or any other obligor on the
Securities with respect to which such determination is being made, shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver only
Securities which a Responsible Officer of the Trustee knows are so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Securities
and that the pledgee is not the Issuer or any other obligor upon the
Securities or any Affiliate of the Issuer or any other obligor on the
Securities. In case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the Issuer shall
furnish to the Trustee promptly an Officers' Certificate listing and
identifying all Securities, if any, known by the Issuer to be owned or held by
or for the account of any of the above-described Persons; and, subject to
Sections 6.1 and 6.2, the Trustee shall be entitled to accept such Officers'
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Securities not listed therein are Outstanding for the purpose of
any such determination.
SECTION 7.5. Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article Seven, revoke such action so
far as concerns such Security provided that such revocation shall not become
effective until three Business Days after such filing. Except as aforesaid,
any such action taken by the Holder of any Security shall be conclusive and
binding upon such Holder and upon all future Holders and owners of such
Security and of any Securities issued in exchange or substitution therefor or
on registration of transfer thereof, irrespective of whether or not any
notation in regard thereto is made upon any such Security. Any action taken by
the Holders of the percentage in aggregate principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in
connection with such action shall be conclusively binding upon the Issuer, the
Trustee and the Holders of all the Securities affected by such action.
SECTION 7.6. Record Date for Consents and Waivers. The Issuer may,
but shall not be obligated to, establish a record date for the purpose of
determining the Persons entitled to (i) waive any past default with respect to
the Securities of such series in accordance with Section 5.7 of the Indenture,
(ii) consent to any supplemental indenture in accordance with Section 8.2 of
the Indenture or (iii) waive compliance with any term, condition or provision
of any covenant hereunder. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and any such Persons, shall be
entitled to waive any such past default, consent to any such supplemental
indenture or waive compliance with any such term, condition or provision,
whether or not such Holder remains a Holder after such record date; provided,
however, that unless such waiver or consent is obtained from the Holders, or
duly designated
40
proxies, of the requisite principal amount of Outstanding Securities of such
series prior to the date which is the 120th day after such record date, any
such waiver or consent previously given shall automatically and without
further action by any Holder be cancelled and of no further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in accordance
with or pursuant to an Issuer Order), and the Trustee may from time to time
and at any time enter into an indenture or indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act of 1939 as
in force at the date of the execution thereof) for one or more of the
following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities of one or more series any property or
assets;
(b) to evidence the succession of another Person to the Issuer, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Issuer herein and the
Securities or the Guarantees;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions for the protection of the Holders
of all or any series of Securities (and if such covenants, restrictions,
conditions or provisions are to be for the protection of less than all
series of Securities, stating that the same are expressly being included
solely for the protection of such series) or to surrender any right or
power herein conferred upon the Issuer, and to make the occurrence, or
the occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies provided
in this Indenture as herein set forth; provided, however, that in respect
of any such additional covenant, restriction, condition or provision such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon
such an Event of Default or may limit the remedies available to the
Trustee upon such an Event of Default or may limit the right of the
Holders of a majority in aggregate principal amount of the Securities of
such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective
or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Issuer may
deem necessary or desirable, provided, however, that no such action shall
materially adversely affect the interests of the Holders of the
Securities;
41
(e) to establish the form or terms of Securities or the Guarantees
to be endorsed thereon of any series as permitted by Sections 2.1 and
2.3;
(f) to provide for the issuance of Securities of any series in
coupon form (including Securities registrable as to principal only) and
to provide for exchangeability of such Securities for the Securities
issued hereunder in fully registered form and to make all appropriate
changes for such purpose;
(g) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act of 1939, or under any similar
federal statute hereafter enacted, and to add to this Indenture such
other provisions as may be expressly permitted by the Trust Indenture Act
of 1939, excluding, however, the provisions referred to in Section
316(a)(2) of the Trust Indenture Act of 1939 as in effect at the date as
of which this instrument was executed or any corresponding provision
provided for in any similar federal statute hereafter enacted; and
(h) to evidence and provide for the acceptance of appointment
hereunder of a Trustee other than First Union National Bank as Trustee
for a series of Securities and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 6.9 hereof;
(i) subject to Section 8.2 hereof, to add to or modify the
provisions hereof as may be necessary or desirable to provide for the
denomination of Securities in foreign currencies which shall not
adversely affect the interests of the Holders of the Securities in any
material respect;
(j) to modify the covenants or Events of Default of the Issuer
solely in respect of, or add new covenants or Events of Default of the
Issuer that apply solely to, Securities not Outstanding on the date of
such supplemental indenture; and
(k) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant
to the requirements of Section 6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities then Outstanding, notwithstanding any of the provisions of Section
8.2.
42
SECTION 8.2. Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Article Seven) of the Holders of
not less than a majority in aggregate principal amount of the Securities then
Outstanding of any series affected by such supplemental indenture, the Issuer,
when authorized by a Board Resolution (which resolution may provide general
terms or parameters for such action and may provide that the specific terms of
such action may be determined in accordance with or pursuant to an Issuer
Order), and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act of 1939 as in force at the date of
execution thereof) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Securities of such series; provided, that no such supplemental
indenture shall (a) extend the stated final maturity of the principal of any
Security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest, if any, thereon (or, in the case of an
Original Issue Discount Security, reduce the rate of accretion of original
issue discount thereon), or reduce or alter the method of computation of any
amount payable on redemption, repayment or purchase by the Issuer thereof (or
the time at which any such redemption, repayment or purchase may be made), or
make the principal thereof (including any amount in respect of original issue
discount), or interest, if any, thereon payable in any coin or currency other
than that provided in the Securities or in accordance with the terms of the
Securities, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof or the amount thereof provable in bankruptcy in each case
pursuant to Article Five, or impair or affect the right of any Securityholder
to institute suit for the payment thereof or, if the Securities provide
therefor, any right of repayment or purchase at the option of the
Securityholder, in each case without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security so
affected. No consent of any Holder of any Security shall be necessary under
this Section 8.2 to permit the Trustee and the Issuer to execute supplemental
indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any covenant,
Event of Default or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of Holders of Securities of such
series, with respect to such covenant or provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Securities of any
other series.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders of the Securities as
aforesaid and other documents, if any, required by Section 7.1, the Trustee
shall join with the Issuer in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may at
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
43
It shall not be necessary for the consent of the Securityholders
under this Section 8.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Issuer (or the Trustee at the request and expense of the Issuer) shall give
notice thereof to the Holders of then Outstanding Securities of each series
affected thereby, as provided in Section 11.4. Any failure of the Issuer to
give such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
SECTION 8.3. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer and the
Holders of Securities of each series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and shall be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.
SECTION 8.4. Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, shall be entitled to receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant to this Article Eight complies
with the applicable provisions of this Indenture and that all conditions
precedent to the execution and delivery of such supplemental indenture have
been satisfied.
SECTION 8.5. Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article Eight may bear a notation in form approved by the Trustee for such
series as to any matter provided for by such supplemental indenture or as to
any action taken by Securityholders. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Issuer, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by
the Issuer, authenticated by the Trustee and delivered in exchange for the
Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1. Consolidate Permitted, etc., on Certain Terms. Subject
to the provisions of Section 9.2, nothing contained in this Indenture or in
any of the Securities shall prevent any consolidation or merger of the Issuer
with or into any other Person or Persons (whether or not affiliated with the
Issuer), or successive consolidations or mergers in which the Issuer or their
successor or successors shall be a party or parties, or shall prevent any
sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Issuer to any other Person (whether or not
affiliated with the Issuer) authorized to acquire and operate the same;
provided, however, and the Issuer hereby covenant and agree, that any such
consolidation,
44
merger, sale, lease, exchange or other disposition shall be upon the
conditions that (a) immediately after giving effect to such consolidation,
merger, sale, lease, exchange or other disposition of the Person (whether the
Issuer or such other Person) formed by or surviving any such consolidation or
merger, or to which such sale, lease, exchange or other disposition shall have
been made, no Event of Default, and no event which after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing; (b) the Person (if other than the Issuer) formed by or surviving
any such consolidation or merger, or to which such sale, lease, exchange or
other disposition shall have been made, shall be a corporation or partnership
organized under the laws of the United States of America, any state thereof or
the District of Columbia; and (c) the due and punctual payment of the
principal of and interest, if any, on all the Securities, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Issuer,
shall be expressly assumed, by supplemental indenture satisfactory in form to
the Trustee executed and delivered to the Trustee, by the Person (if other
than the Issuer) formed by such consolidation, or into which the Issuer shall
have been merged, or by the Person which shall have acquired or leased such
property.
SECTION 9.2. Successor Corporation to be Substituted. In case of any such
consolidation or merger or any sale, conveyance or lease of all or
substantially all of the property of the Issuer and upon the assumption by the
successor Person, by supplemental indenture executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of, premium, if any, and interest, if any, on all of
the Securities and the due and punctual performance of all of the covenants
and conditions of this Indenture to be performed by the Issuer, such successor
Person shall succeed to and be substituted for the Issuer, with the same
effect as if it had been named herein as the party of the first part, and the
Issuer (including any intervening successor to the Issuer which shall have
become the obligor hereunder) shall be relieved of any further obligation
under this Indenture and the Securities; provided, however, that in the case
of a sale, lease, exchange or other disposition of the property and assets of
the Issuer (including any such intervening successor), the Issuer (including
any such intervening successor) shall continue to be liable on its obligations
under this Indenture and the Securities to the extent, but only to the extent,
of liability to pay the principal of, premium, if any, and interest, if any,
on the Securities at the time, places and rate prescribed in this Indenture
and the Securities. Such successor Person thereupon may cause to be signed,
and may issue either in its own name or in the name of the Issuer, any or all
of the Securities issuable hereunder which theretofore shall not have been
signed by the Issuer and delivered to the Trustee; and, upon the order of such
successor Person instead of the Issuer or and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities which such successor Person thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though all of such
Securities had been issued at the date of the execution hereof.
In case of any such consolidation or merger or any sale, lease,
exchange or other disposition of all or substantially all of the property and
assets of the Issuer, such changes in
45
phraseology and form (but not in substance) may be made in the Securities,
thereafter to be issued, as may be appropriate.
SECTION 9.3. Opinion of Counsel to be Given Trustee. The Trustee,
subject to Sections 6.1 and 6.2, shall receive an Officers' Certificate and
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, lease, exchange or other disposition and any such assumption complies
with the provisions of this Article Nine.
ARTICLE TEN
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 10.1. Applicability of Article. Unless specified otherwise
pursuant to Section 2.3 for Securities of a series, this Article shall apply
to each series of Securities issued under this Indenture.
SECTION 10.2. Legal Defeasance And Discharge. The Issuer shall,
subject to the satisfaction of the conditions set forth in Section 10.4
hereof, be deemed to have been discharged from its obligations with respect to
all Outstanding Securities on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Issuer shall be deemed to have paid and discharged
the entire Indebtedness represented by the Outstanding Securities, which shall
thereafter be deemed to be Outstanding only for the purposes of Section 10.5
hereof and the other Sections of this Indenture referred to in clauses (a) and
(b) below, and to have satisfied all of its obligations under such Securities
and this Indenture (and the Trustee, on demand of and at the expense of the
Issuer, shall execute proper instruments delivered to it by the Issuer
acknowledging the same), except of the following provisions which shall
survive until otherwise terminated or discharged hereunder; (a) the rights of
Holder of Outstanding Securities to receive payments in respect of the
principal of, premium, if any, and interest on such Securities when such
payments are due from the trust referred to below; (b) the Issuer's
obligations with respect to the Securities concerning mutilated, destroyed,
lost or stolen Securities and the maintenance of an office or agency for
payment and money for security payments held in trust; (c) the rights, powers,
trusts, duties and immunities of the Trustee, and the Issuer's obligations in
connection therewith; and (d) the Legal Defeasance provisions of this
Indenture.
SECTION 10.3. Covenant Defeasance. The Issuer shall, subject to the
satisfaction of the conditions set forth in Section 10.4 hereof, be released
from its obligations under the covenants contained in Articled Nine and to the
extent described in the applicable supplemental indenture, with respect to any
series of Securities, with respect to the Outstanding Securities on and after
the date of the conditions set forth in Section 10.4 are satisfied
(hereinafter, "Covenant Defeasance"), and the Securities shall thereafter be
deemed not Outstanding for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed Outstanding
for all other purposes hereunder (it being understood that such Securities
shall not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the Outstanding Securities,
the Issuer may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to
46
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a default or an Event of Default under Section 5.1
hereof, but, except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby. Subject to the satisfaction of
the conditions set forth in Section 10.4 hereof, Sections 5.1(e), 5.1(f) and
5.1(g) hereof shall not constitute Events of Default or defaults hereunder.
SECTION 10.4. Conditions To Legal Or Covenant Defeasance. The
following shall be the conditions to the application of either Section 10.2 or
10.3 hereof to the Outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuer must irrevocably deposit, or cause to be deposited,
with the Trustee, in trust, for the benefit of the Holders of the
Securities, cash in U.S. dollars, U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public
accountants, to pay, without reinvestment, the principal of, premium, if
any, and interest on the Outstanding Securities on the stated maturity
thereof or on the applicable redemption date, as the case may be, and the
Issuer must specify whether the Securities are being defeased to maturity
or to a particular redemption date;
(b) in the case of Legal Defeasance, the Issuer must deliver to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that the Issuer has received from, or there has been published
by, the Internal Revenue Service a ruling, or there has been a change in
the applicable United States federal income tax law after the date of
this Indenture, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the Outstanding
Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of such Legal Defeasance, and
will be subject to United States federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;
(c) in the case of Covenant Defeasance, the Issuer must deliver to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that the Holders of the Outstanding Securities will not
recognize income, gain or loss for United States federal income tax
purposes as a result of such Covenant Defeasance, and such Holders will
be subject to United States federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(d) no default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day
after the date of deposit;
47
(e) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under, any material
agreement or instrument (other than the Indenture) to which the Issuer or
any of its Restricted Subsidiaries is a party or by which the issuer or
any of its Restricted Subsidiaries is bound;
(f) the Issuer must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Issuer with the intent of
preferring the Holders of the Securities over other creditors of the
Issuer, or with the intent of defeating, hindering, delaying or
defrauding creditors of the Issuer or others;
(g) the Issuer must deliver to the Trustee an Officers' Certificate
and an opinion of Counsel in the United States reasonably acceptable to
the Trustee, each stating that the conditions precedent provided for or
relating to Legal Defeasance or Covenant Defeasance, as applicable, in
the case of the Officer's Certificate, in clauses (a) through (f) and, in
the case of the opinion of Counsel, in clauses (b) and (c) of this
paragraph, have been complied with.
SECTION 10.5. Deposited Money And Government Securities To Be Held In
Trust; Other Miscellaneous Provisions. Subject to Section 10.6 hereof, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively, and
solely for purposes of this Section 10.5, the "Trustee") pursuant to Section
10.4 hereof in respect of the outstanding Securities shall be held in trust
and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Issuer acting as Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Issuer shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable U.S.
Government Obligations deposited pursuant to Section 10.4 hereof or the
principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the
Outstanding Securities.
Anything in this Article Ten to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuer from time to time upon the request
of the Issuer any money or non-callable U.S. Government Obligations held by it
as provided in Section 10.4 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 10.4(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 10.6. Repayment To Issuer. Any money deposited with the
Trustee or any Paying Agent, or then held by the Issuer, in trust for the
payment of the principal of, premium or interest on any Security and remaining
unclaimed for two years after such principal, and premium, if any, or interest
has become due and payable shall be paid to the Issuer on its request or (if
then held by the Issuer) shall be discharged from such trust; and the Holder
of such
48
Security shall thereafter, as an unsecured creditor, look only to the Issuer
for payment thereof, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the Issuer as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Issuer cause to be published once, in the New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer
SECTION 10.7. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or non-callable U.S. Government Obligations in accordance
with Section 10.2 or 10.3 hereof, as the case may be, by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Issuer's obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 10.2 or 10.3 hereof until such time
as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 10.2 or 10.3 hereof, as the case may be; provided,
however, that, if the Issuer makes any payment of principal of, premium, if
any, or interest on any Security following the reinstatement of its
obligations, the Issuer shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
SECTION 10.8. Survival. The Trustee's rights under this Article Ten
shall survive termination of this Indenture.
SECTION 10.9. Satisfaction and Discharge of Indenture. If at any time
(a) the Issuer shall have paid or caused to be paid the principal of, premium,
if any, and interest, if any, on all the Securities Outstanding (other than
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9) as and when the same shall have
become due and payable, or (b) the Issuer shall have delivered to the Trustee
for cancellation all Securities theretofore authenticated (other than
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9); and if, in any such case, the
Issuer shall also pay or cause to be paid all other sums payable hereunder by
the Issuer (including all amounts, payable to the Trustee pursuant to Section
6.6), then this Indenture shall cease to be of further effect, and the
Trustee, on demand of the Issuer accompanied by an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent relating to
the satisfaction and discharge contemplated by this provision have been
complied with, and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging such satisfaction and discharging this Indenture.
The Issuer agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred, and to compensate the Trustee for
any services thereafter reasonably and properly rendered, by the Trustee in
connection with this Indenture or the Securities.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1. Partners, Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse under or
upon any obligation, covenant
49
or agreement contained in this Indenture, or in any Security, or because of
any indebtedness evidenced thereby, shall be had against any incorporator, as
such or against any past, present or future stockholder, officer or director,
as such, of the Issuer, or any partner of the Issuer or of any successor,
either directly or through the Issuer or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities by the
Holders thereof and as part of the consideration for the issue of the
Securities.
SECTION 11.2. Provisions of Indenture for the Sole Benefit of Parties
and Holders of Securities. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any Person, other
than the parties hereto and their successors and the Holders of the Senior
Indebtedness and the Holders of the Securities, any legal or equitable right,
remedy or claim under this Indenture or under any covenant or provision herein
contained, all such covenants and provisions being for the sole benefit of the
parties hereto and their successors and of the Holders of the Securities.
SECTION 11.3. Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4. Notices and Demands on Issuer, Trustee and Holders of
Securities. Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Issuer, or as required pursuant to the Trust
Indenture Act of 1939, may be given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein)
addressed (until another address of the Issuer is filed by the Issuer with the
Trustee) to Hovnanian Enterprises, Inc., 00 Xxxxxxx 00, X.X. Xxx 000, Xxx
Xxxx, Xxx Xxxxxx 00000. Any notice, direction, request or demand by the Issuer
or any Holder of Securities to or upon the Trustee shall be deemed to have
been sufficiently given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee with the Issuer)
to First Union National Bank, 00 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000,
[attention: Corporate Trust Administration (Hovnanian Enterprises, Inc.
[specify series of Securities])].
Where this Indenture provides for notice to Holders of Securities,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder entitled thereto, at his last address as it appears in the Security
register. Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given
50
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to
be sufficient notice.
SECTION 11.5. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, or as required pursuant to the Trust Indenture Act of 1939, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture (other
than a certificate provided pursuant to Section 4.3(d)) and delivered to the
Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition, (b) 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, (c) 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
opinion as to whether or not such covenant or condition has been complied
with, and (d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of counsel may be based,
insofar as it relates to factual matters, on information with respect to which
is in the possession of the Issuer, upon the certificate, statement or opinion
of or representations by an officer or officers of the Issuer, unless such
counsel knows that the certificate, statement or opinion or representations
with respect to the matters upon which his certificate, statement or opinion
may be based as aforesaid are erroneous, or in the exercise of reasonable care
should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer or unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
51
SECTION 11.6. Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of principal of or interest, if any, on the Securities of any
series or the date fixed for redemption, purchase or repayment of any such
Security shall not be a Business Day, then payment of interest, if any,
premium, if any, or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made
on the date of maturity or the date fixed for redemption, purchase or
repayment, and, in the case of payment, no interest shall accrue for the
period after such date.
SECTION 11.7. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, or is deemed applicable to this Indenture by virtue of the
provisions, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 11.8. GOVERNING LAW. THIS INDENTURE AND EACH SECURITY SHALL
BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 11.9. Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1. Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified, as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2. Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a
whole or in part at the option of the Issuer shall be given by mailing notice
of such redemption by first class mail, postage prepaid, at least 30 days and
not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear in
the Security register. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or
not the Holder receives the notice. Failure to give notice by mail, or any
defect in the notice to the Holder of any Security of a series designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such series.
52
The notice of redemption to each such Holder shall specify (i) the
principal amount of each Security of such series held by such Holder to be
redeemed, (ii) the date fixed for redemption, (iii) the redemption price, (iv)
the place or places of payment, (v) the CUSIP number relating to such
Securities, (vi) that payment will be made upon presentation and surrender of
such Securities, (vii) whether such redemption is pursuant to the mandatory or
optional sinking fund, or both, if such be the case, (viii) whether interest,
if any, (or, in the case of Original Issue Discount Securities, original issue
discount) accrued to the date fixed for redemption will be paid as specified
in such notice and (ix) whether on and after said date interest, if any, (or,
in the case of Original Issue Discount Securities, original issue discount)
thereon or on the portions thereof to be redeemed will cease to accrue. In
case any Security of a series is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for redemption, upon
surrender of such Security, a new Security or Securities of such series in
principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed
at the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section 12.2, the Issuer will deposit
with the Trustee or with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.5) an amount of money sufficient to redeem on the
redemption date all the Securities of such series so called for redemption at
the appropriate redemption price, together with accrued interest, if any, to
the date fixed for redemption. The Issuer will deliver to the Trustee at least
45 days prior to the date fixed for redemption (unless a shorter notice period
shall be satisfactory to the Trustee) an Officers' Certificate stating the
aggregate principal amount of Securities to be redeemed. In case of a
redemption at the election of the Issuer prior to the expiration of any
restriction on such redemption, the Issuer shall deliver to the Trustee, prior
to the giving of any notice of redemption to Holders pursuant to this Section,
an Officers' Certificate stating that such restriction has been complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee, within 10 Business Days after the Issuer gives written notice to the
Trustee that such redemption is to occur, shall select, in such manner as it
shall deem appropriate and fair, Securities of such series to be redeemed.
Notice of the redemption shall be given only after such selection has been
made. Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Securities of such series or any multiple thereof.
The Trustee shall promptly notify the Issuer in writing of the Securities of
such series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities of any
series shall relate, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Security which
has been or is to be redeemed.
SECTION 12.3. Payment of Securities Called for Redemption. If notice
of redemption has been given as provided by this Article Twelve, the
Securities or portions of
53
Securities specified in such notice shall become due and payable on the date
and at the place or places stated in such notice at the applicable redemption
price, together with interest, if any, accrued to the date fixed for
redemption, and on and after said date (unless the Issuer shall default in the
payment of such Securities at the redemption price, together with interest, if
any, accrued to said date) interest, if any (or, in the case of Original Issue
Discount Securities, original issue discount) on the Securities or portions of
Securities so called for redemption shall cease to accrue, and such Securities
shall cease from and after the date fixed for redemption (unless an earlier
date shall be specified in a Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3 by or
pursuant to which the form and terms of the Securities of such series were
established) except as provided in Sections 6.5 and 10.4, to be entitled to
any benefit or security under this Indenture, and the Holders thereof shall
have no right in respect of such Securities except the right to receive the
redemption price thereof and unpaid interest, if any, to the date fixed for
redemption. On presentation and surrender of such Securities at a place of
payment specified in said notice, said Securities or the specified portions
thereof shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest, if any, accrued thereon to the date fixed for
redemption; provided that payment of interest, if any, becoming due on or
prior to the date fixed for redemption shall be payable to the Holders of
Securities registered as such on the relevant record date subject to the terms
and provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the redemption price shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the
rate of interest or Yield to Maturity (in the case of an Original Issue
Discount Security) borne by such Security.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the
order of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, and of like tenor, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so presented.
SECTION 12.4. Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and
certificate number in an Officers' Certificate delivered to the Trustee at
least 45 days prior to the last date on which notice of redemption may be
given as being owned of record and beneficially by, and not pledged or
hypothecated by either (a) the Issuer, or (b) a Person specifically identified
in such written statement as an Affiliate of the Issuer.
SECTION 12.5. Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of the Securities
of any series is herein referred to as a "mandatory sinking fund payment," and
any payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment." The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date."
54
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at
its option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise
acquired (except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so, credited) made pursuant to this Section
12.5, or (c) receive credit for Securities of such series (not previously so
credited) redeemed by the Issuer through any optional redemption provision
contained in the terms of such series. Securities so delivered or credited
shall be received or credited by the Trustee at the sinking fund redemption
price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officers'
Certificate (a) specifying the portion of the mandatory sinking fund payment
to be satisfied by payment of cash and the portion to be satisfied by credit
of Securities of such series and the basis for such credit, (b) stating that
none of the Securities of such series to be so credited has theretofore been
so credited, (c) stating that no defaults in the payment of interest or Events
of Default with respect to such series have occurred (which have not been
waived or cured or otherwise ceased to exist) and are continuing, and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so,
specifying the amount of such optional sinking fund payment which the Issuer
intends to pay on or before the next succeeding sinking fund payment date. Any
Securities of such series to be credited and required to be delivered to the
Trustee in order for the Issuer to be entitled to credit therefor as aforesaid
which have not theretofore been delivered to the Trustee shall be delivered
for cancellation pursuant to Section 2.10 to the Trustee with such Officers'
Certificate (or reasonably promptly thereafter if acceptable to the Trustee).
Such Officers' Certificate shall be irrevocable and upon its receipt by the
Trustee the Issuer shall become unconditionally obligated to make all the cash
payments or payments therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the Issuer, on or before any
such 60th day, to deliver such Officers' Certificate and Securities (subject
to the parenthetical clause in the second preceding sentence) specified in
this paragraph, if any, shall not constitute a default but shall constitute,
on and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect thereof, and (ii) that
the Issuer will make no optional sinking fund payment with respect to such
series as provided in this Section 12.5.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000, or a lesser sum if the Issuer shall so request with respect to
the Securities of any particular series, such cash shall be applied on the
next succeeding sinking fund payment date to the redemption of Securities of
such series at the sinking fund redemption price together with accrued
interest, if any, to the date fixed for redemption. If such amount shall be
$50,000 or less and the Issuer makes no such request, then it shall be carried
over until a sum in excess of $50,000 is available. The Trustee shall select,
in the manner provided in Section 12.2, for redemption on such sinking fund
payment date a
55
sufficient principal amount of Securities of such series to absorb said cash,
as nearly as may be, and shall (if requested in writing by the Issuer) inform
the Issuer of the serial numbers of the Securities of such series (or portions
thereof) so selected. The Issuer, or the Trustee, in the name and at the
expense of the Issuer (if the Issuer shall so request the Trustee in writing)
shall cause notice of redemption of the Securities of such series to be given
in substantially the manner provided in Section 12.2 (and with the effect
provided in Section 12.3) for the redemption of Securities of such series in
part at the option of the Issuer. The amount of any sinking fund payments not
so applied or allocated to the redemption of Securities of such series shall
be added to the next cash sinking fund payment for such series and, together
with such payment, shall be applied in accordance with the provisions of this
Section 12.5. Any and all sinking fund moneys held on the stated maturity date
of the Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of, and
interest, if any, on, the Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all
interest, if any, accrued to the date fixed for redemption on Securities to be
redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities
of a series with sinking fund moneys or give any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default with respect to such series except that, where the giving of
notice of redemption of any Securities shall theretofore have been made, the
Trustee shall redeem or cause to be redeemed such Securities, provided that it
shall have received from the Issuer a sum sufficient for such redemption.
Except as aforesaid, and subject to Article Thirteen, any moneys in the
sinking fund for such series at the time when any such default or Event of
Default known to a Responsible Officer of the Trustee shall occur, and any
moneys thereafter paid into the sinking fund, shall, during the continuance of
such default or Event of Default, be deemed to have been collected under
Article Five and held for the payment of all such Securities. In case such
Event of Default shall have been waived as provided in Article Five or the
default cured on or before the 60th day preceding the sinking fund payment
date in any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this Section to the
redemption of such Securities.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1. Securities Subordinated to Senior Indebtedness. (a) The
Issuer covenants and agrees, and each Holder of Securities of each series, by
his acceptance thereof, likewise covenants and agrees, that anything in this
Indenture or the Securities of any series to the contrary notwithstanding, the
indebtedness evidenced by the Securities of each series is subordinate and
junior in right of payment, to the extent provided herein, to all Senior
Indebtedness, whether outstanding on the date of execution of this Indenture
or thereafter created, incurred or assumed, and that the subordination is for
the benefit of the holders of Senior Indebtedness.
56
(b) Subject to Section 13.4, if (i) the Issuer shall default in the
payment of any principal of, premium, if any, or interest, if any, on any
Senior Indebtedness when the same becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration of acceleration or
otherwise, or (ii) any other default shall occur with respect to Senior
Indebtedness and the maturity of such Senior Indebtedness has been accelerated
in accordance with its terms, then, upon written notice of such default to the
Issuer and the Trustee by the holders of Senior Indebtedness or any trustee
therefor, unless and until, in either case, the default has been cured or
waived, or has ceased to exist, or any such acceleration has been rescinded or
such Senior Indebtedness has been paid in full, no direct or indirect payment
(in cash, property, securities, by set-off or otherwise) shall be made or
agreed to be made on account of the principal of, premium, if any, or
interest, if any, on any of the Securities, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Securities other than
those made in capital stock of the Issuer (or cash in lieu of fractional
shares thereof).
(c) If any default (other than a default described in paragraph (b)
of this Section 13.1) shall occur under the Senior Indebtedness, pursuant to
which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration) or
the expiration of any applicable grace periods occurs (a "Senior Nonmonetary
Default"), then, upon the receipt by the Issuer and the Trustee of written
notice thereof (a "Payment Notice") from or on behalf of holders of such
Senior Indebtedness specifying an election to prohibit such payment and other
action by the Issuer in accordance with the following provisions of this
paragraph (c), the Issuer may not make any payment or take any other action
that would be prohibited by paragraph (b) of this Section 13.1 during the
period (the "Payment Blockage Period") commencing on the date of receipt of
such Payment Notice and ending on the earlier of (i) the date, if any, on
which the holders of such Senior Indebtedness or their representative notify
the Trustee that such Senior Nonmonetary Default is cured or waived or ceases
to exist or the Senior Indebtedness to which such Senior Nonmonetary Default
relates is discharged or (ii) the 179th day after the date of receipt of such
Payment Notice. Notwithstanding the provisions described in the immediately
preceding sentence, the Issuer may resume payments on the Securities following
such Payment Blockage Period. Any number of Payment Notices may be given;
provided, however, that (i) not more than one Payment Notice shall be given
within a period of any 360 consecutive days, and (ii) no default that existed
upon the date of such Payment Notice or the commencement of such Payment
Blockage Period (whether or not such event of default is on the same issue of
Senior Indebtedness) shall be made the basis for the commencement of any other
Payment Blockage Period.
(d) If (i) (A) without the consent of the Issuer, a receiver,
conservator, liquidator or trustee of the Issuer or of any of its property is
appointed by the order or decree of any court or agency or supervisory
authority having jurisdiction, and such decree or order remains in effect for
more than 60 days or (B) the Issuer is adjudicated bankrupt or insolvent or
(C) any of its property is sequestered by court order and such order remains
in effect for more than 60 days or (D) a petition is filed against the Issuer
under any state or federal bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, liquidation or receivership law
of any jurisdiction whether now or hereafter in effect (including without
limitation the Bankruptcy Code), and is not dismissed within 60 days after
such filing; or (ii) the Issuer (A) commences a voluntary case or other
proceeding seeking liquidation, reorganization, arrangement, insolvency,
readjustment of debt, dissolution, liquidation or other relief with respect to
itself or its debt or
57
other liabilities under any bankruptcy, insolvency or other similar law now or
hereafter in effect (including without limitation the Bankruptcy Code) or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or (B)
consents to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced against
it, or (C) fails generally to, or cannot, pay its debts generally as they
become due or (D) takes any corporate action to authorize or effect any of the
foregoing; or (iii) any Subsidiary of the Issuer takes, suffers or permits to
exist any of the events or conditions referred to in the foregoing clause (i)
or (ii), then all Senior Indebtedness (including any interest thereon accruing
after the commencement of any such proceedings) shall first be paid in full
before any payment or distribution, whether in cash, securities or other
property, shall be made to any Holder of any Securities on account thereof.
Any payment or distribution, whether in cash, securities or other property
(other than securities of the Issuer or any other corporation provided for by
a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent provided in these subordination provisions with respect
to the indebtedness evidenced by the Securities to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or adjustment) which would otherwise
(but for these subordination provisions) be payable or deliverable in respect
of the Securities of any series shall be paid or delivered directly to the
holders of Senior Indebtedness in accordance with the priorities then existing
among such holders until all Senior Indebtedness (including any interest
thereon accruing after the commencement of any such proceedings) shall have
been paid in full. In the event of any such proceeding, after payment in full
of all sums owing with respect to Senior Indebtedness, the Holders of the
Securities, together with the holders of any obligations of the Issuer ranking
on a parity with the Securities, shall be entitled to be paid from the
remaining assets of the Issuer the amounts at the time due and owing on
account of unpaid principal of and interest, if any, on the Securities and
such other obligations before any payment or other distribution, whether in
cash, property or otherwise, shall be made on account of any capital stock or
any obligations of the Issuer ranking junior to the Securities and such other
obligations.
(e) If, notwithstanding the foregoing, any payment or distribution of
any character, whether in cash, securities or other property (other than
securities of the Issuer or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least
to the extent provided in the subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), shall be received by
the Trustee or any Holder in contravention of any of the terms hereof, such
payment or distribution of securities shall be received in trust for the
benefit of and shall be paid over or delivered and transferred to the holders
of the Senior Indebtedness then outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any Holder
to endorse or assign any such payment, distribution or security, each holder
of such Senior Indebtedness is hereby irrevocably authorized to endorse or
assign the same.
(f) No present or future holder of any Senior Indebtedness shall be
prejudiced in the right to enforce subordination of the indebtedness evidenced
by the Securities by any act or failure to act on the part of the Issuer or
any Holder of Securities. Nothing contained herein shall
58
impair, as between the Issuer and the Holders of Securities of each series,
the obligation of the Issuer to pay to such Holders the principal of and
interest, if any, on such Securities or prevent the Trustee or the Holder from
exercising all rights, powers and remedies otherwise permitted by applicable
law or hereunder upon a default or Event of Default hereunder, all subject to
the rights of the holders of the Senior Indebtedness to remove cash,
securities or other property otherwise payable or deliverable to the Holders.
(g) Senior Indebtedness shall not be deemed to have been paid in full
unless the holders thereof shall have received cash, securities or other
property equal to the amount of such Senior Indebtedness then outstanding.
Upon the payment in full of all Senior Indebtedness, the Holders of Securities
of each series shall be subrogated to all rights of any holders of Senior
Indebtedness to receive any further payment or distributions applicable to the
Senior Indebtedness until the indebtedness evidenced by the Securities of such
series shall have been paid in full and such payments or distributions
received by such Holders, by reason of such subrogation, of cash, securities
or other property which otherwise would be paid or distributed to the holders
of Senior Indebtedness, shall, as between the Issuer and its creditors other
than the holders of Senior Indebtedness, on the one hand, and such Holders, on
the other hand, be deemed to be a payment by the Issuer on account of Senior
Indebtedness, and not on account of the Securities of such series.
(h) The provisions of this Section 13.1 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Issuer in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
(i) The securing of any obligations of the Issuer, otherwise ranking
on a parity with the Securities, shall not be deemed to prevent such
obligations from constituting, respectively, obligations ranking on a parity
with the Securities.
SECTION 13.2. Reliance on Certificate of Liquidating Agent; Further
Evidence as to Ownership of Senior Indebtedness. Upon any payment or
distribution of assets of the Issuer, the Trustee and the Holders shall be
entitled to rely upon an order or decree issued by any court of competent
jurisdiction in which such dissolution or winding up or liquidation or
reorganization or arrangement proceedings are pending or upon a certificate of
the bankruptcy trustee, receiver, assignee for the benefit of creditors or
other Person making such payment or distribution, delivered to the Trustee or
to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Thirteen. In the absence of any such bankruptcy
trustee, receiver, assignee or other Person, the Trustee shall be entitled to
rely upon written notice by a Person representing himself to be a holder of
Senior Indebtedness (or a trustee or representative on behalf of such holder)
as evidence that such Person is a holder of Senior Indebtedness (or is such a
trustee or representative). If the Trustee determines, in good faith, that
further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distributions
pursuant to this Article Thirteen, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, as to the extent to which
such Person is entitled to participate in such payment or distribution, and to
other
59
facts pertinent to the rights of such Person under this Article Thirteen, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 13.3. Payment Permitted If No Default. Nothing contained in
this Article Thirteen or elsewhere in this Indenture, or in any of the
Securities, shall prevent (a) the Issuer at any time, except during the
pendency of any default with respect to Senior Indebtedness described in
Section 13.1(b) or Section 13.1(c) or of any of the events described in
Section 13.1(d), from making payments of the principal of or interest, if any,
on the Securities, or (b) the application by the Trustee or any paying agent
of any moneys deposited with it hereunder to payments of the principal of or
interest, if any, on the Securities, if, at the time of such deposit, the
Trustee or such paying agent, as the case may be, did not have the written
notice provided for in Section 13.5 of any event prohibiting the making of
such deposit, or if, at the time of such deposit (whether or not in trust) by
the Issuer with the Trustee or paying agent (other than the Issuer) such
payment would not have been prohibited by the provisions of this Article
Thirteen, and the Trustee or any paying agent shall not be affected by any
notice to the contrary received by it on or after such date.
SECTION 13.4. Disputes with Holders of Certain Senior Indebtedness.
Any failure by the Issuer to make any payment on or under any Senior
Indebtedness, other than any Senior Indebtedness as to which the provisions of
this Section 13.4 shall have been waived by the Issuer in the instrument or
instruments by which the Issuer incurred, assumed, guaranteed or otherwise
created such Senior Indebtedness, shall not be deemed a default under Section
13.1 hereof if (i) the Issuer shall be disputing its obligation to make such
payment or perform such obligation, and (ii) either (A) no final judgment
relating to such dispute shall have been issued against the Issuer which is in
full force and effect and is not subject to further review, including a
judgment that has become final by reason of the expiration of the time within
which a party may seek further appeal or review, or (B) if a judgment that is
subject to further review or appeal has been issued, the Issuer shall in good
faith be prosecuting an appeal or other proceeding for review, and a stay of
execution shall have been obtained pending such appeal or review.
SECTION 13.5. Trustee Not Charged with Knowledge of Prohibition.
Anything in this Article Thirteen or elsewhere in this Indenture contained to
the contrary notwithstanding, the Trustee shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making
of any payment of moneys to or by the Trustee and shall be entitled to assume
conclusively that no such facts exist and that no event specified in clauses
(b) and (c) of Section 13.1 has happened unless and until the Trustee shall
have received an Officers' Certificate to the effect or notice in writing to
that effect signed by or on behalf of the holder or holders, or the
representatives, of Senior Indebtedness who shall have been certified by the
Issuer or otherwise established to the reasonable satisfaction of the Trustee
to be such holder or holders or representatives or from any trustee under any
indenture pursuant to which such Senior Indebtedness shall be outstanding;
provided, however, that, if the Trustee shall not have received the Officers'
Certificate or notice provided for in this Section 13.5 at least three
Business Days preceding the date upon which by the terms hereof any moneys
become payable for any purpose (including, without limitation, the payment of
either the principal of or interest, if any, on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such moneys and apply the same to the purpose
for which
60
they were received and shall not be affected by any notice to the contrary
that may be received by it within three Business Days preceding such date. The
Issuer shall give prompt written notice to the Trustee and to each paying
agent of any facts that would prohibit any payment of moneys to or by the
Trustee or any paying agent, and the Trustee shall not be charged with
knowledge of the curing of any default or the elimination of any other fact or
condition preventing such payment or distribution unless and until the Trustee
shall have received an Officers' Certificate to such effect.
SECTION 13.6. Trustee to Effectuate Subordination. Each Holder of
Securities by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate
the subordination as between such Holder and holders of Senior Indebtedness as
provided in this Article Thirteen and appoints the Trustee its
attorney-in-fact for any and all such purposes.
SECTION 13.7. Rights of Trustee as Holder of Senior Indebtedness. The
Trustee shall be entitled to all the rights set forth in this Article Thirteen
with respect to any Senior Indebtedness which may at the time be held by it,
to the same extent as any other holder of Senior Indebtedness and nothing in
this Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article Thirteen shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.
SECTION 13.8. Article Applicable to Paying Agents. In case at any
time any paying agent other than the Trustee shall have been appointed by the
Issuer and be then acting hereunder, the term "Trustee" as used in this
Article Thirteen shall in such case (unless the context shall otherwise
require) be construed as extending to and including such paying agent within
its meaning as fully for all intents and purposes as if the paying agent were
named in this Article Thirteen in addition to or in place of the Trustee;
provided, however, that Sections 13.5 and 13.7 shall not apply to the Issuer
if it acts as paying agent.
SECTION 13.9. Subordination Rights Not Impaired by Acts or Omissions
of the Issuer or Holders of Senior Indebtedness. No right of any present or
future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Issuer or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Issuer with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The
holders of Senior Indebtedness, may at any time or from time to time and in
their absolute direction, change the manner, place or terms of payment, change
or extend the time of payment of, or renew or alter, any such Senior
Indebtedness, or amend or supplement any instrument pursuant to which any such
Senior Indebtedness is issued or by which it may be secured, or release any
security therefor, or exercise or refrain from exercising any other of their
rights under such Senior Indebtedness, including, without limitation, the
waiver of default thereunder, all without notice to or assent from the Holders
of the Securities or the Trustee and without affecting the obligations of the
Issuer, the Trustee or the Holders of Securities under this Article Thirteen.
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of the Senior
61
Indebtedness, and shall not be liable to any such holders if it shall
mistakenly pay over or distribute money or assets to Securityholders or the
Issuer. With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants or obligations
as are specifically set forth in this Article Thirteen and no implied
covenants or obligations with respect to holders of Senior Indebtedness shall
be read into this Indenture against the Trustee.
ARTICLE FOURTEEN
SUBORDINATED GUARANTEE
SECTION 14.1. Applicability of Article. The provisions of this
Article shall be applicable to each of the Guarantors specified pursuant to
Section 2.3 for the Guarantee of Securities of a series.
SECTION 14.2. Guarantee. Each Guarantor of a particular series of
Securities hereby unconditionally guarantees (each such guarantee to be
referred to herein as a "Guarantee"), jointly and severally with each other
Guarantor of the Securities of that series, if any, to each Holder of such
Securities authenticated and delivered by the Trustee and to the Trustee and
its successors and assigns, irrespective of the validity and enforceability of
this Indenture, such Securities or the obligations of the Company hereunder or
thereunder, (i) the due and punctual payment of the principal of and any
premium or interest on such Securities, whether at maturity or on an interest
payment date, by acceleration, pursuant to an offer to purchase such
Securities or otherwise, and interest on the overdue principal of and
interest, if any, on such Securities, if lawful, and all other obligations of
the Company to the Holders of such Securities or the Trustee hereunder or
thereunder shall be promptly paid in full, all in accordance with the terms
hereof and thereof including all amounts payable to the Trustee under Section
6.6 hereof, and (ii) in case of any extension of time of payment or renewal of
any such Securities or any of such other obligations, the same shall be
promptly paid in full when due or to be performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise.
If the Company fails to make any payment when due of any amount so
guaranteed for whatever reason, the Guarantor of the Securities of that series
shall be obligated, jointly and severally with each other Guarantor, if any,
to pay the same immediately. Each 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 such
Guarantor. Each 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 its Guarantee shall not be discharged
except by complete performance of the obligations contained in the Securities
guaranteed by such Guarantee, in this Indenture and in this Article 14. If any
Holder of Securities of a series guaranteed hereby or the Trustee is required
by any court or otherwise to return to the
62
Company or any Guarantor of such Securities, or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or any
Guarantor, any amount paid by the Company or any Guarantor of such Securities
to the Trustee or such Holder, this Article 13, to the extent theretofore
discharged with respect to any Guarantee of such Securities, shall be
reinstated in full force and effect. Each Guarantor agrees that it shall not
be entitled to any right of subrogation in relation to the Holders of
Securities of a series guaranteed hereby by such Guarantor in respect of any
obligations guaranteed hereby by such Guarantee until payment in full of all
such obligations. Each Guarantor further agrees that, as between such
Guarantor, on the one hand, and the Holders of Securities of a series
guaranteed hereby by such Guarantor and the Trustee on the other hand, (i) the
maturity of the obligations guaranteed hereby may be accelerated as provided
in Article 5 hereof for the purposes of such 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 acceleration
of such obligations as provided in Article 5 hereof such obligations (whether
or not due and payable) shall forthwith become due and payable by such
Guarantor, jointly severally with any other Guarantor of such Securities, for
the purpose of this Article 14. In addition, without limiting the foregoing,
upon the effectiveness of an acceleration under Article 5, the Trustee may
make a demand for payment on the Securities under any Guarantee provided
hereunder and not discharged.
With respect to each Guarantee by a Guarantor, such Guarantor shall
be subrogated to all rights of the Holder of any Securities guaranteed hereby
by such Guarantee against the Company in respect of any amounts paid to such
Holder by such Guarantor pursuant to the provisions of such 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 such Securities shall have been paid in full.
The Guarantee set forth in this Section 14.1 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.
The Guarantees provided in this Section 14.1 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 14.3. Guarantee Subordinated to Senior Debt of the Guarantor.
Each Guarantor agrees, and each Holder of the Securities by his
acceptance thereof likewise agrees, that the payments pursuant to the
Guarantee by each Guarantor shall be subordinated in accordance with the
following provisions of this Article 14 to the prior payment in full of all
Senior Debt of each Guarantor.
"Senior Debt of each Guarantor" means the Principal of and interest
on:
(1) all indebtedness for money borrowed by each Guarantor or which
is evidenced by a bond, debenture, note or other similar instrument or
agreement whether or not for money borrowed;
(2) lease obligations of the Guarantor;
63
(3) all indebtedness, secured or unsecured, in connection with the
acquisition or improvement of any property or asset or the acquisition of
any business by the Guarantor;
(4) all indebtedness secured by any mortgage, lien, pledge, charge
or encumbrance upon property owned by the Guarantor and all indebtedness
secured in the manner specified in this clause (4) even if a Guarantor
has not assumed or become liable for the payment thereof;
(5) all customer deposits held by each Guarantor in escrow accounts
pending closing of the related sales;
(6) all indebtedness of each Guarantor created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by each Guarantor or otherwise representing the
deferred and unpaid balance of the purchase price of any such property,
including all indebtedness created or arising in the manner specified in
this clause (6) even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to
repossession or sale of such property;
(7) guarantees by each Guarantor, direct or indirect, of any
indebtedness of another Person of the types referred to in clauses (1),
(2), (3), (4), (5) or (6); and
(8) contingent obligations of the Guarantor in respect of, or to
purchase or otherwise acquire or be responsible or liable for through the
purchase of products or services, irrespective of whether such products
are delivered or such services are rendered, any such indebtedness
referred to in clauses (1), (2), (3), (4), (5) or (6),
which indebtedness, lease obligation, deposit, guarantee or contingent
obligation each Guarantor has directly or indirectly created, incurred,
assumed, guaranteed or otherwise become liable or responsible for, whether
currently outstanding or hereafter created. All references to indebtedness
include any renewals, extensions, refundings, amendments and modifications of
any such indebtedness issued in exchange for such indebtedness; provided,
however, that Senior Debt of each Guarantor shall not include, without
limitation (i) a Guarantee, (ii) the guarantee by each Guarantor of the
Subordinated Notes, (iii) accounts payable or any other indebtedness to trade
creditors created or assumed by each Guarantor in the ordinary course of
business in connection with the obtaining of materials or services, (iv) any
liability for federal, state or local taxes owed or owing by each Guarantor
and (v) any indebtedness as to which, in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is provided that
such indebtedness is on a parity with or otherwise not superior in right of
payment to a Guarantee.
This Article 14 shall constitute a continuing offer to all persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Debt of each Guarantor, and such provisions are made for the benefit of
the holders of Senior Debt of the Guarantor, and
64
such holders are made obligees hereunder and any one or more of them may
enforce such provisions.
SECTION 14.4. Guarantors Not to Make Payments With Respect to
Securities in Certain Circumstances.
(a) Upon the maturity of the principal of any Senior Debt of each
Guarantor (other than payment of sinking fund installments) by lapse of time,
acceleration 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 Debt of each Guarantor,
before any payment, pursuant to the Guarantee, is made on account of the
principal or interest on the Securities or to acquire any of the Securities or
on account of the mandatory redemption provisions in the Securities (except
mandatory redemption payments made in respect of Securities acquired by each
Guarantor before the maturity of such Senior Debt of each Guarantor).
(b) Unless Section 14.4 shall be applicable, upon (1) the occurrence
of a Payment Default with respect to Senior Debt of each Guarantor and receipt
by each Guarantor and the Trustee of written notice of such occurrence or (2)
upon the acceleration of such indebtedness, then no payment or distribution of
any assets of each Guarantor of any kind or character shall be made by each
Guarantor or the Trustee on account of principal of (or premium, if any) or
interest on the Securities or on account of the purchase or redemption or
other acquisition of Securities, unless and until such Payment Default shall
have been cured or waived in writing or shall have ceased to exist or such
Senior Debt of each Guarantor shall have been discharged, after which each
Guarantor shall resume making any and all required payments in respect of the
Securities, including any missed payments.
(c) Unless Section 14.4 shall be applicable, upon (1) the occurrence
of a Non-Payment Default and (2) receipt by the Trustee of written notice of
such occurrence, then no payment or distribution of any assets of each
Guarantor of any kind or character shall be made by each Guarantor or the
Trustee on account of any principal of (or premium, if any) or interest on the
Securities or on account of the purchase or redemption or other acquisition of
Securities, for a period ("Payment Blockage Period") commencing on the earlier
of the date of receipt by the Trustee of such written notice from the holder
of Senior Debt of each Guarantor or of the Company, or any representative of a
holder of Senior Debt of each Guarantor or of the Company unless and until
(subject to any blockage of payment that may then be in effect under
subsection (a) of this Section) the earlier of (x) more than 120 days shall
have elapsed since receipt of such written notice by each Guarantor or the
Trustee, whichever was earlier, (y) such Non-Payment Default shall have been
cured or waived in writing or shall have ceased to exist or such Senior Debt
of each Guarantor or of the Company shall have been discharged or (z) such
Payment Blockage Period shall have been terminated by written notice to each
Guarantor or to the Company, as the case may be, or to the Trustee from the
holders of the Senior Debt of each Guarantor or of the Company or any
representative of the holders of the Senior Debt of each Guarantor or of the
Company initiating such Payment Blockage Period, after which, in the case of
clause (x), (y) or (z), each Guarantor shall promptly resume making any and
all required payments in respect of the Securities, including any missed
payments. In no event shall a Payment Blockage Period extend beyond 120 days
from the date of the receipt by the Trustee of
65
the notice referred to in clause (2) hereof (the "Initial Period"). Any number
of additional Payment Blockage Periods may be commenced during the Initial
Period; provided, however, that no such additional period shall extend beyond
the Initial Period. After the expiration of the Initial Period, no Payment
Blockage Period may be commenced on the basis of a Non-Payment Default on the
Senior Debt which was the basis of a Payment Blockage Period commenced during
the Initial Period until at least 270 consecutive days have elapsed from the
last day of the Initial Period. No Non-Payment Default which existed or was
continuing on the date of the commencement of any Payment Blockage Period and
of which the applicable Senior Debt holder(s) are aware shall be, or be made,
the basis for the commencement of a second Payment Blockage Period whether or
not within a period of 270 consecutive days unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
(d) In the event that notwithstanding the provisions of this Section
14.3 each Guarantor shall make, pursuant to this Guarantee, any payment or
distribution of any character to the Trustee on account of the principal of or
interest on the Securities, or on account of the mandatory redemption
provisions, after the happening of an event of default with respect to any
Senior Debt of each Guarantor based on a default in the payment of the
principal or interest on Senior Debt of each Guarantor, or after receipt by
the Trustee of written notice as provided in this Section 14.3 of an Event of
Default with respect to any Senior Debt of each Guarantor, or after the
acceleration of the Securities of any series pursuant to Section 5.1, then,
but only if the Trustee is in receipt of the notice specified in Section 14.7,
unless and until such default or event of default shall have been cured or
waived or shall have ceased to exist, or such acceleration shall have been
rescinded, such payment (subject to the provisions of Sections 14.7 and 14.8)
shall be held by the Trustee in trust for the benefit of, and, if the Senior
Debt of each Guarantor shall have been declared immediately due and payable,
shall be paid forthwith over and delivered to, the holders of Senior Debt of
each Guarantor (pro rata as to each of such holders on the basis of the
respective amounts of Senior Debt of each Guarantor held by them) or their
representative or the trustee under the indenture or other agreement (if any)
pursuant to which Senior Debt of each Guarantor may have been issued, as their
respective interests may appear, such payments to be made in accordance with
an Officers' Certificate as provided in Section 11.5 (on which the Trustee may
conclusively rely) identifying all holders of Senior Debt of each Guarantor
and the principal amount of Senior Debt of each Guarantor then outstanding
held by each and stating the reasons why such Officers' Certificate is being
delivered to the Trustee, for application to the payment of all Senior Debt of
each Guarantor remaining unpaid to the extent necessary to pay all Senior Debt
of each Guarantor in full in accordance with its terms, after giving effect to
any concurrent payment or distribution to or for the holders of Senior Debt of
each Guarantor. In the event of the failure of any Holder of a Security to
endorse or assign any such payment or distribution, each holder of Senior Debt
of each Guarantor is hereby irrevocably authorized to endorse or assign the
same. Each Guarantor shall give prompt notice to the Trustee of any default
under any Senior Debt of each Guarantor or under any agreement pursuant to
which Senior Debt of each Guarantor may have been issued, as required by
Section 3.5.
SECTION 14.5. Guarantee Subordinated to Prior Payment of All Senior
Debt of a Guarantor on Dissolution, Winding Up, Liquidation or Reorganization
of the Guarantor.
In the event of (i) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to a Guarantor, its
66
creditors or its property, (ii) any case or proceeding for the liquidation,
dissolution or other winding-up of a Guarantor, voluntary or involuntary,
whether or not involving insolvency or bankruptcy proceedings, (iii) any
assignment by such Guarantor for the benefit of creditors, or (iv) any other
marshalling of the assets of such Guarantor:==
(a) the holders of all Senior Debt of such Guarantor shall first be
entitled to receive payment in full (or to have such payment
duly provided for) of the principal and interest due thereon
(including any interest thereon accruing after commencement of
any such proceeding) before the Holders of the Securities are
entitled to receive, pursuant to this Guarantee any payment or
any distribution, whether in cash, securities or other
property, on account of the principal 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
(other than securities of such Guarantor as reorganized or
readjusted or securities of such Guarantor or any other
company, trust or corporation provided for by a plan of
reorganization or readjustment, junior or the payment of which
is otherwise subordinate, at least to the extent provided in
this Article, to the payment of all Senior Debt of such
Guarantor at the time outstanding and to the payment of all
securities issued in exchange therefor to the holders of the
Senior Debt of such Guarantor at the time outstanding), to
which the Holders of the Securities or the Trustee on behalf of
the Holders of the Securities would be entitled, pursuant to
this Guarantee except for the provisions of this Article 14.4,
including any such payment or distribution which may be payable
or deliverable by reason of the payment of any other
indebtedness of such 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 Senior Debt of such
Guarantor or their representative(s), or to the trustee under
any indenture under which Senior Debt of such 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 Debt of such Guarantor held or
represented by each), to the extent necessary to make payment
in full of all Senior Debt of such Guarantor remaining unpaid
after giving effect to any concurrent payment or distribution
or provision therefor to the holders of such Senior Debt of
such Guarantor; and
(c) in the event that notwithstanding the foregoing provisions of
this Section 14.4, any payment or distribution of assets of
such Guarantor of any kind or character, whether in cash,
property or securities shall be received, pursuant to the
Guarantee, by the Trustee or the Holders of the Securities on
account of principal or interest on the Securities before all
Senior Debt of such Guarantor is paid in full, or effective
provisions made for its payment, such payment or
distribution (subject to the provisions of Sections 14.7 and
14.8) shall be received and held in trust for and shall be paid
over or delivered to the liquidating trustee, agent or other
person making such payment or
67
distribution or to the holders of the Senior Debt of such
Guarantor remaining unpaid or unprovided for or their
representative, or to the trustee under any indenture under
which Senior Debt of such Guarantor may have been issued (pro
rata as provided in subsection (b) above), for application to
the payment of such Senior Debt of such Guarantor until all
such Senior Debt of such 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 Debt of such Guarantor.
If a Guarantor effects a transaction permitted by Article Nine, such
transaction shall not be deemed to be a dissolution, winding up, liquidation
or reorganization of such Guarantor for purposes of this Section.
A Guarantor shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of such Guarantor,
assignment for the benefit of creditors by such Guarantor or any other
marshalling of assets of such Guarantor.
SECTION 14.6. Holders to be Subrogated to Rights of Holders of Senior
Debt of each Guarantor.
Subject to the payment in full of all Senior Debt of each Guarantor,
the Holders of the Securities shall be subrogated to the rights of the holders
of Senior Debt of each Guarantor to receive payments or distributions of
assets of each Guarantor applicable to the Senior Debt of each Guarantor until
all amounts owing under the Guarantee shall be paid in full and for the
purpose of such subrogation no payments or distributions to the holders of
Senior Debt of each Guarantor by virtue of this Article 14 which otherwise
would have been made to the Holders of the Securities, shall, as between each
Guarantor, its creditors other than holders of its Senior Debt of each
Guarantor and the Holders, be deemed to be a payment by each Guarantor to or
on account of the Senior Debt of each Guarantor, it being understood that the
provisions of this Article 14 are solely for the purpose of defining the
relative rights of the holders of Senior Debt of the Guarantors on the one
hand and the Holders on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article shall have been
applied, pursuant to the provisions of this Article, to the payment of Senior
Debt of each Guarantor, then and in such case, the Holders shall be entitled
to receive from the holders of such Senior Debt of each Guarantor at the time
outstanding any payments or distributions received by such holders of such
Senior Debt of each Guarantor in excess of the amount sufficient to pay all
amounts payable under or in respect of such Senior Debt of each Guarantor in
full.
SECTION 14.7. Obligations of Each Guarantor Unconditional.
Nothing contained in this Article 14 or elsewhere in this Indenture
or in any Security is intended to or shall impair, as between a Guarantor and
the Holders, the obligations of the Guarantor, which are absolute and
unconditional, to pay to the Holders the principal of and interest on the
Securities as and when the same shall become due and payable in accordance
with the provisions of this Guarantee or is intended to or shall affect the
relative rights of the Holders
68
and creditors of a Guarantor other than the holders of the Senior Debt of such
Guarantor, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
Default under this Indenture, subject to the rights, if any, under this
Article 14 of the holders of Senior Debt of a Guarantor in respect of cash,
property or securities of such Guarantor received upon the exercise of any
such remedy.
Upon any distribution of assets of a Guarantor referred to in this
Article 14, the Trustee, subject to the provisions of Sections 6.1 and 6.2,
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 to the Holders of the Securities, for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of each
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 14.
SECTION 14.8. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee, and the Trustee shall not be required to withhold payment to the
Holders of Securities as provided in Section 14.3(d), unless and until the
Trustee shall have received written notice thereof at its Corporate Trust
Office from a Guarantor or from one or more holders of Senior Debt of such
Guarantor or from any representative thereof or trustee therefor identifying
the specific sections of this Indenture involved and describing in detail the
facts that would obligate the Trustee to withhold payments to Holders of
Securities, as well as any other facts required by the next succeeding
paragraph of this Section 14.7; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Sections 6.1 and 6.2, shall
be entitled to assume conclusively that no such facts exist.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a person representing himself to be a holder of Senior Debt
of a Guarantor (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Debt of such Guarantor or a
trustee on behalf of any such holder. In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of
any person as a holder of Senior Debt of a Guarantor to participate in any
payment or distribution pursuant to this Article 14, the Trustee may request
such person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Debt of such Guarantor held by such person, the
extent to which such person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such person under
this Article 14, and if such evidence is not furnished the Trustee may defer
any payment to such person pending judicial determination as to the right of
such person to receive such payment.
SECTION 14.9. Application by Trustee of Monies Deposited with It.
69
Except as provided in Section 10 any deposit of monies by a Guarantor
with the Trustee or any Paying Agent (whether or not in trust) for the payment
of the principal or interest on any Securities shall be subject to the
provisions of Sections 14.2, 14.3, 14.4 and 14.5 except that, if prior to the
opening of business on the date on which by the terms of this Indenture any
such monies may become payable for any purpose (including, without limitation,
the payment, pursuant to this Guarantee, of either the principal or the
interest on any Security) the Trustee shall not have received with respect to
such monies the notice provided for in Section 14.7, 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,
without, however, limiting any rights that holders of Senior Debt of a
Guarantor may have to recover any such payments from the Holders in accordance
with the provisions of this Article.
SECTION 14.10. Subordination Rights Not Impaired by Acts or Omissions
of a Guarantor or Holders of Senior Debt of such Guarantor.
No right of any present or future holders of any Senior Debt of a
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 such
Guarantor or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by such 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 Debt of such Guarantor may
extend, renew, modify or amend the terms of the Senior Debt of such Guarantor
or any security therefor and release, sell or exchange such security and
otherwise deal freely with such Guarantor, all without affecting the
liabilities and obligations of the parties to this Indenture or the Holders.
SECTION 14.11. Holders Authorize Trustee to Effectuate Subordination
of Securities.
Each Holder of the Securities by his acceptance thereof authorizes
and expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article 14 and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of a Guarantor (whether in bankruptcy, insolvency or
receivership proceedings, voluntary liquidation or upon assignment for the
benefit of creditors or otherwise) tending towards liquidation of the business
and assets of the Guarantor, the timely filing of a claim for the unpaid
balance, pursuant to this Guarantee, of its or his 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 on or prior to 30 days before the expiration of the time to
file such claim or claims, then the holders of Senior Debt of the Guarantor
have the right to file and are hereby authorized to file an appropriate claim
for and on behalf of the Holders of said Securities.
SECTION 14.12. Right of Trustee to Hold Senior Debt of a Guarantor.
The Trustee in its individual capacity, shall be entitled to all of
the rights set forth in this Article 14 in respect of any Senior Debt of a
Guarantor at any time held by it to the same
70
extent as any other holder of such Senior Debt of a Guarantor, and nothing in
this Indenture shall be construed to deprive the Trustee of any of its rights
as such holder.
SECTION 14.13. Trustee Not Fiduciary for Holders of Senior Debt of a
Guarantor.
With respect to the holders of Senior Debt of a Guarantor, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 14, and no implied
covenants or obligations with respect to the holders of Senior Debt of a
Guarantor shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior Debt of
a Guarantor and the Trustee shall not be liable to any holder of Senior Debt
of a Guarantor if it shall pay over or deliver to Holders of Securities, a
Guarantor or any other person monies or assets to which any holder of Senior
Debt of such Guarantor shall be entitled by virtue of this Article 14 or
otherwise.
SECTION 14.14. Article 14 Not To Prevent Events of Default.
The failure to make a payment on account of principal or interest on
the Securities of any series by reason of any provision in this Article 14
shall not be construed as preventing the occurrence of an Event of Default
under Section 5.1.
SECTION 14.15. Execution and Delivery of Guarantee. To evidence a
Guarantee set forth in this Article 14, the Guarantor hereby agrees that the
Guarantee Notation, substantially in the form of Exhibit A hereto, shall be
endorsed on each Security authenticated and delivered by the Trustee that is
guaranteed by such Guarantee and that this Indenture shall be executed on
behalf of such Guarantor by its Chairman of the Board, its President or one of
its Vice Presidents under a facsimile of its seal reproduced thereon.
Each Guarantor hereby agrees that its Guarantee shall remain in full
force and effect notwithstanding any failure to endorse the Guarantee Notation
on each such Security.
If an officer whose signature is on this Indenture or on the
Securities guaranteed hereby no longer holds that office at the time the
Trustee authenticates the Security on which a notation of the Guarantee is
endorsed, such Guarantee shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of each Guarantee thereof.
SECTION 14.16. Subordination of Indebtedness Owed by the Company to a
Guarantor.
Any indebtedness owed by the Company to a 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 Debt of the Company.
SECTION 14.17. Officers' Certificate.
71
If there occurs an event referred to in the first sentence of Section
14.4(c) or the first sentence of Section 14.4, the applicable Guarantor shall
promptly give to the Trustee an Officers' Certificate (on which the Trustee
may conclusively rely) identifying all holders of Senior Debt of such
Guarantor and the principal amount of Senior Debt of such Guarantor then
outstanding held by each such holder and stating the reasons why such
Officers' Certificate is being delivered to the Trustee.
72
HOVNANIAN ENTERPRISES, INC.
ISSUER
By
------------------------------
[title]
[CORPORATE SEAL]
Attest:
--------------------------------
Secretary
[CORPORATE SEAL]
FIRST UNION NATIONAL BANK, AS TRUSTEE
By
------------------------------
[title]
Attest:
--------------------------------
Trust Officer
EXHIBIT A
[FORM OF NOTATION OF SECURITY
RELATING TO GUARANTEE]
GUARANTEE
[Name of Guarantor] (hereinafter referred to as the "Guarantor",
which term includes any successor person under the Indenture (the "Indenture")
referred to in the Security upon which this notation is endorsed) (the
"Endorsed Security"), has unconditionally guaranteed (i) the due and punctual
payment of the principal of, premium, if any, and interest on the Endorsed
Security and all other Securities of the same series as the Endorsed Security
(the "Guaranteed Securities"), whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal
of, premium, if any, and interest, if any, on the Guaranteed Securities, to
the extent lawful, and the due and punctual performance of all other
obligations of the Company to the Holders of Guaranteed Securities or the
Trustee all in accordance with the terms set forth in Article 14 of the
Indenture and (ii) in case of any extension of time of payment or renewal of
any Guaranteed Securities or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Indenture.
The obligations of the Guarantor to the Holders of Guaranteed
Securities and to the Trustee pursuant to the Guarantee evidenced hereby and
the Indenture are expressly set forth in Article 14 of the Indenture and
reference is hereby made to such Indenture for the terms of such Guarantee.
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Guarantor shall have any personal liability under
the Guarantee evidenced hereby by reason of his or its status as such
stockholder, officer, director or incorporator.
The Guarantee evidenced hereby shall not be valid or obligatory for
any purpose until the certificate of authentication of the Guaranteed
Securities shall have been executed by the Trustee under the Indenture by the
manual signature of one of its authorized officers.
Guarantor
[SEAL]
[NAME OF GUARANTOR]
By_____________________
By_____________________
EXHIBIT B
[SUBSIDIARY GUARANTORS]
