SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 13, 1999
TOLL BROTHERS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-9186 23-2416878
(State or other juris- (Commission (IRS Employer
diction of incorporation) File No.) Identification No.)
3103 Philmont Avenue
Huntingdon Valley, Pennsylvania 19006
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 938-8000
(Former name or former address, if changed since last report)
Item 5. Other Events
The Registrant is filing this current report on From 8-K solely for
the purpose of filing the exhibits listed in Item 7 (c) below.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
4.1 Indenture dated as of January 26, 1999 among Toll Corp., Toll
Brothers, Inc. and NBD Bank.
4.2 Authorizing Resolutions relating to $100,000,000 principal amount of
8% Senior Subordinated Notes due 2009 of Toll Corp. guaranteed on a
Senior Subordinated basis by Toll Brothers, Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TOLL BROTHERS, INC.
(Registrant)
Date: July 13, 1999 By: /s/ Joseph R. Sicree
Name: Joseph R. Sicree
Title: Vice President
EXHIBIT INDEX
Exhibit Description
4.1 Indenture dated as of January 26, 1999 among Toll Corp., Toll
Brothers, Inc. and NBD Bank.
4.2 Authorizing Resolutions relating to $100,000,000 principal
amount of 8% Senior Subordinated Notes due 2009 of Toll Corp.,
guaranteed on a Senior Subordinated basis by Toll Brothers, Inc.
*Filed electronically herewith.
TOLL CORP.,
as Issuer
TOLL BROTHERS, INC.,
as Guarantor
Debt Securities
INDENTURE
Dated as of January 26, 1999
NBD Bank,
Trustee
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) 9.10
(a)(2) 9.10
(a)(3) N.A.
(a)(4) N.A.
(b). 9.08; 9.10;13.02
(c). N.A.
311(a). 9.11
(b). 9.11
(c). N.A.
312(a). 2.05
(b). 13.03
(c). 13.03
313(a). 9.06
(b)(1) N.A.
(b)(2) 9.06
(c). 9.06; 13.02
(d). 9.06
314(a). 4.03; 13.02
(b). N.A.
(c)(1) 13.04
(c)(2) 13.04
(c)(3) N.A.
(d). N.A.
(e). 13.05
(f). N.A.
315(a). 9.01(b)
(b). 9.05; 13.02
(c). 9.01(a)
(d). 9.01(c)
(e). 8.11
316(a)(last sentence) 13.06
(a)(1)(A). 8.05
(a)(1)(B). 8.04
(a)(2) N.A.
(b). 8.07
317(a)(1) 8.08
(a)(2) 8.09
(b). 2.04
318(a). 13.01
_______________
N.A. means Not Applicable.
Note: This cross-reference table shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference
Section 1.01 Definitions
Section 1.02. Incorporation by Reference of Trust Indenture Act
Section 1.03. Incorporation by Reference of Provisions of Securities
Section 1.04. Rules of Construction
ARTICLE 2
The Securities
Section 2.01. Form and Dating
Section 2.02. Execution and Authentication
Section 2.03. Registrar and Paying Agent
Section 2.04. Paying Agent To Hold Money in Trust
Section 2.05. Securityholder Lists
Section 2.06. Transfer and Exchange
Section 2.07. Replacement Securities
Section 2.08. Outstanding Securities
Section 2.09. Temporary Securities
Section 2.10. Cancellation
Section 2.11. Defaulted Interest
Section 2.12. Global Securities
ARTICLE 3
Redemption
Section 3.01. Notices to Trustee
Section 3.02. Selection of Securities To Be Redeemed
Section 3.03 Notice of Redemption
Section 3.04. Effect of Notice of Redemption
Section 3.05. Deposit of Redemption Price
Section 3.06. Securities Redeemed in Part
ARTICLE 4
Covenants
Section 4.01. Payment of Securities
Section 4.02. SEC Reports
Section 4.03. Compliance Certificate
<PAGE>
ARTICLE 5
Successor Corporation
Section 5.01. When the Company and the Guarantor May Merge, Etc
ARTICLE 6
Subordination
Section 6.01. Agreement To Subordinate
Section 6.02. Company Not To Make Payments with Respect to
Securities in Certain Circumstances
Section 6.03. Securities Subordinated to Prior Payment of All
Senior Indebtedness of the Company on Dissolution,
Liquidation or Reorganization of the Company
Section 6.04. Securityholders To Be Subrogated to Rights of Holders
of Senior Indebtedness of the Company
Section 6.05. Obligation of the Company Unconditional
Section 6.06. Knowledge of Trustee
Section 6.07. Application by Trustee of Monies Deposited with It
Section 6.08. Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness
of the Company
Section 6.09. Securityholders Authorize Trustee To Effectuate
Subordination of Securities
Section 6.10. Right of Trustee To Hold Senior Indebtedness of the
Company
Section 6.11. Article Six Not To Prevent Events of Default
ARTICLE 7
Guarantee
Section 7.01. Guarantee
Section 7.02. Agreement To Subordinate
Section 7.03. Guarantor Not To Make Payments with
Respect to Securities in Certain Circumstances
Section 7.04. Guarantee Subordinated to Prior Payment of All Senior
Indebtedness of the Guarantor on Dissolution,
Liquidation or Reorganization of the Guarantor
Section 7.05. Securityholders To Be Subrogated to Rights of Holders
of Senior Indebtedness of the Guarantor
Section 7.06. Obligation of the Guarantor Unconditional
Section 7.07. Knowledge of Trustee
Section 7.08. Application by Trustee of Monies Deposited with It
Section 7.09. Subordination Rights Not Impaired by Acts or
Omissions of Guarantor or Holders of Senior Indebtedness
of the Guarantor
Section 7.10. Securityholders Authorize Trustee To Effectuate
Subordination of Guarantee
Section 7.11. Right of Trustee To Hold Senior Indebtedness of the
Guarantor
Section 7.12. Article 7 Not To Prevent Events of Default
Section 7.13. Execution and Delivery of Guarantee
Section 7.14. Subordination of Indebtedness Owed by the Company
to the Guarantor
Section 7.15. Officers' Certificate
<PAGE>
ARTICLE 8
Defaults and Remedies
Section 8.01. Events of Default
Section 8.02. Acceleration
Section 8.03. Other Remedies
Section 8.04. Waiver of Past Defaults
Section 8.05. Control by Majority
Section 8.06. Limitation on Suits
Section 8.07. Rights of Holders To Receive Payment
Section 8.08. Collection Suit by Trustee
Section 8.09. Trustee May File Proofs of Claim
Section 8.10. Priorities
Section 8.11. Undertaking for Costs
ARTICLE 9
Trustee
Section 9.01. Duties of Trustee
Section 9.02. Rights of Trustee
Section 9.03. Individual Rights of Trustee
Section 9.04. Trustee Disclaimer
Section 9.05. Notice of Defaults
Section 9.06. Reports by Trustee to Holders
Section 9.07. Compensation and Indemnity
Section 9.08. Replacement of Trustee
Section 9.09. Successor Trustee by Merger, etc
Section 9.10. Eligibility; Disqualification
Section 9.11. Preferential Collection of Claims Against Company
ARTICLE 10
CONVERSION OF SECURITIES
Section 10.01. Applicability of Article
Section 10.02. Conversion Privilege
Section 10.03. Manner of Exercise of Conversion Privilege
Section 10.04. Payment in Lieu of Fractional Shares
Section 10.05. Adjustment of Conversion Price
Section 10.06. Notice of Certain Corporate Action
Section 10.07. Guarantor To Provide Stock
Section 10.08. Taxes on Conversions
Section 10.09. Covenant as to Stock
Section 10.10. Consolidation or Merger
Section 10.11. Disclaimer of Responsibility for Certain Matters
<PAGE>
ARTICLE 11
Discharge of Indenture
Section 11.01. Termination of the Company's and the Guarantor's
Obligations
Section 11.02. Application of Trust Money
Section 11.03. Repayment to Company
ARTICLE 12
Amendments, Supplements and Waivers
Section 12.01. Without Consent of Holders
Section 12.02. With Consent of Holders
Section 12.03. Compliance with Trust Indenture Act
Section 12.04 Revocation and Effect of Consents
Section 12.05. Notation on or Exchange of Securities
Section 12.06. Trustee To Sign Amendments, etc
ARTICLE 13
Miscellaneous
Section 13.01. Trust Indenture Act Controls
Section 13.02. Notices
Section 13.03. Communication by Holders with Other Holders
Section 13.04. Certificate and Opinion as to Conditions Precedent
Section 13.05. Statements Required in Certificate or Opinion
Section 13.06. When Treasury Securities Disregarded
Section 13.07. Rules by Trustee, Paying Agent, Registrar
Section 13.08. Legal Holidays
Section 13.09. Governing Law
Section 13.10. No Adverse Interpretation of Other Agreements
Section 13.11. No Recourse Against Others
Section 13.12. Successors
Section 13.13. Duplicate Originals
Section 13.14. Counterparts
<PAGE>
Signatures
Exhibit A - Form of Security. A-1
Exhibit B - Form of Guarantee B-1
INDENTURE dated as of January 26, 1999 among TOLL CORP., a
Delaware corporation (the "Company"), TOLL BROTHERS, INC., a Delaware
corporation (the "Guarantor"), and NBD Bank, a Michigan banking corporation
(the "Trustee"). Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's
debt securities issued under this Indenture ("Securities"):
<PAGE>
ARTICLE I
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 8.02.
"Affiliate" has the meaning provided in Rule 405 promulgated under
the Securities Act of 1933, as amended and in effect on the date hereof.
"Authorizing Resolution" means a resolution adopted by the Board of
Director or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities. An Authorizing Resolution shall be so
adopted by both the Company and the Guarantor.
"Bankruptcy Law" has the meaning provided in Section 8.01.
"Board of Directors" means the Board of Directors of the Company or
the Guarantor, as the case may be, or any authorized committee of the Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or the Guarantor, as the
case may be, to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification and delivered to the
Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means the classes of capital stock of a Person as
they exist on the date of this Indenture or as they may be constituted from
time to time and warrants, options and similar rights to acquire such capital
stock.
"Common Stock" means the Common Stock ($.01 par value) of the
Guarantor as the same exists at the date of this Indenture as originally
executed or as such stock may be constituted from time to time.
"Company" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor or any other obligor
on the Securities. "Company" shall also mean the Guarantor in the event the
Company fails to perform those duties required by Sections 312 through 317 of
the TIA.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, as determined in accordance with generally
accepted accounting principles.
<PAGE>
"Conversion Price" means the initial conversion price of Securities of
a Series specified in the Authorizing Resolution establishing the terms of such
Series Security, as adjusted in accordance with the provisions of Article 10.
"Current Market Price" for any relevant date means, (a) except for
purposes of Section 10.04, the average of the last reported sale prices of the
Common Stock for the 30 consecutive Business Days commencing 45 Business Days
before the day in question and (b) for purposes of Section 10.04 only, the last
reported sale price of the Common Stock, in either such case as reported on the
composite tape, or similar reporting system, for issues listed on the New York
Stock Exchange (or if the Common Stock is not then listed on that exchange, for
issues listed on such other national securities exchange upon which the Common
Stock is listed as may be designated by the Board of Directors for the purposes
hereof) or, if there is no such reported sale on the day or days in question,
on the basis of the average of the closing bid and asked quotations as so
reported, or, if the Common Stock is not listed on any national securities
exchange, on the basis of the average of the high bid and low asked quotations
on the day or days in question in the over-the-counter market as reported by
the National Association of Securities Dealers' Automated Quotations System,
or if not so quoted, as reported by National Quotation Bureau, Incorporated,
or any similar organization, or if not so reported as determined in good
faith by the Board.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Designated Senior Debt of the Company" means any single issue of
indebtedness of the Company constituting Senior Indebtedness of the Company
which at the time of determination has an aggregate principal amount outstanding
of at least $25,000,000 and is specifically designated in the instrument or
instruments creating, governing or evidencing such Senior Indebtedness of the
Company as "Designated Senior Debt of Toll Corp." (it being understood that
the Company's guarantee of the Revolving Credit Agreement shall be considered a
single issue of indebtedness of the Company for purposes of this definition).
"Designated Senior Debt of the Guarantor" means any single issue of
indebtedness of the Guarantor constituting Senior Indebtedness of the Guarantor
which at the time of determination has an aggregate principal amount outstanding
of at least $25,000,000 and is specifically designated in the instrument or
instruments creating, governing or evidencing such Senior Indebtedness of
the Guarantor as "Designated Senior Debt of Toll Brothers, Inc." (it being
understood that the Guarantor's guarantee of the Revolving Credit Agreement
shall be considered a single issue of indebtedness of the Guarantor for
purposes of this definition).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Event of Default" has the meaning provided in Section 8.01.
"Guarantee" has the meaning provided in Section 7.01.
"Guarantor" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
<PAGE>
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Interest Payment Date," when used with respect to any installment of
interest payable on the Securities, has the meaning provided in Section 1 of the
Securities.
"Legal Holiday" has the meaning provided in Section 13.08.
"Non-Recourse Indebtedness" means indebtedness or other obligations
secured by a lien on property to the extent that the liability for such
indebtedness or other obligations is limited to the security of the property
without liability on the part of the Guarantor or any Subsidiary (other than
the Subsidiary which holds title to such property) for any deficiency.
"Non-Recourse Judgment" means a judgment in respect of indebtedness
or other obligations secured by a lien on property to the extent that the
liability for (i) such indebtedness or other obligations and (ii) such judgment
is limited to such property without liability on the part of the Guarantor or
any Subsidiary (other than the Subsidiary which holds title to such property)
for any deficiency.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Chief Accounting Officer, the Controller, the Treasurer or the
Secretary of the Company or the Guarantor, as the case may be.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the President or any Vice President, and by the Chief Accounting
Officer, the Controller, the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company or the Guarantor, as the case may be.
See Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be counsel to, but not an employee
of, the Company or the Guarantor. See Sections 13.04 and 13.05.
"Paying Agent" has the meaning provided in Section 2.03.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"principal" of a debt security means the principal of the security
plus, when appropriate, the premium, if any, on the security.
"Record Date" for the interest payable on any Interest Payment Date
on the Securities has the meaning provided in Section 1 of the Securities.
"Registrar" has the meaning provided in Section 2.03.
<PAGE>
"Restricted Subsidiary," if applicable, has the meaning provided in
the Authorizing Resolution.
"Revolving Credit Agreement" means the Credit Agreement dated as of
February 25, 1998 among First Huntingdon Finance, Corp., Toll Brothers, Inc.,
The First National bank of Chicago, (Administrative Agent); Bank of America
National Trust and Savings Association; (co-Agent); CoreStates Bank, N.A.,
(Co-Agent); Credit Lyonnais New York Branch (Co-Agent); Comerica Bank;
Nationsbank, National Association; Fleet National Bank; Guaranty Federal Bank,
F.S.B.; Mellon Bank, N.A.; Banque Paribas; Bayerische Vereinsbank AG, New
York Branch; Kredietbank N.V.; Suntrust Bank, Atlanta; The Fuji Bank
Limited; and Bank Hapoalim B.M. Philadelphia Branch, as the same may be amended
from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" means the securities as amended or supplemented from
time to time that are authenticated and issued under this Indenture.
"Senior Indebtedness of the Company," if applicable, has the meaning
provided in the Authorizing Resolution.
"Senior Indebtedness of the Guarantor," if applicable, has the
meaning provided in the Authorizing Resolution.
"Series" means a series of Securities or the Securities of a Series.
"Special Record Date" has the meaning provided in Section 2.11.
"Subsidiary" means any corporation of which at least a majority in
interest of the outstanding stock having by the terms thereof voting power
under ordinary circumstances to elect a majority of the directors of such
corporation, irrespective of whether or not at the time stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency, is at the time, directly or
indirectly, owned or controlled by the Guarantor.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture and as it may be
amended from time to time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
"Trust Officer" when used with respect to the Trustee means any
officer within the Corporate Trust Department (or any successor group) of the
Trustee, including any Vice President, Second Vice President, Assistant Vice
President, Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
<PAGE>
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder or Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor on the indenture securities" means the Company, the
Guarantor or any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them.
Section 1.03. Incorporation by Reference of Provisions of
Securities. Whenever this Indenture refers to a provision of the Securities,
the provision is incorporated by reference in and made a part of this Indenture.
Section 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles at
the time of the relevant computation;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
<PAGE>
ARTICLE 2
The Securities
Section 2.01. Form and Dating. The aggregate principal
amount of Securities that may be issued under this Indenture is unlimited.
The Securities may be issued from time to time in one or more Series. Each
Series shall be created by an Authorizing Resolution or a supplemental indenture
that establishes the terms of the Series, which may include the following:
(1) the title of the Series;
(2) the aggregate principal amount of the Series;
(3) the interest rate or method of calculation of the interest
rate;
(4) the date from which interest will accrue;
(5) the Record Dates for interest payable on Securities of the
Series;
(6) the dates when, places where and manner in which principal and
interest are payable;
(7) the Registrar and Paying Agent;
(8) the terms of any mandatory or optional redemption by the
Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form
and the terms of any such forms of Securities;
(12) whether any Securities will be represented by a global Security
and the terms of any such global Security;
(13) the currencies (including any composite currency) in which
principal or interest or both may be paid;
(14) if payments of principal or interest may be made in a currency
other than that in which Securities are denominated, the manner for determining
such payments;
(15) provisions for electronic issuance of Securities or issuance of
Securities in uncertificated form;
(16) any Events of Default or covenants in addition to or in lieu of
those set forth in this Indenture;
(17) whether and upon what terms Securities may be defeased;
(18) the form of the Securities and the Guarantees, which, unless the
Authorizing Resolution otherwise provides, shall be in the form of Exhibits A
and B;
<PAGE>
(19) whether the Securities of such Series will be convertible into
Common Stock of the Guarantor and the terms thereof (including without
limitation the Conversion Price, the conversion period and any other provision
in addition to or in lieu of those set forth in this Indenture);
(20) whether the Securities and Guarantees of such Series shall be
subordinated to any obligations of the Company or the Guarantor, and the
obligations to which such subordination will apply;
(21) any terms that may be required by or advisable under applicable
law; and
(22) any other terms not inconsistent with this Indenture.
All Securities of one Series need not be issued at the same time and, unless
otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and
delivery thereof are not subject to any conditions precedent.
Section 2.02. Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be reproduced on the Securities. Two Officers of the
Guarantor shall sign the notation of the Guarantee by manual or facsimile
signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue upon
a written order of the Company signed by two Officers or by an Officer and an
Assistant Treasurer of the Company. Each Security shall be dated the date of
its authentication.
Section 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer, for exchange or, if applicable, for conversion (in the case of
conversion, as agent for the Guarantor) ("Registrar") and an office or agency
where Securities may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer. The Company may
have one or more co-registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of
any such agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
<PAGE>
Section 2.04. Paying Agent To Hold Money in Trust. Each Paying
Agent shall hold in trust for the benefit of the Securityholders or the Trustee
all money held by the Paying Agent for the payment of principal or interest on
the Securities, andshall notify the Trustee of any default by the Company (or
any other obligor on the Securities) in making any such payment. While any
such default continues, the Trustee shall require a Paying Agent to pay all
money held by it to the Trustee. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate the money and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee. Upon doing so the Paying Agent shall have no further liability
for the money.
Section 2.05. Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders. If the Trustee
is not the Registrar, the Company shall furnish to the Trustee on or before
each Interest Payment Date and at such other times as the Trustee may request
in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.
Section 2.06. Transfer and Exchange. Where a Security is
presented to the Registrar or a co-registrar with a request to register a
transfer, the Registrar shall register its transfer as requested if its
reasonable requirements are met. Where Securities are presented to the
Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall
make the exchange as requested if the same requirements are met. To permit
transfers and exchanges, the Trustee shall authenticate Securities at the
Registrar's request. The Registrar need not transfer or exchange any Security
selected for redemption, except the unredeemed part thereof if the Security
is redeemed in part, or transfer or exchange any Securities for a period of
15 days before a selection of Securities to be redeemed. The Company may
charge a reasonable fee for any transfer or exchange (including the payment
of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any such transfer or exchange and any
other expenses in connection therewith) but not for any exchange pursuant to
Section 2.09, 3.06 or 12.05. This Section 2.06 is subject to Section 11 of the
Securities.
Section 2.07. Replacement Securities. If the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security and the Guarantor shall endorse the Guarantee thereon if the Trustee's
reasonable requirements are met. An indemnity bond must be sufficient in the
judgment of the Company, the Guarantor and the Trustee to protect the Company,
the Guarantor, the Trustee, the Paying Agent, the Registrar or any co-registrar
from any loss which any of them may suffer if a Security is replaced. The
Company may charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company and the Guarantor.
Section 2.08. Outstanding Securities. Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
presented to it by the Company or its designee for cancellation and those
described in this Section as not outstanding. A Security does not cease to be
outstanding because the Company, the Guarantor or one of their Affiliates holds
the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a redemption date or maturity date
money sufficient to pay Securities payable on that date, then on and after that
date such Securities cease to be outstanding and interest on them ceases to
accrue.
<PAGE>
If a Security is called for redemption or if it matures in less
than six months and if the Company has satisfied its obligation to pay the
Security, or if a Security has been converted in accordance with the provisions
of Article 10, the Company and the Trustee need not treat the Security as
outstanding in determining whether Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.09. Temporary Securities. Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities and the Guarantor shall endorse the Guarantee
thereon. Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Securities and the Guarantor
shall endorse the Guarantee thereon in exchange for temporary Securities.
Section 2.10. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for transfer,
exchange, conversion or payment. The Trustee and no one else shall cancel and
destroy all Securities surrendered for transfer, exchange, conversion, payment
or cancellation. Unless the Authorizing Resolution so provides, the Company may
not issue new Securities to replace Securities it has paid or delivered to the
Trustee for cancellation.
Section 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, it shall pay the defaulted interest in
any lawful manner. It may pay the defaulted interest, plus any interest payable
on the defaulted interest (to the extent lawful) if an Event of Default has
occurred and is continuing, to the Persons who are Securityholders on a
subsequent special record date (the "Special Record Date"). The Company shall
fix the subsequent Special Record Date and payment date. At least 15 days
before such Special Record Date, the Company shall give notice to the Trustee
and shall mail to each Securityholder a notice that states the subsequent
Special Record Date, the payment date, and the amount of defaulted interest to
be paid.
Section 2.12. Global Securities. Unless the Authorizing
Resolution provides otherwise, the Company may issue some or all of the
Securities of a Series in temporary or permanent global form. A global
Security shall representthat amount of Securities of a Series as specified in
the global Security or as endorsed thereon from time to time. At the Company's
request, the Registrar shall endorse a global Security to reflect the amount of
any increase or decrease in the Securities represented thereby.
<PAGE>
The Company may issue a global Security only to a depositary
designated by the Company. A depositary may transfer a global Security only as
a whole to its nominee or to a successor depositary.
The Authorizing Resolution may establish, among other things, the
manner of paying principal and interest on a global Security and whether and
upon what terms a beneficial owner of an interest in a global Security may
exchange such interest for definitive Securities.
The Company and the Trustee shall not be responsible for any acts or
omissions of a depositary, for any depositary records of beneficial ownership
interests or for any transactions between the depositary and beneficial owners.
ARTICLE 3
Redemption
Section 3.01. Notices to Trustee. Securities of a
Series that are redeemable prior to maturity shall be redeemable in accordance
with their terms and, unless the Authorizing Resolution provides otherwise, in
accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the redemption date
and the principal amount of Securities to be redeemed. Any such notice may be
cancelled at any time prior to notice of such redemption being mailed to
Holders. Any such cancelled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed,
retired or acquired against any redemption pursuant to Paragraph 6 of the
Securities, it shall notify the Trustee of the amount of the credit and it
shall deliver any Securities not previously delivered to the Trustee for
cancellation with such notice.
The Company shall give each notice provided for in this Section
3.01 at least 10 Business Days before the notice of any such redemption is to
be mailed to Holders (unless a shorter notice shall be satisfactory to the
Trustee).
Section 3.02. Selection of Securities To Be Redeemed. If less
than all the Securities of a Series are to be redeemed, the Trustee shall
select the Securities to be redeemed, if the Securities of such Series are
listed on a national securities exchange, in accordance with the rules of such
exchange, or if the Securities of such Series are not so listed, on either a
pro rata basis or by lot or by such method as the Trustee shall deem fair and
appropriate. The Trustee shall make the selection from Securities outstanding
and not previously called for redemption. Securities in denominations of $1,000
may only be redeemed in whole. The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
<PAGE>
Section 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a redemption date, the Company shall mail a notice of
redemption by first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) in the event that any Security is to be redeemed in part only,
the portion of the principal amount thereof to be redeemed and that on and after
the redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will be
issued;
(5) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that interest on Securities called for redemption ceases to
accrue on and after the redemption date;
(7) that the Securities are being redeemed pursuant to the
mandatory redemption or the optional redemption provisions, as applicable; and
(8) if applicable, the current Conversion Price and the date on
which the right to convert the Securities into Common Stock will expire.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
Section 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price. Upon surrender to the
Paying Agent, such Securities shall be paid at the redemption price, plus
accrued interest to the redemption date.
Section 3.05. Deposit of Redemption Price. Prior to the
redemption date, the Company or its designee shall deposit with the Paying Agent
money sufficient to pay the redemption price of and accrued and unpaid interest
on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Trustee shall authenticate for the Holder
a new Security and the Guarantor shall endorse the Guarantee thereon equal in
principal amount to the unredeemed portion of the Securities surrendered.
<PAGE>
ARTICLE 4
Covenants
Section 4.01. Payment of Securities. The Company shall pay
the principal of and interest on Securities of a Series on the dates and in the
manner provided in the Securities of the Series. An installment of principal
or interest shall be considered paid on the date due if the Trustee or Paying
Agent holds on that date immediately available legal tender funds designated
for, available and sufficient to pay the installment.
The Company shall pay interest on overdue principal at the rate
borne by the Series; it shall pay interest on overdue installments of interest
at the same rate to the extent lawful.
Section 4.02. SEC Reports. Within 15 days after each of the
Guarantor and the Company files with the SEC copies of its annual reports and
other information, documents and reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which they are
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act, the Guarantor and the Company shall file the same with the Trustee. If
the Guarantor shall cease to be subject to the requirements of Section 13 or
15(d) of the Exchange Act, the Guarantor shall file with the Trustee, within 15
days after the last date on which it would have been required to make such a
filing with the SEC, financial statements, including any notes thereto, and a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," each comparable to that which the Guarantor would have been
required to include in such annual reports, information, documents or other
reports, if the Guarantor were then subject to the requirements of Section 13
or 15(d) of the Exchange Act. The Company and the Guarantor also shall comply
with the other provisions of TIA Section 314(a).
Section 4.03. Compliance Certificate. The Company and the
Guarantor each shall deliver to the Trustee within 120 days after the end of
their respective fiscal year an Officers' Certificate satisfying the
requirements of Section 3.14(a)(4) of the TIA and stating whether or not the
signers know of any Default or Event of Default. If they do know of such a
Default or Event of Default, the certificate shall describe the Default or
Event of Default.
ARTICLE 5
Successor Corporation
Section 5.01. When the Company and the Guarantor
May Merge, Etc. Neither the Company nor the Guarantor shall consolidate with or
merge into, or transfer all or substantially all of its assets to, any other
person unless (i) such other Person is a corporation organized and existing
under the laws of the United States or a State thereof or the District of
Columbia and expressly assumes by supplemental indenture all the obligations
of the Company or the Guarantor under the Indenture and either the Securities
or the Guarantee, as the case may be; (ii) immediately after giving effect to
such transaction no Default or Event of Default shall have occurred and be
continuing; and (iii) the Consolidated Net Worth of the surviving corporation
is equal to or greater than the Consolidated Net Worth of the Company or the
Guarantor, as the case may be, immediately prior to such merger or transfer
of assets. Thereafter all such obligations of the predecessor corporation shall
terminate.
<PAGE>
ARTICLE 6
Subordination
Section 6.01. Agreement To Subordinate. The
provisions of this Article 6 shall apply to the Securities of a Series to the
extent specified in the Authorizing Resolution relating to such Series. Each
reference in this Article 6 to "a
Security" or "the Securities" refers to the Securities of each such Series so
designated.
The Company, for itself and its successors, and each Holder, by accepting
Securities, agrees that the payment of the principal of, interest on or any
other amounts due on the Securities are subordinated in right of payment, to the
extent and in the manner stated in this Article 6, to the prior payment in full
of all Senior Indebtedness of the Company. Each Holder by accepting Securities
authorizes and directs the Trustee on behalf of such Holder to take such action
as may be necessary or appropriate to effectuate, as between the holders of
Senior Indebtedness of the Company and such Holder, the subordination provided
in this Article 6 and appoints the Trustee attorney-in-fact for such Holder for
such purpose.
This Article 6 shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness of the Company, and such provisions are made for the
benefit of the holders of Senior Indebtedness of the Company and such holders
are made obligees hereunder and they and/or each of them may enforce such
provisions.
Section 6.02. Company Not To Make Payments with Respect to
Securities in Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness of the Company
by lapse of time, acceleration (unless waived) or otherwise, all principal
thereof and interest thereon shall first be paid in full, or such payment duly
provided for in cash or in a manner satisfactory to the holders of such Senior
Indebtedness of the Company, before any payment is made on account of the
principal of or interest on the Securities or to acquire any of the Securities.
(b) In the event that notwithstanding the provisions of this
Section 6.02 the Company shall make any payment to the Trustee on account of
the principal of or interest on the Securities after the happening of a default
in payment of the principal of or interest on Senior Indebtedness of the
Company, then, unless and until such default shall have been cured or waived or
shall have ceased to exist, such payment (subject to the provisions of Sections
6.06 and 6.07) shall be held by the Trustee, in trust for the benefit of, and
shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness of the Company (pro rata as to each of such holders on the basis
of the respective amounts of Senior Indebtedness of the Company held by them)
or their representative or the trustee under the indenture or other agreement
(if any) pursuant to which Senior Indebtedness of the Company may have been
issued, as their respective interests may appear, for
application to the payment of all Senior Indebtedness of the Company
remaining unpaid to the extent necessary to pay all Senior Indebtedness of the
Company in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of the Senior
Indebtedness of the Company.
<PAGE>
The Company shall give prompt written notice to the Trustee of any
default in the payment of principal of or interest on any Senior Indebtedness
of the Company.
Section 6.03. Securities Subordinated to Prior Payment of All
Senior Indebtedness of the Company on Dissolution, Liquidation or
Reorganization of the Company. Upon any distribution of assets of the Company
in any dissolution, winding up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefits of creditors or otherwise):
(a) the holders of all Senior Indebtedness of the Company shall
first be entitled to receive payment in full of the principal thereof and
interest due thereon before the Holders of the Securities are entitled to
receive any payment on account of the principal of or interest on the
Securities;
(b) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which the Holders
of the Securities or the Trustee on behalf of the Holders of the Securities
would be entitled except for the provisions of this Article 6, including any
such payment or distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Company being subordinated to the
payment of the Securities, shall be paid by the liquidating trustee or agent or
other Person making such payment or distribution directly to the holders of the
Senior Indebtedness of the Company or their representative, or to the trustee
under any indenture under which Senior Indebtedness of the Company may have been
issued (pro rata as to each such holder, representative or trustee on the basis
of the respective amounts of unpaid Senior Indebtedness of the Company held or
represented by each), to the extent necessary to make payment in full of all
Senior Indebtedness of the Company remaining unpaid, after giving effect to any
concurrent payment or distribution or provision therefor to the holders of such
Senior Indebtedness of the Company, except that Holders of the Securities would
be entitled to receive securities that are subordinated to Senior Indebtedness
of the Company to at least the same extent as the Securities; and
(c) in the event that notwithstanding the foregoing provisions
of this Section 6.03, any payment or distribution of assets of the Company of
any kind or character whether in cash, property or securities, including any
such payment or distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Company being subordinated to the
payment of the Securities, shall be received by the Trustee or the Holders of
the Securities on account of principal of or interest on the Securities before
all Senior Indebtedness of the Company is paid in full, or effective provision
made for its payment, such payment or distribution (subject to the provisions
of Sections 6.06 and 6.07) shall be received and held in trust for and shall be
paid over to the holders of the Senior Indebtedness of the Company remaining
unpaid or unprovided for or their representative, or to the trustee under any
indenture under which such Senior Indebtedness of the Company may have been
issued (pro rata as provided in subsection (b) above), for application to the
payment of such Senior Indebtedness of the Company until all such Senior
Indebtedness of the Company shall have been paid in full, after giving effect
to any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness of the Company, except that Holders of the
Securities would be entitled to receive securities that are subordinated to
Senior Indebtedness of the Company to at least the same extent as the
Securities.
<PAGE>
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company.
Section 6.04. Securityholders To Be Subrogated to Rights of
Holders of Senior Indebtedness of the Company. Subject to the payment in full
of all Senior Indebtedness of the Company, the Holders of the Securities shall
be subrogated equally and ratably to the rights of the holders of the Senior
Indebtedness of the Company to receive payments or distributions of assets of
the Company applicable to the Senior Indebtedness of the Company until all
amounts owing on the Securities shall be paid in full, and for the purpose of
such subrogation no payments or distributions to the holders of the Senior
Indebtedness of the Company by or on behalf of the Company or by or on behalf
of the Holders of the Securities by virtue of this Article 6 which otherwise
would have been made to the Holders of the Securities shall, as among the
Company, its creditors other than holders of the Senior Indebtedness of the
Company and the Holders of the Securities, be deemed to be payment by the
Company to or on account of the Senior Indebtedness of the Company, it being
understood that the provisions of this Article 6 are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on the
one hand, and the holders of the Senior Indebtedness of the Company, on the
other hand.
Section 6.05. Obligation of the Company Unconditional. Nothing
contained in this Article 6 or elsewhere in this Indenture or in any Security is
intended to or shall impair, as between the Company and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of and interest on the
Securities as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors of the Company other than the holders of
the Senior Indebtedness of the Company, nor shall anything herein or therein
prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article 6 of the holders of Senior
Indebtedness of the Company in respect of cash, property or securities of the
Company received upon the exercise of any such remedy. Upon any distribution
of assets of the Company referred to in this Article 6, the Trustee, subject to
the provisions of Sections 9.01 and 9.02, and the Holders of the Securities
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other Person making any distribution to the Trustee or
the Holders of the Securities, for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness of the Company and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 6.
Nothing contained in this Article 6 or elsewhere in this Indenture
or in any Security is intended to or shall affect the obligation of the Company
to make, or prevent the Company from making, at any time except during the
pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and except during the continuance of any default specified in
Section 6.02 (not cured or waived), payments at any time of the principal of or
interest on the Securities.
<PAGE>
Section 6.06. Knowledge of Trustee. Notwithstanding any
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee until two business days after the Trustee shall
have received written notice thereof from the Company, any Securityholder or
any Paying Agent or the holder or representative of any class of Senior
Indebtedness of the Company.
Section 6.07. Application by Trustee of Monies Deposited with It.
If at least two business days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may become
payable for any purpose (including, without limitation, the payment of either
the principal of or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 6.06,
then the Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section shall be construed solely for the benefit of the
Trustee and such Paying Agent and shall not otherwise affect the rights of
holders of Senior Indebtedness of the Company.
Section 6.08. Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness of the Company. No
right of any present or future holders of any Senior Indebtedness of the
Company to enforce subordination as provided herein shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company with the terms of this Indenture, regardless
of any knowledge thereof which any such holder may have or be otherwise charged
with. The holders of Senior Indebtedness of the Company may extend, renew,
modify or amend the terms of the Senior Indebtedness of the Company or any
security therefor and release, sell or exchange such security and otherwise deal
freely with the Company, all without affecting the liabilities and obligations
of the parties to this Indenture or the Holders. No provision in any
supplemental indenture which affects the superior position of the holders of
Senior Indebtedness of the Company shall be effective against the holders of
Senior Indebtedness of the Company who have not consented thereto.
Section 6.09. Securityholders Authorize Trustee To Effectuate
Subordination of Securities. Each Holder of Securities by acceptance thereof
authorizes and expressly directs the Trustee on its, his or her behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article 6 and appoints the Trustee its, his or her attorney-in-
fact for such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise) tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of its, his or
her Securities in the form required in said proceedings and cause said claim to
be approved. If the Trustee does not file a proper claim or proof of debt in
the form required in such proceedings prior to 30 days before the expiration of
the time to file such claim or claims, then the holders of Senior Indebtedness
of the Company have the right to file and are hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Securities.
Section 6.10. Right of Trustee To Hold Senior Indebtedness of the
Company. The Trustee shall be entitled to all of the rights set forth in this
Article 6 in respect of any Senior Indebtedness of the Company at any time held
by it to the same extent as any other holder of Senior Indebtedness of the
Company and nothing in this Indenture shall be construed to deprive the Trustee
of any of its rights as such holder.
Section 6.11. Article Six Not To Prevent Events of Default. The
failure to make a payment on account of principal or interest by reason of any
provision in this
Article 6 shall not be construed as preventing the occurrence of an
Event of Default under Section 8.01.
ARTICLE 7
Guarantee
Section 7.01. Guarantee. The Guarantor hereby
unconditionally guarantees (such guarantee to be referred to herein as the
"Guarantee") to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Securities or the obligations
of the Company hereunder or thereunder, (i) the due and punctual payment of the
principal of and any interest on the Securities, whether at maturity or on an
Interest Payment Date, by acceleration or otherwise, and interest on the
overdue principal of and interest, if any, on the Securities, if lawful, and
all other obligations of the Company to the Holders or the Trustee hereunder or
under the Securities shall be promptly paid in full, all in accordance with
the terms hereof and thereof including all amounts payable to the Trustee under
Section 9.07 hereof, and (ii) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that the same shall
be promptly paid in full when due or to be performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
<PAGE>
If the Company fails to make any payment when due of any amount so
guaranteed for whatever reason, the Guarantor shall be obligated to pay the
same immediately. The Guarantor hereby agrees that its obligations hereunder
shall be continuing, absolute and unconditional, irrespective of, and shall be
unaffected by, the validity, regularity or enforceability of the Securities,
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Securities or the Trustee with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of the Guarantor. The
Guarantor hereby waives diligence, presentment, demand of payment, demand of
performance, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, the benefit of discussion, protest, notice and all demand whatsoever
and covenants that this Guarantee shall not be discharged except by complete
performance of the obligations contained in the Securities, in this Indenture
and in this Article 7. If any Securityholder or the Trustee is required by any
court or otherwise to return to the Company or the Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or the Guarantor, any amount paid by the Company or the Guarantor to the Trustee
or such Securityholder, this Article 7, to the extent theretofore discharged,
shall be reinstated in full force and effect. The Guarantor agrees that it
shall not be entitled to any right of subrogation in relation to the
Securityholders in respect of any obligations guaranteed hereby until payment
in full of all obligations guaranteed hereby. The Guarantor further agrees
that, as between the Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (i) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 8 for the purposes of the
Guarantee,notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (ii)
in the event of any declaration of acceleration of such obligations as provided
in Article 8 such obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantor for the purpose of this Article 7.
In addition, without limiting the foregoing, upon the effectiveness of an
acceleration under Article 8, the Trustee may make a demand for payment on the
Securities under the Guarantee provided hereunder and not discharged.
The Guarantor shall be subrogated to all rights of the Holder of any
Securities against the Company in respect of any amounts paid to the Holder by
the Guarantor pursuant to the provisions of this Guarantee; provided that the
Guarantor shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until the principal of
and interest on all the Securities shall have been paid in full.
The Guarantee set forth in this Section 7.01 shall not be valid or become
obligatory for any purpose with respect to a Security until the certificate of
authentication on such Security shall have been signed by the Trustee or
any duly appointed agent.
Section 7.02. Agreement To Subordinate. The provisions of this
Article 7 shall apply to the Securities of a Series to the extent specified in
the Authorizing Resolution relating to such Series. Each reference in this
Article 7 to "a Security" or "the Securities" refers to the Securities of each
such Series so designated.
The Guarantor, for itself and its successors, and each Holder, by
accepting the Securities, agrees that the payment of the principal of, interest
on and any other amounts due on the Securities pursuant to the Guarantee are
subordinated in right of payment, to the extent and in the manner stated in this
Article 7, to the prior payment in full of all Senior Indebtedness of the
Guarantor. Each Holder by accepting Securities authorizes and directs the
Trustee on behalf of such Holder to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Indebtedness of the
Guarantor and such Holder, the subordination provided in this Article 7 and
appoints the Trustee attorney-in-fact for such Holder for such purpose.
This Article shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness of the Guarantor, and such provisions are made for the benefit of
the holders of Senior Indebtedness of the Guarantor, and such holders are made
obligees hereunder and they and/or each of them may enforce such provisions.
Section 7.03. Guarantor Not To Make Payments with Respect to
Securities in Certain Circumstances.
(a) Upon the maturity of any Senior Indebtedness of the Guarantor
by lapse of time, acceleration (unless waived) or otherwise, all principal
thereof and interest thereon shall first be paid in full, or such payment duly
provided for in cash or in a manner satisfactory to the holders of such Senior
Indebtedness of the Guarantor, before any payment, pursuant to the Guarantee, is
made on account of the principal of or interest on the Securities or to acquire
any of the Securities.
(b) In the event that notwithstanding the provisions of this
Section 7.03 the Guarantor shall make any payment to the Trustee on account of
the principal of or interest on the Securities after the happening of a default
in payment of the principal of or interest on Senior Indebtedness of the
Guarantor, then, unless and until such default shall have been cured or waived
or shall have ceased to exist, such payment (subject to the provisions of
Sections 7.07 and 7.08) shall be held by the Trustee, in trust for the benefit
of, and shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness of the Guarantor (pro rata as to each of such holders on the basis
of the respective amounts of Senior Indebtedness of the Guarantor held by them)
or their representative or the trustee under the indenture or other agreement
(if any) pursuant to which Senior Indebtedness of the Guarantor may have been
issued, as their respective interests may appear, for application to the
payment of all Senior Indebtedness of the Guarantor remaining unpaid to the
extent necessary to pay all Senior Indebtedness of the Guarantor in full in
accordance with its terms, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness of the Guarantor.
The Guarantor shall give prompt written notice to the Trustee of any
default in the payment of principal of or interest on any Senior Indebtedness of
the Guarantor.
Section 7.04. Guarantee Subordinated to Prior Payment of All
Senior Indebtedness of the Guarantor on Dissolution, Liquidation or
Reorganization of the Guarantor. Upon any distribution of assets of the
Guarantor in any dissolution, winding up, liquidation or reorganization of the
Guarantor (whether in bankruptcy, insolvency or receivership proceedings or
upon an assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness of the Guarantor shall
first be entitled to receive payment in full of the principal thereof and
interest due thereon before the Holders of the Securities are entitled to
receive any payment on account of the principal of or interest on the Securities
pursuant to the Guarantee;
(b) any payment or distribution of assets of the Guarantor of any
kind or character, whether in cash, property or securities, to which the Holders
of the Securities or the Trustee on behalf of the Holders of the Securities
would be entitled except for the provisions of this Article 7, including any
such payment or distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Guarantor being subordinated to
the payment of the Securities, shall be paid by the liquidating trustee or agent
or other Person making such payment or distribution directly to the holders of
the Senior Indebtedness of the Guarantor or their representative, or to the
trustee under any indenture under which Senior Indebtedness of the Guarantor may
have been issued (pro rata as to each such holder, representative or trustee on
the basis of the respective amounts of unpaid Senior Indebtedness of the
Guarantor held or represented by each), to the extent necessary to make payment
in full of all Senior Indebtedness of the Guarantor remaining unpaid, after
giving effect to any concurrent payment or distribution or provision therefor
to the holders of such Senior Indebtedness of the Guarantor,
except that Holders of the Securities would be entitled to receive securities
that are subordinated to Senior Indebtedness of the Guarantor to at least the
same extent as the Securities; and
<PAGE>
(c) in the event that, notwithstanding the foregoing provisions of
this Section 7.04, any payment or distribution of assets of the Guarantor of
any kind or character, whether in cash, property or securities, including any
such payment or distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Guarantor being subordinated to
the payment of the Securities, shall be received by the Trustee or the Holders
of the Securities on account of principal of or interest on the Securities
before all Senior Indebtedness of the Guarantor is paid in full, or effective
provision made for its payment, such payment or distribution (subject to the
provisions of Sections 7.07 and 7.08) shall be received and held in trust for
and shall be paid over to the holders of the Senior Indebtedness of the
Guarantor remaining unpaid or unprovided for or their representative, or to the
trustee under any indenture under which such Senior Indebtedness of the
Guarantor may have been issued (pro rata as provided in
subsection (b) above), for application to the payment of such Senior
Indebtedness of the Guarantor until all such Senior Indebtedness of the
Guarantor shall have been paid in full, after giving effect to any concurrent
payment or distribution or provision therefor to the holders of such Senior
Indebtedness of the Guarantor, except that Holders of the Securities would be
entitled to receive securities that are subordinated to Senior Indebtedness of
the Guarantor to at least the same extent as the Securities.
Upon any distribution of assets of the Guarantor referred to in this
Article 7, the Trustee, subject to the provisions of Sections 9.01 and 9.02,
and the Holders of the Securities shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating trustee or agent or other Person making any
distribution to the Trustee or the Holders of the Securities, for the purpose
of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness of the Guarantor
and other Indebtedness of the Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 7.
The Guarantor shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Guarantor.
Section 7.05. Securityholders To Be Subrogated to Rights of
Holders of Senior Indebtedness of the Guarantor. Subject to the payment in full
of all Senior Indebtedness of the Guarantor, the Holders of the Securities shall
be subrogated equally and ratably to the rights of the holders of the Senior
Indebtedness of the Guarantor to receive payments or distributions of assets of
the Guarantor applicable to the Senior Indebtedness of the Guarantor until all
amounts owing on the Securities shall be paid in full, and for the purpose of
such subrogation no payments or distributions to the holders of the Senior
Indebtedness of the Guarantor by or on behalf of the Guarantor or by or on
behalf of the Holders of the Securities by virtue of this Article 7 which
otherwise would have been made to the Holders of the Securities shall, as among
the Guarantor, its creditors other than holders of Senior Indebtedness of the
Guarantor and the Holders of the Securities, be deemed to be payment by the
Guarantor to or on account of the Senior Indebtedness of the Guarantor, it being
understood that the provisions of this Article 7 are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on the
one hand, and the holders of the Senior Indebtedness of the Guarantor, on the
other hand.
<PAGE>
Section 7.06. Obligation of the Guarantor Unconditional. Nothing
contained in this Article 7 or elsewhere in this Indenture or in any Security
is intended to or shall impair, as between the Guarantor and the Holders of the
Securities, the obligation of the Guarantor, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
interest on the Securities as and when the same shall become due and payable in
accordance with the terms of the Guarantee, or is intended to or shall affect
the relative rights of the Holders of the Securities and creditors of the
Guarantor other than the holders of the Senior Indebtedness of the Guarantor,
nor shall anything herein or therein prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
Default under this Indenture, subject to the rights, if any, under this Article
7 of the holders of Senior Indebtedness of the Guarantor in respect of cash,
property or securities of the Guarantor received upon the exercise of any such
remedy.
Nothing contained in this Article 7 or elsewhere in this Indenture
or in any Security is intended to or shall affect the obligation of the
Guarantor to make, or prevent the Guarantor from making, at any time except
during the pendency of any dissolution, winding up, liquidation or
reorganization proceeding, and except during the continuance of any default
specified in Section 7.03 (not cured or waived), payments at any time of the
principal of or interest on the Securities pursuant to the Guarantee.
Section 7.07. Knowledge of Trustee. Notwithstanding any provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of monies
to or by the Trustee until two Business Days after the Trustee shall have
received written notice thereof from the Guarantor, any Securityholder or any
Paying Agent or the holder or representative of any class of Senior Indebtedness
of the Guarantor.
Section 7.08. Application by Trustee of Monies Deposited with It.
If at least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may become
payable for any purpose (including, without limitation, the payment of either
the principal of or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 7.07,
then the Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section shall be construed solely for the benefit of the
Trustee and such Paying Agent and shall not otherwise affect the rights of
holders of Senior Indebtedness of the Guarantor.
<PAGE>
Section 7.09. Subordination Rights Not Impaired by Acts or
Omissions of Guarantor or Holders of Senior Indebtedness of the Guarantor.
No right of any present or future holders of any Senior Indebtedness of the
Guarantor to enforce subordination as provided herein shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Guarantor or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Guarantor with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness of the Guarantor may
extend, renew, modify or amend the terms of the Senior Indebtedness of the
Guarantor, or any security therefor and release, sell or exchange such security
and otherwise deal freely with the Guarantor, all without affecting the
liabilities and obligations of the parties to the Indenture or the Holders. No
provision in any supplemental indenture which affects the superior position
of the holders of Senior Indebtedness of the Guarantor shall be effective
against the holders of Senior Indebtedness of the Guarantor who have not
consented thereto.
Section 7.10. Securityholders Authorize Trustee To Effectuate
Subordination of Guarantee. Each Holder of Securities by acceptance thereof
authorizes and expressly directs the Trustee on its, his or her behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article 7 and appoints the Trustee its, his or her
attorney-in-fact for such purpose, including, in the event of any dissolution,
winding up, liquidation or reorganization of the Guarantor (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of the Guarantor, the immediate filing of a claim for the
unpaid balance, pursuant to the Guarantee, of its, his or her Securities, in the
form required in said proceedings and cause said claim to be approved. If the
Trustee does not file a proper claim or proof of debt in the form required in
such proceeding prior to 30 days before the expiration of the time to file such
claim or claims, then the holders of Senior Indebtedness of the Guarantor have
the right to file and are hereby authorized to file an appropriate claim for
and on behalf of the Holders of said Securities.
Section 7.11. Right of Trustee To Hold Senior Indebtedness of the
Guarantor. The Trustee shall be entitled to all of the rights set forth in this
Article 7 in respect of any Senior Indebtedness of the Guarantor at any time
held by it to the same extent as any other holder of Senior Indebtedness of the
Guarantor, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
Section 7.12. Article 7 Not To Prevent Events of Default. The
failure to make a payment on account of principal or interest by reason of any
provision in this Article 7 shall not be construed as preventing the occurrence
of an Event of Default under Section 8.01.
Section 7.13. Execution and Delivery of Guarantee. To evidence the
Guarantee set forth in this Article 7, the Guarantor hereby agrees that a
notation of the Guarantee, substantially in the form of Exhibit B hereto, shall
be endorsed on each Security authenticated and delivered by the Trustee and that
this Indenture shall be executed on behalf of the Guarantor by the Chairman of
the Board, its President or one of its Vice Presidents under a facsimile of its
seal reproduced thereon.
The Guarantor hereby agrees that its Guarantee shall remain in full
force and effect notwithstanding any failure to endorse on each Security a
notation of the Guarantee.
If an Officer whose signature is on this Indenture or on the
Securities no longer holds that office at the time the Trustee authenticates the
Security on which a notation of the Guarantee is endorsed, the Guarantee shall
be valid nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of the Guarantor.
Section 7.14. Subordination of Indebtedness Owed by the Company to
the Guarantor. Any indebtedness owed by the Company to the Guarantor
shall be subordinate to all obligations of the Company with respect to the
Securities and this Indenture to the same extent as the Securities are
subordinated to Senior Indebtedness of the Company.
Section 7.15. Officers' Certificate. If there occurs an event
referred to in the first sentence of Section 7.04(c) or the first sentence of
Section 7.04, the Guarantor shall promptly give to the Trustee an Officers'
Certificate (on which the Trustee may conclusively rely) identifying all holders
of Senior Indebtedness of the Guarantor and the principal amount of Senior
Indebtedness of the Guarantor then outstanding held by each such holder and
stating the reasons why such Officers' Certificate is being delivered to the
Trustee.
ARTICLE 8
Defaults and Remedies
Section 8.01. Events of Default. An "Event of
Default" on a Series occurs if:
(1) the Company or the Guarantor defaults in the payment of
interest on any Security of the Series when the same becomes due and payable
and the default continues for a period of 30 days whether or not such payment
shall be prohibited by the provisions of Article 6 or Article 7; or
(2) the Company or the Guarantor defaults in the payment of the
principal of any Security of the Series when the same becomes due and
payable at maturity or upon redemption, whether or not such payment shall be
prohibited by the provisions of Article 6 or Article 7; or
(3) the Company or the Guarantor fails to comply with any of its
other agreements in the Securities, the Guarantee or this Indenture applicable
to the Series and such failure continues for the period and after the notice
specified below; or
(4) there occurs a default in the payment of indebtedness of the
Company, the Guarantor or any Subsidiary under the terms of the instrument
evidencing
or securing such indebtedness permitting the holder thereof to accelerate
the payment of in excess of an aggregate of $2,000,000 in principal amount of
such indebtedness (after the lapse of applicable grace periods) or, in the case
of non-payment defaults, there occurs an acceleration of any such indebtedness
if such acceleration is not rescinded or annulled within 10 days after such
acceleration; provided, the term "indebtedness" as used in this Section 8.01(4)
shall not include an acceleration of or default on Non-Recourse Indebtedness
(a) if the Guarantor would be able to declare a dividend pursuant to the terms
of such Series in the amount of the excess of the aggregate book value of all
property (net of any previous write-downs or reserves in respect of such
property) subject to the Non-Recourse Indebtedness being accelerated or in
default over such Non-Recourse Indebtedness or (b) which consists of a purchase
money obligation, provided such purchase money obligation does not exceed
$2,000,000 in aggregate principal amount; or
<PAGE>
(5) a final judgment for the payment of money in an amount in excess of
$2,000,000 shall be entered against the Company, the Guarantor or any
Subsidiary, and shall remain undischarged for a period (during which execution
shall not be effectively stayed) of 60 days after the date on which the right
to appeal has expired; provided the term "final judgment" shall not include a
Non-Recourse Judgment unless the book value of all property (net of any previous
write-downs or reserves in respect of such property) subject to such
Non-Recourse Judgment exceeds the amount of such Non-Recourse Judgment by more
than $5,000,000; or
(6) the Company and the Guarantor pursuant to or within the meaning
of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
or
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) provides for relief against the Company and the Guarantor
in involuntary case,
(B) appoints a Custodian of the Company and the Guarantor for
all or substantially all of its property, or
(C) orders the liquidation of the Company and the Guarantor and
the order or decree remains unstayed and in effect for 90 days; or
(8) the Guarantee shall for any reason (other than pursuant to its
terms) cease to be in full force and effect.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
A default under clause (3) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the Securities of
the Series affected notify the Company of the default and the Company does not
cure the default within 60 days after receipt of the notice. The notice must
specify the default, demand that it be remedied and state that the notice is a
"Notice of Default."
Section 8.02. Acceleration. If an Event of Default (other than an
Event of Default under Section 8.01(6) or 8.01(7)) on a Series occurs and is
continuing, the Trustee by notice to the Company and the Person or Persons
designated to receive notices for the Agent (or other Person acting on behalf of
the banks) under the Revolving Credit Agreement, or the Holders of at least 25%
in principal amount of the outstanding Securities of the Series by notice to the
Company, the Trustee and such Person or Persons (either such notice is referred
to herein as an "Acceleration Notice") may declare the unpaid principal of and
accrued and unpaid interest on all the Securities of the Series to be due and
payable if, with respect to such Series, (i)(a) no Designated Senior Debt of the
Company or the Guarantor is outstanding, or (b) if the Securities of the Series
are not subordinated to other indebtedness of the Company, immediately, or (ii)
if Designated Senior Debt of the Company or the Guarantor is outstanding and
the Securities of the Series are subordinated to other indebtedness of the
Company, upon the earlier of (A) ten days after such Acceleration Notice is
received by the Company and (B) the acceleration of any Senior Indebtedness of
the Company or the Guarantor. If an Event of Default specified in Section
8.01(6) or 8.01(7) occurs, the unpaid principal of and accrued and unpaid
interest on the Securities then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholder. The Holders of a majority in principal
amount of the Securities of the Series by notice to the Trustee may rescind such
declaration or acceleration and its consequences if all existing Events of
Default have been cured or waived (except nonpayment of principal or interest
that has become due solely because of the acceleration) and if the rescission
would not conflict with any judgment or decree.
The Company and the Guarantor (i) agree, promptly after execution of this
Indenture, to notify the Trustee in writing of the Person or Persons referred
to in the first sentence of this Section 8.02 and (ii) agree, promptly after any
change thereof, to so notify the Trustee. Any failure by the Trustee or holders
of Securities to give an Acceleration Notice to such Person or Persons will
not affect the substance or validity of the Acceleration Notice provided that
it is otherwise given in accordance with the first paragraph of this Section
8.02.
Section 8.03. Other Remedies. If an Event of Default on a Series
occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect the payment of principal or interest
on the Series or to enforce the performance of any provisions of the Securities
or this Indenture and applicable to the Series. The Trustee may maintain a
proceeding even if it does not possess any of the Securities or does not
produce any of them in the proceeding. A delay or omission by the Trustee or
any Securityholder in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
Section 8.04. Waiver of Past Defaults. Subject to Section 12.02,
the Holders of a majority in principal amount of the Securities of a Series by
notice to the Trustee may waive on behalf of all Holders of Securities of the
Series an existing Default and its consequences. When a Default is waived, it
is cured and stops continuing, but no such waiver shall extend to any subsequent
or other Default or impair any right consequent thereon.
Section 8.05. Control by Majority. The Holders of a majority in
principal amount of the Securities of a Series may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it with respect to such Series.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, that is unduly prejudicial to the rights of another
Securityholder, or that would involve the Trustee in personal liability.
<PAGE>
Section 8.06. Limitation on Suits. A Securityholder may not
pursue any remedy with respect to this Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in principal amount of the Securities
of the Series make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory
to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the Securities do not give the Trustee a direction inconsistent with
such request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 8.07. Rights of Holders To Receive Payment.
Notwithstanding any other provisions of this Indenture, the right of any Holder
of a Security to receive payment of principal of and interest on the Security,
on or after the respective due dates expressed in the Security, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Holder.
Section 8.08. Collection Suit by Trustee. If an Event of Default
in payment of interest or principal specified in Section 8.01(1) or (2) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company, the Guarantor or any other
obligor on the Securities for the whole amount of principal and interest
remaining unpaid.
Section 8.09. Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Securities, including the Guarantor), its creditors or its
property.
Section 8.10. Priorities. If the Trustee collects any money
pursuant to this Article 8, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 9.07;
Second: to the holders of Senior Indebtedness of the Company as
required by Article 6 and to the holders of Senior Indebtedness of the Guarantor
as required by Article 7;
Third: to Securityholders of the Series for amounts due and unpaid
on the Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Series for
principal and interest, respectively; and
Fourth: to the Company, or its designee.
The Trustee may fix a record date and payment date for any payment
to Securityholders.
<PAGE>
Section 8.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including attorneys' fees, against any party litigant
in the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit by
the Trustee, a suit by a Holder pursuant to Section 8.07, or a suit by Holders
of more than 10% in principal amount of the Securities of the Series.
ARTICLE 9
Trustee
Section 9.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise as a prudent
man would exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 8.05.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company or the
Guarantor, as the case may be.
(g) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
Section 9.02. Rights of Trustee. Subject to Section 9.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on the Certificate or Opinion.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
Section 9.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 9.10 and 9.11.
Section 9.04. Trustee Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement in the
Securities other than its certificate of authentication.
Section 9.05. Notice of Defaults. If a Default on a Series occurs
and is continuing and if it is known to the Trustee, the Trustee shall mail to
each Securityholder notice of the Default within 90 days after it occurs.
Except in the case of a default in payment of principal or interest on a Series,
the Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders of the Series.
Section 9.06. Reports by Trustee to Holders. Within 60 days after
each May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder, if required by TIA Section 313(a), a
brief report dated as of such May 15 that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b) and Section 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed.
The Company shall notify the Trustee when the Securities have been listed on
any securities exchange.
Section 9.07. Compensation and Indemnity. The Company and the
Guarantor shall pay to the Trustee from time to time reasonable compensation for
its services. The Trustee's compensation hereunder shall not be limited by
any law on compensation relating to the trustee of an express trust.
The Company and the Guarantor shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred by it. Such expenses shall include
the reasonable compensation and expenses of the Trustee's agents and counsel.
The Company and the Guarantor shall indemnify and hold harmless the Trustee
against any loss or liability incurred by it in the administration of this trust
or the performance of its duties hereunder. The Trustee shall notify the
Company and the Guarantor promptly of any claim for which it may seek indemnity.
The Company and the Guarantor shall defend the claim and the Trustee shall
cooperate in the defense. In the event that counsel to the Trustee shall advise
counsel to the Company and the Guarantor that there may be defenses reasonably
available to the Trustee different than or additional to those available to the
Company and the Guarantor, then in such event the Trustee shall be permitted to
employ counsel of its choosing at the expense of the Company and the Guarantor.
The Company and the Guarantor need not pay for any settlement made without their
consent. The Company and the Guarantor need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence, bad faith or with willful misconduct.
To ensure the Company's and the Guarantor's payment obligations in
this Section, the Trustee shall have a claim prior to the Securities on all
money or property held or collected by the Trustee, except that held in trust to
pay principal and interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 8.01(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 9.08. Replacement of Trustee. The Trustee may resign by
so notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee to be removed and
may appoint a successor Trustee with the Company's and the Guarantor's consent.
The Company or the Guarantor may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee (subject to the prior claim provided by Section 9.07). Any
resignation or removal of the Trustee and any appointment of a successor Trustee
shall become effective upon acceptance of appointment by the successor Trustee.
The successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company of the
Holders of a majority in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10, any Securityholder
may, subject to Section 8.11, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
Section 9.09. Successor Trustee by Merger, etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
Section 9.10. Eligibility; Disqualification. This Indenture shall
always have a Trustee who satisfies the requirements of TIA Section 310(a)(1).
The Trustee shall have a combined capital and surplus of at least $15,000,000 as
set forth in the most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b).
Section 9.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 10
CONVERSION OF SECURITIES
Section 10.01. Applicability of Article. Securities of any Series
which are convertible into Common Stock at the option of the Holder shall be
convertible in accordance with their terms and unless the Authorizing
Resolution provides otherwise, in accordance with this Article.
Each reference in this Article 10 to "a Security" or "the Securities" refers to
the Securities of the particular Series that is convertible into Common Stock.
If more than one Series of Securities with conversion privileges are outstanding
at any time, the provisions of this Article 10 shall be applied separately to
each such Series.
Section 10.02. Conversion Privilege. Subject to and upon
compliance with the provisions of this Article 10, the Holder of any Security so
designated shall have the right, at its, his or her option, at any time prior to
the close of business on the date specified in the Securities of such Series (or
if such Security or portion thereof is called for redemption prior to such date,
then in respect of such Security or portion thereof to and including but not
after the close of business on the second day (or, if such day is not a Business
Day, then on the next following Business Day) preceding the date fixed for such
redemption) to convert the principal amount of any such Security, or any portion
of such principal amount which is $1,000 or an integral multiple thereof, into
that number of fully paid and non-assessable shares of the Guarantor's Common
Stock (calculated as to each conversion to the nearest 1/100th of a share)
obtained by dividing the principal amount of the Security or portion thereof to
be converted by the Conversion Price and by surrender of the Security so to be
converted in whole or in part, such surrender to be made in the manner provided
in Section 10.03. Notwithstanding the previous sentence, if the Company shall
fail to redeem a Security which has been called for redemption, the Holder of
such Security shall retain the right to convert such Security as provided in
this Article 10.
Section 10.03. Manner of Exercise of Conversion Privilege. In
order to exercise a conversion privilege, the Holder of any Security to be
converted in whole or in part shall surrender such Security at any of the
offices or agencies to be maintained for such purpose by the Company pursuant to
Section 2.03, and shall give notice to the Company and the Guarantor in the
form provided in the Security, duly executed, at such office or agency that the
Holder elects to convert such Security or the portion thereof specified in said
notice. Such notice shall also state the name or names, together with the
address or addresses, in which the certificate or certificates for shares of
Common Stock which shall be issuable on such conversion shall be issued. Each
Security surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the same name as the name in which such Security
is registered, be accompanied by instruments of transfer, in form satisfactory
to the Guarantor, duly executed by the Holder or its, his or her duly authorized
attorney. Securities so surrendered during the period from the close of
business on a Record Date, or the next preceding Business Day if such Record
Date is not a Business Day, preceding any Interest Payment Date to the opening
of business on such Interest Payment Date (excluding Securities or portions
thereof called for redemption during such period) shall also be accompanied
by payment in next-day funds or other funds acceptable to the Guarantor of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of such Security then being converted; provided, however, that,
if the Company shall default on the payment of said interest, said
funds shall be returnable to the payor thereof. As promptly as practicable
after the surrender of such Security, as aforesaid, the Guarantor shall issue
and shall deliver at such office or agency to such Holder, or on its, his or
her written order, a certificate or certificates for the number of full shares
of Common Stock issuable upon the conversion of such Security or portion thereof
in accordance with the provisions of this Article 10 and any fractional interest
in respect of a share of Common Stock arising upon such conversion shall be
settled as provided in Section 10.04. In case any Security of a denomination
greater than $1,000 shall be surrendered for partial conversion, the Company and
the Guarantor shall execute and the Trustee shall authenticate and deliver to or
upon the order of the Holder of the Security so surrendered, at the expense of
the Company, a new Security or Securities and Guarantee or Guarantees in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Security. Such conversion shall be
deemed to have been effected immediately prior to the close of business on the
date on which such Security shall have been surrendered and such notice received
by the Company and the Guarantor as aforesaid, and the Person or Persons in
whose name or names any certificate or certificates for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have become the
holder or holders of record of the shares represented thereby at such time and
such conversion shall be at the Conversion Price in effect at such time, unless
the stock transfer books of the Guarantor shall be closed on that date, in
which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date upon which such Security shall have been
surrendered and such notice received by the Company and the Guarantor. Subject
to the aforesaid requirement for a payment in the event of conversion after
the close of business on a Record Date preceding an Interest Payment Date, no
payment or adjustment shall be made on conversion for interest accrued on the
Securities surrendered for conversion or for dividends on the Common Stock
delivered on such conversion.
Section 10.04. Payment in Lieu of Fractional Shares. No
fractional shares of Common Stock shall be issued upon conversion of the
Securities. Instead of any fractional interest in a share of Common Stock
which would otherwise be deliverable upon the conversion of any Security or
Securities, the Company and/or the Guarantor shall make an adjustment therefor
to the nearest 1/100th of a share in cash at the Current Market Price thereof at
the close of business on the Business Day next preceding the day of conversion.
If more than one Security shall be surrendered for conversion at one time by the
same Holder, the number of full shares issuable upon conversion thereof shall
be computed on the basis of the aggregate principal amount of the Securities,
or specified portions thereof to be converted, so surrendered.
Section 10.05. Adjustment of Conversion Price. The Conversion
Price shall be adjusted from time to time as follows:
(a) In case the Guarantor shall hereafter (i) pay a dividend or
make a distribution on its Common Stock in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number of
shares, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares, or (iv) issue by reclassification of its Common Stock any
shares of Capital Stock of the Guarantor, the Conversion Price in effect
immediately prior to such action shall be adjusted so that the Holder of any
Security thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock or other Capital Stock of the Guarantor which
he would have owned immediately following such action had such Security been
converted immediately prior thereto. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to this
subsection (a), the Holder of any Security thereafter surrendered for
conversion shall become entitled to receive shares of two or more classes of
Capital Stock or shares of Common Stock and other Capital Stock of the
Guarantor, the Board of Directors (whose determination shall be
conclusive and shall be described in a statement filed with the Trustee and
with the Registrar) shall determine in an equitable manner the allocation of the
adjusted Conversion Price between or among shares of such classes of Capital
Stock or shares of Common Stock and other Capital Stock.
(b) In case the Guarantor shall hereafter issue rights or
warrants to holders of its outstanding shares of Common Stock generally
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price per share of the Common Stock on
the record date mentioned below, the Conversion Price of the shares of Common
Stock shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of shares which the aggregate offering
price of the total number of shares so offered would purchase at such Current
Market Price, and of which the denominator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights or warrants plus
the number of additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall become effective immediately after the record
date for the determination of shareholders entitled to receive such rights or
warrants.
(c) In case the Guarantor shall hereafter distribute to holders
of its outstanding Common Stock generally evidences of its indebtedness or
assets (excluding any cash dividend paid from retained earnings of the Guarantor
and dividends or distributions payable in stock for which adjustment is made
pursuant to subsection (a) of this Section 10.05) or rights or warrants to
subscribe to securities of the Guarantor (excluding those referred to in
subsection (b) of this Section 10.05), then in each such case the Conversion
Price of the shares of Common Stock shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock on the
record date mentioned below less the then fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and shall be
described in a statement filed with the Trustee and with the Registrar) of the
portion of the evidences of indebtedness or assets so distributed to the
holder of one share of Common Stock or of such subscription rights or warrants
applicable to one share of Common Stock, and of which the denominator shall be
such Current Market Price per share of Common Stock. Such adjustment shall
become effective immediately after the record date for the determination of
shareholders entitled to receive such distribution.
(d) In any case in which this Section 10.05 shall require that an
adjustment be made immediately following a record date, the Guarantor may elect
to defer (but only until five Business Days following the filing by the Company
with the Trustee and the Registrar of the certificate of independent public
accountants described in subsection (f) of this Section 10.05) issuing to the
Holder of any Security converted after such record date the shares of Common
Stock issuable upon such conversion over and above the shares of Common Stock
issuable upon such conversion on the basis of the Conversion Price prior to
adjustment.
(e) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1% of
such price; provided, however, that any adjustments which by reason of this
subsection (e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment, and provided further that adjustment
shall be required and made in accordance with the provisions of this Article
10 (other than this subsection (e)), not later than such time as may be required
in order to preserve the tax-free nature of a distribution to the holders of
Securities or Common Stock. All calculations under this Section 10.05 shall be
made to the nearest cent or to the nearest 1/100th of a share, as the case may
be. Anything in this Section 10.05 to the contrary notwithstanding, the
Guarantor shall be entitled to make such reductions in the Conversion Price, in
addition to those required by this Section 10.05, as it in its discretion shall
determine to be advisable in order that any stock dividend, subdivision of
shares, distribution of rights to purchase stock or securities, or distribution
of securities convertible into or exchangeable for stock hereafter made by the
Guarantor to its shareholders shall not be taxable.
(f) Whenever the Conversion Price is adjusted as herein provided,
(i) the Company and the Guarantor shall promptly file with the Trustee and the
Registrar a certificate of a firm of independent public accountants setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment and the manner of computing the
same, which certificate shall be conclusive evidence of the correctness of such
adjustment and
(ii) a notice stating that the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall forthwith be given by the
Company and the Guarantor to the Holders in the manner provided in Section
13.02. Subject to TIA Section 315(a), (c) and (d), the Trustee and any
conversion agent shall be under no duty or responsibility with respect to any
such certificate or the certificate provided for in Section 10.10 except to
exhibit the same from time to time to any Holder of a Security desiring an
inspection of such certificate.
(g) In the event that at any time as a result of an adjustment
made pursuant to subsection (a) of this Section 10.05, the Holder of any
Security thereafter surrendered for conversion shall become entitled to receive
any shares of the Guarantor other than shares of Common Stock, thereafter the
Conversion Price of such other shares so receivable upon conversion of any
Security shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Common Stock contained in this Article 10.
Section 10.06. Notice of Certain Corporate Action. In the event:
(a) the Guarantor shall take any action which would require an
adjustment in the Conversion Price pursuant to Section 10.05(c); or
(b) the Guarantor shall authorize the granting to the holders of
its Common Stock (as a class) of rights or warrants to subscribe for or purchase
any shares of stock of any class or of any other rights; or
(c) there shall be any capital reorganization or reclassification
of the Common Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in the par value of the Common Stock), or
any consolidation or merger to which the Guarantor is a party or any statutory
exchange of securities with another corporation and for which approval of any
shareholders of the Guarantor is required, or any sale or transfer of all or
substantially all of the assets of the Guarantor; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Guarantor; then the Company and the Guarantor
shall cause to be filed with the Trustee and the Registrar, and shall cause to
be given to the Holders, in the manner provided in Section 13.02, at least 14
days prior to the applicable date hereinafter specified, a notice stating (i)
the date on which a record is to be taken for the purpose of such distribution
or rights, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such distribution or rights are to
be determined, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. Failure to give such
notice or any defect therein shall not affect the legality or validity of the
proceedings described in subsection (a), (b), (c) or (d) of this Section 10.06.
Section 10.07. Guarantor To Provide Stock. The Guarantor covenants
that it will at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued shares of Common
Stock or its issued shares of Common Stock held in its treasury, or both, for
the purpose of effecting conversions of Securities, the full number of shares of
Common Stock deliverable upon the conversion of all outstanding Securities not
theretofore converted. For purposes of this Section 10.07, the number of shares
of Common Stock which shall be deliverable upon the conversion of all
outstanding Securities shall be computed as if at the time of computation all
outstanding Securities were held by a single Holder.
Before taking any action which would cause an adjustment reducing
the Conversion Price below the then par value (if any) of the shares of
Common Stock deliverable upon conversions of the Securities, the Guarantor will
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Guarantor may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
<PAGE>
The Guarantor will endeavor to list the shares of Common Stock
required to be delivered upon conversion of Securities prior to such delivery
upon each national securities exchange, if any, upon which the outstanding
Common Stock is listed at the time of such delivery.
Prior to the delivery of any securities which the Guarantor shall be
obligated to deliver upon conversion of the Securities, the Guarantor will
endeavor to comply with all federal and state laws and regulations thereunder
requiring the registration of such securities with, or any approval of or
consent to the delivery thereof by, any governmental authority.
Section 10.08. Taxes on Conversions. The Company and/or the
Guarantor will pay any and all documentary stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of shares of Common Stock on
conversions of Securities pursuant hereto; provided, however, that neither the
Company nor the Guarantor shall be required to pay any tax which may be payable
in respect of any transfer involved in the issue or delivery of shares of Common
Stock in a name other than that of the Holder of the Securities to be converted
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Company and/or the Guarantor
the amount of any such tax or has established, to the satisfaction of the
Company and the Guarantor, that such tax has been paid.
Section 10.09. Covenant as to Stock. The Guarantor covenants that
all shares of Common Stock which may be delivered upon conversions of Securities
will upon delivery be duly and validly issued and fully paid and non-assessable,
free of all liens and charges and not subject to any preemptive rights.
Section 10.10. Consolidation or Merger. Notwithstanding any other
provision herein to the contrary, in case of any consolidation or merger to
which the Guarantor is a party other than a merger or consolidation in which the
Guarantor is the continuing corporation, or in case of any sale or conveyance to
another corporation of the property of the Guarantor as an entirety or
substantially as an entirety, or in the case of any statutory exchange of
securities with another corporation (including any exchange effected in
connection with a merger of a third corporation into the Guarantor), there shall
be no adjustments under Section 10.05 but the Holder of each Security then
outstanding shall have the right thereafter to convert such Security into the
kind and amount of securities, cash or other property which he would have owned
or have been entitled to receive immediately after such consolidation, merger,
statutory exchange, sale or conveyance had such Security been converted
immediately prior to the effective date of such consolidation, merger, statutory
exchange, sale or conveyance and in any such case, if necessary, appropriate
adjustment shall be made in the application of the provisions set forth in this
Article 10 with respect to the rights and interests thereafter of the Holders of
the Securities, to the end that the provisions set forth in this Article 10
shall thereafter correspondingly be made applicable, as nearly as may
reasonably be, in relation to any shares of stock or other securities or
property thereafter deliverable on the conversion of the Securities. Any such
adjustment shall be made by and set forth in a supplemental
indenture executed by the Company, the Guarantor and the Trustee and
approved by a firm of independent public accountants, evidenced by a certificate
to that effect; and any adjustment so approved shall for all purposes hereof
conclusively be deemed to be an appropriate adjustment.
The above provisions of this Section 10.10 shall similarly apply to
successive consolidations, mergers, statutory exchanges, sales or conveyances.
The Company shall give notice of the execution of such a
supplemental indenture to the Holders of Securities in the manner provided in
Section 13.02 within 30 days after the execution thereof.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in such supplemental indenture relating
either to the kind or amount of shares of stock or securities or property
receivable by Holders upon the conversion of their Securities after any such
consolidation, merger, statutory exchange, sale or conveyance, or to any
adjustment to be made with respect thereto.
Section 10.11. Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor the Registrar shall at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to
the nature or extent of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. Neither the Trustee nor the Registrar shall be
accountable with respect to the listing or registration referred to in Section
10.07 or the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property, which may at any time be issued or
delivered upon the conversion of any Security; and neither the Trustee nor the
Registrar makes any representation with respect thereto. Neither the Trustee
nor the Registrar shall be responsible for any failure of the Guarantor to
issue, transfer or deliver any shares of Common Stock or stock certificates
or other securities or property or to make any cash payment upon the
surrender of any Security for the purpose of conversion or, subject to TIA
Section 315(a), (c) and (d), to comply with any of the covenants
contained in this Article 10.
ARTICLE 11
Discharge of Indenture
Section 11.01. Termination of the Company's and the
Guarantor's Obligations. Securities of a Series may be defeased in accordance
with their terms and, unless the Authorizing Resolution provides otherwise, in
accordance with this Article.
The Company may terminate all of its obligations under the
Securities of a Series and this Indenture, to the extent its obligations under
this Indenture relate to that Series, and the obligations of the Guarantor shall
terminate if all Securities of a Series previously authenticated and delivered
(other than destroyed, lost or stolen Securities which have been replaced or
paid) have been delivered to the Trustee for cancellation or if:
(1) the Securities mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the Trustee money
sufficient to pay principal of and interest on the outstanding Securities to
maturity or redemption, as the case may be. The Company may make the deposit
only if Article 6 permits it. Immediately after making the deposit, the Company
shall give notice of such event and proposed date of payment to each
Securityholder. The Company's obligations and, to the extent applicable, the
Guarantor's obligations, in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 9.07,
9.08 and 11.03 and Article 10, however, shall survive until the Securities are
no longer outstanding. Thereafter, the Company's obligations and, to the extent
applicable, the Guarantor's obligations, in Sections 9.07 and 11.03 shall
survive. After a deposit, the Trustee upon request shall acknowledge in writing
the discharge of the Company's obligations under the Securities, the Guarantor's
obligations under the Guarantee and their obligations under the Indenture
except for those surviving obligations specified above.
<PAGE>
Section 11.02. Application of Trust Money. The Trustee shall hold
in trust money deposited with it pursuant to Section 11.01. It shall apply the
deposited money through the Paying Agent and in accordance with this Indenture
to the payment of principal and interest on the Securities.
Section 11.03. Repayment to Company. The Trustee and the Paying
Agent shall promptly pay to the Company upon request any excess money held by
them at any time. The Trustee and the Paying Agent shall pay to the Company
upon request any money held by them for the payment of principal or interest
(including interest, if any, earned on such money) that remains unclaimed for
two years; provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company
cause to be published once in a newspaper of general circulation in The City of
New York or mail to each Holder notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Securityholders entitled to any of such money must look to the Company
or, if applicable, the Guarantor for payment as general creditors unless
applicable abandoned property law designates another person and all liability
of the Trustee or Paying Agent with respect to such money shall thereupon cease.
ARTICLE 12
Amendments, Supplements and Waivers
Section 12.01. Without Consent of Holders. The
Company may amend or supplement this Indenture or the Securities without notice
to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; or
(4) to make any change that does not adversely affect the rights of any
Securityholder.
<PAGE>
Section 12.02. With Consent of Holders. The Company may amend or
supplement this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities of all Series affected by the
amendment voting as a class. The Holders of a majority in principal amount of
the Securities may waive compliance by the Company with any provision of this
Indenture or the Securities without notice to any Securityholder. However,
without the consent of each Securityholder affected, an amendment, supplement or
waiver, including a waiver pursuant to Section 8.04, may not:
(1) reduce the amount of Securities whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the fixed maturity of any
Security or alter the redemption provisions with respect thereto;
(4) waive a default in the payment of the principal of or interest on
any Security;
(5) modify the provisions of Article 6 (subordination) or Article 7
(guarantee) in a manner adverse to the Holders;
(6) make any security payable in money other than that stated in the
Security;
(7) if applicable, make any change that adversely affects the right to
convert or the Conversion Price for any Security; or
(8) make any change in Section 8.04 or 8.07 or this Section 12.02.
After an amendment under this Section 12.02 becomes effective, the Company
shall mail to the Holders a notice briefly describing the amendment.
Section 12.03. Compliance with Trust Indenture Act. Every
amendment to or supplement of this Indenture or the Securities shall comply
with the TIA as then in effect.
Section 12.04. Revocation and Effect of Consents. A consent to an
amendment, supplement or waiver by a Holder of a Security shall bind the Holder
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation
of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to the Security or portion of a
Security of such Holder. The Trustee must receive the notice of revocation
before the date the amendment, supplement or waiver becomes effective.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder unless it makes a change described in clauses (1)
through (8) of Section 12.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
Section 12.05. Notation on or Exchange of Securities. If an
amendment, supplement or waiver changes the terms of a Security, the Trustee
may require the Holder of the Security to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determine, the Company in exchange for the Security shall issue and the
Trustee shall authenticate, a new Security that reflects the changed terms.
<PAGE>
Section 12.06. Trustee To Sign Amendments, etc. The Trustee shall
sign any amendment, supplement or waiver authorized pursuant to this Article if
the amendment, supplement or waiver does not adversely affect the rights or
duties of the Trustee. If it does, the Trustee may but need not sign it. In
signing any amendment, supplement or waiver, the trustee may rely on an Opinion
of Counsel which shall state that such amendment, supplement or waiver is
permitted under this Article 12.
ARTICLE 13
Miscellaneous
Section 13.01. Trust Indenture Act Controls. If
any provision of this Indenture limits, qualifies, or conflicts with another
provision which is required to beincluded in this Indenture by the TIA or the
TIA as amended after the date hereof, the required provision shall control.
Section 13.02. Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first-
class mail addressed as follows:
if to the Company or the Guarantor:
Toll Brothers, Inc.
3103 Philmont Avenue
Huntingdon Valley, Pennsylvania 19006
Attention: Chief Financial Officer
with a copy to:
Mark K. Kessler, Esq.
Wolf, Block, Schorr and Solis-Cohen
Twelfth Floor Packard Building
15th and Chestnut Streets
Philadelphia, PA 19102
if to the Trustee:
NBD Bank
611 Woodward Avenue
Detroit, ME 48226
Attention: Corporate Trust Services
<PAGE>
The Company, the Guarantor or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices
or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to him at his address as it appears on the registration books of the
Registrar and shall be sufficiently given to him if so mailed within the time
prescribed. In addition, a copy of each such notice or communication shall be
mailed to the Trustee at the address specified above.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it. If the
Company or the Guarantor mails a notice or communication to Securityholders, it
shall mail a copy of such notice to the Trustee and each agent at the same time.
Section 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantor, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).
Section 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Section 13.06. When Treasury Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities of a Series
have concurred in any direction, waiver or consent, Securities of the Series
owned by the Company or the Guarantor or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or the guarantor shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities of the Series which the Trustee
knows are so owned shall be so disregarded.
<PAGE>
Section 13.07. Rules by Trustee, Paying Agent, Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Paying Agent or Registrar each may make reasonable rules for its functions.
Section 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday, a legal holiday or a day on which banking institutions are not required
to be open. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
Section 13.09. Governing Law. The laws of the State of New York
shall govern this Indenture, the Securities and the Guarantee without regard to
principles of conflicts of law.
Section 13.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company, the Guarantor or a Subsidiary. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
Section 13.11. No Recourse Against Others. All liability
described in paragraph 20 of the Securities of any director, officer, employee
or shareholder, as such, of the Company or the Guarantor is waived and released.
Section 13.12. Successors. All agreements of the Company or the
Guarantor in this Indenture and the Securities shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.
Section 13.13. Duplicate Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
Section 13.14. Counterparts. This Indenture may be executed in
any number of counterparts, all of which shall together constitute one and the
same instrument. This Indenture shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as the signatories.
<PAGE>
SIGNATURES
Dated: January 26, 1999 TOLL CORP., as Issuer
By:
Name:
Title:
(SEAL)
Attest:
Name:
Title:
Dated: January 26, 1999 TOLL BROTHERS, INC., as Guarantor
By:
Name:
Title:
(SEAL)
Attest:
Name:
Title:
Dated: January 26, 1999 NBD Bank, as Trustee
By:
Name:
Title:
(SEAL)
Attest:
Name:
Title:
<PAGE>
No. EXHIBIT A
TOLL CORP.
promises to pay to
or registered assigns
the principal sum of [Dollars] on
[Title of Security]
Interest Payment Dates: and
Record Dates: and
Authenticated: Dated:
TOLL CORP.
[Seal]
By:
[Name of Trustee]
as Trustee, certifies that
this is one of the
Securities referred to in
the Indenture.
By:
Authorized Signatory
<PAGE>
(REVERSE OF SECURITY)
TOLL CORP.
[Title of Security]
1. Interest.
Toll Corp. (the "Company"), a Delaware corporation, promises to pay
interest on the principal amount of this Security at the rate per annum shown
above. The Company will pay interest semi-annually on and of each
year (the "Interest Payment Date"), commencing on .Interest on the
Security will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from , provided that,
if there is no existing default in the payment of interest, and if this Security
is authenticated between a record date referred to on the face hereof (the
"Record Date") and the next succeeding Interest Payment Date, interest shall
accrue from such Interest Payment Date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
2. Method of Payment.
The Company will pay interest on the Securities (except defaulted
interest) to the persons who are registered holders of Securities at the close
of business on the Record Date next preceding the Interest Payment Date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by wire
transfer or by its check payable in such money. It may mail an interest check
to a holder's registered address.
3. Paying Agent and Registrar.
Initially, [Name of Trustee] (the "Trustee") will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its subsidiaries may act as Paying Agent,
Registrar or co-registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
, among the Company, Toll Brothers, Inc. (the
"Guarantor") and the Trustee, as supplemented by the Authorizing Resolutions
approved by the Company and the Guarantor on (collectively,
the "Indenture"). The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Section 77aaa-77bbbb) as in effect on the
date of the Indenture and as may be amended from time to time. The Securities
are subject to all such terms, and Securityholders are referred to the
Indenture and the Act for a statement of them. Payment of the Securities is
guaranteed on a senior subordinated basis by the Guarantor (the "Guarantee").
5. Optional Redemption.*
The Company may redeem the Securities at any time on or after in
whole, or from time to time in part, at the following redemption prices
(expressed as a percentage of principal amount), plus accrued and unpaid
interest to the redemption date:
If redeemed during the 12-month period beginning ,
Year Percentage
%
%
%
%
%
and thereafter. %
6. Mandatory Redemption.*
The Company shall redeem % of the aggregate principal amount o
Securities originally issued under the Indenture on each of
, which redemptions are calculated to retire
% of the Securities originally issued prior to maturity. Such redemptions shall
be made at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to the redemption date. The Company may reduce
the principal amount of Securities to be redeemed pursuant to this Paragraph 6
by the principal amount of any Securities previously redeemed, retired or
acquired, otherwise than pursuant to this Paragraph 6, that the Company has
delivered to the Trustee for cancellation and not previously credited to the
Company's obligations under this Paragraph 6. Each such Security shall be
received and credited for such purpose by the Trustee at the redemption price
and the amount of such mandatory redemption payment shall be reduced
accordingly.
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of Securities to be redeemed at
its, his or her registered address. Securities in denominations larger than
$1,000 may be redeemed in part. On and after the redemption date interest
ceases to accrue on Securities or portions of them called for redemption,
provided that if the Company shall default in the payment of such Security at
the redemption price together with accrued interest, interest shall continue to
accrue at the rate borne by the Securities.
8. Selection.
Selection of Securities for any redemption will be made by the Trustee,
if the Securities are listed on a national securities exchange by the rules of
such exchange or if the Securities are not so listed on either a pro rata basis
or by lot or by any other method that the Trustee deems fair and appropriate.
9. Repurchase After a Change of Control.*
In the event of a Change of Control (as defined in the Authorizing
Resolution), each holder of the Securities will have the right, at such holder's
option, subject to the terms and conditions of the Indenture, to require the
Company to purchase all or any part of the Securities at a price equal to 100%
of the principal amount thereof, plus accrued and unpaid interest thereon, in
accordance with the terms set forth in the Indenture.
10. Conversion*
A Holder of a Security may convert it into Common Stock of the Guarantor
at any time prior to the close of business on , or, if the
Security is called for redemption, the Holder may convert it at any time before
the close of business on the second Business Day before the date fixed for
redemption. The initial Conversion Price is $ per share of Common Stock,
subject to adjustment in certain events. The Company and/or the Guarantor will
deliver a check in lieu of any fractional share. On conversion no payment or
adjustment for interest accrued on the Securities will be made.
To convert a Security a Holder must (1) complete and sign the conversion
notice on the back of the Security, (2) surrender the Security to the Registrar
(as agent for the Guarantor), (3) furnish appropriate endorsements and transfer
documents if required by the Registrar and (4) pay any transfer or similar tax
if required. A Holder may convert a portion of a Security if the portion is
$1,000 or a whole multiple of $1,000.
11. Subordination.*
The Securities will be subordinated in right of payment to the prior
payment in full of all Senior Indebtedness of the Company (as defined in the
Authorizing Resolution). The Securities will be senior in right of payment to
certain specified obligations of the Company as set forth in the Authorizing
Resolution.
The Guarantee will be subordinated in right of payment to the prior
payment in full of all Senior Indebtedness of the Guarantor (as defined in the
Authorizing Resolution). The Guarantee will be senior in right of payment to
certain specified obligations of the Guarantor as set forth in the Authorizing
Resolution.
12. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations of
$1,000 and integral multiples thereof. A holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a
holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Securities selected
for redemption. Also, it need not transfer or exchange any Securities for a
period of 15 days before a selection of Securities to be redeemed is scheduled.
13. Person Deemed Owner.
The registered holder of a Security may be treated as the owner of it for
all purposes.
14. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company as
its request. After that, holders entitled to the money must look to the
Company or, if applicable, the Guarantor for payment unless an abandoned
property law designates another person.
15. Discharge Prior to Redemption or Maturity.
The Indenture will be discharged and cancelled except for certain Sections
thereof, subject to the terms of the Indenture, upon the payment of all the
Securities or upon the deposit with the Trustee, within not more than one
year prior to the maturity or redemption of the Securities, of funds sufficient
for such payment or redemption. In the case of such a deposit, Securityholders
must look to the deposited money for payment.
16. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the holders of at least a majority
in principal amount of the Securities of all Series affected by the amendment
voting as a class, and any past default or compliance with any provision may be
waived with the consent of the holders of a majority in principal amount of the
Securities. Without the consent of any Securityholder, the Company may amend or
supplement the Indenture or the Securities to cure any ambiguity, defect or
inconsistency; to comply with Article 5 of the Indenture (providing for the
assumption of the obligations of the Company or the Guarantor under the
Indenture by a successor corporation); to provide for uncertificated
Securities in addition to or in place of certificated Securities; or to make any
change that does not adversely affect the rights of any Securityholder.
17. Restrictive Covenants*
The Securities are general unsecured obligations of the Company limited
to $ principal amount. [Insert brief description of any covenants.]
Once a year the Company must report to the Trustee on compliance with the
limitations.
18. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor corporation
will be released from those obligations.
19. Defaults and Remedies.
An Event of Default is:
(i) failure of the Company or the Guarantor to pay interest for 30
days or principal when due (whether or not prohibited by the subordination
provision); (ii) failure of the Company or Guarantor to perform any other
agreement for 60 days after notice; (iii) default in the payment of Indebtedness
of the Company, the Guarantor or any Subsidiary under the terms of the
instrument evidencing or securing such Indebtedness permitting the holder
thereof to accelerate the payment of in excess of an aggregate of $2,000,000 in
principal amount of such Indebtedness (after the lapse of applicable grace
periods) or, in the case of non-payment defaults, acceleration of any such
Indebtedness if such acceleration is not rescinded or annulled within 10 days
after such acceleration, provided that, subject to the terms of the Indenture,
the term "Indebtedness" shall not include an acceleration of or default on
certain Non-Recourse Indebtedness (as defined in the Indenture); (iv) entry
of a final judgment for the payment of money in an amount in excess of
$2,000,000 shall be entered against the Company, the Guarantor or
any Subsidiary which remains undischarged or unstayed for a period of 60
days after the date on which the right to appeal has expired; provided the term
"final judgment" shall not include a Non-Recourse Judgment (as defined in the
Indenture) unless the book value of all property (net of any previous write-
downs or reserves in respect of such property) subject to such Non-Recourse
Judgment exceeds the amount of such Non-Recourse Judgment by more than
$5,000,000; (v) certain events of bankruptcy, insolvency or reorganization; or
(vi) the Guarantee shall for any reason (other than pursuant to its terms)
cease to be in full force and effect.
The Indenture provides that the Trustee will, within 90 days after
the occurrence of a Default, give the Holders notice of all uncured Defaults
known to it (the term "Default" to include the events specified above, without
grace or notice), provided that, except in the case of default in the payment
of principal of or interest on any of the Securities, the Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of the Securityholders.
In case an Event of Default (other than arising out of certain
events of bankruptcy, insolvency or reorganization) occurs and is continuing,
the Trustee or the holders of not less than 25% in aggregate principal amount
of the Securities then outstanding, by notice in writing to the Company (and to
the Trustee if given by the Securityholders), may declare the Securities to be
due and payable (i) if (a) no Designated Senior Debt of the Company or the
Guarantor is outstanding, or (b) if the Securities are not subordinated to other
indebtedness of the Company, immediately, or (ii) if Designated Senior Debt of
the Company or the Guarantor is outstanding and the Securities are subordinated
to other indebtedness of the Company, upon the earlier of (A) ten days after
such Acceleration Notice is received by the Company and (B) the acceleration of
any Senior Indebtedness of the Company or the Guarantor. In case an Event of
Default arising out of certain events of bankruptcy, insolvency or
reorganization occurs and is continuing, the
outstanding principal of and accrued interest on the Securities shall ipso
facto become and be due and payable immediately, without declaration or any
further act on the part of the Trustee or any Securityholder.
Such declaration or acceleration and its consequences may be
rescinded by holders of a majority in principal amount of the outstanding
Securities of the affected Series if all existing Events of Defaults have been
cured and waived (except non-payment of principal or interest that has become
due solely because of the acceleration) and if the rescission would not
conflict with any judgment or decree.
Defaults (except, unless theretofore cured, a default in payment of
principal of or interest on the Securities or a default with respect to a
provision which cannot be modified under the terms of the Indenture without the
consent of each Securityholder affected) may be waived by the holders of a
majority in principal amount of outstanding Securities upon the conditions
provided in the Indenture.
The Indenture requires the Guarantor to file periodic reports with
the Trustee as to the absence of defaults.
20. Trustee Dealings with Company.
[Name of Trustee], the Trustee under the Indenture, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company, the Guarantor or their affiliates, and may otherwise
deal with the Company, the Guarantor or their affiliates, as if it were not
Trustee.
21. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company or
the Guarantor shall not have any liability for any obligations of the Company
or the Guarantor under the Securities, the Guarantee or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
22. Authentication.
This Security shall not be valid until the Trustee signs the certificate
of authentication on the other side of this Security.
23. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (=tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not
as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. Requests may be made to:
Secretary, Toll Brothers, Inc., 3103 Philmont Avenue, Huntingdon Valley,
Pennsylvania 19006.
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Security to
(Insert assignee's social security or tax ID number)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date: Your Signature:
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee:
NOTE: Signature(s) must be guaranteed by a member firm of a major stock
exchange or a commercial bank or trust company.
CONVERSION NOTICE
If you want to convert this Security pursuant to Article 10 of the Indenture,
check the box:
o
If you want to convert only part of this Security pursuant to Article 10 of
the Indenture, state the amount:
$
If you want the stock certificate made out in another person's name, fill in
the form below:
(Insert other person's Social Security or Tax. I.D. Number)
(Print or type other person's name, address and zip code)
Date: Your Signature:
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee:
NOTE: Signature(s) must be guaranteed by a member firm of a major stock
exchange or a commercial bank or trust company.
EXHIBIT B
[FORM OF NOTATION ON SECURITY
RELATING TO GUARANTEE]
GUARANTEE
Toll Brothers, Inc. (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),
has unconditionally guaranteed on a subordinated basis (i) the due and punctual
payment of the principal of and interest on the Securities, whether at maturity
, by acceleration or otherwise, the due and punctual payment of interest on the
overdue principal of and interest, if any, on the Securities, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee under the Indenture and the Security all
in accordance with the terms set forth in Article 7 of the Indenture and (ii)
in case of any extension of time of payment or renewal of any Securities or any
of such other obligations, that the same 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.
[The obligations of the Guarantor to the Holders of the Securities
and to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth and are expressly subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness of the Guarantor, to the extent
and in the manner provided in Article 7 of the Indenture and reference is
hereby made to the Indenture for the precise terms of the Guarantee and the
subordination thereof therein made.]
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Guarantor shall have any personal liability under the
Guarantee by reason of his or its status as such stockholder, officer, director
or incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Securities upon which this Guarantee is
endorsed shall have been executed by the Trustee under the Indenture by the
manual signature of one of its authorized officers.
Guarantor
TOLL BROTHERS, INC.
By:
By:
(Seal)
Joint Resolutions Adopted by
the Board of Directors
of
Toll Corp.
and by
the Shelf Terms Committee
of
Toll Brothers, Inc.
As of April 13, 1999
Relating to $100,000,000 Principal Amount of
8% Senior Subordinated Notes
of Toll Corp. due 2009 and
Guaranteed on a Senior Subordinated Basis by Toll Brothers, Inc.
WHEREAS, Toll Brothers, Inc. (the "Guarantor") and Toll Corp. (the
"Company") previously filed a Registration Statement on Form S-3 (File Nos.
333-38347 and 333-38347-01) with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), relating
to the "shelf registration" of the Guarantor's Common Shares, Preferred Shares,
and Guarantees and the Company's Debt Securities for a proposed public offering
or offerings in the aggregate amount up to $300,000,000 (the "Shelf
Registration Statement"), including, pursuant to Rule 429 under the Act,
$11,000,000 of securities previously registered by the Guarantor and the Issuer
pursuant to a Registration Statement on Form S-3 (File Nos. 333-51775 and
333-51775-01);
WHEREAS, the Shelf Registration Statement was declared effective by the
Commission on December 3, 1997; and
WHEREAS, the Company and the Guarantor desire to sell $100,000,000 principal
amount of a new series of Senior Subordinated Notes of the Company, guaranteed
on a senior subordinated basis by the Guarantor (the "Securities"), which series
may be reopened for issuances of additional Securities of such series not to
exceed the principal amount of $75,000,000, pursuant to the Shelf Registration
Statement and any subsequent shelf registration statement.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors of the
Company (the "Toll Board") and the Shelf Terms Committee of the Board of
Directors of the Guarantor (the "Shelf Committee") hereby approve the
establishment and the issuance of the Securities to be issued as a series
pursuant to an Indenture among the Company, as the issuer, the
Guarantor, as the Guarantor, and NBD Bank, a Michigan banking corporation, as
Trustee (the "Trustee"), (the "Base Indenture"), executed in the form included
as Exhibit 4.1 to the Shelf Registration Statement, as the same is supplemented
by these resolutions.
<PAGE>
RESOLVED, FURTHER, that the Toll Board and the Shelf Committee hereby
approve, ratify and confirm the appointment of NBD Bank, a Michigan banking
corporation, as trustee under the Indenture relating to the Securities.
RESOLVED, FURTHER, that the Toll Board and the Shelf Committee hereby
approve the following terms and provisions which shall supplement the terms and
provisions of the Base Indenture (said supplemented terms and provisions and the
Base Indenture are hereinafter collectively referred to as the "Indenture" and
each reference herein to the "Indenture" is a reference to the Base Indenture as
the same is supplemented by the terms and provisions of these joint
resolutions):
Paragraph 1. The title of the Securities shall be "8% Senior Subordinated
Notes due 2009".
Paragraph 2. The aggregate principal amount at maturity of the Securities
which may be authenticated and delivered under the Indenture shall be $100,000,
000 (except for any Securities authenticated and delivered upon registration of
the transfer of, or in exchange for, or in lieu of other Securities pursuant to
the terms of the Indenture); provided, however, that this
series of Securities may be reopened for issuances of additional Securities not
to exceed the principal amount of $75,000,000. The Securities will be issued
only in registered form in denominations of $1,000 and integral multiples
thereof.
Paragraph 3. The principal amount of the Securities is due and payable in
full on May 1, 2009, subject to earlier redemption as referred to in the
Indenture.
Paragraph 4. The Securities shall bear interest at the rate of 8% per
annum (computed on the basis of a 360-day year of twelve 30-day months), from
April 16, 1999 to maturity or early redemption; and interest will be payable
semi-annually on May 1 and November 1 in each year, commencing November 1, 1999,
to the persons in whose name such Securities are registered at the close of
business on April 15 or October 15, as the case may be, preceding such interest
payment date.
Paragraph 5. The Securities are redeemable, in whole or in part from
time to time on or after May 1, 2004 and prior to maturity, at the option of
the Company upon not less than 30 nor more than 60 days' notice mailed by
first-class mail to each Holder of record at such Holder's last address as it
appears on the registration books of the Registrar. Redemption of the
Securities made at the election of the Company shall be made at the following
respective redemption prices (expressed as a percentage of principal amount),
plus accrued and unpaid interest to the redemption date, if redeemed during the
12-month period beginning May 1 of the years indicated:
Year Percentage
2004 104.000%
2005 102.667%
2006 101.333%
2007 and thereafter 100.000%
<PAGE>
Paragraph 6. Principal of and interest on the Securities shall be
payable in accordance with Section 4.01 of the Indenture.
Paragraph 7. The Securities shall not be convertible into the
Company's or the Guarantor's Common Stock.
Paragraph 8. The payment of the principal of, premium, if any, and
interest on the Securities is subordinated in right of payment, in the manner
and to the extent set forth in the Indenture, to the prior payment in full of
all senior indebtedness of the Company (referred to in the Indenture as "Senior
Indebtedness of the Company" and as further defined herein) whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed.
The term "Senior Indebtedness of the Company" as used in the Indenture shall
mean: (i) the principal of, and premium, if any, and interest on, any
indebtedness, whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed by the Company, (a) under the
Revolving Credit Agreement (as defined in the Indenture), (b) for money
borrowed from others (including, for this purpose, all obligations incurred
under capitalized leases or purchase money mortgages or under letters of credit
or similar commitments), or (c) in connection with the acquisition by it of any
other business, property or entity and, in each case,
all renewals, extensions and refundings thereof, unless the terms of the
instrument creating or evidencing such indebtedness expressly provide that such
indebtedness is not superior in right of payment to the payment of the principal
of, and premium, if any, and interest on, the Securities. Senior Indebtedness
of the Company, as such term is used in the Indenture, shall not include (a)
indebtedness or amounts owed for compensation to employees, for goods or
materials purchased in the ordinary course of business, or for services, (b)
indebtedness of the Company to the Guarantor or any Subsidiary (as defined in
the Indenture) for money borrowed or advances from such entities, (c) the
Company's 8 % Senior Subordinated Notes due 2006 (which shall rank
pari passu in right of payment with the Securities), (d) the Company's 7 %
Senior Subordinated Notes due 2007 (which shall rank pari passu in right of
payment with the Securities), (e) the Company's 8 % Senior Subordinated Notes
due 2009 (which shall rank pari passu with the Securities) and (f) the
Securities. For purposes hereof, a "capitalized lease" shall be deemed to
mean a lease of real or personal property which, in accordance with generally
accepted accounting principles, has been capitalized.
Paragraph 9. The payment of the principal of, premium, if any, and
interest on the Securities pursuant to the Guarantee (as such term is defined in
the Indenture) will be subordinated in right of payment, in the manner and to
the extent set forth in the Indenture, to the prior payment in full of all
senior indebtedness of the Guarantor (referred to in the Indenture as
"Senior Indebtedness of the Guarantor" and as further defined herein), whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. The term "Senior Indebtedness of the Guarantor" as used
in the Indenture shall mean: (i) the principal of, and premium, if any, and
interest on, any indebtedness, whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed by the
Guarantor, (a) under the Revolving Credit Agreement, or (b) for money borrowed
from others (including, for this purpose, all obligations incurred under
capitalized leases or purchase money mortgages or under letters of credit or
similar commitments), or (c) in connection with the acquisition by it of any
other business, property or entity, and, in each case, all renewals, extensions
and refundings thereof, unless the terms of the instrument creating or
evidencing such indebtedness expressly provide that such indebtedness is not
superior in right of payment to the payment of the Securities pursuant to the
Guarantee. Senior Indebtedness of the Guarantor, as such term is used
in the Indenture, shall not include (a) the Guarantee, (b) indebtedness of the
Guarantor to any Subsidiary for money borrowed or advances from such Subsidiary,
(c) the Guarantor's guarantee of the Company's 8 % Senior Subordinated Notes
due 2006 (which shall rank pari passu in right of payment with the Guarantee),
(d) the Guarantor's guarantee of the Company's 7% Senior Subordinated Notes
due 2007 (which shall rank pari passu in right of payment with the
Guarantee), and (e) the Company's 8 1/8% Senior Subordinated Notes due 2009
(which shall rank pari passu with the Securities). For purposes hereof, a
"capitalized lease" shall be deemed to mean a lease of real or personal
property which, in accordance with generally accepted accounting principles,
has been capitalized.
<PAGE>
Paragraph 10. As used in the Indenture, the following terms shall
have the respective meanings set forth below:
"Consolidated Adjusted Net Worth" of the Guarantor means the
Consolidated Net Worth of the Guarantor less the stockholders' equity of each of
the Unrestricted Subsidiaries, as determined in accordance with generally
accepted accounting principles.
"Consolidated Fixed Charge Ratio" of the Guarantor means the ratio of
(i) the aggregate amount of Consolidated Net Income Available for Fixed Charges
of such Person for the four fiscal quarters for which financial information in
respect thereof is available immediately prior to the date of the transaction
giving rise to the need to calculate the Consolidated Fixed
Charge Ratio (the "Transaction Date") to (ii) the aggregate Consolidated
Interest Expense of such Person for the four fiscal quarters for which financial
information in respect thereof is available immediately prior to the Transaction
Date.
"Consolidated Income Tax Expense" of the Guarantor means, for any
period for which the determination thereof is to be made, the aggregate of the
income tax expense of the Guarantor and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Consolidated Interest Expense" of the Guarantor means, for any
period for which the determination thereof is to be made, the Interest Expense
of the Guarantor and its Restricted Subsidiaries for such period, determined on
a consolidated basis in accordance with generally accepted accounting
principles.
<PAGE>
"Consolidated Net Adjusted Income" of the Guarantor means, for any
period for which the determination thereof is to be made taken as one accounting
period, the aggregate Consolidated Net Income of the Guarantor and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles, adjusted by excluding (to the
extent not otherwise excluded in calculating Consolidated Net Income) any net
extraordinary gain or any net extraordinary loss, as the case may be, during
such period.
"Consolidated Net Income" for any period means the aggregate of the
Net Income of the Guarantor and its consolidated subsidiaries for such period,
on a consolidated basis, determined in accordance with generally accepted
accounting principles, provided that (i) the Net Income of any person in which
the Guarantor or any consolidated Subsidiary has a joint interest
with a third party or which is organized outside of the United States shall
be included only to the extent of the lesser of (A) the amount of dividends or
distributions paid to the Guarantor or a consolidated subsidiary or (B) the
Guarantor's direct or indirect proportionate interest in the Net
Income of such Person, provided that, so long as the Guarantor or a consolidated
subsidiary has an unqualified legal right to require the payment of a dividend
or distribution, Net Income shall be determined solely pursuant to clause (B);
(ii) the Net Income of any Person acquired in a pooling of interests transaction
for any period prior to the date of such acquisition shall be excluded, and
(iii) the Net Income of any Unrestricted Subsidiary shall be included only
to the extent of the amount of dividends or distributions (the fair value of
which, if other than in cash, to be determined by the Board of Directors, in
good faith) by such Subsidiary to the Guarantor or to any of its consolidated
Restricted Subsidiaries.
"Consolidated Net Income Available for Fixed Charges" means, for any
period for which the determination thereof is to be made, the sum of the amounts
for such period of (i) Consolidated Net Adjusted Income, (ii) Consolidated
Interest Expense (excluding capitalized interest) and (iii) Consolidated Income
Tax Expense, all as determined on a consolidated basis for the Guarantor and
its Subsidiaries in conformity with generally accepted accounting principles.
"Designated Senior Debt of the Guarantor" means any single issue of
Indebtedness of the Guarantor constituting Senior Indebtedness of the Guarantor
which at the time of determination has an aggregate principal amount
outstanding of at least $25,000,000 and is specifically designated in the
instrument or instruments creating, governing or evidencing such
Senior Indebtedness of the Guarantor as "Designated Senior Debt of Toll Brothers
, Inc." (it being understood that the Guarantor's guarantee of the Revolving
Credit Agreement shall be considered a single issue of Indebtedness of the
Guarantor for purposes of this definition).
"Designated Senior Debt of the Company" means any single issue of
Indebtednessof the Company constituting Senior Indebtedness of the Company which
at the time of determination has an aggregate principal amount outstanding of
at least $25,000,000 and is specifically designated in the instrument or
instruments creating, governing or evidencing such Senior Indebtedness of the
Company as "Designated Senior Debt of Toll Corp." (it being understood that
the Company's guarantee of the Revolving Credit Agreement shall be considered
a single issue of Indebtedness of the Company for purposes of this definition).
<PAGE>
"Excluded Debt" means any Indebtedness of the Guarantor and any
Indebtedness or preferred stock of the Company, whether outstanding on the date
of the Indenture or thereafter created, which is (i) subordinated in right of
payment to the Securities or the Guarantee (upon
liquidation or otherwise) and (ii) matures after, and is not redeemable,
mandatorily or at the option of the holder thereof prior to the date of
maturity of the Securities.
"Indebtedness," for the purpose of the covenants described in
Sections 4.07 and 4.08, and certain definitions, means without duplication (i)
any liability of any Person (a) for borrowed money or evidenced by a bond,
note, debenture or similar instrument (including a purchase money obligation)
given in connection with the acquisition of any businesses, properties or
assets of any kind (other than a trade payable or current liability arising in
the ordinary course of business) to the extent it would appear as a liability
upon a balance sheet of such Person prepared on a consolidated basis in
accordance with generally accepted accounting principles, or (b) for the
payment of money relating to a capitalized lease obligation; (ii) any
liability of any Person under any obligation incurred under letters of credit;
and (iii) any liability of others described in clause (i) or (ii) with respect
to which such Person has made a guarantee or similar arrangement, directly or
indirectly (to the extent of such guarantee or arrangement).
"Interest Expense" of any Person means, for any period for which the
determination thereof is to be made, the sum of the aggregate amount of (i)
interest in respect of indebtedness (including all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing), (ii) all but the principal component of
rentals in respect of capitalized lease obligations, paid, accrued or scheduled
to be paid or accrued by such Person during such period and (iii) capitalized
interest, all as determined in accordance with generally accepted accounting
principles, minus (iv) interest expenseattributable to such Person's directly
or indirectly majority-owned mortgage finance Affiliates.
"Net Income" of any Person means the net income (loss) of such Person,
determined in accordance with generally accepted accounting principles;
excluding, however, from the determination of Net Income all gain (to the extent
that it exceeds all losses) realized upon the sale or other disposition
(including, without limitation, dispositions pursuant to sale leaseback
transactions) of any real property or equipment of such Person, which is not
sold or otherwise disposed of in the ordinary course of business, or of any
capital stock of such Person or its subsidiaries owned by such Person.
"Restricted Subsidiary" means any Subsidiary that is not an
Unrestricted Subsidiary.
"Unrestricted Subsidiary" means (a) any Subsidiary which, in
accordance with the provisions of the Indenture, has been designated in a Board
Resolution of the Guarantor as an Unrestricted Subsidiary, in each case unless
and until such Subsidiary shall, in accordance with
the provisions of the Indenture, be designated by Board Resolution as a
Restricted Subsidiary; and (b) any Subsidiary a majority of the voting stock of
which shall at the time be owned directly or indirectly by one or more
Unrestricted Subsidiaries.
<PAGE>
"Unrestricted Subsidiary Investment" means any loan, advance, capital
contribution or transfer (including by way of guarantee or other similar
arrangement) in or to any Unrestricted Subsidiary. For the purposes of the
covenant described in Section 4.04, (i) "Unrestricted Subsidiary Investment"
shall include the fair market value of the net assets of any Subsidiary at
the time that such Subsidiary is designated an Unrestricted Subsidiary and
(ii) any property transferred to an Unrestricted Subsidiary shall be valued at
fair market value at the time of such transfer, in each case as determined by
the Board of Directors of the Guarantor in good faith. "Unrestricted Subsidiary
Investment" does not include the fair market value of the net
assets of an Unrestricted Subsidiary that is designated as a Restricted
Subsidiary (as determined by the Board of Directors of the Guarantor in good
faith), provided that such designation is then permitted pursuant to the terms
of the Indenture.
Capitalized terms not otherwise defined herein shall have the
meanings given to them in the Indenture.
Paragraph 11. The Securities shall be entitled to the benefit of each
of the covenants in Article 4 of the Base Indenture and each of the following
additional covenants (each of which shall be deemed to be a provision of the
Indenture and, when referred to as a provision of the Indenture, shall be
identified by reference to the Section number which is set forth
immediately preceding such covenant):
Section 4.04. Limitation on Restricted Payments. The Guarantor may
not declare or pay any dividend or make any distribution or payment on its
Capital Stock or to its shareholders, as shareholders (other than dividends or
distributions payable in its Capital Stock), or purchase, redeem or otherwise
acquire or retire for value, or permit any Restricted Subsidiary
to purchase or otherwise acquire for value, any Capital Stock of the Guarantor
(collectively, "Restricted Payments"), or make or permit any Restricted
Subsidiary to make (I) any loan, advance, capital contribution or transfer other
than for fair market value (as determined by a majority of the disinterested
members of the Board of Directors of the Guarantor or the relevant
Restricted Subsidiary, which shall be evidenced by a written resolution of
such Board of Directors) in or to any Affiliate (which term does not include
joint ventures (whether in corporate, partnership or other form) with an
unaffiliated party or parties) other than a Restricted
Subsidiary or the Guarantor or (II) any Unrestricted Subsidiary Investment
(collectively, "Restricted Investments"), if, at the time of such Restricted
Payment or Restricted Investment, or after giving effect thereto, (i) a
Default or an Event of Default shall have occurred and be continuing, or (ii)
the sum of (x) the aggregate amount expended for such Restricted Payments
(the amount expended for such purposes, if other than in cash, to be determined
by the Board of Directors of the Guarantor, whose determination shall be
conclusive and evidenced by a resolution of such Board of Directors filed with
the Trustee) subsequent to October 31, 1991, and (y) the amount by which the
aggregate book value of all property (net of any previous write-downs or
reserves in respect of such property) subject to Non-Recourse Indebtedness
which has been accelerated or is in default is in excess of such Non-Recourse
Indebtedness and (z) the aggregate amount of Restricted Investments then
outstanding, shall exceed the sum of (a) 50% of the aggregate Consolidated
Net Income (or, in case such aggregate Consolidated Net Income
shall be a deficit, minus 100% of such deficit) of the Guarantor accrued on a
cumulative basis subsequent to October 31, 1991, and (b) the aggregate net
proceeds, including the fair market value of property other than cash (as
determined by the Board of Directors of the Guarantor, whose determination
shall be conclusive and evidenced by a resolution of such Board of Directors
filed with the Trustee), received by the Guarantor from the issue or sale after
October 31, 1991 of Capital Stock of the Guarantor, including capital stock of
the Guarantor issued upon the conversion of indebtedness of the Guarantor, other
than Capital Stock that is redeemable at the option of the holder or is
mandatorily redeemable and (c) $20,000,000, or (iii) the Guarantor would be
unable to incur an additional $1.00 of Indebtedness (other than Excluded
Debt) pursuant to Section 4.07; provided, however, that the foregoing shall
not prevent (A) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration the making of such
payment would have complied with the provisions of this limitation on
dividends, or (B) the retirement of any shares of the Guarantor's Capital
Stock by exchange for, or out of proceeds of the substantially concurrent sale
of, other shares of its Capital Stock (other than Capital Stock that is
redeemable at the option of the holder or is mandatorily redeemable), or (C)
the payment or advance of cash compensation or any compensation pursuant
to or in connection with any employee benefit plan of the Guarantor and the
Subsidiaries paid or payable to any Person in his or her capacity as an
employee, officer or director, and neither such retirement nor the proceeds
of any such sale or exchange nor the payment or advance of any such
compensation shall be included in any computation made under clause (ii) of
this Section 4.04.
<PAGE>
Section 4.05. Limitation on Restrictions on Payment of Dividends by
Subsidiaries. The Guarantor will not, and will not permit any Subsidiary to,
enter into any agreement or amendment of any existing agreement if such
agreement or amendment would restrict the payment of dividends or the making
of other distributions on any Subsidiary's Capital Stock, provided that a
Subsidiary may enter into such an agreement or amendment if, immediately
prior thereto either (i) (A) the Consolidated Net Worth of the Guarantor
(excluding the Consolidated Net Worth of such Subsidiary and any other
Subsidiaries which have such agreements) is at least $50,000,000 and (B) the
Consolidated Net Worth of such Subsidiary and any other Subsidiaries which
have such agreements does not account for more than 20% of the
Consolidated Net Worth of the Guarantor (including such Subsidiary and any
other Subsidiaries which have such agreements) or (ii) the Consolidated Net
Worth of the Guarantor (excluding the Consolidated Net Worth of such Subsidiary
and any other Subsidiaries which have such agreements) is at least $70,000,000.
Section 4.06. Maintenance of Consolidated Net Worth. If the
Consolidated Net Worth of the Guarantor and its Subsidiaries at the end of any
two consecutive fiscal quarters is less than $55,000,000, then the Guarantor
shall cause the Company to offer to repurchase (the "Offer") on the last day
of the fiscal quarter next following such second fiscal quarter, or, if such
second fiscal quarter ends on the last day of the Guarantor's fiscal year,
120 days following the last day of such second fiscal quarter (the "Purchase
Date") $7,500,000 aggregate principal amount of Securities (or such lesser
amount as may be outstanding at the time, such amount being referred to as
the "Offer Amount") at a purchase price equal to their principal amount plus
accrued and unpaid interest to the Purchase Date. The Company may credit
against its obligation to offer to repurchase Securities on a Purchase Date
the principal amount of (i) Securities acquired by the Company and surrendered
for cancellation otherwise than pursuant to an Offer and (ii) Securities
redeemed or called for redemption, in each case at least 60 days before the
Purchase Date. In no event shall the failure to meet the minimum Consolidated
Net Worth stated above at the end of any fiscal quarter be counted toward the
making of more than one Offer.
<PAGE>
The Company shall provide the Trustee with notice of the Offer at
least 60 days before any such Purchase Date and at least 10 days before the
notice of any Offer is mailed to Holders. The Company shall notify the Trustee
promptly after the occurrence of any of the events specified in this Section.
Notice of an Offer shall be mailed by the Trustee not less than 30
days nor more than 60 days prior to the Purchase Date to each Holder of the
Securities at its last registered address. The Offer shall remain open from
the time of mailing until 5 days before the Purchase Date. The notice shall
be accompanied by a copy of the information regarding the Guarantor
required to be contained in a Quarterly Report on Form 10-Q for the second
fiscal quarter referred to above if such second fiscal quarter is one of the
Guarantor's first three fiscal quarters. If such second fiscal quarter is the
Guarantor's last fiscal quarter, a copy of the information
required to be contained in an Annual Report to Shareholders pursuant to Rule
14a-3 under the Exchange Act for the fiscal year ending with such second fiscal
quarter shall either accompany the notice or be mailed to Holders not less than
15 days before the Purchase Date. The notice
shall contain all instructions and materials necessary to enable such Holders
to tender Securities pursuant to the Offer. The notice, which shall govern the
terms of the Offer, shall state:
(1) that the Offer is being made pursuant to this Section 4.06;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Security not tendered or accepted for payment will
continue to accrue interest;
(4) that any Security accepted for payment pursuant to the
Offer shall cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Security purchased pursuant
to an Offer will be required to surrender the Security, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Security completed,
to the Paying Agent at the address specified in the notice at least 5 days
before the Purchase Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than three days prior to the Purchase Date,
a telegram, telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to have
the Security purchased;
(7) that if Securities in a principal amount in excess of the
Offer Amount are tendered pursuant to the Offer, the Company shall purchase
Securities on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000
or integral multiples of $1,000 shall be acquired); and
(8) that Holders whose Securities were purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered.
<PAGE>
Before a Purchase Date the Company shall (i) accept for payment
Securities or portions thereof properly tendered pursuant to the Offer (on a pro
rata basis if required pursuant to paragraph (7) above), (ii) deposit with the
Paying Agent money sufficient to pay the purchase price of all Securities or
portions thereof so accepted and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly authenticate
and mail or deliver to such Holders a new Security equal in principal
amount to any unpurchased portion of the Security surrendered. Any Securities
not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company will publicly announce the results of the Offer on
the Purchase Date. For purposes of this Section 4.06, the Trustee shall act as
the Paying Agent.
Section 4.07. Limitation on Additional Indebtedness. The Guarantor
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, incur, issue, assume, guarantee or in any other manner become
liable, contingently or otherwise, with respect to any Indebtedness (or, with
respect to Restricted Subsidiaries only, any preferred stock) (whether in
liquidation or otherwise) other than Excluded Debt, unless, after giving
effect thereto, either (A) the Consolidated Fixed Charge Ratio of the Guarantor
exceeds 1.5:1 or (B) the ratio of Indebtedness (and, if applicable, Restricted
Subsidiary preferred stock) of such Persons (excluding, for purposes of this
calculation, purchase money mortgages that are Non-Recourse Indebtedness,
obligations incurred under letters of credit, escrow agreements and surety
bonds in the ordinary course of business, Indebtedness of the Guarantor's
directly or indirectly majority-owned mortgage finance Affiliates and Excluded
Debt) to Consolidated Adjusted Net Worth of the Guarantor is less than 4.5:1.
Notwithstanding the foregoing, the Guarantor and its Restricted Subsidiaries
may incur, issue, assume, guarantee or otherwise become liable with
respect to: (I) purchase money mortgages that are Non-Recourse Indebtedness,
(ii) obligations incurred under letters of credit, escrow agreements and surety
bonds in the ordinary course of business, (iii) Indebtedness of the Guarantor's
directly or indirectly majority-owned mortgage finance Affiliates and (iv)
Indebtedness solely for the purpose of refinancing or repaying any
existing Indebtedness or Restricted Subsidiary preferred stock so long as
after giving effect to such refinancing or repayment, the sum of total
consolidated Indebtedness of the Guarantor and its Restricted Subsidiaries and
the aggregate liquidation preference of Restricted Subsidiary
preferred stock is not increased (provided that for purposes of this
subsection 4.07(iv), application of the proceeds from the sale of assets of the
Guarantor or its Restricted Subsidiaries in the ordinary course of business to
reduce Indebtedness or Restricted Subsidiary preferred stock
and the subsequent reborrowing to purchase assets in the ordinary course
of business shall be deemed to be a refinancing).
Section 4.08. Restrictions on Permitting Restricted Subsidiaries to
Become Unrestricted Subsidiaries and Unrestricted Subsidiaries to Become
Restricted Subsidiaries.
(a) The Guarantor will not permit any Restricted Subsidiary to be
designated as an Unrestricted Subsidiary unless the Guarantor and its Restricted
Subsidiaries would thereafter be permitted to (i) incur at least $1.00 of
Indebtedness (other than Excluded Debt) pursuant to Section 4.07 and (ii)
make a Restricted Payment or Restricted Investment of at least $1.00
pursuant to Section 4.04.
(b) The Guarantor will not permit any Unrestricted Subsidiary to be
designated as a Restricted Subsidiary unless such Subsidiary has outstanding no
Indebtedness except such Indebtedness as the Guarantor could permit it to become
liable for immediately after becoming a Restricted Subsidiary under the
provisions of Section 4.07.
(c) Promptly after the adoption of any Board Resolution designating
a Restricted Subsidiary as an Unrestricted Subsidiary or an Unrestricted
Subsidiary as a Restricted Subsidiary, a copy thereof shall be filed with the
Trustee, together with a Officers' Certificate stating that the provisions of
this Section have been complied with in connection with such designation.
(d) The Guarantor will not designate the Company an Unrestricted
Subsidiary.
(e) At the date of this Indenture all of the Subsidiaries are, and
shall be permitted to be, Restricted Subsidiaries.
<PAGE>
Section 4.09. When the Company and the Guarantor May Merge, Etc.
Neither the Company nor the Guarantor shall consolidate with or merge into, or
transfer all or substantially all of its assets to, any other Person unless (i)
such other Person is a corporation organized and existing under the laws of the
United States or a state thereof or the District of Columbia and expressly
assumes by supplemental indenture all the obligations of the Company
or the Guarantor under the Indenture and either the Securities issued
thereunder, or the Guarantee, as the case may be; (ii) immediately after giving
effect to such transaction no Default or Event of Default shall have occurred
and be continuing; (iii) the Consolidated Net Worth of the obligor of the
Securities immediately after such transaction is not less than the Consolidated
Net Worth of the Company or the Guarantor, as applicable, immediately prior to
such transaction and (iv) the surviving corporation would be able to incur at
least an additional $1.00 of Indebtedness (other than Excluded Debt) under
Section 4.07. Thereafter all such obligations of a predecessor corporation
shall terminate.
Paragraph 12. The Securities shall initially be represented by one
or more global Securities (each a "Global Security") deposited with the Trustee
on behalf of The Depositary Trust Company ("DTC") and registered in the name of
Cede & Co. or in the name of such other nominee of DTC as is requested by an
authorized representative of DTC. Unless and until a Global Security registered
in the name of DTC or a nominee of DTC is exchanged in whole or in
part for certificated Securities in definitive form, such Global Security may
not be transferred except as a whole by DTC to a nominee of DTC or by a nominee
of DTC to DTC or another nominee of DTC. If DTC is at any time unwilling,
unable or ineligible to continue as a depositary for the Securities and a
successor depositary is not appointed by the Company within 90 days, the
Company shall cause the Trustee to issue individual Securities in definitive
form in exchange for each Global Security then registered in the name of DTC or
a nominee of DTC. The Company shall be entitled at any time and in its sole
discretion to determine not to have Global Securities and, in such event, shall
cause the Trustee to issue individual Securities in definitive form in exchange
for each Global Security then representing all such Securities. In
either instance, an owner of a beneficial interest in a Global Security
shall be entitled to physical delivery of Securities in definitive form equal in
principal amount to such beneficial interest and to have such Securities
registered in its name. Individual Securities so issued in definitive form
shall be issued in denominations of $1,000 and any larger amount that is an
integral multiple of $1,000 and shall be issued in registered form only, without
coupons. In the event a beneficial owner of a Security represented by a Global
Security requests to have such beneficially owned Security (a "DTC Withdrawn
Security") issued in definitive form in exchange for the beneficial
interest in the Global Security representing the DTC Withdrawn Security, such
owner shall be entitled to physical delivery of a Security in definitive form
equal in principal amount to such DTC Withdrawn Security and to have such
Security registered in its name. Payments of principal of and interest on a
Global Security registered in the name of DTC or a nominee of DTC shall be
made by the Company through the Trustee to DTC or its nominee, as the case may
be, as the registered owner of such Global Security. If a Global Security is
issued in the name of a depositary other than DTC or such other depositary's
nominee, the terms and provisions of this Paragraph 12 which are applicable to
DTC and its nominee shall be applicable to, and each reference to DTC and its
nominee shall be deemed to be a reference to such other depositary and
its nominee, respectively, with respect to the Global Security registered in
the name of such other depositary or its nominee.
<PAGE>
Paragraph 13. Except as otherwise indicated, each reference herein
to a "Paragraph" shall refer to a Paragraph hereof, and each reference herein
to a "Section" shall refer to a Section of the Indenture.
FURTHER RESOLVED, that the Chairman, President, Chief Financial
Officer, Chief Accounting Officer, Vice President - Controller or Vice
President - Finance of the Company (each a "Company Designated Officer"), and
the Chairman, President, Chief Financial Officer, Chief Accounting Officer,
Vice President - Controller or Vice President - Finance of the
Guarantor (each a "Guarantor Designated Officer" and together with each Company
Designated Officer, each a "Designated Officer"), acting alone or with any other
officer, be and they hereby are, authorized and empowered, for and on behalf of
the Company and the Issuer, respectively, to execute and deliver the Terms
Agreement dated April 13, 1999 among the Company, the Guarantor and Goldman,
Sachs & Co. (the "Terms Agreement"), a copy of which is attached
hereto as Attachment B, relating to the issuance and sale of the Securities.
FURTHER RESOLVED, that any two of the Company Designated Officers be,
and they hereby are, authorized and empowered, for and on behalf of the Company,
to execute and deliver a Global Security in the form attached hereto as
Attachment A, in the principal amount of $100,000,000 and payable to Cede & Co.,
with such changes thereto as such officers shall approve (the "Authorized Global
Security"), their execution of the Authorized Global Security to be conclusive
evidence of such approval;
FURTHER RESOLVED, that any two of the Company Designated Officers be,
and they hereby are, authorized and empowered, for and on behalf of the Company,
to execute and deliver certificated Securities in definitive form, in
substantially the same form as the Authorized Global Security, provided,
however, that the legends appearing on the face of the
Authorized Global Security shall not be included in such certificated
Securities;
FURTHER RESOLVED, that any two of the Guarantor Designated Officers
be, and they hereby are, authorized and empowered, for and on behalf of the
Guarantor, to execute and deliver the Guarantee of the Authorized Global
Security in the form of the Guarantee included in Attachment A, with such
changes thereto as such officers shall approve (the "Authorized Guarantee"),
their execution of the Authorized Guarantee to be conclusive evidence of such
approval;
FURTHER RESOLVED, that any two of the Guarantor Designated Officers
be, and they hereby are, authorized and empowered, for and on behalf of the
Guarantor, to execute and deliver certificated Securities in definitive form, in
substantially the same form as the Authorized Global Security, provided,
however, that the legends appearing on the face of the Authorized Global
Security shall not be included in such certificated Securities;
<PAGE>
FURTHER RESOLVED, that the Company Designated Officers be, and each of
them hereby is, authorized and directed in the name and on behalf of the Company
and under its manual or facsimile seal, and the Guarantor Designated Officers
be, and each of them hereby is, authorized and directed in the name and on
behalf of the Guarantor, to execute, acknowledge and deliver the Base
Indenture; and
FURTHER RESOLVED, that a Designated Officer, acting alone or with any
other officer of the Company or the Guarantor, as the case may be, be and he
hereby is authorized, empowered and directed with the advice of counsel, for
and on behalf of the Company or the Guarantor, as the case may be, to prepare,
execute and file any other documents, instruments, or certificates, to perform
any acts and to do any and all other things on behalf of the Company or the
Guarantor, as the case may be, that said officer shall deem appropriate in
order to effectuate the foregoing resolutions and complete and consummate the
offering of the Securities pursuant to the terms of the Terms Agreement and the
Indenture, and to qualify the Securities for sale to the public in accordance
with any law, rule or regulation of any federal or state governmental body.
<PAGE>
<PAGE>
AUTHORIZING RESOLUTIONS
Relating to the $100,000,000 Principal Amount of
8% Senior Subordinated Notes
Due 2009
of
Toll Corp.
Guaranteed on a Senior Subordinated Basis
by
Toll Brothers, Inc.
______________________________
Approved by the Board of Directors
of Toll Corp.
and the Shelf Terms Committee
of Toll Brothers, Inc.
______________________________
As of April 13, 1999
<PAGE>
<PAGE>
ATTACHMENT A
Form of Global Security
<PAGE>
<PAGE>
Joint Action by Unanimous Consent in Writing
of the Board of Directors of
Toll Corp.
and of the
Shelf Terms Committee of Toll Brothers, Inc.
As of April 13, 1999
The undersigned, constituting all of the Directors of Toll Corp., a
Delaware corporation, and all of the members of the Shelf Terms Committee of
Toll Brothers, Inc., a Delaware corporation, by joint consent in writing
pursuant to the authority contained in the General Corporation Law of Delaware,
as amended, without the formality of convening a meeting, do hereby consent to
the authorization, adoption and approval of the Authorizing Resolutions in
the form attached hereto and incorporated herein.
TOLL CORP.
BOARD OF DIRECTORS
_____________________ ____________________
Robert I. Toll Zvi Barzilay
_____________________
Joel H. Rassman
TOLL BROTHERS, INC.
SHELF TERMS COMMITTEE
_____________________ ____________________
Robert I. Toll Bruce E. Toll
_____________________
Carl B. Marbach
<PAGE>
