As filed with the Securities and Exchange Commission,
via EDGAR, on November 30, 1999.
Registration Nos. 333- ____________, 333 - ____________, 333 - ____________
and 333 - ____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
TOLL BROTHERS, INC.
TOLL CORP.
FIRST HUNTINGDON FINANCE CORP.
TOLL FINANCE CORP.
(Exact name of each registrant as specified in its charter)
Delaware
--------- 22-2416878 - Toll Brothers, Inc.
(State or other 22-2485860 - Toll Corp.
jurisdiction of 23-2485787 - First Huntingdon Finance Corp.
incorporation 23-2978196 - Toll Finance Corp.
of each registrant) -------------------------------------------
(I.R.S. Employer Identification Number)
3103 Philmont Avenue
Huntingdon Valley, Pennsylvania 19006
(215) 938-8000
---------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
Robert I. Toll
Chairman of the Board and
Chief Executive Officer
Toll Brothers, Inc.
3103 Philmont Avenue
Huntingdon Valley, Pennsylvania 19006
(215) 938-8000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------
Copies to:
Mark K. Kessler, Esquire
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street, 22nd Floor
Philadelphia, Pennsylvania 19103-2097
(215) 977-2000
------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [X]
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================================
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price aggregate offering Amount of
securities to be registered registered (1) per unit (2) price (2)(3) registration fee(4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value (5)..........
Preferred Stock, $.01 par value (6)....... $500,000,000 100% $ 500,000,000 $ 139,000
Warrants (7)..............................
Debt Securities (8)(9). ..................
Guarantees (9)............................
================================================================================================================================
</TABLE>
(1) In United States Dollars or the equivalent thereof in one or
more foreign currencies or units of two or more foreign currencies or
composite currencies, including the European Currency Unit. The aggregate
initial offering price of all securities issued from time to time pursuant
to this Registration Statement will not exceed $500,000,000. Such amount
represents (i) the issue price of any common stock, (ii) the liquidation
preference (or, if different, the issue price) of any preferred stock, (iii)
the principal amount of any debt securities issued at their principal amount
or the issue price rather than the principal amount of any debt securities
issued at an original issue discount, and (iv) the issue price of any
Warrants (but not the exercise price of any securities issuable upon the
exercise of such warrants).
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933. The proposed
maximum offering price per unit will be determined from time to time by the
registrant issuing such units or, in the case of an issuance of units which
includes a guarantee, by the registrants.
(3) No separate consideration will be received for (i) any guarantee or any
common stock, preferred stock or debt securities that may be issuable upon
conversion of or in exchange for convertible or exchangeable preferred stock
or debt securities (including any securities issuable upon stock splits or
similar transactions pursuant to Rule 416 under the Securities Act of 1933).
(4) Pursuant to Rule 429 under the Securities Act of 1933, $9,090 of this
amount, which has been previously paid, is being carried forward, including
(i) $3,333 paid upon the filing of a registration statement on Form S-3
(File Nos. 333-35775 and 333-35775-01) allocable to $11,000,000 of the
securities covered thereby which are unsold, and (ii) $5,757 paid upon the
filing of a registration statement on Form S-3 (File Nos. 333-38347 and
333-38347-01) allocable to $19,000,000 of securities covered thereby which
are unsold.
(5) Subject to Footnote (1), there are being registered hereunder an
indeterminate number of shares of common stock as may be sold, from time to
time, by Toll Brothers, Inc. There are also being registered hereunder an
indeterminate number of shares of common stock as may be issuable upon
conversion of, or in exchange for, or upon exercise of, convertible,
exchangeable or exercisable debt securities, preferred stock or warrants.
This registration statement also pertains to Rights to Purchase Series A
Junior Participating Preferred Stock ("Rights") of Toll Brothers, Inc. Upon
the occurrence of certain prescribed events, one Right will be issued for
each share of common stock. Until the occurrence of such events, the Rights
are not exercisable, will be evidenced by the certificate for the common
stock and will be transferred along with and only with the common stock.
(6) Subject to Footnote (1), there are being registered hereunder an
indeterminate number of shares of preferred stock as may be sold, from time
to time, by Toll Brothers, Inc. There are also being registered hereunder an
indeterminate number of shares of preferred stock as may be issuable upon
conversion of, or in exchange for, or upon exercise of, convertible,
exchangeable or exercisable debt securities, preferred stock or warrants.
(7) Subject to Footnote (1), there are being registered hereunder an
indeterminate number of warrants as may be sold, from time to time, by Toll
Brothers, Inc. entitling the holders thereof to purchase common stock or
preferred stock of Toll Brothers, Inc. or debt securities of Toll Corp.,
First Huntingdon Finance Corp. or Toll Finance Corp. Warrants may be sold
separately or as units with common stock or preferred stock of Toll
Brothers, Inc. or debt securities of Toll Corp., First Huntingdon Finance
Corp. or Toll Finance Corp.
(8) Subject to Footnote (1), there is being registered hereunder an
indeterminate principal amount of debt securities as may be sold, from time
to time, by Toll Corp., First Huntingdon Finance Corp. or Toll Finance Corp.
There is also being registered hereunder an indeterminate principal amount
of such debt securities as may be issuable upon conversion of, or in
exchange for, or upon exercise of, convertible, exchangeable or exercisable
debt securities, preferred stock or warrants.
(9) Each of the debt securities issued by Toll Corp., First Huntingdon Finance
Corp. or Toll Finance Corp. will be accompanied by a guarantee to be issued
by Toll Brothers, Inc.
------------------
The Registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
================================================================================
<PAGE>
Subject to Completion, dated November 30, 1999
PROSPECTUS
[TOLL BROTHERS, INC. LOGO]
TOLL BROTHERS, INC.
Common Stock
Preferred Stock
Warrants
Guarantees of Debt Securities
TOLL CORP.
FIRST HUNTINGDON FINANCE CORP.
TOLL FINANCE CORP.
Debt Securities
Toll Brothers, Inc. may offer any of the following securities from time to
time:
o common stock;
o preferred stock;
o warrants to purchase common stock or preferred stock issued by Toll
Brothers, Inc. or debt securities issued by Toll Corp., First
Huntingdon Finance Corp. or Toll Finance Corp.; and
o guarantees of debt securities issued by Toll Corp., First Huntingdon
Finance Corp. or Toll Finance Corp.
Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp. may offer
debt securities from time to time. Toll Corp., First Huntingdon Finance Corp.
and Toll Finance Corp. are wholly-owned subsidiaries of Toll Brothers, Inc.
Toll Brothers, Inc.'s common stock is listed on the New York Stock Exchange
and the Pacific Exchange under the Symbol "TOL."
Each time we offer any of the securities described in this prospectus we
will provide a prospectus supplement that will describe the specific price of
the securities being offered and the other terms of the offering. You should
read this prospectus and the applicable prospectus supplement carefully before
you invest. This prospectus may not be used to sell any securities unless it is
accompanied by the applicable prospectus supplement.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed on the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is ___________ __, 1999.
*****************************************************************************
The following text is to appear vertically in the left margin of cover.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
*****************************************************************************
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus describes certain securities of Toll Brothers, Inc., Toll
Corp., First Huntingdon Finance Corp. and Toll Finance Corp. This prospectus is
part of a registration statement that we filed with the SEC utilizing a "shelf"
registration process, which allows us to offer and sell any combination of the
securities described in this prospectus in one or more offerings. Using this
prospectus, Toll Brothers, Inc., Toll Corp., First Huntingdon Finance Corp. and
Toll Finance Corp. may offer up to $500,000,000 worth of securities.
This prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a prospectus
supplement that will describe the specific terms of the securities we are
offering. Each supplement will also contain specific information about the terms
of the offering it describes. The prospectus supplement may also add to, update
or change the information contained in this prospectus. In addition, as we
describe below in the section entitled "Where You Can Find More Information,"
Toll Brothers, Inc. has filed and plans to continue to file other documents with
the SEC that contain information about it and the business conducted by it and
its subsidiaries. Before you decide whether to invest in any of the securities
offered by this prospectus, you should read this prospectus, the prospectus
supplement that further describes the offering of those securities and the
information Toll Brothers, Inc. otherwise files with the SEC.
When this prospectus or a supplement to this prospectus uses the words
"we," "us" and "our," they refer to Toll Brothers, Inc. and its subsidiaries,
including Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp.,
unless the context otherwise requires. The phrase "this prospectus" refers to
this prospectus and any applicable prospectus supplement, unless the context
otherwise requires.
WHERE YOU CAN FIND MORE INFORMATION
Toll Brothers, Inc. is subject to the informational requirements of the
Securities Exchange Act of 1934. In accordance with those requirements, Toll
Brothers, Inc. files annual, quarterly and special reports, proxy statements and
other information with the SEC. You can read and copy any document Toll
Brothers, Inc. files with the SEC at the SEC's public reference rooms at the
following locations:
Judiciary Plaza 7 World Trade Center
450 Fifth Street, N.W. 13th Floor
Washington, D.C. 20549 New York, New York 10048
You may obtain information on the operation of the SEC's public reference rooms
by calling the SEC at 1-800-SEC-0330. The SEC filings of Toll Brothers, Inc.
are also available to the public from the SEC's Internet website at
http://www.sec.gov. In addition, the common stock of Toll Brothers, Inc. is
listed on the New York Stock Exchange and the Pacific Exchange and similar
information concerning Toll Brothers, Inc. can be inspected and copied at the
New York Stock Exchange, 20 Broad Street, New York, New York 10005 and the
Pacific Exchange, 301 Pine Street, San Francisco, California 94104.
The SEC allows us to "incorporate by reference" into this prospectus the
information Toll Brothers, Inc. files with the SEC. This means that we are
permitted to disclose important information to you by referring you to other
documents Toll Brothers, Inc. has filed with the
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<PAGE>
SEC. We incorporate by reference in two ways. First, we list certain documents
that Toll Brothers, Inc. has filed with the SEC. The information in these
documents is considered part of this prospectus. Second, Toll Brothers, Inc.
expects to file additional documents with the SEC in the future. The information
in these documents, when filed, will update and supersede the current
information included in or incorporated by reference in this prospectus. You
should consider any statement contained in this prospectus or in a document
which is incorporated by reference into this prospectus to be modified or
superseded to the extent that the statement is modified or superseded by another
statement contained in a later dated document that constitutes a part of this
prospectus or is incorporated by reference into this prospectus. You should
consider any statement which is so modified or superseded to be a part of this
prospectus only as so modified or superseded.
We incorporate by reference in this prospectus all the documents listed
below and any filings Toll Brothers, Inc. makes with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date
of this prospectus and before all the securities offered by this prospectus have
been sold or de-registered:
o The annual report of Toll Brothers, Inc. on Form 10-K filed with the SEC
for the fiscal year ended October 31, 1998;
o The quarterly reports of Toll Brothers, Inc. on Form 10-Q filed with
the SEC for the fiscal quarters ended January 31, 1999, April 30, 1999
and July 31, 1999;
o The current reports of Toll Brothers, Inc. on Form 8-K filed with the
SEC on January 25, 1999, April 14, 1999 and July 13, 1999;
o The description of the common stock of Toll Brothers, Inc.
contained in its registration statement filed with the SEC on
a Form 8-A dated June 19, 1986 registering the common stock
under Section 12 of the Securities Exchange Act of 1934; and
o The description of preferred stock purchase rights contained
in the registration statement of Toll Brothers, Inc. filed
with the SEC on a Form 8-A dated June 20, 1997, as the same
was amended by an amendment on Form 8-A/A on August 21, 1998,
registering the preferred stock purchase rights under Section
12 of the Securities Exchange Act of 1934.
We will deliver, without charge, to anyone receiving this prospectus, upon
written or oral request, a copy of any document incorporated by reference in
this prospectus but not delivered with this prospectus, but the exhibits to
those documents will not be delivered unless they have been specifically
incorporated by reference. Requests for these documents should be made to:
Director of Investor Relations, Toll Brothers, Inc., 3103 Philmont Avenue,
Huntingdon Valley, PA 19006, (215) 938-8000. We will also make available to the
holders of the securities offered by this prospectus annual reports which will
include audited financial statements of Toll Brothers, Inc. and its consolidated
subsidiaries, including Toll Corp., First Huntingdon Finance Corp. and Toll
Finance Corp. Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp.
do not expect that they will be required to make filings with the SEC under
Section 15(d) of the Securities Exchange Act of 1934.
This prospectus is part of our "shelf" registration statement. Toll
Brothers, Inc., Toll Corp., First Huntingdon Finance Corp. and Toll Finance
Corp. have filed the registration statement with the SEC under the Securities
Act of 1933 to register the securities that any of them may offer by this
prospectus, including any applicable prospectus supplement. Not all of the
information in the registration statement appears in this prospectus, or will
appear in any
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<PAGE>
prospectus supplement. You should refer to the registration statement and to the
exhibits filed with the registration statement for further information about
Toll Brothers, Inc., its consolidated subsidiaries, including Toll Corp., First
Huntingdon Finance Corp. and Toll Finance Corp., and the securities offered by
this prospectus.
TOLL BROTHERS, INC.
Toll Brothers, Inc. designs, builds, markets and arranges financing for
single-family homes in residential communities that include both detached and
attached homes. We market our homes primarily to middle-income and upper-income
buyers, catering to both move-up and empty nester home buyers. We emphasize high
quality construction and consumer satisfaction. In the design, construction and
marketing of our homes, we utilize our own architectural, engineering, mortgage,
title, security monitoring, landscape, insurance brokerage, component assembly
and manufacturing operations. We currently operate in eighteen states and six
regions around the country. While we continue to explore additional geographic
areas for expansion, our operations are currently conducted in the following
major suburban residential areas:
o southeastern Pennsylvania and Delaware
o central New Jersey
o the Virginia and Maryland suburbs of Washington, D.C.
o the Boston, Massachusetts metropolitan area
o Fairfield and Hartford Counties, Connecticut
o Westchester County, New York
o southern and northern California
o Raleigh and Charlotte, North Carolina
o Metro Phoenix, Arizona
o Las Vegas, Nevada
o Dallas and Austin, Texas
o the east and west coasts of Florida
o Columbus, Ohio
o Nashville, Tennessee
o Detroit, Michigan
o Chicago, Illinois
In recognition of its achievements, Toll Brothers, Inc. has received
numerous awards from national, state and local homebuilder publications and
associations. In fiscal 1996, the National Association of Home Builders and
Builder magazine gave Toll Brothers, Inc. its "America's Best Builder" award in
recognition of our excellent financial performance, unique custom-production
system for building luxury homes in high volume and the excellence of our
designs. In 1995, the National Association of Home Builders awarded Toll
Brothers, Inc. its National Housing Quality Award, which recognized our
outstanding commitment to total quality management and continuous improvement.
In 1994, Toll Brothers, Inc. received a first place award in the "Build America
Beautiful" Awards Program, sponsored by Better Homes and Gardens magazine, the
National Association of Home Builders and Keep America Beautiful, Inc. in
recognition of our programs to improve the handling of solid waste on
construction sites. In addition, Professional Builder magazine named Toll
Brothers, Inc. "The Builder of the Year" in 1988.
-4-
<PAGE>
Co-founded by Robert I. Toll and Bruce E. Toll, Toll Brothers, Inc.
commenced its business operations, through predecessor entities, in 1967. Toll
Brothers, Inc. is a Delaware corporation that was formed in May 1986.
Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp. are
indirect, wholly- owned subsidiaries of Toll Brothers, Inc. which were
incorporated in Delaware in July 1987, July 1987 and October 1998, respectively.
Neither Toll Corp., First Huntingdon Finance Corp. nor Toll Finance Corp. has
any independent operations or generates any operating revenues other than
providing financing to other subsidiaries of Toll Brothers, Inc. by lending the
proceeds of its offerings of debt securities and related activities. There is no
present intention to have Toll Corp., First Huntingdon Finance Corp. or Toll
Finance Corp. engage in other activities.
The principal executive offices of Toll Brothers, Inc., Toll Corp., First
Huntingdon Finance Corp. and Toll Finance Corp. are located at 3103 Philmont
Avenue, Huntingdon Valley, Pennsylvania 19006, and their telephone number is
(215) 938-8000.
THE HOUSING INDUSTRY
Residential real estate developers, including Toll Brothers, Inc.,
are subject to various risks, both on the national and regional levels. These
risks include:
o economic recession,
o oversupply of homes,
o changes in governmental regulation,
o effects of environmental factors,
o increases in costs of land, materials and labor,
o increases in real estate taxes; and
o the unavailability of construction funds or mortgage loans at rates
acceptable to builders and home buyers.
Our business and earnings are substantially dependent on our ability to
obtain financing for our development activities on terms that are acceptable to
us. Increases in interest rates increase our construction cost and, to the
extent the increase is passed on to our customers in the form of higher prices
for our homes, may adversely impact our ability to sell our homes. In addition,
increases in interest rates may have an adverse effect on the availability of
home financing to our present and potential customers.
The housing industry has been subject to increasing environmental,
building, zoning and sales regulation by various federal, state and local
authorities. This regulation affects construction activities as well as sales
activities and other dealings with consumers. In addition, the industry has also
seen an increase in state and local legislation authorizing the acquisition of
land, mainly by governmental, quasi-public and non-profit entities, as
designated open spaces. We must obtain the approval of numerous governmental
authorities in connection with our development activities. We may be required to
apply for additional approvals or the modification of our existing approvals
because of changes in local circumstances or applicable law. Expansion of
regulation in the housing industry has increased the time required to obtain the
necessary approvals to begin construction and has prolonged the time between the
initial acquisition of land or land options and the commencement and completion
of construction.
-5-
<PAGE>
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the securities offered
by this prospectus for general corporate purposes, which may include the
acquisition of residential development properties, the repayment of our
outstanding indebtedness, working capital or for any other purposes as may be
described in an accompanying prospectus supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratio of earnings to fixed charges of Toll
Brothers, Inc. for the periods indicated:
Year Ended October 31,
<TABLE>
<CAPTION>
Nine
Months
Ended
1994 1995 1996 1997 1998 July 31, 1999
---- ---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
Ratio, including collateralized mortgage
financing(1)................................. 3.37 3.82 3.87 3.81 4.35 3.63
</TABLE>
- ----------
(1) For purposes of computing the ratio of earnings to fixed charges,
earnings consist of income before income taxes, extraordinary loss and
change in accounting plus interest expense and fixed charges except
interest incurred. Fixed charges consist of interest incurred (whether
expensed or capitalized), the portion of rent expense that is
representative of the interest factor, and amortization of debt
discount and issuance costs.
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp. may issue
debt securities from time to time in one or more series. Any series of debt
securities offered by Toll Corp., First Huntingdon Finance Corp. or Toll Finance
Corp. will be offered together with the unconditional guarantees of Toll
Brothers, Inc.
One or more series of the debt securities of Toll Corp., First Huntingdon
Finance Corp. or Toll Finance Corp. may be issued under a single indenture.
Alternatively, any series of debt securities may be issued under a separate
indenture. The terms applicable to each series of debt securities will be stated
in the indenture and may be modified by the resolution(s) authorizing that
series of debt securities adopted by the board of directors, or an officer or
committee of officers authorized by the board of directors, of both the issuer
of the debt securities and Toll Brothers, Inc. under the applicable indenture.
We refer in this prospectus to the resulution(s) authorizing a series of debt
securities as an authorizing resolution. Each indenture under which any debt
securities are issued, including the applicable authorizing resolution(s), is
referred to in this prospectus as an "indenture," and collectively with any
other indentures, as the "indentures." Each indenture will be entered into among
Toll Corp., First Huntingdon Finance Corp. or Toll Finance Corp., as the
obligor, Toll Brothers, Inc., as the issuer of the related guarantees, and Bank
One Trust Company, NA, or another institution named in the applicable prospectus
supplement, as trustee.
The following is a description of certain general terms and provisions
of the debt securities we may offer by this prospectus. The name of the issuer
and the particular terms of any series of debt securities we offer, including
the extent to which the general terms and provisions may apply to that series of
debt securities, will be described in a prospectus
-6-
<PAGE>
supplement relating to those debt securities. Except as otherwise indicated in
this prospectus or in the applicable prospectus supplement, the following
description of indenture terms is applicable to, and each reference to "the
indenture" is a reference to, each indenture that Toll Corp., First Huntingdon
Finance Corp. or Toll Finance Corp. may enter into with respect to any series of
debt securities we may offer by this prospectus, unless the context otherwise
requires. All references to "Section" in the following description refer to the
applicable Section of the indenture.
The terms of any series of the debt securities include those stated in the
applicable indenture. Holders of each series of the debt securities are referred
to the indenture for that series, including the applicable authorizing
resolution, for a statement of the terms. The respective forms of the indenture
for the debt securities of Toll Corp., First Huntingdon Finance Corp. and Toll
Finance Corp. are filed as exhibits to the registration statement. Each
indenture may be amended or modified for any series of debt securities by an
authorizing resolution which will be described in an applicable prospectus
supplement, and the applicable authorizing resolution relating to any series of
debt securities offered pursuant to this prospectus will be filed as an exhibit
to a report incorporated by reference in this prospectus. The following summary
of certain provisions of the debt securities and the indenture is not complete.
You should read all of the provisions of the indenture, including the
definitions contained in the indenture which are not otherwise defined in this
prospectus, and the applicable prospectus supplement. Wherever we refer to
particular provisions or defined terms of the indenture, these provisions or
defined terms are incorporated in this prospectus by reference.
General
The debt securities, when issued, will be obligations that constitute
either senior secured debt, senior unsecured debt, senior subordinated debt or
subordinated debt of Toll Corp., First Huntingdon Finance Corp. or Toll Finance
Corp., as the case may be. Toll Brothers, Inc. will unconditionally guarantee
the payment of the principal, premium, if any, and interest on the debt
securities when due, whether at maturity, by declaration of acceleration, call
for redemption or otherwise. See "Guarantee of Debt Securities." The total
principal amount of debt securities which may be issued under the indenture will
not be limited. Debt securities may be issued under the indenture from time to
time in one or more series. Unless the applicable prospectus supplement relating
to the original offering of a particular series of debt securities indicates
otherwise, the issuer of that series of debt securities will have the ability to
reopen the previous issue of that series of debt securities and issue additional
debt securities of that series pursuant to an authorizing resolution, an
officers' certificate or an indenture supplement. Because neither Toll Corp.,
First Huntingdon Finance Corp. nor Toll Finance Corp. has any independent
operations or generates any operating revenues, the funds required to pay the
principal, the premium, if any, and interest on the debt securities will come
from Toll Brothers, Inc. and its other subsidiaries. Except as otherwise stated
in the applicable prospectus supplement, there is no legal or contractual
restriction on the ability of Toll Brothers, Inc. or the other subsidiaries of
Toll Brothers, Inc. to provide these funds.
If the debt securities of any series issued by Toll Corp., First Huntingdon
Finance Corp. or Toll Finance Corp. will be subordinated to any other
indebtedness of that issuer, the indebtedness of that issuer to which that
series will be subordinated will be referred to in the applicable authorizing
resolution and prospectus supplement as senior indebtedness of Toll Corp., First
Huntingdon Finance Corp. or Toll Finance Corp., as the case may be. The
applicable authorizing resolution and prospectus supplement will define that
senior
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<PAGE>
indebtedness and describe the terms of the subordination. Unless otherwise
stated in the applicable prospectus supplement, the payment of principal,
premium, if any, and interest on any series of debt securities issued by Toll
Corp., First Huntingdon Finance Corp. or Toll Finance Corp. which is
subordinated by its terms to other indebtedness of that issuer will be
subordinated in right of payment, in the manner and to the extent described in
the indenture under which that series is issued, to the prior payment in full of
all senior indebtedness of the issuer, as defined in the applicable authorizing
resolution and prospectus supplement, whether the senior indebtedness is
outstanding on the date of the indenture or is created, incurred, assumed or
guaranteed after the date of the indenture.
The prospectus supplement relating to any series of debt securities that
are offered by this prospectus will name the issuer and describe the specific
terms of that series of debt securities. The applicable prospectus supplement
will describe, among other things, the following terms, to the extent they are
applicable to that series of debt securities:
o their title and, if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which they will be issuable;
o their price or prices (expressed as a percentage of the respective
aggregate principal amount of the debt securities) at which they will
be issued;
o their total principal amount and, if applicable, the terms on which the
principal amount of the series may be increased by a subsequent offering
of additional debt securities of the same series;
o the interest rate (which may be fixed or variable and which
may be zero in the case of certain debt securities issued at an issue
price representing a discount from the principal amount payable at
maturity), the date or dates from which interest, if any, will accrue
and the circumstances, if any, in which the issuer may defer interest
payments;
o any special provisions for the payment of any additional amounts with
respect to the debt securities;
o any provisions relating to the seniority or subordination of all or
any portion of the indebtedness evidenced by the securities to other
indebtedness of the issuer;
o the date or dates on which principal and premium, if any, are payable
or the method of determining those dates;
o the dates and times at which interest, if any, will be payable, the
record date for any interest payment and the person to whom interest
will be payable if other than the person in whose name the debt security
is registered at the close of business on the record date for the
interest payment;
o the place or places where principal of, premium, if any, and interest,
if any, will be payable;
o the terms applicable to any "original issue discount" (as defined in
the Internal Revenue Code of 1986, as amended, and the related
regulations), including the
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rate or rates at which the original issue discount will accrue, and any
special federal income tax and other considerations;
o the right or obligation, if any, of the issuer to redeem or
purchase debt securities under any sinking fund or analogous provisions
or at the option of a holder of debt securities, or otherwise, the
conditions, if any, giving rise to the right or obligation and the
period or periods within which, and the price or prices at which and the
terms and conditions upon which, debt securities will be redeemed or
purchased, in whole or in part, and any provisions for the marketing of
the debt securities;
o if the amount of payments of principal, premium, if any, and
interest, if any, is to be determined by reference to an index, formula
or other method, the manner in which these amounts are to be determined
and the calculation agent, if any, with respect to the payments;
o if other than the principal amount of the debt securities, the
portion of the principal amount of the debt securities which will be
payable upon declaration or acceleration of the stated maturity of the
debt securities pursuant to an "Event of Default," as defined in the
applicable indenture;
o whether the debt securities will be issued in registered or bearer form
and the terms of these forms;
o whether the debt securities will be issued in certificated or book-entry
form and, if applicable, the identity of the depositary;
o any provision for electronic issuance or issuances in uncertificated
form;
o any listing of the debt securities on a securities exchange;
o any events of default or covenants in addition to or in place of those
described in this prospectus;
o the terms, if any, on which the debt securities will be convertible
into or exchangeable for other debt or equity securities, including
without limitation the conversion price, the conversion period and any
other provisions in addition to or in place of those included in this
prospectus;
o the collateral, if any, securing payments with respect to the debt
securities and any provisions relating to the collateral;
o whether and upon what terms the debt securities may be defeased; and
o any other material terms of that series of debt securities.
Guarantee of Debt Securities
Toll Brothers, Inc. will unconditionally guarantee the payment of the
principal, premium, if any, and interest on the debt securities as they become
due, whether at maturity, by declaration of acceleration, call for redemption or
otherwise.
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Unless otherwise provided in the applicable prospectus supplement or
authorizing resolution, the payment of principal, premium, if any, and interest
on the debt securities under the guarantees will be junior in right of payment
to the prior payment in full of all senior indebtedness of Toll Brothers, Inc.,
in the manner and to the extent described in the indenture, whether the senior
indebtedness is outstanding on the date of the indenture or is created,
incurred, assumed or guaranteed after the date of the indenture. The senior
indebtedness of Toll Brothers, Inc. is referred to in the indenture as "Senior
Indebtedness of the Guarantor" and may be further defined in the applicable
prospectus supplement and authorizing resolution.
Unless otherwise provided in the applicable prospectus supplement, upon (1)
the maturity of any senior indebtedness of Toll Brothers, Inc. by lapse of time,
acceleration, unless waived, or otherwise or (2) any distribution of the assets
of Toll Brothers, Inc. upon any dissolution, winding up, liquidation or
reorganization of Toll Brothers, Inc., the holders of senior indebtedness of
Toll Brothers, Inc. will be entitled to receive payment in full before the
holders of any then outstanding debt securities of a series offered by this
prospectus will be entitled to receive any payment on those debt securities
pursuant to the guarantees. Except as otherwise provided in the applicable
prospectus supplement, if in any of the situations referred to in (1) or (2)
above, a payment is made to the trustee or to holders of the debt securities of
a series offered by this prospectus before all senior indebtedness of Toll
Brothers, Inc. has been paid in full or provision has been made for payment of
all of the senior indebtedness of Toll Brothers, Inc., the payment to the
trustee or holders must be paid over to the holders of the senior indebtedness
of Toll Brothers, Inc.
The assets of Toll Brothers, Inc. consist principally of the stock of its
subsidiaries. Therefore, the rights of Toll Brothers, Inc. and the rights of its
creditors, including the holders of debt securities unconditionally guaranteed
by Toll Brothers, Inc., to participate in the assets of any subsidiary other
than the issuer of those debt securities upon liquidation, recapitalization or
otherwise will be subject to the prior claims of that subsidiary's creditors
except to the extent that claims of Toll Brothers, Inc. itself as a creditor of
the subsidiary may be recognized. This includes the prior claims of the banks
that have provided and are providing First Huntingdon Finance Corp. a revolving
credit facility under an agreement pursuant to which Toll Brothers, Inc. and its
other subsidiaries, including Toll Corp. and Toll Finance Corp., have guaranteed
or will guarantee the obligations owing to the banks under the revolving credit
facility.
Conversion of Debt Securities
Unless otherwise indicated in the applicable prospectus supplement, the
debt securities will not be convertible into common stock of Toll Brothers, Inc.
or into any other securities. The particular terms and conditions of the
conversion rights of any series of convertible debt securities other than those
described below will be described in the applicable prospectus supplement.
Unless otherwise indicated in the applicable prospectus supplement, and
subject, if applicable, to prior redemption at the option of the issuer of the
debt securities, the holders of any series of convertible debt securities will
be entitled to convert the principal amount or a portion of the principal amount
which is an integral multiple of $1,000 at any time before the date specified in
the applicable prospectus supplement for the series of debt securities into
shares of the common stock of Toll Brothers, Inc. at the conversion price stated
in the applicable prospectus supplement, subject to adjustment as described
below.
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In the case of any debt security or portion of debt security called for
redemption, conversion rights will expire at the close of business on the second
business day preceding the redemption date. (Section 10.02).
Toll Brothers, Inc. will not be required to issue fractional shares of
common stock upon conversion of the debt securities of a convertible series.
Instead, Toll Brothers, Inc. will pay a cash adjustment for any fractional
interest in a share of its common stock. (Section 10.04).
Convertible debt securities surrendered for conversion during the period
from the close of business on a "Record Date," as defined in the applicable
indenture, or the next preceding "Business Day," as defined in the applicable
indenture, if the Record Date is not a Business Day, preceding any "Interest
Payment Date," as defined in the applicable indenture, to the opening of
business on that Interest Payment Date, other than convertible debt securities
or portions of convertible debt securities called for redemption during the
period, will be accompanied by payment in next-day funds or other funds
acceptable to Toll Brothers, Inc. of an amount equal to the interest payable on
the Interest Payment Date on the principal amount of the convertible debt
securities then being converted. Except as described in the preceding sentence,
no payment or adjustment will be made on conversion of convertible debt
securities on account of interest accrued on the debt securities surrendered for
conversion or for dividends on the common stock delivered on conversion. If an
issuer of convertible debt securities defaults on the payment of interest for
which payment is made upon the surrender of those convertible debt securities
for conversion, the amount so paid will be returned to the party who made the
payment. (Section 10.03).
The conversion price of the debt securities of a convertible series will be
subject to adjustment in certain events, including:
o the subdivision, combination or reclassification of the outstanding
common stock of Toll Brothers, Inc.;
o the issuance of common stock of Toll Brothers, Inc. as a dividend or
distribution on common stock of Toll Brothers, Inc.;
o the issuance of rights or warrants, expiring within 45 days
after the record date for issuance, to the holders of common
stock of Toll Brothers, Inc. generally entitling them to
acquire shares of common stock of Toll Brothers, Inc. at less
than the common stock's then "Current Market Price" as defined
in the indenture; or
o the distribution to the holders of common stock of Toll
Brothers, Inc. generally of rights or warrants to subscribe
for securities of Toll Brothers, Inc. other than those for
which adjustment is otherwise made, or evidences of
indebtedness or assets of Toll Brothers, Inc., excluding cash
dividends paid from retained earnings and dividends or
distributions payable in stock for which adjustment is
otherwise made.
There will be no upward adjustment in the conversion price except in the
event of a reverse stock split. Toll Brothers, Inc. is not required to make any
adjustment in the conversion price of less than 1%, but the adjustment will be
carried forward and taken into account in the computation of any subsequent
adjustment. (Section 10.05).
A conversion price adjustment or the failure to make a conversion price
adjustment may, under various circumstances, be deemed to be a distribution that
could be taxable as a dividend under the Internal Revenue Code to holders of
debt securities or to holders of common stock.
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There will be no adjustments to the conversion price of the debt securities
of any convertible series as discussed above in the following situations:
o any consolidation or merger to which Toll Brothers, Inc. is a party
other than a merger or consolidation in which Toll Brothers, Inc. is
the continuing corporation;
o any sale or conveyance to another corporation of the property of Toll
Brothers, Inc. as an entirety or substantially as an entirety; or
o any statutory exchange of securities with another corporation,
including any exchange effected in connection with a merger of
a third corporation into Toll Brothers, Inc.
However, the holder of each convertible debt security outstanding at that
time will have the right to convert the debt security into the kind and amount
of securities, cash or other property which the holder would have owned or have
been entitled to receive immediately after the transaction if the debt security
was converted immediately before the effective date of the transaction. (Section
10.10).
Form, Exchange, Registration, Conversion, Transfer and Payment
Unless otherwise indicated in the applicable prospectus supplement:
o each series of debt securities will be issued in registered form only,
without coupons;
o payment of principal, premium, if any, and interest, if any,
on each series of the debt securities will be payable at the
office or agency of the issuer of that series maintained for
this purpose; and
o the exchange, conversion and transfer of each series of debt securities
may be registered at the office or agency of the issuer of that series
maintained for this purpose and at any other office or agency maintained
for this purpose. (Section 2.03).
Subject to various exceptions described in the indenture, the issuer of
each series of debt securities will be entitled to charge a reasonable fee for
the registration of transfer or exchange of the debt securities of that series,
including an amount sufficient to cover any tax or other governmental charge
imposed or expenses incurred in connection with the transfer or exchange.
(Section 2.06).
All payments made by the issuer of a series of debt securities to the
trustee and paying agent for the payment of principal, premium, if any, and
interest on the debt securities of that series which remain unclaimed for two
years after the principal, premium, if any, or interest has become due and
payable may be repaid to the issuer. Afterwards, the holder of the debt security
may look only to the issuer or, if applicable, Toll Brothers, Inc., for payment.
(Section 11.03).
Registered Global Securities
The registered debt securities of a series may be issued in whole or in
part in the form of one or more registered global debt securities. A registered
global security is a security, typically held by a depositary, that represents
the beneficial interests of a number of purchasers of the security. Any
registered global debt securities will be deposited with and registered in the
name of a depositary or its nominee identified in the applicable prospectus
supplement. In
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this case, one or more registered global securities will be issued, each in a
denomination equal to the portion of the total principal amount of outstanding
registered debt securities of the series to be represented by the registered
global security.
Unless and until a registered global security is exchanged in whole or in
part for debt securities in definitive registered form, it may not be
transferred except as a whole:
o by the depositary for the registered global security to a nominee for
the depository;
o by a nominee of the depositary to the depositary or to another nominee
of the depositary; or
o by the depositary or its nominee to a successor depositary or a nominee
of a successor depositary.
The prospectus supplement relating to a particular series of debt
securities will describe the specific terms of the depositary arrangement
involving any portion of a series of debt securities to be represented by a
registered global security. We anticipate that the following provisions will
apply to all depositary arrangements for debt securities:
o ownership of beneficial interests in a registered global
security will be limited to persons that have accounts with
the depositary for the registered global security
(each a "participant" and, collectively, the "participants")
or persons holding interests through the participants;
o after the issuer of a series of debt securities issues the
registered global security for the series, the depositary will
credit, on its book-entry registration and transfer system,
the participants' accounts with the respective principal
amounts of the debt securities of that series represented by
the registered global security beneficially owned by the
participants;
o the underwriters, agents or dealers participating in the distribution
of the debt securities will designate the accounts to be credited;
o only a participant or a person that may hold an interest through a
participant may be the beneficial owner of a registered global
security; and
o ownership of beneficial interests in the registered global
security will be shown on, and the transfer of that ownership
interest will be effected only through, records maintained by
the depositary for the registered global security for
interests of the participants, and on the records of the participants
for interests of persons holding through the participants.
The laws of some states may require that specified purchasers of securities
take physical delivery of the securities in definitive form. These laws may
limit the ability of those persons to own, transfer or pledge beneficial
interests in registered global securities.
So long as the depositary for a registered global security, or its nominee,
is the registered owner of the registered global security, the depositary or its
nominee, as the case may be, will be considered the sole owner or holder of the
debt securities represented by the registered global security for all purposes
under the indenture. Except as stated below, owners of beneficial interests in a
registered global security:
o will not be entitled to have the debt securities represented by a
registered global security registered in their names;
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o will not receive or be entitled to receive physical delivery of the debt
securities in definitive form; and
o will not be considered the owners or holders of the debt securities
under the indenture.
Accordingly, each person owning a beneficial interest in a registered global
security must rely on the procedures of the depositary for the registered global
security and, if the person is not a participant, on the procedures of the
participant through which the person owns its interests, to exercise any rights
of a holder under the indenture applicable to the registered global security.
We understand that under existing industry practices, if we request any
action of holders, or if an owner of a beneficial interest in a registered
global security desires to give or take any action which a holder is entitled to
give or take under the indenture, the depositary for the registered global
security would authorize the participants holding the relevant beneficial
interests to give or take the action, and the participants would authorize
beneficial owners owning through the participants to give or take the action or
would otherwise act upon the instructions of beneficial owners holding through
them.
Principal, premium, if any, and interest payments on debt securities
represented by a registered global security registered in the name of a
depositary or its nominee will be made to the depositary or its nominee, as the
case may be, as the registered owner of the registered global security. Neither
the issuer of a series of debt securities, Toll Brothers, Inc., the trustee
under the indenture nor any other agent of any of them will be responsible or
liable for any aspect of the records relating to, or payments made on account
of, beneficial ownership interests in the registered global security for the
series or for maintaining, supervising or reviewing any records relating to the
beneficial ownership interests.
We expect that the depositary for any debt securities represented by a
registered global security, upon receipt of any payment of principal, premium,
if any, or interest in respect of the registered global security, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of the
registered global security as shown on the depositary's records. We also expect
that payments by participants to owners of beneficial interests in a registered
global security held through the participants will be governed by standing
customer instructions and customary practices, as is now the case with the
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of the participants.
If the depositary for any debt securities represented by a registered
global security is at any time unwilling or unable to continue as depositary or
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, Toll Brothers, Inc. will appoint an eligible successor depositary. If Toll
Brothers, Inc. fails to appoint an eligible successor depositary within 90 days,
the debt securities will be issued in definitive form in exchange for the
registered global security. In addition, Toll Brothers, Inc. may at any time and
in its sole discretion determine not to have any debt securities of a series
represented by one or more registered global securities. In that event, debt
securities of that series will be issued in definitive form in exchange for each
registered global security representing the debt securities. Any debt securities
issued in definitive form in exchange for a registered global security will be
registered in such name or names as the depositary instructs the trustee. We
expect that the instructions will be based upon directions received by the
depositary from the participants with respect to ownership of beneficial
interests in the registered global security.
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Events of Default, Notice and Waiver
Unless otherwise indicated in the applicable prospectus supplement, each of
the following events will be an "Event of Default" with respect to each series
of debt securities issued under the indenture:
o Toll Brothers, Inc. or the issuer of that series of debt securities
fails to pay interest due on any debt securities of that series for 30
days;
o Toll Brothers, Inc. or the issuer of that series of debt securities
fails to pay the principal of any debt securities of that series when
due;
o Toll Brothers, Inc. or the issuer of that series of debt securities
fails to perform any other agreements contained in the debt securities
of that series or in the guarantee relating to that series of debt
securities or contained in the indenture for that series of debt
securities and applicable to that series for a period of 60 days after
the issuer's receipt of notice of the default from the trustee under the
indenture or the holders of at least 25% in principal of the debt
securities of that series;
o default in the payment of indebtedness of Toll Brothers, Inc. or any
"Subsidiary," as defined in the indenture of Toll Brothers, Inc.,
including Toll Corp., First Huntingdon Finance Corp. or Toll Finance
Corp., under the terms of the instrument evidencing or securing the
indebtedness which permits the holder of the indebtedness to accelerate
the payment of in excess of an aggregate of $5,000,000 in principal
amount of the indebtedness, after the lapse of applicable grace periods
or, in the case of non-payment defaults, acceleration of the
indebtedness if the acceleration is not rescinded or annulled within 10
days after the acceleration, provided that, subject to certain
limitations described in the indenture, the term "indebtedness" does not
include for this purpose an acceleration of or default on certain
"Non-Recourse Indebtedness," as that term is defined in the indenture;
o a final judgment for the payment of money in an amount in excess of
$5,000,000 is entered against Toll Brothers, Inc. or any subsidiary (as
defined in the indenture) of Toll Brothers, Inc., including Toll Corp.,
First Huntingdon Finance Corp. or Toll Finance Corp., which remains
undischarged for a period during which execution is not effectively
stayed of 60 days after the date on which the right to appeal has
expired, provided that the term "final judgment" will not include a
"Non-Recourse Judgment," as that term is defined in the indenture,
unless the book value of all property, net of any previous write downs
or reserves in respect of the property, subject to the Non-Recourse
Judgment exceeds the amount of the Non-Recourse Judgment by more than
$10,000,000;
o an "Event of Default", as that term is defined in the indenture relating
to Toll Corp.'s 8-3/4% Senior Subordinated Notes due 2006, 7-3/4% Senior
Subordinated Notes due 2007, 8-1/8% Senior Subordinated Notes due 2009,
or 8% Senior Subordinated Notes due 2009 (each of these series of notes
being referred to below as an "Outstanding Series"), occurs, provided
that on the date of the occurrence, the outstanding principal amount of
at least one Outstanding Series to which the occurrence relates exceeds
$5,000,000;
o any one of various events of bankruptcy, insolvency or reorganization
specified in the indenture occurs with respect to Toll Brothers, Inc. or
the issuer of that series of debt securities; or
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o the guarantee of Toll Brothers, Inc. relating to that series of debt
securities ceases to be in full force and effect for any reason other
than in accordance with its terms. (Section 8.01).
"Non-Recourse Indebtedness," as defined in the indenture, means
indebtedness or other obligations secured by a lien on property to the extent
that the liability for the indebtedness or other obligations is limited to the
security of the property without liability on the part of Toll Brothers, Inc. or
any subsidiary, other than the subsidiary which holds title to the property, for
any deficiency.
"Non-Recourse Judgment," as defined in the indenture, means a judgment in
respect of indebtedness or other obligations secured by a lien on property to
the extent that the liability for (1) the indebtedness or other obligations and
(2) the judgment is limited to the property without liability on the part of
Toll Brothers, Inc. or any subsidiary, other than the subsidiary which holds
title to the property, for any deficiency.
The trustee is required to give notice to the holders of any series of debt
securities within 90 days of a default with respect to that series of debt
securities under the indenture. However, the trustee may withhold notice to the
holders of any series of debt securities, except in the case of a default in the
payment of principal, premium, if any, or interest, if any, with respect to that
series, if the trustee considers the withholding to be in the interest of the
holders. (Section 9.05).
If an Event of Default for the debt securities of any series at the time
outstanding, other than an Event of Default resulting from certain events of
bankruptcy, insolvency or reorganization with respect to Toll Brothers, Inc. or
the issuer of that series of debt securities, occurs and is continuing, either
the trustee or the holders of at least 25% in principal amount of all of the
outstanding debt securities of that series may, by giving an acceleration notice
to the issuer of that series of debt securities, declare the unpaid principal of
and accrued and unpaid interest on all of the debt securities of that series to
be due and payable if, with respect to debt securities of that series (1) (a) no
designated senior debt of Toll Brothers, Inc. or the issuer of that series of
debt securities is outstanding, or (b) if the debt securities of that series are
not subordinated to other indebtedness of the issuer of that series of debt
securities, immediately; or (2) if designated senior debt of Toll Brothers, Inc.
or the issuer of that series of debt securities is outstanding and the debt
securities of that series are junior to other indebtedness of the issuer of that
series of debt securities, upon the earlier of (A) ten days after the
acceleration notice is received by the issuer of that series of debt securities
or (B) the acceleration of any senior indebtedness of Toll Brothers, Inc. or the
issuer of that series of debt securities. The designated senior debt of Toll
Brothers, Inc. is referred to in the indenture as "Designated Senior Debt of the
Guarantor" and the designated senior debt of Toll Corp., First Huntingdon
Finance Corp. or Toll Finance Corp., as the case may be, is referred to in the
indenture for that issuer's debt securities as "Designated Senior Debt of the
Company," and each, as defined in the indenture, may be further defined in the
applicable prospectus supplement.
If an Event of Default occurs with respect to a series of debt securities
as a result of certain events of bankruptcy, insolvency or reorganization with
respect to Toll Brothers, Inc. or the issuer of that series of debt securities,
then the unpaid principal amount of all of the debt securities of that series
outstanding, and any accrued and unpaid interest, will automatically become due
and payable immediately without any declaration or other act by the trustee or
any holder of debt securities of that series. At any time after a declaration of
acceleration with respect to debt securities of any series has been made, but
before a judgment or decree based on
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acceleration has been obtained, the holders of a majority in principal amount of
the outstanding debt securities of that series may rescind the acceleration,
provided that, among other things, all Events of Default with respect to the
particular series, other than payment defaults caused by the acceleration, have
been cured or waived as provided in the indenture. (Section 8.02).
The holders of a majority in outstanding principal amount of the debt
securities of a particular series may generally waive an existing default with
respect to that series and its consequences in accordance with terms and
conditions provided in the indenture. However, these holders may not waive a
default in the payment of the principal, any premium or any interest on the debt
securities. (Section 8.04).
Toll Brothers, Inc. and any issuer of debt securities offered by this
prospectus will be required to file annually with the trustee under the
indenture a certificate, signed by an officer of Toll Brothers, Inc. and the
issuer, stating whether or not the officer knows of any default under the terms
of the indenture and providing a description of any default of which the officer
has knowledge. (Section 4.03).
Additional Provisions
Subject to the duty of the trustee to act with the required standard of
care during a default, the indenture provides that the trustee will be under no
obligation to perform any duty or to exercise any of its rights or powers under
the indenture, unless the trustee receives indemnity satisfactory to it against
any loss, liability or expense. (Section 9.01). Subject to these provisions for
the indemnification of the trustee and various other conditions, the holders of
a majority in total principal amount of the outstanding debt securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the trustee, or exercising any trust
or power conferred on the trustee, with respect to the debt securities of that
series. (Section 8.05).
A holder of debt securities of a series will not have the right to pursue
any remedy with respect to the indenture or the debt securities of that series,
unless:
o the holder gives to the trustee written notice of a continuing Event of
Default;
o the holders of not less than 25% in total principal amount of the
outstanding debt securities of that series make a written request to the
trustee to pursue the remedy;
o the holder offers the trustee indemnity satisfactory to it against any
loss, liability or expense;
o the trustee fails to comply with the holder's request within 60 days
after receipt of the written request and offer of indemnity; and
o the trustee, during the same 60-days, has not received from the holders
of a majority in principal amount of the outstanding debt securities of
that series a direction inconsistent with the aforementioned written
request of holders. (Section 8.06).
However, the holder of any debt security will have an absolute right to
receive payment of the principal of and interest on that debt security on or
after the respective due dates expressed in that debt security and to bring suit
for the enforcement of any payment. (Section 8.07).
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Covenants
The prospectus supplement relating to the debt securities of any series
will describe any special covenants applicable to the issuer of the series or
Toll Brothers, Inc. with respect to that series.
Merger or Consolidation
Neither Toll Brothers, Inc. nor the issuer of a series of debt securities
offered by this prospectus may consolidate with or merge into, or transfer all
or substantially all of its assets to, any other person without the consent of
the holders of that series of debt securities, unless:
o the 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 Toll Brothers, Inc. or the
issuer, as the case may be, under the indenture and either the
guarantees or the debt securities, as the case may be; and
o immediately after giving effect to the transaction no "Default" or
"Event of Default," as these terms are defined in the indenture, has
occurred and is continuing.
Afterwards, all of the obligations of the predecessor corporation will
terminate. (Section 5.01).
Modification of an Indenture
The respective obligations of Toll Brothers, Inc. and the issuer of debt
securities of any series offered by this prospectus and the rights of the
holders of those debt securities under the indenture generally may be modified
with the consent of the holders of a majority in outstanding principal amount of
the debt securities of all series under the indenture affected by the
modification. However, without the consent of each affected holder of debt
securities, no amendment, supplement or waiver may:
o extend the maturity of any debt securities;
o reduce the rate or extend the time for payment of interest on the
debt securities;
o reduce the principal amount of, or premium on, the debt securities;
o change the redemption provisions;
o make a change that adversely affects the right to convert or the
conversion price for any series of convertible debt securities;
o reduce the amount of debt securities whose holders must consent to an
amendment, supplement or waiver;
o waive a default in the payment of the principal, premium, if any, or
interest on any series of debt securities;
o modify the subordination or guarantee provisions in a manner adverse to
holders of any series of debt securities;
o make the medium of payment other than that stated in the debt
securities;
o make any change in the right of any holder of debt securities to receive
payment of principal of, premium, if any, and interest on those debt
securities, or to bring suit for the enforcement of any of these
payments; and
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o change the provisions regarding modifications to the indenture
or waiver of Defaults or Events of Default that will be effective
against any holders of any series of debt securities. (Section 12.02).
Governing Law
The indenture, the debt securities and the guarantees will be governed by
the laws of the State of New York. (Section 13.09).
Satisfaction and Discharge of Indenture
Unless otherwise provided in the applicable authorizing resolution and
prospectus supplement, the indenture will be discharged:
o upon payment of all the series of debt securities issued under the
indenture; or
o upon deposit with the trustee, within one year of the date of maturity
or redemption of all of the series of debt securities issued under the
indenture, of funds sufficient for the payment or redemption of the
securities.
Reports to Holders of Debt Securities
Toll Brothers, Inc. and each issuer of the debt securities offered by this
prospectus will file with the trustee copies of their annual reports and other
information, documents and reports that they file with the SEC. So long as the
obligation of Toll Brothers, Inc. to file these reports or information with the
SEC are suspended or terminated, Toll Brothers, Inc. will provide the trustee
with audited annual financial statements prepared in accordance with generally
accepted accounting principles and unaudited condensed quarterly financial
statements. These financial statements will be accompanied by management's
discussion and analysis of the results of operations and financial condition of
Toll Brothers, Inc. for the period reported upon in substantially the form
required under the rules and regulations of the SEC currently in effect.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of Toll Brothers, Inc. consists of 45,000,000
shares of common stock, $.01 par value per share, and 1,000,000 shares of
preferred stock, $.01 par value per share; however, subject to the limitations
and procedures described below, the stockholders of Toll Brothers, Inc. have
authorized increases in the respective numbers of shares of common stock and
preferred stock. In March 1998, the stockholders of Toll Brothers, Inc.
authorized the filing by the Board of Directors, in its discretion, of one or
more amendments to the Certificate of Incorporation from time to time on or
before March 31, 2003 (1) to increase the authorized common stock by up to
55,000,000 additional shares in any combination of one or more 5,000,000-share
increments and/or (2) to increase the authorized preferred stock by a single
increment of 14,000,000 additional shares. If amendments increasing the
authorized capital stock of Toll Brothers, Inc. to the maximum limits authorized
by the stockholders are filed by March 31, 2003, the authorized common stock of
Toll Brothers, Inc. will be increased to 100,000,000 shares and the authorized
preferred stock of Toll Brothers, Inc. will be increased to 15,000,000 shares.
The procedure was approved by stockholders to permit Toll Brothers, Inc. to save
on its annual Delaware corporate franchise tax while giving the Board of
Directors the flexibility to increase quickly the authorized shares of common or
preferred stock without the necessity of further action by the stockholders.
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Common Stock
Subject to the rights and preferences of any holders of the preferred stock
of Toll Brothers, Inc., none of which is currently outstanding, the holders of
the common stock of Toll Brothers, Inc. are entitled to one vote per share on
all matters which require a vote of the common stockholders. In addition, the
holders of the common stock of Toll Brothers, Inc. are entitled to receive
dividends as legally may be declared by the board of directors and to receive
pro rata the net assets of Toll Brothers, Inc. upon liquidation. There are no
cumulative voting, preemptive, conversion or redemption rights applicable to the
common stock of Toll Brothers, Inc. Persons casting a majority of the votes in
the election of directors will be entitled to elect all of the directors.
On June 12, 1997, the board of directors of Toll Brothers, Inc. adopted a
Stockholder Rights Plan. This Stockholder Rights Plan provides that one right
will attach to each share of the common stock of Toll Brothers, Inc. Each right
entitles the registered holder to purchase from Toll Brothers, Inc. a unit
consisting of one one-thousandth of a share of Series A Junior Participating
Preferred Stock of Toll Brothers, Inc. at a purchase price of $100 per unit.
Initially the rights will attach to all common stock certificates and no
separate rights certificates will be distributed. The rights will separate from
the common stock and a distribution date will occur upon the earlier of:
o 10 days following a public announcement that a person or group
of affiliated persons has acquired beneficial ownership of 15%
or more of the outstanding shares of common stock of Toll
Brothers, Inc.; or
o 10 business days following the commencement of a tender offer
that would result in a person or group beneficially owning 15%
or more of the outstanding shares of common stock of Toll
Brothers, Inc.
The rights are not exercisable until the distribution date and will
expire at the close of business on July 11, 2007. In the event any non-exempt
person or group acquires 15% or more of the then outstanding shares of common
stock, unless the acquisition is made pursuant to a tender offer for all
outstanding shares at a price determined by a majority of the independent
directors of Toll Brothers, Inc., each holder of a right will have the right to
receive, upon exercise, common stock having a value equal to two times the
exercise price of the right. At any time until 10 days following the stock
acquisition date, Toll Brothers, Inc. may redeem the rights at a price of $.001
per right. The Rights Agreement establishing the Stockholder Rights Plan was
filed with the SEC as an exhibit to a registration statement on Form 8-A. An
amendment to the Rights Agreement was filed with the SEC as an exhibit to an
amended registration statement on Form 8-A/A. This summary of the rights is not
complete. Holders of the common stock of Toll Brothers, Inc. should read the
Rights Agreement and the amendment to that agreement which are incorporated by
reference in this prospectus, for additional information.
The common stock of Toll Brothers, Inc. is traded on the New York Stock
Exchange and the Pacific Exchange under the symbol "TOL". The registrar and
transfer agent for the common stock of Toll Brothers, Inc. is Chase Mellon
Shareholder Services, L.L.C.
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Preferred Stock
General. Toll Brothers, Inc. may issue, from time to time, shares of one or
more series of preferred stock.
We have summarized below the general terms and provisions that will apply
to any preferred stock that may be offered, except as otherwise described by the
applicable prospectus supplement. When Toll Brothers, Inc. offers to sell a
particular series of preferred stock, a prospectus supplement will describe the
specific terms of that series of preferred stock. If any of the general terms
and provisions described in this prospectus apply to the particular series of
preferred stock the applicable prospectus supplement will so indicate and will
describe any alternative provisions that are applicable. The preferred stock
will be issued under a certificate of designations relating to each series of
preferred stock, and is also subject to the Toll Brothers, Inc. Certificate of
Incorporation, as amended.
The following summary of various provisions of the preferred stock is not
complete. You should read Toll Brothers, Inc.'s Certificate of Incorporation, as
amended, and each certificate of designation relating to a specific series of
preferred stock for additional information. Each certificate of designation
relating to a specific series of preferred stock will be filed as an exhibit to,
or will be incorporated by reference in, the registration statement at or prior
to the time of issuance of the particular series of preferred stock.
The board of directors of Toll Brothers, Inc. is authorized to issue shares
of preferred stock, in one or more series, and to fix for each series voting
powers and the preferences and relative, participating, optional or other
special rights and the qualifications, limitations or restrictions, that are
permitted by the Delaware General Corporation Law.
The board of directors of Toll Brothers, Inc. is authorized to determine
the following terms for each series of preferred stock, which will be described
in the applicable prospectus supplement:
o the number of shares and their designation and title;
o the dividend rate or the method of calculating the dividend rate, if
applicable;
o the priority as to payment of dividends;
o the dividend periods or the method of calculating the dividend periods,
if applicable;
o the voting rights, if any;
o the liquidation preference and the priority as to payment of the
liquidation preference upon any liquidation or winding-up of Toll
Brothers, Inc.;
o whether or not and on what terms the shares will be subject to
redemption or repurchase at the option of Toll Brothers, Inc.;
o whether and on what terms the shares will be convertible into or
exchangeable for other debt or equity securities;
o whether the shares will be listed on a securities exchange; and
o the other rights and privileges and any qualifications, limitations or
restrictions relating to the shares.
Dividends. Holders of preferred stock will be entitled to receive cash
dividends if declared by the board of directors of Toll Brothers, Inc. out of
funds which Toll Brothers,
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Inc. may legally use for payment. The applicable prospectus supplement will
identify the dividend rates and the dates on which Toll Brothers, Inc. will pay
dividends.
Unless otherwise described in the applicable prospectus supplement, each
series of preferred stock will rank junior as to dividends to any series of
preferred stock that may be issued in the future that is expressly senior as to
dividends to the earlier series of the preferred stock. If at any time Toll
Brothers, Inc. has failed to pay accrued dividends on any senior series of
preferred stock at the time dividends are payable on a junior series of
preferred stock, Toll Brothers, Inc. may not pay any dividend on the junior
series of preferred stock or redeem or otherwise repurchase shares of the junior
series of preferred stock until the accumulated but unpaid dividends on the
senior series have been paid or set aside for payment in full by Toll Brothers,
Inc.
Unless otherwise described in the applicable prospectus supplement:
o no dividends, other than in common stock or other capital
stock ranking junior to the preferred stock of any series as
to dividends and upon liquidation, may be declared or paid or
set aside for payment; and
o no distribution may be declared or made upon the common stock, or any
other capital stock of Toll Brothers, Inc. ranking junior to or equally
with the preferred stock of the particular series as to dividends.
In addition, unless otherwise described in the applicable prospectus
supplement, no common stock or any other capital stock of Toll Brothers, Inc.
ranking junior to or equally with the preferred stock of the particular series
as to dividends may be redeemed, purchased or otherwise acquired for any
consideration and no monies may be paid to or made available for a sinking fund
for the redemption of any shares of any such stock by Toll Brothers, Inc. except
by conversion into or exchange for other capital stock of Toll Brothers, Inc.
ranking junior to the preferred stock of the particular series as to dividends
unless:
o if the series of preferred stock has a cumulative dividend, full
cumulative dividends on the preferred stock of the series have been or
contemporaneously are declared and paid or declared and an amount
sufficient for the payment of the dividends has been set apart for all
past dividend periods and the then current dividend period; or
o if the particular series of preferred stock does not have a cumulative
dividend, full dividends on the preferred stock of the series have been
or contemporaneously are declared and paid or declared and an amount
sufficient for the payment of the dividends has been set apart for
payment for the then current dividend period; provided, however, that
any monies deposited up until that time in any sinking fund with respect
to any preferred stock of Toll Brothers, Inc. in compliance with the
provisions of the sinking fund may subsequently be applied to the
purchase or redemption of the preferred stock in accordance with the
terms of the sinking fund, regardless of whether at the time of the
application full cumulative dividends upon shares of the preferred stock
outstanding on the last dividend payment date have been paid or declared
and set apart for payment; and provided, further, that any of the junior
or equally-ranked classes of preferred stock or common stock of Toll
Brothers, Inc. may be converted into or exchanged for stock of
Toll Brothers,
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Inc. ranking junior to the series of preferred stock then senior to the
junior or equally-ranked classes of preferred stock as to dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period will be computed on the basis of a
360-day year of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
Convertibility. Toll Brothers, Inc. will not convert or exchange any series
of preferred stock for other securities or property unless otherwise stated in
the applicable prospectus supplement.
Redemption and Sinking Fund. Toll Brothers, Inc. will not redeem or pay
into a sinking fund any series of preferred stock unless otherwise stated in the
applicable prospectus supplement.
Liquidation Rights. Unless otherwise stated in the applicable prospectus
supplement, in the event of any liquidation, dissolution or winding-up of Toll
Brothers, Inc., holders of each series of preferred stock will be entitled to
receive the liquidation preference per share specified in the applicable
prospectus supplement for that particular series of preferred stock plus any
accrued and unpaid dividends. Toll Brothers, Inc. will pay these amounts to the
holders of each series of the preferred stock and all amounts owing on any
preferred stock ranking equally with that series of preferred stock as to
distributions. These payments will be made out of the assets of Toll Brothers,
Inc. available for distribution to stockholders before any distribution is made
to holders of common stock or any other shares of preferred stock of Toll
Brothers, Inc. ranking junior to the series of preferred stock as to rights upon
liquidation, dissolution or winding-up.
In the event that there are insufficient funds to pay in full the amounts
payable to all equally-ranked classes of preferred stock, Toll Brothers, Inc.
will allocate the remaining assets equally among all series of equally-ranked
preferred stock in proportion to the full respective preferential amounts to
which they are entitled. Unless otherwise specified in a prospectus supplement
for a series of preferred stock, after Toll Brothers, Inc. pays the full amount
of the liquidation distribution to which they are entitled, the holders of
shares of a series of preferred stock will not be entitled to participate in any
further distribution of the assets of Toll Brothers, Inc. The consideration or
merger of Toll Brothers, Inc. with another corporation or sale of securities
will not be considered a liquidation, dissolution or winding-up of Toll
Brothers, Inc. for these purposes.
Voting Rights. Holders of preferred stock will not have any voting rights
except as described in the applicable prospectus supplement or as otherwise from
time to time required by law.
Miscellaneous. When the preferred stock is issued, it will be fully paid
and nonassessable. Holders of preferred stock will have no preemptive rights. If
Toll Brothers, Inc. redeems or otherwise reacquires any shares of preferred
stock, it will restore the shares to the status of authorized and unissued
shares of preferred stock. These shares will not be a part of any particular
series of preferred stock and Toll Brothers, Inc. may reissue the shares. There
are no restrictions on repurchase or redemption of the preferred stock on
account of any arrearage on sinking fund installments, except as may be
described in an applicable prospectus supplement. Payment of dividends on any
series of preferred stock may be
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restricted by loan agreements, indentures or other agreements entered into by
Toll Brothers, Inc. The accompanying prospectus supplement will describe any
material contractual restrictions on dividend payments. The prospectus
supplement will also describe any material United States federal income tax
considerations applicable to the preferred stock.
No Other Rights. The shares of a series of preferred stock will not have
any preferences, voting powers or relative, participating, optional or other
special rights except for those described above or in the applicable prospectus
supplement, the Certificate of Incorporation, as amended, or the applicable
certificate of designation, or as otherwise required by law.
Transfer Agent and Registrar. The prospectus supplement for each series of
preferred stock will identify the transfer agent and registrar.
DESCRIPTION OF WARRANTS
General
Toll Brothers, Inc. may issue, together with other securities offered by
this prospectus or separately, warrants for the purchase of the following:
o debt securities of Toll Corp., First Huntingdon Finance Corp. or Toll
Finance Corp. with the unconditional guarantees of Toll Brothers, Inc.;
o common stock of Toll Brothers, Inc.; or
o preferred stock of Toll Brothers, Inc.
Each series of warrants will be issued under a separate warrant agreement
to be entered into between Toll Brothers, Inc. and a bank or trust company, as
warrant agent. The terms of each warrant agreement will be discussed in the
applicable prospectus supplement relating to the particular series of warrants.
Copies of the form of agreement for each warrant, including the forms of
certificates representing the warrants, reflecting the provisions to be included
in these agreements for a particular offering will be, in each case, filed with
the SEC as an exhibit to a document incorporated by reference in the
registration statement of which this prospectus is a part prior to the date of
any prospectus supplement relating to an offering of the particular warrant.
We have summarized below the general terms and provisions that will apply
to any warrants that may be offered, except as otherwise described by the
applicable prospectus supplement. When Toll Brothers, Inc. offers to sell
warrants, a prospectus supplement will describe the specific terms of that
series of warrants. If any of the general terms and provisions described in this
prospectus do not apply to the particular series of warrants being offered the
applicable prospectus supplement will so indicate and will describe any
alternative provisions that are applicable. The following summary of various
provisions of the warrants, the warrant agreements and the warrant certificates
is not complete. You should read all of the provisions of the applicable warrant
agreement and warrant certificate, including the definitions contained in those
documents of various terms, for additional important information concerning any
series of warrants offered by this prospectus.
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Debt Warrants
General. The prospectus supplement relating to any series of debt warrants
that are offered by this prospectus will describe the specific terms of that
series of debt warrants, any related debt warrant agreement and the debt warrant
certificate(s) representing the debt warrants. The applicable prospectus
supplement will describe, among other things, the following terms, to the extent
they are applicable to that series of debt warrants:
o the issuer of the debt securities which may be purchased upon
exercise of the debt warrants, the designation, number, stated
value and terms of those debt securities, the terms of the
related guarantees and the procedures and conditions relating
to the exercise of the debt warrants;
o the designation and terms of any debt securities and related
guarantees with which the debt warrants are issued and the
number of the debt warrants issued with each debt security;
o the date, if any, on and after which the debt warrants and the related
debt securities will be separately transferable;
o the principal amount of debt securities which may be purchased
upon exercise of each debt warrant and the price at which the
principal amount of debt securities may be purchased upon
exercise of the debt warrant;
o the date on which the right to exercise the debt warrants will begin and
the date on which the right will expire;
o a discussion of the material United States federal income tax
considerations relevant to the exercise of the debt warrants;
o whether the debt warrants represented by the debt warrant
certificates will be issued in registered or bearer form, and,
if registered, where they may be transferred and registered;
o call provisions of the debt warrants, if any; and
o any other material terms of the debt warrants.
Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations. In addition, debt warrants may be
exercised at the corporate trust office of the warrant agent or any other office
indicated in the applicable prospectus supplement. A holder of a debt warrant
will not have any of the rights of a holder of the debt securities which may be
purchased by the exercise of the debt warrant before the debt securities are
purchased by the exercise of the debt warrant. Accordingly, before a debt
warrant is exercised, the holder will not be entitled to receive any payments of
principal, premium, if any, or interest, if any, on the debt securities which
may be purchased by the exercise of that debt warrant.
Exercise of Debt Warrants. Each debt warrant will entitle the holder to
purchase for cash the principal amount of debt securities described in the
applicable prospectus supplement at the exercise price described or explained in
the prospectus supplement. Debt warrants may be exercised at any time from the
time they become exercisable, as described in the applicable prospectus
supplement, up to the time on the date stated in the applicable prospectus
supplement. Afterwards, unexercised debt warrants will become void.
Debt warrants may be exercised in the manner described in the applicable
prospectus supplement. When Toll Brothers, Inc. receives payment and the
properly completed and duly executed debt warrant certificate at the corporate
trust office of the warrant agent or any other
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office indicated in the applicable prospectus supplement, it will, as soon as
practicable, forward the debt securities purchased upon the exercise of the debt
warrants. If less than all of the debt warrants represented by the debt warrant
certificate are exercised, Toll Brothers, Inc. will issue a new debt warrant
certificate for the amount of debt warrants that remain exercisable.
Common Stock Warrants
General. The prospectus supplement relating to any series of common stock
warrants that are offered by this prospectus will describe the specific terms of
that series of common stock warrants, any related common stock warrant agreement
and the common stock warrant certificate(s) representing the common stock
warrants. The applicable prospectus supplement will describe, among other
things, the following terms, to the extent they are applicable to that series of
common stock warrants:
o the procedures and conditions relating to the exercise of the common
stock warrants;
o the number of shares of common stock, if any, issued with the common
stock warrants;
o the date, if any, on and after which the common stock warrants and any
related shares of common stock will be separately transferable;
o the offering price of the common stock warrants, if any;
o the number of shares of common stock which may be purchased upon
exercise of the common stock warrants and the price or prices at which
the shares may be purchased upon exercise;
o the date on which the right to exercise the common stock warrants will
begin and the date on which the right will expire;
o a discussion of the material United States federal income tax
considerations applicable to the exercise of the common stock warrants;
o call provisions of the common stock warrants, if any; and
o any other material terms of the common stock warrants.
Common stock warrant certificates will be exchangeable for new common stock
warrant certificates of different denominations. In addition, common stock
warrants may be exercised at the corporate trust office of the warrant agent or
any other office indicated in the applicable prospectus supplement. A holder of
a common stock warrant will not have any of the rights of a holder of the common
stock which may be purchased by the exercise of the common stock warrant before
the common stock is purchased by the exercise of the common stock warrant.
Accordingly, before a common stock warrant is exercised, the holder will not be
entitled to receive any dividend payments or exercise any voting or other rights
associated with the shares of common stock which may be purchased when the
common stock warrant is exercised.
Exercise of Common Stock Warrants. Each common stock warrant will entitle
the holder to purchase for cash the number of shares of common stock of Toll
Brothers, Inc. at the exercise price that is described or explained in the
applicable prospectus supplement. Common stock warrants may be exercised at any
time from the time they become exercisable, as described in the applicable
prospectus supplement, up to the time on the date stated in the applicable
prospectus supplement. Afterwards, unexercised common stock warrants will become
void.
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Common stock warrants may be exercised in the manner described in the
applicable prospectus supplement. When Toll Brothers, Inc. receives payment and
the properly completed and duly executed common stock warrant certificate at the
corporate trust office of the warrant agent or any other office indicated in the
applicable prospectus supplement, it will, as soon as practicable, forward a
certificate representing the number of shares of common stock purchased upon
exercise of the common stock warrants. If less than all of the common stock
warrants represented by the common stock warrant certificate are exercised, Toll
Brothers, Inc. will issue a new common stock warrant certificate for the amount
of common stock warrants that remain exercisable.
Preferred Stock Warrants
General. The prospectus supplement relating to any series of preferred
stock warrants that are offered by this prospectus will describe the specific
terms of that series of preferred stock warrants, any related preferred stock
warrant agreement and the preferred stock warrant certificate(s) representing
the preferred stock warrants. The applicable prospectus supplement will
describe, among other things, the following terms, to the extent they are
applicable to that series of preferred stock warrants:
o the designation and terms of the shares of preferred stock
which may be purchased upon exercise of the preferred stock
warrants and the procedures and conditions relating to the
exercise of the preferred stock warrants;
o the designation and terms of any related shares of preferred
stock with respect to which the preferred stock warrants are
issued and the number of shares of the preferred stock, if
any, issued with preferred stock warrants;
o the date, if any, on and after which the preferred stock warrants and
any related shares of preferred stock will be separately transferable;
o the offering price of the preferred stock warrants, if any;
o the number of shares of preferred stock which may be purchased upon
exercise of the preferred stock warrants and the initial price or prices
at which the shares may be purchased upon exercise;
o the date on which the right to exercise the preferred stock warrants
will begin and the date on which the right will expire;
o a discussion of the material United States federal income tax
considerations relevant to the exercise of the preferred stock warrants;
o call provisions of the preferred stock warrants, if any; and
o any other material terms of the preferred stock warrants.
Preferred stock warrant certificates will be exchangeable for new preferred
stock warrant certificates of different denominations. In addition, preferred
stock warrants may be exercised at the corporate trust office of the warrant
agent or any other office indicated in the applicable prospectus supplement. A
holder of a preferred stock warrant will not have any of the rights of a holder
of the preferred stock which may be purchased by the exercise of the preferred
stock warrant before the preferred stock is purchased by the exercise of the
preferred stock warrant. Accordingly, before a preferred stock warrant is
exercised, the holder will not be entitled to receive any dividend payments or
exercise any voting or other rights associated with the preferred stock which
may be purchased when the preferred stock warrant is exercised.
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Exercise of Preferred Stock Warrants. Each preferred stock warrant will
entitle the holder to purchase for cash the number of shares of preferred stock
of Toll Brothers, Inc. at the exercise price described or explained in the
applicable prospectus supplement. Preferred stock warrants may be exercised at
any time from the time they become exercisable, as described in the applicable
prospectus supplement, up to the time on the date stated in the applicable
prospectus supplement. Afterwards, unexercised preferred stock warrants will
become void.
Preferred stock warrants may be exercised in the manner described in the
applicable prospectus supplement. When Toll Brothers, Inc. receives payment and
the properly completed and duly executed preferred stock warrant certificate at
the corporate trust office of the warrant agent or any other office indicated in
the applicable prospectus supplement, it will, as soon as practicable, forward a
certificate representing the number of shares of preferred stock purchased upon
exercise of the preferred stock warrants. If less than all of the preferred
stock warrants represented by the preferred stock warrant certificate are
exercised, Toll Brothers, Inc. will issue a new preferred stock warrant
certificate for the amount of preferred stock warrants that remain exercisable.
CLASSIFIED BOARD OF DIRECTORS AND RESTRICTIONS ON REMOVAL
Under the Certificate of Incorporation, as amended, of Toll Brothers, Inc.,
the board of directors is divided into three classes of directors serving
staggered terms of three years each. Each class is to be as nearly equal in
number as possible, with one class being elected each year. The Certificate of
Incorporation, as amended, also provides that:
o directors may be removed from office only for cause and only
with the affirmative vote of 66 2/3% of the voting power of
the voting stock;
o any vacancy on the board of directors or any newly created
directorship will be filled by the remaining directors then in
office, though less than a quorum; and
o advance notice of shareholder nominations for the elections of
directors must be given in the manner provided by the By-Laws
of Toll Brothers, Inc.
The required 66-2/3% shareholder vote necessary to alter, amend or repeal
these provisions of the Certificate of Incorporation, as amended, the related
amendments to the By-Laws and all other provisions of the By-Laws, or to adopt
any provisions relating to the classification of the board of directors and the
other matters described above may make it more difficult to change the
composition of the board of directors of Toll Brothers, Inc. and may discourage
or make difficult any attempt by a person or group to obtain control of Toll
Brothers, Inc.
PLAN OF DISTRIBUTION
Toll Brothers, Inc., Toll Corp., First Huntingdon Finance Corp. and Toll
Finance Corp., or any of them, may offer and sell their respective securities to
which this prospectus relates in any one or more of the following ways:
o directly to purchasers;
o to or through underwriters;
o to or through dealers; or
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o to or through agents.
Each time we sell securities, we will provide a prospectus supplement that
will name any underwriter, dealer or agent involved in the offer and sale of the
securities. The prospectus supplement will also set forth the terms of the
offering, including the purchase price of the securities and the proceeds to the
issuer(s) from the sale of the securities, any underwriting discounts and other
items constituting underwriters' compensation, any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which the securities may be listed.
The securities may be distributed from time to time in one or more
transactions:
o at a fixed price or prices, which may be changed;
o at market prices prevailing at the time of sale;
o at prices related to prevailing market prices; or
o at negotiated prices.
Each time we sell securities, we will describe the method of distribution
of the securities in the prospectus supplement relating to the transaction.
If underwriters are used in the offer and sale of the securities being
offered by this prospectus, the name of each managing underwriter, if any, and
any other underwriters and the terms of the transaction, including any
underwriting discounts and other items constituting compensation of the
underwriters and dealers, if any, will be included in the prospectus supplement
relating to the offering. The securities will be acquired by the underwriters
for their own accounts and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
If a dealer is used in the sale of the securities being offered by this
prospectus, the issuer(s) of the securities will sell those securities to the
dealer, as principal. The dealer may then resell those securities to the public
at varying prices to be determined by the dealer at the time of resale. The name
of the dealer and the terms of the transaction will be identified in the
applicable prospectus supplement.
If an agent is used in an offering of securities being offered by this
prospectus, the agent will be named, and the terms of the agency will be
described, in the applicable prospectus supplement relating to the offering.
Unless otherwise indicated in the prospectus supplement, an agent will act on a
best efforts basis for the period of its appointment.
Offers to purchase the securities offered by this prospectus may be
solicited, and sales of the securities may be made, by the issuer(s) of those
securities directly to institutional investors or others, who may be deemed to
be underwriters within the meaning of the Securities Act of 1933 with respect to
any resales of the securities. The terms of any offer made in this manner will
be included in the prospectus supplement relating to the offer.
If indicated in the applicable prospectus supplement, the issuer(s) of the
securities to which the prospectus supplement relates will authorize
underwriters or their other agents to solicit offers by certain institutional
investors to purchase securities from the issuer(s)
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pursuant to contracts providing for payment and delivery at a future date.
Institutional investors with which these contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others. In all cases,
these purchasers must be approved by the issuer(s) of the securities. The
obligations of any purchaser under any of these contracts will not be subject to
any conditions except that (a) the purchase of the securities must not at the
time of delivery be prohibited under the laws of any jurisdiction to which that
purchaser is subject and (b) if the securities are also being sold to
underwriters, the issuer(s) must have sold to these underwriters the securities
not subject to delayed delivery. Underwriters and other agents will not have any
responsibility in respect of the validity or performance of these contracts.
In addition, the securities offered by this prospectus and an accompanying
prospectus supplement may be offered and sold by the holders of the securities
in one or more of the transactions described above, which transactions may be
effected at any time and from time to time. Upon a sale of securities made in
this manner, the respective holders of the securities and any participating
broker, dealer or underwriter may be deemed to be underwriters within the
meaning of Section 2(11) of the Securities Act of 1933, and any commissions,
discounts or concessions upon the sale, or any profit on the resale of the
securities, received in connection with the sale may be deemed to be
underwriting commissions or discounts under the Securities Act of 1933. The
compensation, including commissions, discounts, concessions and other profits,
received by any broker, dealer or underwriter in connection with the sale of any
of the securities, may be less than or in excess of customary commissions.
Some of the underwriters, dealers or agents used by Toll Brothers, Inc.,
Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp., or any of
them, in any offering of securities under this prospectus may be customers of,
including borrowers from, engage in transactions with, and perform services for,
Toll Brothers, Inc. Toll Corp., First Huntingdon Finance Corp. and Toll Finance
Corp., or any of them, and/or one or more of their respective affiliates in the
ordinary course of business. Underwriters, dealers, agents and other persons may
be entitled, under agreements which may be entered into with Toll Brothers,
Inc., Toll Corp., First Huntingdon Finance Corp. or Toll Finance Corp., as the
case may be, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act of 1933 and to be
reimbursed by Toll Brothers, Inc. and/or Toll Corp. Toll Finance Corp. or First
Huntingdon Finance Corp. for certain expenses.
Until the distribution of the securities offered by this prospectus is
completed, rules of the SEC may limit the ability of the underwriters and
certain selling group members, if any, to bid for and purchase the securities.
As an exception to these rules, the representatives of the underwriters, if any,
are permitted to engage in certain transactions that stabilize the price of the
securities. These transactions may consist of bids or purchases for the purpose
of pegging, fixing or maintaining the price of the securities.
If underwriters create a short position in the securities in connection
with the offering of the securities (i.e., if they sell more securities than are
included on the cover page of the applicable prospectus supplement), the
representatives of the underwriters may reduce that short position by purchasing
securities in the open market. The representatives of the underwriters also may
elect to reduce any short position by exercising all or part of the
over-allotment option, if any, described in the applicable prospectus
supplement.
-30-
<PAGE>
The representatives of the underwriters also may impose a penalty bid on
certain underwriters and selling group members. This means that if the
representatives purchase securities in the open market to reduce the
underwriters' short position or to stabilize the price of the securities, they
may reclaim the amount of the selling concession from the underwriters and
selling group members who sold those securities as part of the offering of the
securities.
In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of these types of purchases.
The imposition of a penalty bid might have an effect on the price of a security
to the extent that it were to discourage resales of the security by purchasers
in the offering.
Neither Toll Brothers, Inc., Toll Corp., First Huntingdon Finance Corp. or
Toll Finance Corp. nor any of the underwriters, if any, makes any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the securities. In
addition, neither Toll Brothers, Inc., Toll Corp., First Huntingdon Finance
Corp. or Toll Finance Corp. nor any of the underwriters, if any, makes any
representation that the representatives of the underwriters, if any, will engage
in these transactions or that these transactions, once commenced, will not be
discontinued without notice.
The anticipated date of delivery of the securities offered by this
prospectus will be described in the applicable prospectus supplement relating to
the offering. The securities offered by this prospectus may or may not be listed
on a national securities exchange or a foreign securities exchange. We cannot
give any assurances that there will be a market for any of the securities
offered by this prospectus and any prospectus supplement.
We estimate that the total expenses we will incur in offering the
securities to which this prospectus relates, excluding underwriting discounts
and commissions, if any, will be approximately $1,200,000.
LEGAL MATTERS
Certain legal matters relating to the validity of the securities offered by
this prospectus will be passed upon by Wolf, Block, Schorr and Solis-Cohen LLP,
Philadelphia, Pennsylvania.
EXPERTS
The consolidated financial statements and schedule of Toll Brothers, Inc.
appearing in Toll Brothers, Inc.'s Annual Report (Form 10-K) for the year ended
October 31, 1998, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and schedule are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth an estimate of the costs and expenses, other
than underwriting discounts and commissions, to be incurred by Toll Brothers,
Inc. in connection with the issuance and distribution of the securities being
registered.
Securities and Exchange Commission registration fee................. $ 139,000
Printing and Engraving.............................................. $ 120,000
Rating agency fees.................................................. $ 420,000
Blue Sky fees and expenses.......................................... $ 50,000
Legal fees and expenses............................................. $ 250,000
Accounting fees and expenses........................................ $ 125,000
Trustee fees and expenses........................................... $ 30,000
Miscellaneous....................................................... $ 66,000
Total.......... $1,200,000
==========
All expenses, except the Securities and Exchange Commission registration
fee, are estimated.
Item 15. Indemnification of Directors and Officers.
For information regarding provisions under which a director or officer of
Toll Corp. or Toll Brothers, Inc. may be insured or indemnified in any manner
against any liability which he may incur in his capacity as such, reference is
made to Section 145 of the Delaware General Corporation Law, which provides in
its entirety as follows:
"(a) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
the person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.
II-1
<PAGE>
(b) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that the person is or
was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the present or former director, officer, employee or agent is proper in
the circumstances because the person has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) by a committee of such directors
designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or (4) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in such person's official capacity and as to action in another capacity
while holding such office.
II-2
<PAGE>
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against such person and incurred by such person in
any such capacity, or arising out of such person's status as such, whether
or not the corporation would have the power to indemnify such person
against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees)."
See also Article Six of Toll Brothers, Inc.'s Certificate of Incorporation,
as amended, Article VII of Toll Brothers, Inc.'s By-Laws, as amended, and
Article VIII of the By-Laws, as amended, of Toll Corp., First Huntingdon Finance
Corp., and Toll Finance Corp. pursuant to which each of the respective entities
is granted the power to indemnify their directors, officers, employees and
agents.
See also Section 6 of the Underwriting Agreement Basic Provisions, filed as
Exhibit 1 hereto, pursuant to which the Underwriters agree to indemnify the
Registrants and
II-3
<PAGE>
their respective directors, officers and controlling persons against certain
liabilities, including liabilities under the Securities Act.
See Item 17 of this Part II for further information concerning
indemnification of directors, officers and controlling persons of Toll Brothers,
Inc., Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp.
Item 16. Exhibits
1 Form of Underwriting Agreement Basic Provisions. Incorporated by
reference to Exhibit 1 to the Registration Statement of Toll Brothers,
Inc. and Toll Corp. on Form S-3 (Commission File Nos. 33-51775 and
33-51775-01).
4.1 Form of Indenture among Toll Corp., as issuer, Toll Brothers, Inc., as
guarantor, and Bank One Trust Company, NA, as Trustee.
4.2 Form of Indenture among First Huntingdon Finance Corp., as issuer, Toll
Brothers, Inc., as guarantor, and Bank One Trust Company, NA, as
Trustee.
4.3 Form of Indenture among Toll Finance Corp., as issuer, Toll Brothers,
Inc., as guarantor, and Bank One Trust Company, NA, as Trustee.
5 Form of Opinion and Consent of Wolf, Block, Schorr and Solis-Cohen LLP.*
12 Statement RE: Computation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Wolf, Block, Schorr and Solis-Cohen LLP (included as part of
Exhibit 5).
23.2 Consent of Ernst & Young LLP.
24 Powers of Attorney (included on signature pages of this Registration
Statement).
25.1 Form T-1, Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 with respect to the debt
securities of Toll Corp. and guarantees of Toll Brothers, Inc.
25.2 Form T-1, Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 with respect to the debt
securities of First Huntingdon Finance Corp. and guarantees of
Toll Brothers, Inc.
25.3 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 with respect to the debt securities of Toll
Finance Corp. and guarantees of Toll Brothers, Inc.
- ----------
*This exhibit, as signed, will be filed by pre-effective amendment.
II-4
<PAGE>
Additional exhibits to this registration statement will be filed with or
incorporated by reference in this registration statement in connection with
future amendments to, or supplements to the prospectus forming a part of this
registration statement.
Item 17. Undertakings.
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in the volume
of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrants pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the Securities being registered, the registrants will, unless in
the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrants hereby undertake that:
(1) For the purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part or this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Lower Moreland, Commonwealth of Pennsylvania, on
November 24, 1999.
TOLL BROTHERS, INC.
By: /s/ Robert I. Toll
----------------------------------
Robert I. Toll,
Chairman of the Board of Directors
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Robert I. Toll, Zvi Barzilay, Richard J.
Braemer, Joel H. Rassman and Joseph R. Sicree, and each of them, jointly and
severally, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments to
this registration statement, and to file the same with all exhibits thereto, and
other documents in connection therewith (including, without limitation, any
related registration statement or amendment thereto filed in accordance with
Rule 462 under the Securities Act of 1933, as amended), with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents or any of
them full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on November 24, 1999.
Signature Title
/s/ Robert I. Toll
- ------------------------------------ Chairman of the Board, Chief Executive
Robert I. Toll Officer and Director (Principal
Executive Officer)
/s/ Bruce E. Toll
- ------------------------------------ Vice Chairman of the Board and Director
Bruce E. Toll
/s/ Zvi Barzilay
- ------------------------------------ President, Chief Operating Officer and
Zvi Barzilay Director
/s/ Robert S. Blank
- ------------------------------------ Director
Robert S. Blank
II-7
<PAGE>
/s/ Richard J. Braemer
- ------------------------------------ Director
Richard J. Braemer
/s/ Roger S. Hillas
- ------------------------------------ Director
Roger S. Hillas
/s/ Carl B. Marbach
- ------------------------------------ Director
Carl B. Marbach
/s/ Joel H. Rassman
- ------------------------------------ Senior Vice President, Treasurer, Chief
Joel H. Rassman Financial Officer, Director
(Principal Financial Officer)
/s/ Paul Shapiro
- ------------------------------------ Director
Paul Shapiro
/s/ Joseph R. Sicree
- ------------------------------------ Chief Accounting Officer
Joseph R. Sicree (Principal Accounting Officer)
II-8
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Lower Moreland, Commonwealth of Pennsylvania, on
November 24, 1999.
TOLL CORP.
By: /s/ Robert I. Toll
----------------------------------
Robert I. Toll,
Chairman of the Board of Directors
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Robert I. Toll, Zvi Barzilay, Richard J.
Braemer, Joel H. Rassman and Joseph R. Sicree, and each of them, jointly and
severally, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments to
this registration statement, and to file the same with all exhibits thereto, and
other documents in connection therewith (including, without limitation, any
related registration statement or amendment thereto filed in accordance with
Rule 462 under the Securities Act of 1933, as amended), with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents or any of
them full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on November 24, 1999.
Signature Title
/s/ Robert I. Toll
- ------------------------------------ Chairman of the Board, Chief Executive
Robert I. Toll Officer and Director (Principal
Executive Officer)
/s/ Zvi Barzilay
- ------------------------------------ President, Chief Operating Officer,
Zvi Barzilay Secretary and Director
/s/ Joel H. Rassman
- ------------------------------------ Senior Vice President, Treasurer, Chief
Joel H. Rassman Financial Officer (Principal Financial
Officer)
/s/ Joseph R. Sicree
- ------------------------------------ Chief Accounting Officer
Joseph R. Sicree (Principal Accounting Officer)
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<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Lower Moreland, Commonwealth of Pennsylvania, on
November 24, 1999.
FIRST HUNTINGDON FINANCE CORP.
By: /s/ Robert I. Toll
----------------------------------
Robert I. Toll,
Chairman of the Board of Directors
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Robert I. Toll, Zvi Barzilay, Richard J.
Braemer, Joel H. Rassman and Joseph R. Sicree, and each of them, jointly and
severally, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments to
this registration statement, and to file the same with all exhibits thereto, and
other documents in connection therewith (including, without limitation, any
related registration statement or amendment thereto filed in accordance with
Rule 462 under the Securities Act of 1933, as amended), with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents or any of
them full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on November 24, 1999.
Signature Title
/s/ Robert I. Toll
- ------------------------------------ Chairman of the Board, Chief Executive
Robert I. Toll Officer and Director (Principal
Executive Officer)
/s/ Zvi Barzialy
- ------------------------------------ President, Chief Operating Officer,
Zvi Barzialy Secretary and Director
/s/ Joel H. Rassman
- ------------------------------------ Senior Vice President, Treasurer, Chief
Joel H. Rassman Financial Officer (Principal Financial
Officer)
/s/ Joseph R. Sicree
- ------------------------------------ Chief Accounting Officer
Joseph R. Sicree (Principal Accounting Officer)
II-10
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Lower Moreland, Commonwealth of Pennsylvania, on
November 24, 1999.
TOLL FINANCE CORP.
By: /s/ Robert I. Toll
----------------------------------
Robert I. Toll,
Chairman of the Board of Directors
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Robert I. Toll, Zvi Barzilay, Richard J.
Braemer, Joel H. Rassman and Joseph R. Sicree, and each of them, jointly and
severally, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments to
this registration statement, and to file the same with all exhibits thereto, and
other documents in connection therewith (including, without limitation, any
related registration statement or amendment thereto filed in accordance with
Rule 462 under the Securities Act of 1933, as amended), with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents or any of
them full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on November 24, 1999.
Signature Title
/s/ Robert I. Toll
- ------------------------------------ Chairman of the Board, Chief Executive
Robert I. Toll Officer and Director (Principal
Executive Officer)
/s/ Zvi Barzilay
- ------------------------------------ President, Chief Operating Officer,
Zvi Barzilay Secretary and Director
/s/ Joel H. Rassman
- ------------------------------------ Senior Vice President, Treasurer, Chief
Joel H. Rassman Financial Officer (Principal Financial
Officer)
/s/ Joseph R. Sicree
- ------------------------------------ Chief Accounting Officer
Joseph R. Sicree (Principal Accounting Officer)
II-11
EXHIBIT 4.1
TOLL CORP., as Issuer
TOLL BROTHERS, INC., as Guarantor
Debt Securities
Indenture
Dated as of
BANK ONE TRUST COMPANY, NA
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).............................................. 2.07
(b).............................................. 13.03
(c).............................................. 13.03
313(a).............................................. 9.06
(b)(1)........................................... N.A.
(b)(2)........................................... 9.06
(c).............................................. 9.06; 13.02
(d).............................................. 9.06
314(a).............................................. 4.03; 13.02
(b).............................................. N.A.
(c)(1)........................................... 13.04
(c)(2)........................................... 13.04
(c)(3)........................................... N.A.
(d).............................................. N.A.
(e).............................................. 13.05
(f).............................................. N.A.
315(a).............................................. 9.01(b)
(b).............................................. 9.05; 13.02
(c).............................................. 9.01(a)
(d).............................................. 9.01(c)
(e).............................................. 8.11
316(a)(last sentence)............................... 13.06
(a)(1)(A)........................................ 8.05
(a)(1)(B)........................................ 8.04
(a)(2)........................................... N.A.
(b).............................................. 8.07
317(a)(1)........................................... 8.08
(a)(2)........................................... 8.09
(b).............................................. 2.06
318(a).............................................. 13.01
N.A. means Not Applicable.
Note: This cross-reference table shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Article Section Heading Page
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<S> <C> <C>
ARTICLE 1. Definitions and Incorporation by Reference......................................................1
1.01. Definitions.....................................................................................1
1.02. Incorporation by Reference of Trust Indenture Act...............................................5
1.03. Incorporation by Reference of Provisions of Securities..........................................6
1.04. Rules of Construction...........................................................................6
ARTICLE 2. The Securities..................................................................................6
2.01. Forms Generally.................................................................................6
2.02. Form of Trustee's Certificate of Authentication.................................................7
2.03. Amount Unlimited, Issuable in Series............................................................7
2.04. Execution and Authentication....................................................................9
2.05. Registrar and Paying Agent......................................................................9
2.06. Paying Agent To Hold Money in Trust............................................................10
2.07. Securityholder Lists...........................................................................10
2.08. Transfer and Exchange..........................................................................10
2.09. Replacement Securities.........................................................................10
2.10. Outstanding Securities.........................................................................11
2.11. Temporary Securities...........................................................................11
2.12. Cancellation...................................................................................11
2.13. Defaulted Interest.............................................................................12
2.14. Global Securities..............................................................................12
ARTICLE 3. Redemption.....................................................................................12
3.01. Notices to Trustee.............................................................................12
3.02. Selection of Securities To Be Redeemed.........................................................13
3.03. Notice of Redemption...........................................................................13
3.04. Effect of Notice of Redemption.................................................................14
3.05. Deposit of Redemption Price....................................................................14
3.06. Securities Redeemed in Part....................................................................14
ARTICLE 4. Covenants......................................................................................14
4.01. Payment of Securities..........................................................................14
4.02. SEC Reports....................................................................................14
4.03. Compliance Certificate.........................................................................15
ARTICLE 5. Successor Corporation..........................................................................15
5.01. When the Company and the Guarantor May Merge, Etc..............................................15
ARTICLE 6. Subordination..................................................................................15
6.01. Agreement To Subordinate.......................................................................15
6.02 Company Not To Make Payments with Respect to Securities in Certain Circumstances...............16
</TABLE>
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<TABLE>
<S> <C> <C>
6.03. Securities Subordinated to Prior Payment of All Senior Indebtedness of the
Company on Dissolution, Liquidation or Reorganization of the Company...........................16
6.04. Securityholders To Be Subrogated to Rights of Holders of Senior Indebtedness of
the Company....................................................................................17
6.05. Obligation of the Company Unconditional........................................................18
6.06. Knowledge of Trustee...........................................................................18
6.07. Application by Trustee of Monies Deposited With It.............................................18
6.08. Subordination Rights Not Impaired by Acts or Omissions of Company or Holders
of Senior Indebtedness of the Company..........................................................19
6.09. Securityholders Authorize Trustee To Effectuate Subordination of Securities....................19
6.10. Right of Trustee To Hold Senior Indebtedness of the Company....................................19
6.11. Article Six Not To Prevent Events of Default...................................................19
ARTICLE 7. Guarantee......................................................................................19
7.01. Guarantee......................................................................................19
7.02. Agreement To Subordinate.......................................................................21
7.03. Guarantor Not To Make Payments with Respect to Securities in Certain
Circumstances..................................................................................21
7.04. Guarantee Subordinated to Prior Payment of All Senior Indebtedness of the
Guarantor on Dissolution, Liquidation or Reorganization of the Guarantor.......................22
7.05. Securityholders To Be Subrogated to Rights of Holders of Senior Indebtedness of
the Guarantor..................................................................................23
7.06. Obligation of the Guarantor Unconditional......................................................23
7.07. Knowledge of Trustee...........................................................................24
7.08. Application by Trustee of Monies Deposited With It.............................................24
7.09. Subordination Rights Not Impaired by Acts or Omissions of Guarantor or Holders
of Senior Indebtedness of the Guarantor........................................................24
7.10. Securityholders Authorize Trustee To Effectuate Subordination of Guarantee.....................24
7.11. Right of Trustee To Hold Senior Indebtedness of the Guarantor..................................25
7.12. Article 7 Not To Prevent Events of Default.....................................................25
7.13. Execution and Delivery of Guarantee............................................................25
7.14. Subordination of Indebtedness Owed by the Company to the Guarantor.............................25
7.15. Officers' Certificate..........................................................................25
ARTICLE 8. Defaults and Remedies..........................................................................26
8.01. Events of Default..............................................................................26
8.02. Acceleration...................................................................................28
8.03. Other Remedies.................................................................................28
8.04. Waiver of Past Defaults........................................................................29
8.05. Control by Majority............................................................................29
8.06. Limitation on Suits............................................................................29
8.07. Rights of Holders To Receive Payment...........................................................29
8.08. Collection Suit by Trustee.....................................................................29
8.09. Trustee May File Proofs of Claim...............................................................30
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
8.10. Priorities.....................................................................................30
8.11. Undertaking for Costs..........................................................................30
ARTICLE 9. Trustee........................................................................................30
9.01. Duties of Trustee..............................................................................30
9.02. Rights of Trustee..............................................................................31
9.03. Individual Rights of Trustee...................................................................32
9.04. Trustee Disclaimer.............................................................................32
9.05. Notice of Defaults.............................................................................32
9.06. Reports by Trustee to Holders..................................................................32
9.07. Compensation and Indemnity.....................................................................32
9.08. Replacement of Trustee.........................................................................33
9.09. Successor Trustee by Merger, etc...............................................................34
9.10. Eligibility; Disqualification..................................................................34
9.11. Preferential Collection of Claims Against Company..............................................34
ARTICLE 10. CONVERSION OF SECURITIES.......................................................................34
10.01. Applicability of Article.......................................................................34
10.02. Conversion Privilege...........................................................................34
10.03. Manner of Exercise of Conversion Privilege.....................................................34
10.04. Payment in Lieu of Fractional Shares...........................................................35
10.05. Adjustment of Conversion Price.................................................................36
10.06. Notice of Certain Corporate Action.............................................................38
10.07. Guarantor To Provide Stock.....................................................................39
10.08. Taxes on Conversions...........................................................................39
10.09. Covenant as to Stock...........................................................................39
10.10. Consolidation or Merger........................................................................39
10.11. Disclaimer of Responsibility for Certain Matters...............................................40
ARTICLE 11. Discharge of Indenture.........................................................................41
11.01. Termination of the Company's and the Guarantor's Obligations...................................41
11.02. Application of Trust Money.....................................................................41
11.03. Repayment to Company...........................................................................41
ARTICLE 12. Amendments, Supplements and Waivers............................................................42
12.01. Without Consent of Holders.....................................................................42
12.02. With Consent of Holders........................................................................42
12.03. Compliance with Trust Indenture Act............................................................43
12.04. Revocation and Effect of Consents..............................................................43
12.05. Notation on or Exchange of Securities..........................................................43
12.06. Trustee To Sign Amendments, etc................................................................43
ARTICLE 13. Miscellaneous..................................................................................43
13.01. Trust Indenture Act Controls...................................................................43
</TABLE>
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<TABLE>
<S> <C> <C>
13.02. Notices........................................................................................44
13.03. Communication by Holders with Other Holders....................................................44
13.04. Certificate and Opinion as to Conditions Precedent.............................................44
13.05. Statements Required in Certificate or Opinion..................................................45
13.06. When Treasury Securities Disregarded...........................................................45
13.07. Rules by Trustee, Paying Agent, Registrar......................................................45
13.08. Legal Holidays.................................................................................45
13.09. Governing Law..................................................................................45
13.10. No Adverse Interpretation of Other Agreements..................................................45
13.11. No Recourse Against Others.....................................................................46
13.12. Successors.....................................................................................46
13.13. Duplicate Originals............................................................................46
13.14. Counterparts...................................................................................46
SIGNATURES......................................................................................................46
</TABLE>
-iv-
<PAGE>
INDENTURE dated as of __________ among TOLL CORP., a Delaware corporation
(the "Company"), TOLL BROTHERS, INC., a Delaware corporation (the "Guarantor"),
and Bank One Trust Company, NA (the "Trustee").
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its bonds,
debentures, notes and/or other evidences of indebtedness (herein called the
"Securities"), which may be senior secured, senior unsecured, senior
subordinated or subordinated, to be issued in one or more series as in this
Indenture provided.
The Guarantor has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unconditional
guarantee of the Securities (herein called the "Guarantee"), which may be senior
secured, senior unsecured, senior subordinated or subordinated, as in this
Indenture provided.
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
ratable benefit of the Holders of the Securities or of each series thereof as
follows:
ARTICLE 1.
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 8.02.
"Affiliate" has the meaning provided in Rule 405 promulgated under the
Securities Act of 1933, as amended and in effect on the date hereof.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities. An Authorizing Resolution shall be so
adopted by both the Company and the Guarantor.
"Bankruptcy Law" has the meaning provided in Section 8.01.
"Board of Directors" means the Board of Directors of the Company or the
Guarantor, as the case may be, or any authorized committee of the Board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or the Guarantor, as the case may be,
to have been duly
<PAGE>
adopted by the Board of Directors and to be in full force and effect on the date
of such certification and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means the classes of capital stock of a Person as they
exist on the date of this Indenture or as they may be constituted from time to
time and warrants, options and similar rights to acquire such capital stock.
"Common Stock" means the Common Stock ($.01 par value) of the Guarantor as
the same exists at the date of this Indenture as originally executed or as such
stock may be constituted from time to time.
"Company" means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor or any other obligor on the
Securities. "Company" shall also mean the Guarantor in the event the Company
fails to perform those duties required by Sections 312 through 317 of the TIA.
"Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, as determined in accordance with generally accepted
accounting principles.
"Conversion Price" means the initial conversion price of Securities of a
Series specified in the Authorizing Resolution establishing the terms of such
Series Security, as adjusted in accordance with the provisions of Article 10.
"Current Market Price" for any relevant date means, (a) except for purposes
of Section 10.04, the average of the last reported sale prices of the Common
Stock for the 30 consecutive Business Days commencing 45 Business Days before
the day in question and (b) for purposes of Section 10.04 only, the last
reported sale price of the Common Stock, in either such case as reported on the
composite tape, or similar reporting system, for issues listed on the New York
Stock Exchange (or if the Common Stock is not then listed on that exchange, for
issues listed on such other national securities exchange upon which the Common
Stock is listed as may be designated by the Board of Directors for the purposes
hereof) or, if there is no such reported sale on the day or days in question, on
the basis of the average of the closing bid and asked quotations as so reported,
or, if the Common Stock is not listed on any national securities exchange, on
the basis of the average of the high bid and low asked quotations on the day or
days in question in the over-the-counter market as reported by the National
Association of Securities Dealers' Automated Quotations System, or if not so
quoted, as reported by National Quotation Bureau, Incorporated, or any similar
organization, or if not so reported as determined in good faith by the Board.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
2
<PAGE>
"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.
"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
3
<PAGE>
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.
"Original Issue Discount Security" means any Security which provides that
an amount less than its principal amount is due and payable upon acceleration
after an Event of Default.
"Paying Agent" has the meaning provided in Section 2.05.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"Principal" of a debt security means the principal of the security plus the
premium, if any, on the security.
"Record Date" for the interest payable on any Interest Payment Date on the
Securities has the meaning provided in Section 1 of the Securities.
"Registrar" has the meaning provided in Section 2.05.
"Restricted Subsidiary," if applicable, has the meaning provided in the
Authorizing Resolution.
["Revolving Credit Agreement" means the Credit Agreement dated as of
February 25, 1998 among First Huntingdon Finance Corp., Toll Brothers, Inc., The
First National Bank of Chicago (now known as Bank One National Association)
(Administrative Agent); Bank of America National Trust and Savings Association
(Co-Agents); 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,
4
<PAGE>
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 2.13.
"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, Assistant Vice President, Trust Officer or any
other officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made
- --------
*If applicable.
5
<PAGE>
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.
ARTICLE 2.
The Securities
Section 2.01. Forms Generally. The Securities and the Guarantee,
respectively, of each series shall be in such forms (including global form) as
shall be established by or pursuant to an Authorizing Resolution or in one or
more supplemental indentures hereto, in each case with such appropriate
provisions as are required or permitted by this Indenture, and may have such
letters,
6
<PAGE>
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or depositary therefor or as may, consistent herewith, be determined appropriate
by the Officers executing such Securities, as evidenced by their execution
thereof. If the form of any series of Securities is established by action taken
pursuant to an Authorizing Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or any Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of a written
order of the Company signed by two Officers or an Officer and an Assistant
Treasurer of the Company for the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, provided that
such method is permitted by the rules of any securities exchange on which such
Securities may be listed, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities.
The terms and provisions in the Securities shall constitute, and are hereby
expressly made, a part of this Indenture.
Section 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
This is one of the Securities of the series designated herein referred
to in the within mentioned Indenture.
BANK ONE TRUST COMPANY, NA
As Trustee
By_________________________________
Authorized Signatory
Section 2.03. Amount Unlimited, Issuable in Series. The aggregate principal
amount of Securities that may be issued under this Indenture is unlimited. The
Securities may be issued from time to time in one or more Series. Each Series
shall be created by an Authorizing Resolution or a supplemental indenture that
establishes the terms of the Series, which may include the following:
(1) the title of the Series;
(2) any limit upon the aggregate principal amount of the Series which may
be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of other Securities which, pursuant to Sections 2.08, 2.09, 2.11
or 10.05 and except for any Securities which, pursuant to Section 2.04, are
deemed never to have been authenticated and delivered hereunder);
7
<PAGE>
(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 respective forms of the Securities and the Guarantees;
(19) whether the Securities of such Series will be convertible into Common
Stock of the Guarantor and the terms thereof (including without limitation the
Conversion Price, the conversion period and any other provision in addition to
or in lieu of those set forth in this Indenture);
8
<PAGE>
(20) whether the Securities and Guarantees of such Series shall be
subordinated to any obligations of the Company or the Guarantor, and the
obligations to which such subordination will apply;
(21) whether the Securities of such Series and/or the Guarantees of such
Series will be secured and, if applicable, any provisions for securing all or
any potion of the indebtedness evidenced by the Securities of such Series and/or
the Guarantees of such Series;
(22) any terms that may be required by or advisable under applicable law;
and
(23) any other terms not inconsistent with this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and delivery
thereof are not subject to any conditions precedent.
Section 2.04. Execution and Authentication. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be reproduced on the Securities. Two Officers of the Guarantor shall sign
the notation of the Guarantee by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon a written
order of the Company signed by two Officers or by an Officer and an Assistant
Treasurer of the Company. Each Security shall be dated the date of its
authentication. In authenticating Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to the TIA) shall be fully
protected in relying upon, an Opinion of Counsel stating that all conditions
precedent to the authentication and delivery of the Securities have been
complied with and that the Securities have been duly executed and, when the
Securities have been duly authenticated and delivered by the Trustee, will be
duly issued and delivered and will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to any applicable bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and subject to the
effect of general principles of equity,
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including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether enforcement is considered in a
proceeding in equity or at law).
Section 2.05. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer,
for exchange or, if applicable, for conversion (in the case of conversion, as
agent for the Guarantor) ("Registrar") and an office or agency where Securities
may be presented for payment ("Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such.
The Company initially appoints the Trustee as Registrar and Paying Agent.
Section 2.06. Paying Agent To Hold Money in Trust. Each Paying Agent shall
hold in trust for the benefit of the Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal or interest on the
Securities, and shall notify the Trustee of any default by the Company (or any
other obligor on the Securities) in making any such payment. While any such
default continues, the Trustee shall require a Paying Agent to pay all money
held by it to the Trustee. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate the money and hold it as a separate trust fund. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon doing so the Paying Agent shall have no further liability for the
money.
Section 2.07. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee on or before each Interest
Payment Date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
Section 2.08. Transfer and Exchange. Where a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register its transfer as requested if its reasonable requirements are met.
Where Securities are presented to the Registrar or a co-registrar with a request
to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met. To permit transfers and exchanges, the Trustee shall
authenticate Securities at the Registrar's request. The Registrar need not
transfer or exchange any Security selected for redemption, except the unredeemed
part thereof if the Security is redeemed in part, or transfer or exchange any
Securities
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for a period of 15 days before a selection of Securities to be redeemed. The
Company may charge a reasonable fee for any transfer or exchange (including the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any such transfer or exchange and any other
expenses in connection therewith) but not for any exchange pursuant to Section
2.11, 3.06 or 12.05. This Section 2.08 is subject to the provisions of any
series of the Securities providing for the subordination or seniority of such
series and the related Guarantees of such series in right of payment to other
indebtedness of the Company and the Guarantor, respectively.
Section 2.09. Replacement Securities. If the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Security and the
Guarantor shall endorse the Guarantee thereon if the Trustee's reasonable
requirements are met. An indemnity bond must be sufficient in the judgment of
the Company, the Guarantor and the Trustee to protect the Company, the
Guarantor, the Trustee, the Paying Agent, the Registrar or any co-registrar from
any loss which any of them may suffer if a Security is replaced. The Company may
charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company and
the Guarantor.
Section 2.10. Outstanding Securities. Securities outstanding at any time
are all Securities authenticated by the Trustee except for those presented to it
by the Company or its designee for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company, the Guarantor or one of their Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a redemption date or maturity date money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
If a Security is called for redemption or if it matures in less than six
months and if the Company has satisfied its obligation to pay the Security, or
if a Security has been converted in accordance with the provisions of Article
10, the Company and the Trustee need not treat the Security as outstanding in
determining whether Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent.
For each series of Original Issue Discount Securities, the principal amount
of such Securities that shall be deemed to be outstanding and used to determine
whether the necessary Holders have given any request, demand, authorization,
direction, notice, consent or waiver shall be the principal amount of such
Securities that could be declared to be due and payable upon acceleration upon
an Event of Default as of the date of such determination. When requested by the
Trustee, the Company will advise the Trustee of such amount, showing its
computations in reasonable detail.
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Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.11. Temporary Securities. Until definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities and the Guarantor shall endorse the Guarantee thereon.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities and the Guarantor shall endorse
the Guarantee thereon in exchange for temporary Securities.
Section 2.12. Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange, conversion or payment. The Trustee and no one else shall cancel and
destroy all Securities surrendered for transfer, exchange, conversion, payment
or cancellation in accordance with its customary procedure. Unless the
Authorizing Resolution so provides, the Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation.
Section 2.13. Defaulted Interest. If the Company defaults in a payment of
interest on the Securities, it shall pay the defaulted interest in any lawful
manner. It may pay the defaulted interest, plus any interest payable on the
interest (to the extent lawful) if an Event of Default has occurred and is
continuing, to the Persons who are Securityholders on a subsequent special
record date (the "Special Record Date"). The Company shall fix the subsequent
Special Record Date and payment date. At least 15 days before such Special
Record Date, the Company shall give notice to the Trustee and shall mail to each
Securityholder a notice that states the subsequent Special Record Date, the
payment date, and the amount of defaulted interest to be paid.
Section 2.14. Global Securities. Unless the Authorizing Resolution provides
otherwise, the Company may issue some or all of the Securities of a Series in
temporary or permanent global form. A global Security shall represent that
amount of Securities of a Series as specified in the global Security or as
endorsed thereon from time to time. At the Company's request, the Registrar
shall endorse a global Security to reflect the amount of any increase or
decrease in the Securities represented thereby.
The Company may issue a global Security only to a depositary designated by
the Company. A depositary may transfer a global Security only as a whole to its
nominee or to a successor depositary.
The Authorizing Resolution may establish, among other things, the manner of
paying principal and interest on a global Security and whether and upon what
terms a beneficial owner of an interest in a global Security may exchange such
interest for definitive Securities.
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The Company and the Trustee shall not be responsible for any acts or
omissions of a depositary, for any depositary records of beneficial ownership
interests or for any transactions between the depositary and beneficial owners.
ARTICLE 3.
Redemption
Section 3.01. Notices to Trustee. Securities of a Series that are
redeemable prior to maturity shall be redeemable in accordance with their terms
and, unless the Authorizing Resolution provides otherwise, in accordance with
this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the redemption date and
the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed, retired
or acquired against any redemption pursuant to Paragraph 6 of the Securities, it
shall notify the Trustee of the amount of the credit and it shall deliver any
Securities not previously delivered to the Trustee for cancellation with such
notice.
The Company shall give each notice provided for in this Section 3.01 at
least 10 Business Days before the notice of any such redemption is to be mailed
to Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities To Be Redeemed. If less than all the
Securities of a Series are to be redeemed, the Trustee shall select the
Securities to be redeemed, if the Securities of such Series are listed on a
national securities exchange, in accordance with the rules of such exchange, or
if the Securities of such Series are not so listed, on either a pro rata basis
or by lot or by such method as the Trustee shall deem fair and appropriate. The
Trustee shall make the selection from Securities outstanding and not previously
called for redemption. Securities in denominations of $1,000 may only be
redeemed in whole. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
Section 3.03. Notice of Redemption. At least 30 days but not more than 60
days before a redemption date, the Company shall mail a notice of redemption by
first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
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(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.
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
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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; and (ii) immediately after giving effect to such transaction no
Default or Event of Default shall have occurred and be continuing. Thereafter
all such obligations of the predecessor corporation shall terminate.
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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.
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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
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that Holders of the Securities would be entitled to receive securities that are
subordinated to Senior Indebtedness of the Company to at least the same extent
as the Securities.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company.
Section 6.04. Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness of the Company. Subject to the payment in full of all Senior
Indebtedness of the Company, the Holders of the Securities shall be subrogated
equally and ratably to the rights of the holders of the Senior Indebtedness of
the Company to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness of the Company until all amounts owing on
the Securities shall be paid in full, and for the purpose of such subrogation no
payments or distributions to the holders of the Senior Indebtedness of the
Company by or on behalf of the Company or by or on behalf of the Holders of the
Securities by virtue of this Article 6 which otherwise would have been made to
the Holders of the Securities shall, as among the Company, its creditors other
than holders of the Senior Indebtedness of the Company and the Holders of the
Securities, be deemed to be payment by the Company to or on account of the
Senior Indebtedness of the Company, it being understood that the provisions of
this Article 6 are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of the
Senior Indebtedness of the Company, on the other hand.
Section 6.05. Obligation of the Company Unconditional. Nothing contained in
this Article 6 or elsewhere in this Indenture or in any Security is intended to
or shall impair, as between the Company and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of and interest on the Securities as and
when the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Securities
and creditors of the Company other than the holders of the Senior Indebtedness
of the Company, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article 6 of the holders of Senior Indebtedness of the Company in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy. Upon any distribution of assets of the Company
referred to in this Article 6, the Trustee, subject to the provisions of
Sections 9.01 and 9.02, and the Holders of the Securities shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding up, liquidation or reorganization proceedings
are pending, or a certificate of the liquidating trustee or agent or other
Person making any distribution to the Trustee or the Holders of the Securities,
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness of the Company and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 6.
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Nothing contained in this Article 6 or elsewhere in this Indenture or in
any Security is intended to or shall affect the obligation of the Company to
make, or prevent the Company from making, at any time except during the pendency
of any dissolution, winding up, liquidation or reorganization proceeding, and
except during the continuance of any default specified in Section 6.02 (not
cured or waived), payments at any time of the principal of or interest on the
Securities.
Section 6.06. Knowledge of Trustee. Notwithstanding any provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of monies to or by the
Trustee until two Business Days after the Trustee shall have received written
notice thereof from the Company, any Securityholder or any Paying Agent or the
holder or representative of any class of Senior Indebtedness of the Company.
Section 6.07. Application by Trustee of Monies Deposited With It. If at
least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may become
payable for any purpose (including, without limitation, the payment of either
the principal of or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 6.06,
then the Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section shall be construed solely for the benefit of the Trustee
and such Paying Agent and shall not otherwise affect the rights of holders of
Senior Indebtedness of the Company.
Section 6.08. Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Indebtedness of the Company. No right of any
present or future holders of any Senior Indebtedness of the Company to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The holders
of Senior Indebtedness of the Company may extend, renew, modify or amend the
terms of the Senior Indebtedness of the Company or any security therefor and
release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders. No provision in any supplemental indenture which
affects the superior position of the holders of Senior Indebtedness of the
Company shall be effective against the holders of Senior Indebtedness of the
Company who have not consented thereto.
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
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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.
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
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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
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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
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are entitled to receive any payment on account of the principal of or interest
on the Securities pursuant to the Guarantee;
(b) any payment or distribution of assets of the Guarantor of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee on behalf of the Holders of the Securities would be
entitled except for the provisions of this Article 7, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other indebtedness of the Guarantor being subordinated to the payment of the
Securities, shall be paid by the liquidating trustee or agent or other Person
making such payment or distribution directly to the holders of the Senior
Indebtedness of the Guarantor or their representative, or to the trustee under
any indenture under which Senior Indebtedness of the Guarantor may have been
issued (pro rata as to each such holder, representative or trustee on the basis
of the respective amounts of unpaid Senior Indebtedness of the Guarantor held or
represented by each), to the extent necessary to make payment in full of all
Senior Indebtedness of the Guarantor remaining unpaid, after giving effect to
any concurrent payment or distribution or provision therefor to the holders of
such Senior Indebtedness of the Guarantor, except that Holders of the Securities
would be entitled to receive securities that are subordinated to Senior
Indebtedness of the Guarantor to at least the same extent as the Securities; and
(c) in the event that, notwithstanding the foregoing provisions of this
Section 7.04, any payment or distribution of assets of the Guarantor of any kind
or character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Guarantor being subordinated to the
payment of the Securities, shall be received by the Trustee or the Holders of
the Securities on account of principal of or interest on the Securities before
all Senior Indebtedness of the Guarantor is paid in full, or effective provision
made for its payment, such payment or distribution (subject to the provisions of
Sections 7.07 and 7.08) shall be received and held in trust for and shall be
paid over to the holders of the Senior Indebtedness of the Guarantor remaining
unpaid or unprovided for or their representative, or to the trustee under any
indenture under which such Senior Indebtedness of the Guarantor may have been
issued (pro rata as provided in subsection (b) above), for application to the
payment of such Senior Indebtedness of the Guarantor until all such Senior
Indebtedness of the Guarantor shall have been paid in full, after giving effect
to any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness of the Guarantor, except that Holders of the
Securities would be entitled to receive securities that are subordinated to
Senior Indebtedness of the Guarantor to at least the same extent as the
Securities.
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
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amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 7.
The Guarantor shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Guarantor.
Section 7.05. Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness of the Guarantor. Subject to the payment in full of all
Senior Indebtedness of the Guarantor, the Holders of the Securities shall be
subrogated equally and ratably to the rights of the holders of the Senior
Indebtedness of the Guarantor to receive payments or distributions of assets of
the Guarantor applicable to the Senior Indebtedness of the Guarantor until all
amounts owing on the Securities shall be paid in full, and for the purpose of
such subrogation no payments or distributions to the holders of the Senior
Indebtedness of the Guarantor by or on behalf of the Guarantor or by or on
behalf of the Holders of the Securities by virtue of this Article 7 which
otherwise would have been made to the Holders of the Securities shall, as among
the Guarantor, its creditors other than holders of Senior Indebtedness of the
Guarantor and the Holders of the Securities, be deemed to be payment by the
Guarantor to or on account of the Senior Indebtedness of the Guarantor, it being
understood that the provisions of this Article 7 are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on the
one hand, and the holders of the Senior Indebtedness of the Guarantor, on the
other hand.
Section 7.06. Obligation of the Guarantor Unconditional. Nothing contained
in this Article 7 or elsewhere in this Indenture or in any Security is intended
to or shall impair, as between the Guarantor and the Holders of the Securities,
the obligation of the Guarantor, which is absolute and unconditional, to pay to
the Holders of the Securities the principal of and interest on the Securities as
and when the same shall become due and payable in accordance with the terms of
the Guarantee, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors of the Guarantor other than the holders
of the Senior Indebtedness of the Guarantor, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon Default under this
Indenture, subject to the rights, if any, under this Article 7 of the holders of
Senior Indebtedness of the Guarantor in respect of cash, property or securities
of the Guarantor received upon the exercise of any such remedy.
Nothing contained in this Article 7 or elsewhere in this Indenture or in
any Security is intended to or shall affect the obligation of the Guarantor to
make, or prevent the Guarantor from making, at any time except during the
pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and except during the continuance of any default specified in
Section 7.03 (not cured or waived), payments at any time of the principal of or
interest on the Securities pursuant to the Guarantee.
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
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shall have received written notice thereof from the Guarantor, any
Securityholder or any Paying Agent or the holder or representative of any class
of Senior Indebtedness of the Guarantor.
Section 7.08. Application by Trustee of Monies Deposited With It. If at
least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may become
payable for any purpose (including, without limitation, the payment of either
the principal of or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 7.07,
then the Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section shall be construed solely for the benefit of the Trustee
and such Paying Agent and shall not otherwise affect the rights of holders of
Senior Indebtedness of the Guarantor.
Section 7.09. Subordination Rights Not Impaired by Acts or Omissions of
Guarantor or Holders of Senior Indebtedness of the Guarantor. No right of any
present or future holders of any Senior Indebtedness of the Guarantor to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Guarantor with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The holders
of Senior Indebtedness of the Guarantor may extend, renew, modify or amend the
terms of the Senior Indebtedness of the Guarantor, or any security therefor and
release, sell or exchange such security and otherwise deal freely with the
Guarantor, all without affecting the liabilities and obligations of the parties
to the Indenture or the Holders. No provision in any supplemental indenture
which affects the superior position of the holders of Senior Indebtedness of the
Guarantor shall be effective against the holders of Senior Indebtedness of the
Guarantor who have not consented thereto.
Section 7.10. Securityholders Authorize Trustee To Effectuate Subordination
of Guarantee. Each Holder of Securities by acceptance thereof authorizes and
expressly directs the Trustee on its, his or her behalf to take such action as
may be necessary or appropriate to effectuate the subordination provided in this
Article 7 and appoints the Trustee its, his or her attorney-in-fact for such
purpose, including, in the event of any dissolution, winding up, liquidation or
reorganization of the Guarantor (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets of the
Guarantor, the immediate filing of a claim for the unpaid balance, pursuant to
the Guarantee, of its, his or her Securities, in the form required in said
proceedings and cause said claim to be approved. If the Trustee does not file a
proper claim or proof of debt in the form required in such proceeding prior to
30 days before the expiration of the time to file such claim or claims, then the
holders of Senior Indebtedness of the Guarantor have the right to file and are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of said Securities.
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
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of the Guarantor at any time held by it to the same extent as any other holder
of Senior Indebtedness of the Guarantor, and nothing in this Indenture shall be
construed to deprive the Trustee of any of its rights as such holder.
Section 7.12. Article 7 Not To Prevent Events of Default. The failure to
make a payment on account of principal or interest by reason of any provision in
this Article 7 shall not be construed as preventing the occurrence of an Event
of Default under Section 8.01.
Section 7.13. Execution and Delivery of Guarantee. To evidence the
Guarantee set forth in this Article 7, the Guarantor hereby agrees that a
notation of the Guarantee, substantially in the form established by or pursuant
to an Authorizing Resolution or in one or more supplemental indentures in
accordance with Section 2.01, shall be endorsed on each Security authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of the Guarantor by the Chairman of the Board, its President or one of its Vice
Presidents under a facsimile of its seal reproduced thereon.
The Guarantor hereby agrees that its Guarantee shall remain in full force
and effect notwithstanding any failure to endorse on each Security a notation of
the Guarantee.
If an Officer whose signature is on this Indenture or on the Securities no
longer holds that office at the time the Trustee authenticates the Security on
which a notation of the Guarantee is endorsed, the Guarantee shall be valid
nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantor.
Section 7.14. Subordination of Indebtedness Owed by the Company to the
Guarantor. Any indebtedness owed by the Company to the Guarantor shall be
subordinate to all obligations of the Company with respect to the Securities and
this Indenture to the same extent as the Securities are subordinated to Senior
Indebtedness of the Company.
Section 7.15. Officers' Certificate. If there occurs an event referred to
in the first sentence of Section 7.04(c) or the first sentence of Section 7.04,
the Guarantor shall promptly give to the Trustee an Officers' Certificate (on
which the Trustee may conclusively rely) identifying all holders of Senior
Indebtedness of the Guarantor and the principal amount of Senior Indebtedness of
the Guarantor then outstanding held by each such holder and stating the reasons
why such Officers' Certificate is being delivered to the Trustee.
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ARTICLE 8.
Defaults and Remedies
Section 8.01. Events of Default. An "Event of Default" on a Series occurs
if:
(1) the Company or the Guarantor defaults in the payment of interest on any
Security of the Series when the same becomes due and payable and the default
continues for a period of 30 days whether or not such payment shall be
prohibited by the provisions of Article 6 or Article 7; or
(2) the Company or the Guarantor defaults in the payment of the principal
of any Security of the Series when the same becomes due and payable at maturity
or upon redemption, whether or not such payment shall be prohibited by the
provisions of Article 6 or Article 7; or
(3) the Company or the Guarantor fails to comply with any of its other
agreements in the Securities, the Guarantee or this Indenture applicable to the
Series and such failure continues for the period and after the notice specified
below; or
(4) there occurs a default in the payment of indebtedness of the Company,
the Guarantor or any Subsidiary under the terms of the instrument evidencing or
securing such indebtedness permitting the holder thereof to accelerate the
payment of in excess of an aggregate of $5,000,000 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
$5,000,000 in aggregate principal amount, whether or not the Guarantor is so
diligently contesting); or
(5) a final judgment for the payment of money in an amount in excess of
$5,000,000 shall be entered against the Company, the Guarantor or any
Subsidiary, and shall remain undischarged for a period (during which execution
shall not be effectively stayed) of 60 days after the date on which the right to
appeal has expired; provided the term "final judgment" shall not include a
Non-Recourse Judgment unless the book value of all property (net of any previous
write-downs or reserves in respect of such property) subject to such
Non-Recourse Judgment exceeds the amount of such Non-Recourse Judgment by more
than $10,000,000;
(6) there occurs an "Event of Default," as that term is defined in the
indenture relating to the 8-3/4% Senior Subordinated Notes due 2006 issued by
Toll Corp., a Delaware corporation ("Toll Corp."), the 7-3/4% Senior
Subordinated Notes due 2007 issued by Toll Corp., the 8-1/8% Senior Subordinated
Notes due 2009 issued by Toll Corp., or the 8% Senior Subordinated Notes due
2009 issued by Toll Corp. (each such series being hereinafter referred to as a
"Previously Issued Series"); provided that on the date of the occurrence, the
outstanding principal amount of at least one Previously Issued Series to which
the occurrence relates exceeds $5,000,000; or
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(7) 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
(8) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) provides for relief against the Company and the Guarantor in an
involuntary case,
(B) appoints a Custodian of the Company and the Guarantor for all or
substantially all of its property, or
(C) orders the liquidation of the Company and the Guarantor and the
order or decree remains unstayed and in effect for 90 days; or
(9) the Guarantee shall for any reason (other than pursuant to its terms)
cease to be in full force and effect.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
A default under clause (3) is not an Event of Default until the Trustee or
the Holders of at least 25% in principal amount of the Securities of the Series
affected notify the Company of the default and the Company does not cure the
default within 60 days after receipt of the notice. The notice must specify the
default, demand that it be remedied and state that the notice is a "Notice of
Default."
Section 8.02. Acceleration. If an Event of Default (other than an Event of
Default under Section 8.01(7) or 8.01(8)) on a Series occurs and is continuing,
the Trustee by notice to the Company [and the Person or Persons designated to
receive notices for the Agent (or other Person acting on behalf of the banks)
under the Revolving Credit Agreement],* or the Holders of at least
- ----------
*If applicable.
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25% in principal amount of the outstanding Securities of the Series by notice to
the Company, the Trustee and such Person or Persons (either such notice is
referred to herein as an "Acceleration Notice") may declare the unpaid principal
of and accrued and unpaid interest on all the Securities of the Series to be due
and payable if, with respect to such Series, (i)(a) no Designated Senior Debt of
the Company or the Guarantor is outstanding, or (b) if the Securities of the
Series are not subordinated to other indebtedness of the Company, immediately,
or (ii) if Designated Senior Debt of the Company or the Guarantor is outstanding
and the Securities of the Series are subordinated to other indebtedness of the
Company, upon the earlier of (A) ten days after such Acceleration Notice is
received by the Company and (B) the acceleration of any Senior Indebtedness of
the Company or the Guarantor. If an Event of Default specified in Section
8.01(7) or 8.01(8) occurs, the unpaid principal of and accrued and unpaid
interest on the Securities then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholder. The Holders of a majority in principal amount
of the Securities of the Series by notice to the Trustee may rescind such
declaration or acceleration and its consequences if all existing Events of
Default have been cured or waived (except nonpayment of principal or interest
that has become due solely because of the acceleration) and if the rescission
would not conflict with any judgment or decree.
[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.
- ----------
*If applicable.
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Section 8.05. Control by Majority. The Holders of a majority in principal
amount of the Securities of a Series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it with respect to such Series. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that is unduly prejudicial to the rights of another Securityholder,
or that would involve the Trustee in personal liability.
Section 8.06. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Series unless:
(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.
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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.
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,
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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.
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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 acceptance or administration of this
trust or the performance of its duties hereunder. The Trustee shall notify the
Company and the Guarantor promptly of any claim for which it may seek indemnity.
The Company and the Guarantor shall defend the claim and the Trustee shall
cooperate in the defense. In the event that counsel to the Trustee shall advise
counsel to the Company and the Guarantor that there may be defenses reasonably
available to the Trustee different than or additional to those available to the
Company and the Guarantor, then in such event the Trustee shall be permitted to
employ counsel of its choosing at the expense of the Company and the Guarantor.
The Company and the Guarantor need not pay for any settlement made without their
consent. The Company and the Guarantor need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence, bad faith or with willful misconduct. The indemnity contained in
this Section 9.07 shall survive the resignation or removal of the Trustee and
the termination of this Indenture.
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To ensure the Company's and the Guarantor's payment obligations in this
Section, the Trustee shall have a claim prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 8.01(7) or (8) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 9.08. Replacement of Trustee. The Trustee may resign by so
notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee to be removed and
may appoint a successor Trustee with the Company's and the Guarantor's consent.
The Company or the Guarantor may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee (subject to the prior claim provided by Section 9.07). Any resignation
or removal of the Trustee and any appointment of a successor Trustee shall
become effective upon acceptance of appointment by the successor Trustee. The
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the expense of
the Company), the Company or the Holders of a majority in principal amount of
the Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10, any Securityholder may,
subject to Section 8.11, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Section 9.09. Successor Trustee by Merger, etc. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust assets to, another
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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
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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
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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.
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(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,
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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.
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Section 10.07. Guarantor To Provide Stock. The Guarantor covenants that it
will at all times reserve and keep available, free from preemptive rights, out
of the aggregate of its authorized but unissued shares of Common Stock or its
issued shares of Common Stock held in its treasury, or both, for the purpose of
effecting conversions of Securities, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding Securities not theretofore
converted. For purposes of this Section 10.07, the number of shares of Common
Stock which shall be deliverable upon the conversion of all outstanding
Securities shall be computed as if at the time of computation all outstanding
Securities were held by a single Holder.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Common Stock
deliverable upon conversions of the Securities, the Guarantor will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Guarantor may validly and legally issue fully paid and non-assessable
shares of Common Stock at such adjusted Conversion Price.
The Guarantor will endeavor to list the shares of Common Stock required to
be delivered upon conversion of Securities prior to such delivery upon each
national securities exchange, if any, upon which the outstanding Common Stock is
listed at the time of such delivery.
Prior to the delivery of any securities which the Guarantor shall be
obligated to deliver upon conversion of the Securities, the Guarantor will
endeavor to comply with all federal and state laws and regulations thereunder
requiring the registration of such securities with, or any approval of or
consent to the delivery thereof by, any governmental authority.
Section 10.08. Taxes on Conversions. The Company and/or the Guarantor will
pay any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on conversions of
Securities pursuant hereto; provided, however, that neither the Company nor the
Guarantor shall be required to pay any tax which may be payable in respect of
any transfer involved in the issue or delivery of shares of Common Stock in a
name other than that of the Holder of the Securities to be converted and no such
issue or delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Company and/or the Guarantor the amount of any
such tax or has established, to the satisfaction of the Company and the
Guarantor, that such tax has been paid.
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
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(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.
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ARTICLE 11.
Discharge of Indenture
Section 11.01. Termination of the Company's and the Guarantor's
Obligations. Securities of a Series may be defeased in accordance with their
terms and, unless the Authorizing Resolution provides otherwise, in accordance
with this Article.
The Company may terminate all of its obligations under the Securities of a
Series and this Indenture, to the extent its obligations under this Indenture
relate to that Series, and the obligations of the Guarantor shall terminate if
all Securities of a Series previously authenticated and delivered (other than
destroyed, lost or stolen Securities which have been replaced or paid) have been
delivered to the Trustee for cancellation or if:
(1) the Securities mature within one year or all of them are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the Trustee money
sufficient to pay principal of and interest on the outstanding Securities to
maturity or redemption, as the case may be. The Company may make the deposit
only if Article 6 permits it. Immediately after making the deposit, the Company
shall give notice of such event and proposed date of payment to each
Securityholder.
The Company's obligations and, to the extent applicable, the Guarantor's
obligations, in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 9.07, 9.08 and
11.03 and Article 10, however, shall survive until the Securities are no longer
outstanding. Thereafter, the Company's obligations and, to the extent
applicable, the Guarantor's obligations, in Sections 9.07 and 11.03 shall
survive.
After a deposit, the Trustee upon request shall acknowledge in writing the
discharge of the Company's obligations under the Securities, the Guarantor's
obligations under the Guarantee and their obligations under the Indenture except
for those surviving obligations specified above.
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
42
<PAGE>
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication or mailing, any unclaimed
balance of such money then remaining will be repaid to the Company. After
payment to the Company, Securityholders entitled to any of such money must look
to the Company or, if applicable, the Guarantor for payment as general creditors
unless applicable abandoned property law designates another person and all
liability of the Trustee or Paying Agent with respect to such money shall
thereupon cease.
ARTICLE 12.
Amendments, Supplements and Waivers
Section 12.01. Without Consent of Holders. The Company may amend or
supplement this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in place of
certificated Securities; or
(4) to make any change that does not adversely affect the rights of any
Securityholder.
Section 12.02. With Consent of Holders. The Company may amend or supplement
this Indenture or the Securities without notice to any Securityholder but with
the written consent of the Holders of at least a majority in principal amount of
the Securities of all Series affected by the amendment voting as a class. The
Holders of a majority in principal amount of the Securities may waive compliance
by the Company with any provision of this Indenture or the Securities without
notice to any Securityholder. However, without the consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 8.04, may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(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;
43
<PAGE>
(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.
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.
44
<PAGE>
ARTICLE 13.
Miscellaneous
Section 13.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA or the TIA as amended after
the date hereof, the required provision shall control.
Section 13.02. Notices. Any notice or communication shall be sufficiently
given if in writing and delivered in person or mailed by first-class mail
addressed as follows: if to the Company or the Guarantor:
Toll Brothers, Inc., 3103 Philmont Avenue, Huntingdon Valley, Pennsylvania
19006 Attention: Chief Financial Officer
with a copy to:
Mark K. Kessler, Esquire
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street, 22nd Floor
Philadelphia, PA 19103-2097
if to the Trustee:
Bank One Trust Company, NA
611 Woodward Avenue, 11th Floor
Detroit, Michigan 48226
Attention: Corporate Trust Securities Division
The Company, the Guarantor or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be mailed to
him at his address as it appears on the registration books of the Registrar and
shall be sufficiently given to him if so mailed within the time prescribed. In
addition, a copy of each such notice or communication shall be mailed to the
Trustee at the address specified above.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it. If the Company or the Guarantor
mails a notice or communication to Securityholders, it shall mail a copy of such
notice to the Trustee and each agent at the same time.
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).
45
<PAGE>
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.
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.
46
<PAGE>
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.
SIGNATURES
Dated: TOLL CORP., as Issuer
By:
------------------------------------
Name:
Title:
(SEAL)
Attest:
- -----------------------------
Name:
Title:
47
<PAGE>
Dated: TOLL BROTHERS, INC., as Guarantor
By:
------------------------------------
Name:
Title:
(SEAL)
Attest:
- -----------------------------
Name:
Title:
Dated: [Name of Trustee]
as Trustee
By:
------------------------------------
Name:
Title:
(SEAL)
Attest:
- -----------------------------
Name:
Title:
48
EXHIBIT 4.2
FIRST HUNTINGDON FINANCE CORP., as Issuer
TOLL BROTHERS, INC., as Guarantor
Debt Securities
Indenture
Dated as of
BANK ONE TRUST COMPANY, NA
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).............................................. 2.07
(b).............................................. 13.03
(c).............................................. 13.03
313(a).............................................. 9.06
(b)(1)........................................... N.A.
(b)(2)........................................... 9.06
(c).............................................. 9.06; 13.02
(d).............................................. 9.06
314(a)............................................... 4.03; 13.02
(b).............................................. N.A.
(c)(1)........................................... 13.04
(c)(2)........................................... 13.04
(c)(3)........................................... N.A.
(d).............................................. N.A.
(e).............................................. 13.05
(f).............................................. N.A.
315(a).............................................. 9.01(b)
(b).............................................. 9.05; 13.02
(c).............................................. 9.01(a)
(d).............................................. 9.01(c)
(e).............................................. 8.11
316(a)(last sentence)............................... 13.06
(a)(1)(A)........................................ 8.05
(a)(1)(B)........................................ 8.04
(a)(2)........................................... N.A.
(b).............................................. 8.07
317(a)(1)........................................... 8.08
(a)(2)........................................... 8.09
(b).............................................. 2.06
318(a).............................................. 13.01
N.A. means Not Applicable.
Note: This cross-reference table shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Article Section Heading Page
- ----------------------- ----
<S> <C> <C>
ARTICLE 1. Definitions and Incorporation by Reference......................................................1
1.01. Definitions.....................................................................................1
1.02. Incorporation by Reference of Trust Indenture Act...............................................5
1.03. Incorporation by Reference of Provisions of Securities..........................................6
1.04. Rules of Construction...........................................................................6
ARTICLE 2. The Securities..................................................................................6
2.01. Forms Generally.................................................................................6
2.02. Form of Trustee's Certificate of Authentication.................................................7
2.03. Amount Unlimited, Issuable in Series............................................................7
2.04. Execution and Authentication....................................................................9
2.05. Registrar and Paying Agent......................................................................9
2.06. Paying Agent To Hold Money in Trust............................................................10
2.07. Securityholder Lists...........................................................................10
2.08. Transfer and Exchange..........................................................................10
2.09. Replacement Securities.........................................................................10
2.10. Outstanding Securities.........................................................................11
2.11. Temporary Securities...........................................................................11
2.12. Cancellation...................................................................................11
2.13. Defaulted Interest.............................................................................12
2.14. Global Securities..............................................................................12
ARTICLE 3. Redemption.....................................................................................12
3.01. Notices to Trustee.............................................................................12
3.02. Selection of Securities To Be Redeemed.........................................................13
3.03. Notice of Redemption...........................................................................13
3.04. Effect of Notice of Redemption.................................................................14
3.05. Deposit of Redemption Price....................................................................14
3.06. Securities Redeemed in Part....................................................................14
ARTICLE 4. Covenants......................................................................................14
4.01. Payment of Securities..........................................................................14
4.02. SEC Reports....................................................................................14
4.03. Compliance Certificate.........................................................................15
ARTICLE 5. Successor Corporation..........................................................................15
5.01. When the Company and the Guarantor May Merge, Etc..............................................15
ARTICLE 6. Subordination..................................................................................15
6.01. Agreement To Subordinate.......................................................................15
</TABLE>
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<TABLE>
<S> <C> <C>
6.03. Securities Subordinated to Prior Payment of All Senior Indebtedness of the
Company on Dissolution, Liquidation or Reorganization of the Company...........................16
6.04. Securityholders To Be Subrogated to Rights of Holders of Senior Indebtedness of
the Company....................................................................................17
6.05. Obligation of the Company Unconditional........................................................18
6.06. Knowledge of Trustee...........................................................................18
6.07. Application by Trustee of Monies Deposited With It.............................................18
6.08. Subordination Rights Not Impaired by Acts or Omissions of Company or Holders
of Senior Indebtedness of the Company..........................................................19
6.09. Securityholders Authorize Trustee To Effectuate Subordination of Securities....................19
6.10. Right of Trustee To Hold Senior Indebtedness of the Company....................................19
6.11. Article Six Not To Prevent Events of Default...................................................19
ARTICLE 7. Guarantee......................................................................................19
7.01. Guarantee......................................................................................19
7.02. Agreement To Subordinate.......................................................................21
7.03. Guarantor Not To Make Payments with Respect to Securities in Certain
Circumstances..................................................................................21
7.04. Guarantee Subordinated to Prior Payment of All Senior Indebtedness of the
Guarantor on Dissolution, Liquidation or Reorganization of the Guarantor.......................22
7.05. Securityholders To Be Subrogated to Rights of Holders of Senior Indebtedness of
the Guarantor..................................................................................23
7.06. Obligation of the Guarantor Unconditional......................................................23
7.07. Knowledge of Trustee...........................................................................24
7.08. Application by Trustee of Monies Deposited With It.............................................24
7.09. Subordination Rights Not Impaired by Acts or Omissions of Guarantor or Holders
of Senior Indebtedness of the Guarantor........................................................24
7.10. Securityholders Authorize Trustee To Effectuate Subordination of Guarantee.....................24
7.11. Right of Trustee To Hold Senior Indebtedness of the Guarantor..................................25
7.12. Article 7 Not To Prevent Events of Default.....................................................25
7.13. Execution and Delivery of Guarantee............................................................25
7.14. Subordination of Indebtedness Owed by the Company to the Guarantor.............................25
7.15. Officers' Certificate..........................................................................25
ARTICLE 8. Defaults and Remedies..........................................................................26
8.01. Events of Default..............................................................................26
8.02. Acceleration...................................................................................28
8.03. Other Remedies.................................................................................28
8.04. Waiver of Past Defaults........................................................................29
8.05. Control by Majority............................................................................29
8.06. Limitation on Suits............................................................................29
8.07. Rights of Holders To Receive Payment...........................................................29
8.08. Collection Suit by Trustee.....................................................................29
8.09. Trustee May File Proofs of Claim...............................................................30
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
8.10. Priorities.....................................................................................30
8.11. Undertaking for Costs..........................................................................30
ARTICLE 9. Trustee........................................................................................30
9.01. Duties of Trustee..............................................................................30
9.02. Rights of Trustee..............................................................................31
9.03. Individual Rights of Trustee...................................................................32
9.04. Trustee Disclaimer.............................................................................32
9.05. Notice of Defaults.............................................................................32
9.06. Reports by Trustee to Holders..................................................................32
9.07. Compensation and Indemnity.....................................................................32
9.08. Replacement of Trustee.........................................................................33
9.09. Successor Trustee by Merger, etc...............................................................34
9.10. Eligibility; Disqualification..................................................................34
9.11. Preferential Collection of Claims Against Company..............................................34
ARTICLE 10. Conversion of Securities.......................................................................34
10.01. Applicability of Article.......................................................................34
10.02. Conversion Privilege...........................................................................34
10.03. Manner of Exercise of Conversion Privilege.....................................................34
10.04. Payment in Lieu of Fractional Shares...........................................................35
10.05. Adjustment of Conversion Price.................................................................36
10.06. Notice of Certain Corporate Action.............................................................38
10.07. Guarantor To Provide Stock.....................................................................39
10.08. Taxes on Conversions...........................................................................39
10.09. Covenant as to Stock...........................................................................39
10.10. Consolidation or Merger........................................................................39
10.11. Disclaimer of Responsibility for Certain Matters...............................................40
ARTICLE 11. Discharge of Indenture.........................................................................41
11.01. Termination of the Company's and the Guarantor's Obligations...................................41
11.02. Application of Trust Money.....................................................................41
11.03. Repayment to Company...........................................................................41
ARTICLE 12. Amendments, Supplements and Waivers............................................................42
12.01. Without Consent of Holders.....................................................................42
12.02. With Consent of Holders........................................................................42
12.03. Compliance with Trust Indenture Act............................................................43
12.04. Revocation and Effect of Consents..............................................................43
12.05. Notation on or Exchange of Securities..........................................................43
12.06. Trustee To Sign Amendments, etc................................................................43
ARTICLE 13. Miscellaneous..................................................................................43
13.01. Trust Indenture Act Controls...................................................................43
</TABLE>
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<TABLE>
<S> <C> <C>
13.02. Notices........................................................................................44
13.03. Communication by Holders with Other Holders....................................................44
13.04. Certificate and Opinion as to Conditions Precedent.............................................44
13.05. Statements Required in Certificate or Opinion..................................................45
13.06. When Treasury Securities Disregarded...........................................................45
13.07. Rules by Trustee, Paying Agent, Registrar......................................................45
13.08. Legal Holidays.................................................................................45
13.09. Governing Law..................................................................................45
13.10. No Adverse Interpretation of Other Agreements..................................................45
13.11. No Recourse Against Others.....................................................................46
13.12. Successors.....................................................................................46
13.13. Duplicate Originals............................................................................46
13.14. Counterparts...................................................................................46
SIGNATURES......................................................................................................46
</TABLE>
-iv-
<PAGE>
INDENTURE dated as of __________ among FIRST HUNTINGDON FINANCE CORP., a
Delaware corporation (the "Company"), TOLL BROTHERS, INC., a Delaware
corporation (the "Guarantor"), and Bank One Trust Company, NA (the "Trustee").
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its bonds,
debentures, notes and/or other evidences of indebtedness (herein called the
"Securities"), which may be senior secured, senior unsecured, senior
subordinated or subordinated, to be issued in one or more series as in this
Indenture provided.
The Guarantor has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unconditional
guarantee of the Securities (herein called the "Guarantee"), which may be senior
secured, senior unsecured, senior subordinated or subordinated, as in this
Indenture provided.
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
ratable benefit of the Holders of the Securities or of each series thereof as
follows:
ARTICLE 1.
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 8.02.
"Affiliate" has the meaning provided in Rule 405 promulgated under the
Securities Act of 1933, as amended and in effect on the date hereof.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities. An Authorizing Resolution shall be so
adopted by both the Company and the Guarantor.
"Bankruptcy Law" has the meaning provided in Section 8.01.
"Board of Directors" means the Board of Directors of the Company or the
Guarantor, as the case may be, or any authorized committee of the Board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or the Guarantor, as the case may be,
to have been duly
<PAGE>
adopted by the Board of Directors and to be in full force and effect on the date
of such certification and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means the classes of capital stock of a Person as they
exist on the date of this Indenture or as they may be constituted from time to
time and warrants, options and similar rights to acquire such capital stock.
"Common Stock" means the Common Stock ($.01 par value) of the Guarantor as
the same exists at the date of this Indenture as originally executed or as such
stock may be constituted from time to time.
"Company" means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor or any other obligor on the
Securities. "Company" shall also mean the Guarantor in the event the Company
fails to perform those duties required by Sections 312 through 317 of the TIA.
"Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, as determined in accordance with generally accepted
accounting principles.
"Conversion Price" means the initial conversion price of Securities of a
Series specified in the Authorizing Resolution establishing the terms of such
Series Security, as adjusted in accordance with the provisions of Article 10.
"Current Market Price" for any relevant date means, (a) except for purposes
of Section 10.04, the average of the last reported sale prices of the Common
Stock for the 30 consecutive Business Days commencing 45 Business Days before
the day in question and (b) for purposes of Section 10.04 only, the last
reported sale price of the Common Stock, in either such case as reported on the
composite tape, or similar reporting system, for issues listed on the New York
Stock Exchange (or if the Common Stock is not then listed on that exchange, for
issues listed on such other national securities exchange upon which the Common
Stock is listed as may be designated by the Board of Directors for the purposes
hereof) or, if there is no such reported sale on the day or days in question, on
the basis of the average of the closing bid and asked quotations as so reported,
or, if the Common Stock is not listed on any national securities exchange, on
the basis of the average of the high bid and low asked quotations on the day or
days in question in the over-the-counter market as reported by the National
Association of Securities Dealers' Automated Quotations System, or if not so
quoted, as reported by National Quotation Bureau, Incorporated, or any similar
organization, or if not so reported as determined in good faith by the Board.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
2
<PAGE>
"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.
"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
3
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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.
"Original Issue Discount Security" means any Security which provides that
an amount less than its principal amount is due and payable upon acceleration
after an Event of Default.
"Paying Agent" has the meaning provided in Section 2.05.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"Principal" of a debt security means the principal of the security plus the
premium, if any, on the security.
"Record Date" for the interest payable on any Interest Payment Date on the
Securities has the meaning provided in Section 1 of the Securities.
"Registrar" has the meaning provided in Section 2.05.
"Restricted Subsidiary," if applicable, has the meaning provided in the
Authorizing Resolution.
["Revolving Credit Agreement" means the Credit Agreement dated as of
February 25, 1998 among First Huntingdon Finance Corp., Toll Brothers, Inc., The
First National Bank of Chicago (now known as Bank One National Association)
(Administrative Agent); Bank of America National Trust and Savings Association
(Co-Agents); 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,
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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 2.13.
"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, Assistant Vice President, Trust Officer or any
other officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made
- ----------
*If applicable.
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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.
ARTICLE 2.
The Securities
Section 2.01. Forms Generally. The Securities and the Guarantee,
respectively, of each series shall be in such forms (including global form) as
shall be established by or pursuant to an Authorizing Resolution or in one or
more supplemental indentures hereto, in each case with such appropriate
provisions as are required or permitted by this Indenture, and may have such
letters,
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numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or depositary therefor or as may, consistent herewith, be determined appropriate
by the Officers executing such Securities, as evidenced by their execution
thereof. If the form of any series of Securities is established by action taken
pursuant to an Authorizing Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or any Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of a written
order of the Company signed by two Officers or an Officer and an Assistant
Treasurer of the Company for the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, provided that
such method is permitted by the rules of any securities exchange on which such
Securities may be listed, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities.
The terms and provisions in the Securities shall constitute, and are hereby
expressly made, a part of this Indenture.
Section 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
This is one of the Securities of the series designated herein referred
to in the within mentioned Indenture.
BANK ONE TRUST COMPANY, NA
As Trustee
By_________________________________
Authorized Signatory
Section 2.03. Amount Unlimited, Issuable in Series. The aggregate principal
amount of Securities that may be issued under this Indenture is unlimited. The
Securities may be issued from time to time in one or more Series. Each Series
shall be created by an Authorizing Resolution or a supplemental indenture that
establishes the terms of the Series, which may include the following:
(1) the title of the Series;
(2) any limit upon the aggregate principal amount of the Series which may
be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of other Securities which, pursuant to Sections 2.08, 2.09, 2.11
or 10.05 and except for any Securities which, pursuant to Section 2.04, are
deemed never to have been authenticated and delivered hereunder);
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(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 respective forms of the Securities and the Guarantees;
(19) whether the Securities of such Series will be convertible into Common
Stock of the Guarantor and the terms thereof (including without limitation the
Conversion Price, the conversion period and any other provision in addition to
or in lieu of those set forth in this Indenture);
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(20) whether the Securities and Guarantees of such Series shall be
subordinated to any obligations of the Company or the Guarantor, and the
obligations to which such subordination will apply;
(21) whether the Securities of such Series and/or the Guarantees of such
Series will be secured and, if applicable, any provisions for securing all or
any potion of the indebtedness evidenced by the Securities of such Series and/or
the Guarantees of such Series;
(22) any terms that may be required by or advisable under applicable law;
and
(23) any other terms not inconsistent with this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and delivery
thereof are not subject to any conditions precedent.
Section 2.04. Execution and Authentication. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be reproduced on the Securities. Two Officers of the Guarantor shall sign
the notation of the Guarantee by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon a written
order of the Company signed by two Officers or by an Officer and an Assistant
Treasurer of the Company. Each Security shall be dated the date of its
authentication. In authenticating Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to the TIA) shall be fully
protected in relying upon, an Opinion of Counsel stating that all conditions
precedent to the authentication and delivery of the Securities have been
complied with and that the Securities have been duly executed and, when the
Securities have been duly authenticated and delivered by the Trustee, will be
duly issued and delivered and will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to any applicable bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and subject to the
effect of general principles of equity,
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including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether enforcement is considered in a
proceeding in equity or at law).
Section 2.05. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer,
for exchange or, if applicable, for conversion (in the case of conversion, as
agent for the Guarantor) ("Registrar") and an office or agency where Securities
may be presented for payment ("Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such.
The Company initially appoints the Trustee as Registrar and Paying Agent.
Section 2.06. Paying Agent To Hold Money in Trust. Each Paying Agent shall
hold in trust for the benefit of the Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal or interest on the
Securities, and shall notify the Trustee of any default by the Company (or any
other obligor on the Securities) in making any such payment. While any such
default continues, the Trustee shall require a Paying Agent to pay all money
held by it to the Trustee. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate the money and hold it as a separate trust fund. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon doing so the Paying Agent shall have no further liability for the
money.
Section 2.07. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee on or before each Interest
Payment Date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
Section 2.08. Transfer and Exchange. Where a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register its transfer as requested if its reasonable requirements are met.
Where Securities are presented to the Registrar or a co-registrar with a request
to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met. To permit transfers and exchanges, the Trustee shall
authenticate Securities at the Registrar's request. The Registrar need not
transfer or exchange any Security selected for redemption, except the unredeemed
part thereof if the Security is redeemed in part, or transfer or exchange any
Securities
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for a period of 15 days before a selection of Securities to be redeemed. The
Company may charge a reasonable fee for any transfer or exchange (including the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any such transfer or exchange and any other
expenses in connection therewith) but not for any exchange pursuant to Section
2.11, 3.06 or 12.05. This Section 2.08 is subject to the provisions of any
series of the Securities providing for the subordination or seniority of such
series and the related Guarantees of such series in right of payment to other
indebtedness of the Company and the Guarantor, respectively.
Section 2.09. Replacement Securities. If the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Security and the
Guarantor shall endorse the Guarantee thereon if the Trustee's reasonable
requirements are met. An indemnity bond must be sufficient in the judgment of
the Company, the Guarantor and the Trustee to protect the Company, the
Guarantor, the Trustee, the Paying Agent, the Registrar or any co-registrar from
any loss which any of them may suffer if a Security is replaced. The Company may
charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company and
the Guarantor.
Section 2.10. Outstanding Securities. Securities outstanding at any time
are all Securities authenticated by the Trustee except for those presented to it
by the Company or its designee for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company, the Guarantor or one of their Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a redemption date or maturity date money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
If a Security is called for redemption or if it matures in less than six
months and if the Company has satisfied its obligation to pay the Security, or
if a Security has been converted in accordance with the provisions of Article
10, the Company and the Trustee need not treat the Security as outstanding in
determining whether Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent.
For each series of Original Issue Discount Securities, the principal amount
of such Securities that shall be deemed to be outstanding and used to determine
whether the necessary Holders have given any request, demand, authorization,
direction, notice, consent or waiver shall be the principal amount of such
Securities that could be declared to be due and payable upon acceleration upon
an Event of Default as of the date of such determination. When requested by the
Trustee, the Company will advise the Trustee of such amount, showing its
computations in reasonable detail.
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Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.11. Temporary Securities. Until definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities and the Guarantor shall endorse the Guarantee thereon.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities and the Guarantor shall endorse
the Guarantee thereon in exchange for temporary Securities.
Section 2.12. Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange, conversion or payment. The Trustee and no one else shall cancel and
destroy all Securities surrendered for transfer, exchange, conversion, payment
or cancellation in accordance with its customary procedure. Unless the
Authorizing Resolution so provides, the Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation.
Section 2.13. Defaulted Interest. If the Company defaults in a payment of
interest on the Securities, it shall pay the defaulted interest in any lawful
manner. It may pay the defaulted interest, plus any interest payable on the
interest (to the extent lawful) if an Event of Default has occurred and is
continuing, to the Persons who are Securityholders on a subsequent special
record date (the "Special Record Date"). The Company shall fix the subsequent
Special Record Date and payment date. At least 15 days before such Special
Record Date, the Company shall give notice to the Trustee and shall mail to each
Securityholder a notice that states the subsequent Special Record Date, the
payment date, and the amount of defaulted interest to be paid.
Section 2.14. Global Securities. Unless the Authorizing Resolution provides
otherwise, the Company may issue some or all of the Securities of a Series in
temporary or permanent global form. A global Security shall represent that
amount of Securities of a Series as specified in the global Security or as
endorsed thereon from time to time. At the Company's request, the Registrar
shall endorse a global Security to reflect the amount of any increase or
decrease in the Securities represented thereby.
The Company may issue a global Security only to a depositary designated by
the Company. A depositary may transfer a global Security only as a whole to its
nominee or to a successor depositary.
The Authorizing Resolution may establish, among other things, the manner of
paying principal and interest on a global Security and whether and upon what
terms a beneficial owner of an interest in a global Security may exchange such
interest for definitive Securities.
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The Company and the Trustee shall not be responsible for any acts or
omissions of a depositary, for any depositary records of beneficial ownership
interests or for any transactions between the depositary and beneficial owners.
ARTICLE 3.
Redemption
Section 3.01. Notices to Trustee. Securities of a Series that are
redeemable prior to maturity shall be redeemable in accordance with their terms
and, unless the Authorizing Resolution provides otherwise, in accordance with
this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the redemption date and
the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed, retired
or acquired against any redemption pursuant to Paragraph 6 of the Securities, it
shall notify the Trustee of the amount of the credit and it shall deliver any
Securities not previously delivered to the Trustee for cancellation with such
notice.
The Company shall give each notice provided for in this Section 3.01 at
least 10 Business Days before the notice of any such redemption is to be mailed
to Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities To Be Redeemed. If less than all the
Securities of a Series are to be redeemed, the Trustee shall select the
Securities to be redeemed, if the Securities of such Series are listed on a
national securities exchange, in accordance with the rules of such exchange, or
if the Securities of such Series are not so listed, on either a pro rata basis
or by lot or by such method as the Trustee shall deem fair and appropriate. The
Trustee shall make the selection from Securities outstanding and not previously
called for redemption. Securities in denominations of $1,000 may only be
redeemed in whole. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
Section 3.03. Notice of Redemption. At least 30 days but not more than 60
days before a redemption date, the Company shall mail a notice of redemption by
first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
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(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.
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
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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; and (ii) immediately after giving effect to such transaction no
Default or Event of Default shall have occurred and be continuing. Thereafter
all such obligations of the predecessor corporation shall terminate.
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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.
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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
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that Holders of the Securities would be entitled to receive securities that are
subordinated to Senior Indebtedness of the Company to at least the same extent
as the Securities.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company.
Section 6.04. Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness of the Company. Subject to the payment in full of all Senior
Indebtedness of the Company, the Holders of the Securities shall be subrogated
equally and ratably to the rights of the holders of the Senior Indebtedness of
the Company to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness of the Company until all amounts owing on
the Securities shall be paid in full, and for the purpose of such subrogation no
payments or distributions to the holders of the Senior Indebtedness of the
Company by or on behalf of the Company or by or on behalf of the Holders of the
Securities by virtue of this Article 6 which otherwise would have been made to
the Holders of the Securities shall, as among the Company, its creditors other
than holders of the Senior Indebtedness of the Company and the Holders of the
Securities, be deemed to be payment by the Company to or on account of the
Senior Indebtedness of the Company, it being understood that the provisions of
this Article 6 are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of the
Senior Indebtedness of the Company, on the other hand.
Section 6.05. Obligation of the Company Unconditional. Nothing contained in
this Article 6 or elsewhere in this Indenture or in any Security is intended to
or shall impair, as between the Company and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of and interest on the Securities as and
when the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Securities
and creditors of the Company other than the holders of the Senior Indebtedness
of the Company, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article 6 of the holders of Senior Indebtedness of the Company in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy. Upon any distribution of assets of the Company
referred to in this Article 6, the Trustee, subject to the provisions of
Sections 9.01 and 9.02, and the Holders of the Securities shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding up, liquidation or reorganization proceedings
are pending, or a certificate of the liquidating trustee or agent or other
Person making any distribution to the Trustee or the Holders of the Securities,
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness of the Company and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 6.
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Nothing contained in this Article 6 or elsewhere in this Indenture or in
any Security is intended to or shall affect the obligation of the Company to
make, or prevent the Company from making, at any time except during the pendency
of any dissolution, winding up, liquidation or reorganization proceeding, and
except during the continuance of any default specified in Section 6.02 (not
cured or waived), payments at any time of the principal of or interest on the
Securities.
Section 6.06. Knowledge of Trustee. Notwithstanding any provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of monies to or by the
Trustee until two Business Days after the Trustee shall have received written
notice thereof from the Company, any Securityholder or any Paying Agent or the
holder or representative of any class of Senior Indebtedness of the Company.
Section 6.07. Application by Trustee of Monies Deposited With It. If at
least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may become
payable for any purpose (including, without limitation, the payment of either
the principal of or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 6.06,
then the Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section shall be construed solely for the benefit of the Trustee
and such Paying Agent and shall not otherwise affect the rights of holders of
Senior Indebtedness of the Company.
Section 6.08. Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Indebtedness of the Company. No right of any
present or future holders of any Senior Indebtedness of the Company to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The holders
of Senior Indebtedness of the Company may extend, renew, modify or amend the
terms of the Senior Indebtedness of the Company or any security therefor and
release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders. No provision in any supplemental indenture which
affects the superior position of the holders of Senior Indebtedness of the
Company shall be effective against the holders of Senior Indebtedness of the
Company who have not consented thereto.
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
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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.
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
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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
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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
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are entitled to receive any payment on account of the principal of or interest
on the Securities pursuant to the Guarantee;
(b) any payment or distribution of assets of the Guarantor of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee on behalf of the Holders of the Securities would be
entitled except for the provisions of this Article 7, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other indebtedness of the Guarantor being subordinated to the payment of the
Securities, shall be paid by the liquidating trustee or agent or other Person
making such payment or distribution directly to the holders of the Senior
Indebtedness of the Guarantor or their representative, or to the trustee under
any indenture under which Senior Indebtedness of the Guarantor may have been
issued (pro rata as to each such holder, representative or trustee on the basis
of the respective amounts of unpaid Senior Indebtedness of the Guarantor held or
represented by each), to the extent necessary to make payment in full of all
Senior Indebtedness of the Guarantor remaining unpaid, after giving effect to
any concurrent payment or distribution or provision therefor to the holders of
such Senior Indebtedness of the Guarantor, except that Holders of the Securities
would be entitled to receive securities that are subordinated to Senior
Indebtedness of the Guarantor to at least the same extent as the Securities; and
(c) in the event that, notwithstanding the foregoing provisions of this
Section 7.04, any payment or distribution of assets of the Guarantor of any kind
or character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Guarantor being subordinated to the
payment of the Securities, shall be received by the Trustee or the Holders of
the Securities on account of principal of or interest on the Securities before
all Senior Indebtedness of the Guarantor is paid in full, or effective provision
made for its payment, such payment or distribution (subject to the provisions of
Sections 7.07 and 7.08) shall be received and held in trust for and shall be
paid over to the holders of the Senior Indebtedness of the Guarantor remaining
unpaid or unprovided for or their representative, or to the trustee under any
indenture under which such Senior Indebtedness of the Guarantor may have been
issued (pro rata as provided in subsection (b) above), for application to the
payment of such Senior Indebtedness of the Guarantor until all such Senior
Indebtedness of the Guarantor shall have been paid in full, after giving effect
to any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness of the Guarantor, except that Holders of the
Securities would be entitled to receive securities that are subordinated to
Senior Indebtedness of the Guarantor to at least the same extent as the
Securities.
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
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amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 7.
The Guarantor shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Guarantor.
Section 7.05. Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness of the Guarantor. Subject to the payment in full of all
Senior Indebtedness of the Guarantor, the Holders of the Securities shall be
subrogated equally and ratably to the rights of the holders of the Senior
Indebtedness of the Guarantor to receive payments or distributions of assets of
the Guarantor applicable to the Senior Indebtedness of the Guarantor until all
amounts owing on the Securities shall be paid in full, and for the purpose of
such subrogation no payments or distributions to the holders of the Senior
Indebtedness of the Guarantor by or on behalf of the Guarantor or by or on
behalf of the Holders of the Securities by virtue of this Article 7 which
otherwise would have been made to the Holders of the Securities shall, as among
the Guarantor, its creditors other than holders of Senior Indebtedness of the
Guarantor and the Holders of the Securities, be deemed to be payment by the
Guarantor to or on account of the Senior Indebtedness of the Guarantor, it being
understood that the provisions of this Article 7 are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on the
one hand, and the holders of the Senior Indebtedness of the Guarantor, on the
other hand.
Section 7.06. Obligation of the Guarantor Unconditional. Nothing contained
in this Article 7 or elsewhere in this Indenture or in any Security is intended
to or shall impair, as between the Guarantor and the Holders of the Securities,
the obligation of the Guarantor, which is absolute and unconditional, to pay to
the Holders of the Securities the principal of and interest on the Securities as
and when the same shall become due and payable in accordance with the terms of
the Guarantee, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors of the Guarantor other than the holders
of the Senior Indebtedness of the Guarantor, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon Default under this
Indenture, subject to the rights, if any, under this Article 7 of the holders of
Senior Indebtedness of the Guarantor in respect of cash, property or securities
of the Guarantor received upon the exercise of any such remedy.
Nothing contained in this Article 7 or elsewhere in this Indenture or in
any Security is intended to or shall affect the obligation of the Guarantor to
make, or prevent the Guarantor from making, at any time except during the
pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and except during the continuance of any default specified in
Section 7.03 (not cured or waived), payments at any time of the principal of or
interest on the Securities pursuant to the Guarantee.
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
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shall have received written notice thereof from the Guarantor, any
Securityholder or any Paying Agent or the holder or representative of any class
of Senior Indebtedness of the Guarantor.
Section 7.08. Application by Trustee of Monies Deposited With It. If at
least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may become
payable for any purpose (including, without limitation, the payment of either
the principal of or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 7.07,
then the Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section shall be construed solely for the benefit of the Trustee
and such Paying Agent and shall not otherwise affect the rights of holders of
Senior Indebtedness of the Guarantor.
Section 7.09. Subordination Rights Not Impaired by Acts or Omissions of
Guarantor or Holders of Senior Indebtedness of the Guarantor. No right of any
present or future holders of any Senior Indebtedness of the Guarantor to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Guarantor with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The holders
of Senior Indebtedness of the Guarantor may extend, renew, modify or amend the
terms of the Senior Indebtedness of the Guarantor, or any security therefor and
release, sell or exchange such security and otherwise deal freely with the
Guarantor, all without affecting the liabilities and obligations of the parties
to the Indenture or the Holders. No provision in any supplemental indenture
which affects the superior position of the holders of Senior Indebtedness of the
Guarantor shall be effective against the holders of Senior Indebtedness of the
Guarantor who have not consented thereto.
Section 7.10. Securityholders Authorize Trustee To Effectuate Subordination
of Guarantee. Each Holder of Securities by acceptance thereof authorizes and
expressly directs the Trustee on its, his or her behalf to take such action as
may be necessary or appropriate to effectuate the subordination provided in this
Article 7 and appoints the Trustee its, his or her attorney-in-fact for such
purpose, including, in the event of any dissolution, winding up, liquidation or
reorganization of the Guarantor (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets of the
Guarantor, the immediate filing of a claim for the unpaid balance, pursuant to
the Guarantee, of its, his or her Securities, in the form required in said
proceedings and cause said claim to be approved. If the Trustee does not file a
proper claim or proof of debt in the form required in such proceeding prior to
30 days before the expiration of the time to file such claim or claims, then the
holders of Senior Indebtedness of the Guarantor have the right to file and are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of said Securities.
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
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of the Guarantor at any time held by it to the same extent as any other holder
of Senior Indebtedness of the Guarantor, and nothing in this Indenture shall be
construed to deprive the Trustee of any of its rights as such holder.
Section 7.12. Article 7 Not To Prevent Events of Default. The failure to
make a payment on account of principal or interest by reason of any provision in
this Article 7 shall not be construed as preventing the occurrence of an Event
of Default under Section 8.01.
Section 7.13. Execution and Delivery of Guarantee. To evidence the
Guarantee set forth in this Article 7, the Guarantor hereby agrees that a
notation of the Guarantee, substantially in the form established by or pursuant
to an Authorizing Resolution or in one or more supplemental indentures in
accordance with Section 2.01, shall be endorsed on each Security authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of the Guarantor by the Chairman of the Board, its President or one of its Vice
Presidents under a facsimile of its seal reproduced thereon.
The Guarantor hereby agrees that its Guarantee shall remain in full force
and effect notwithstanding any failure to endorse on each Security a notation of
the Guarantee.
If an Officer whose signature is on this Indenture or on the Securities no
longer holds that office at the time the Trustee authenticates the Security on
which a notation of the Guarantee is endorsed, the Guarantee shall be valid
nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantor.
Section 7.14. Subordination of Indebtedness Owed by the Company to the
Guarantor. Any indebtedness owed by the Company to the Guarantor shall be
subordinate to all obligations of the Company with respect to the Securities and
this Indenture to the same extent as the Securities are subordinated to Senior
Indebtedness of the Company.
Section 7.15. Officers' Certificate. If there occurs an event referred to
in the first sentence of Section 7.04(c) or the first sentence of Section 7.04,
the Guarantor shall promptly give to the Trustee an Officers' Certificate (on
which the Trustee may conclusively rely) identifying all holders of Senior
Indebtedness of the Guarantor and the principal amount of Senior Indebtedness of
the Guarantor then outstanding held by each such holder and stating the reasons
why such Officers' Certificate is being delivered to the Trustee.
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ARTICLE 8.
Defaults and Remedies
Section 8.01. Events of Default. An "Event of Default" on a Series occurs
if:
(1) the Company or the Guarantor defaults in the payment of interest on any
Security of the Series when the same becomes due and payable and the default
continues for a period of 30 days whether or not such payment shall be
prohibited by the provisions of Article 6 or Article 7; or
(2) the Company or the Guarantor defaults in the payment of the principal
of any Security of the Series when the same becomes due and payable at maturity
or upon redemption, whether or not such payment shall be prohibited by the
provisions of Article 6 or Article 7; or
(3) the Company or the Guarantor fails to comply with any of its other
agreements in the Securities, the Guarantee or this Indenture applicable to the
Series and such failure continues for the period and after the notice specified
below; or
(4) there occurs a default in the payment of indebtedness of the Company,
the Guarantor or any Subsidiary under the terms of the instrument evidencing or
securing such indebtedness permitting the holder thereof to accelerate the
payment of in excess of an aggregate of $5,000,000 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
$5,000,000 in aggregate principal amount, whether or not the Guarantor is so
diligently contesting); or
(5) a final judgment for the payment of money in an amount in excess of
$5,000,000 shall be entered against the Company, the Guarantor or any
Subsidiary, and shall remain undischarged for a period (during which execution
shall not be effectively stayed) of 60 days after the date on which the right to
appeal has expired; provided the term "final judgment" shall not include a
Non-Recourse Judgment unless the book value of all property (net of any previous
write-downs or reserves in respect of such property) subject to such
Non-Recourse Judgment exceeds the amount of such Non-Recourse Judgment by more
than $10,000,000;
(6) there occurs an "Event of Default," as that term is defined in the
indenture relating to the 8-3/4% Senior Subordinated Notes due 2006 issued by
Toll Corp., a Delaware corporation ("Toll Corp."), the 7-3/4% Senior
Subordinated Notes due 2007 issued by Toll Corp., the 8-1/8% Senior Subordinated
Notes due 2009 issued by Toll Corp., or the 8% Senior Subordinated Notes due
2009 issued by Toll Corp. (each such series being hereinafter referred to as a
"Previously Issued Series"); provided that on the date of the occurrence, the
outstanding principal amount of at least one Previously Issued Series to which
the occurrence relates exceeds $5,000,000; or
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(7) 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
(8) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) provides for relief against the Company and the Guarantor in an
involuntary case,
(B) appoints a Custodian of the Company and the Guarantor for all or
substantially all of its property, or
(C) orders the liquidation of the Company and the Guarantor and the
order or decree remains unstayed and in effect for 90 days; or
(9) the Guarantee shall for any reason (other than pursuant to its terms)
cease to be in full force and effect.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
A default under clause (3) is not an Event of Default until the Trustee or
the Holders of at least 25% in principal amount of the Securities of the Series
affected notify the Company of the default and the Company does not cure the
default within 60 days after receipt of the notice. The notice must specify the
default, demand that it be remedied and state that the notice is a "Notice of
Default."
Section 8.02. Acceleration. If an Event of Default (other than an Event of
Default under Section 8.01(7) or 8.01(8)) on a Series occurs and is continuing,
the Trustee by notice to the Company [and the Person or Persons designated to
receive notices for the Agent (or other Person acting on behalf of the banks)
under the Revolving Credit Agreement],* or the Holders of at least
- ----------
*If applicable.
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25% in principal amount of the outstanding Securities of the Series by notice to
the Company, the Trustee and such Person or Persons (either such notice is
referred to herein as an "Acceleration Notice") may declare the unpaid principal
of and accrued and unpaid interest on all the Securities of the Series to be due
and payable if, with respect to such Series, (i)(a) no Designated Senior Debt of
the Company or the Guarantor is outstanding, or (b) if the Securities of the
Series are not subordinated to other indebtedness of the Company, immediately,
or (ii) if Designated Senior Debt of the Company or the Guarantor is outstanding
and the Securities of the Series are subordinated to other indebtedness of the
Company, upon the earlier of (A) ten days after such Acceleration Notice is
received by the Company and (B) the acceleration of any Senior Indebtedness of
the Company or the Guarantor. If an Event of Default specified in Section
8.01(7) or 8.01(8) occurs, the unpaid principal of and accrued and unpaid
interest on the Securities then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholder. The Holders of a majority in principal amount
of the Securities of the Series by notice to the Trustee may rescind such
declaration or acceleration and its consequences if all existing Events of
Default have been cured or waived (except nonpayment of principal or interest
that has become due solely because of the acceleration) and if the rescission
would not conflict with any judgment or decree.
[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.
- ----------
*If applicable.
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Section 8.05. Control by Majority. The Holders of a majority in principal
amount of the Securities of a Series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it with respect to such Series. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that is unduly prejudicial to the rights of another Securityholder,
or that would involve the Trustee in personal liability.
Section 8.06. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Series unless:
(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.
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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.
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,
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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.
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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 acceptance or administration of this
trust or the performance of its duties hereunder. The Trustee shall notify the
Company and the Guarantor promptly of any claim for which it may seek indemnity.
The Company and the Guarantor shall defend the claim and the Trustee shall
cooperate in the defense. In the event that counsel to the Trustee shall advise
counsel to the Company and the Guarantor that there may be defenses reasonably
available to the Trustee different than or additional to those available to the
Company and the Guarantor, then in such event the Trustee shall be permitted to
employ counsel of its choosing at the expense of the Company and the Guarantor.
The Company and the Guarantor need not pay for any settlement made without their
consent. The Company and the Guarantor need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence, bad faith or with willful misconduct. The indemnity contained in
this Section 9.07 shall survive the resignation or removal of the Trustee and
the termination of this Indenture.
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To ensure the Company's and the Guarantor's payment obligations in this
Section, the Trustee shall have a claim prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 8.01(7) or (8) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 9.08. Replacement of Trustee. The Trustee may resign by so
notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee to be removed and
may appoint a successor Trustee with the Company's and the Guarantor's consent.
The Company or the Guarantor may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee (subject to the prior claim provided by Section 9.07). Any resignation
or removal of the Trustee and any appointment of a successor Trustee shall
become effective upon acceptance of appointment by the successor Trustee. The
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the expense of
the Company), the Company or the Holders of a majority in principal amount of
the Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10, any Securityholder may,
subject to Section 8.11, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Section 9.09. Successor Trustee by Merger, etc. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust assets to, another
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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
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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
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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.
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(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,
38
<PAGE>
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.
39
<PAGE>
Section 10.07. Guarantor To Provide Stock. The Guarantor covenants that it
will at all times reserve and keep available, free from preemptive rights, out
of the aggregate of its authorized but unissued shares of Common Stock or its
issued shares of Common Stock held in its treasury, or both, for the purpose of
effecting conversions of Securities, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding Securities not theretofore
converted. For purposes of this Section 10.07, the number of shares of Common
Stock which shall be deliverable upon the conversion of all outstanding
Securities shall be computed as if at the time of computation all outstanding
Securities were held by a single Holder.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Common Stock
deliverable upon conversions of the Securities, the Guarantor will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Guarantor may validly and legally issue fully paid and non-assessable
shares of Common Stock at such adjusted Conversion Price.
The Guarantor will endeavor to list the shares of Common Stock required to
be delivered upon conversion of Securities prior to such delivery upon each
national securities exchange, if any, upon which the outstanding Common Stock is
listed at the time of such delivery.
Prior to the delivery of any securities which the Guarantor shall be
obligated to deliver upon conversion of the Securities, the Guarantor will
endeavor to comply with all federal and state laws and regulations thereunder
requiring the registration of such securities with, or any approval of or
consent to the delivery thereof by, any governmental authority.
Section 10.08. Taxes on Conversions. The Company and/or the Guarantor will
pay any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on conversions of
Securities pursuant hereto; provided, however, that neither the Company nor the
Guarantor shall be required to pay any tax which may be payable in respect of
any transfer involved in the issue or delivery of shares of Common Stock in a
name other than that of the Holder of the Securities to be converted and no such
issue or delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Company and/or the Guarantor the amount of any
such tax or has established, to the satisfaction of the Company and the
Guarantor, that such tax has been paid.
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
40
<PAGE>
(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.
41
<PAGE>
ARTICLE 11.
Discharge of Indenture
Section 11.01. Termination of the Company's and the Guarantor's
Obligations. Securities of a Series may be defeased in accordance with their
terms and, unless the Authorizing Resolution provides otherwise, in accordance
with this Article.
The Company may terminate all of its obligations under the Securities of a
Series and this Indenture, to the extent its obligations under this Indenture
relate to that Series, and the obligations of the Guarantor shall terminate if
all Securities of a Series previously authenticated and delivered (other than
destroyed, lost or stolen Securities which have been replaced or paid) have been
delivered to the Trustee for cancellation or if:
(1) the Securities mature within one year or all of them are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the Trustee money
sufficient to pay principal of and interest on the outstanding Securities to
maturity or redemption, as the case may be. The Company may make the deposit
only if Article 6 permits it. Immediately after making the deposit, the Company
shall give notice of such event and proposed date of payment to each
Securityholder.
The Company's obligations and, to the extent applicable, the Guarantor's
obligations, in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 9.07, 9.08 and
11.03 and Article 10, however, shall survive until the Securities are no longer
outstanding. Thereafter, the Company's obligations and, to the extent
applicable, the Guarantor's obligations, in Sections 9.07 and 11.03 shall
survive.
After a deposit, the Trustee upon request shall acknowledge in writing the
discharge of the Company's obligations under the Securities, the Guarantor's
obligations under the Guarantee and their obligations under the Indenture except
for those surviving obligations specified above.
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
42
<PAGE>
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication or mailing, any unclaimed
balance of such money then remaining will be repaid to the Company. After
payment to the Company, Securityholders entitled to any of such money must look
to the Company or, if applicable, the Guarantor for payment as general creditors
unless applicable abandoned property law designates another person and all
liability of the Trustee or Paying Agent with respect to such money shall
thereupon cease.
ARTICLE 12.
Amendments, Supplements and Waivers
Section 12.01. Without Consent of Holders. The Company may amend or
supplement this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in place of
certificated Securities; or
(4) to make any change that does not adversely affect the rights of any
Securityholder.
Section 12.02. With Consent of Holders. The Company may amend or supplement
this Indenture or the Securities without notice to any Securityholder but with
the written consent of the Holders of at least a majority in principal amount of
the Securities of all Series affected by the amendment voting as a class. The
Holders of a majority in principal amount of the Securities may waive compliance
by the Company with any provision of this Indenture or the Securities without
notice to any Securityholder. However, without the consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 8.04, may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(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;
43
<PAGE>
(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.
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.
44
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ARTICLE 13.
Miscellaneous
Section 13.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA or the TIA as amended after
the date hereof, the required provision shall control.
Section 13.02. Notices. Any notice or communication shall be sufficiently
given if in writing and delivered in person or mailed by first-class mail
addressed as follows: if to the Company or the Guarantor:
Toll Brothers, Inc., 3103 Philmont Avenue, Huntingdon Valley,
Pennsylvania 19006 Attention: Chief Financial Officer
with a copy to:
Mark K. Kessler, Esquire
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street, 22nd Floor
Philadelphia, PA 19103-2097
if to the Trustee:
Bank One Trust Company, NA
611 Woodward Avenue, 11th Floor
Detroit, Michigan 48226
Attention: Corporate Trust Securities Division
The Company, the Guarantor or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be mailed to
him at his address as it appears on the registration books of the Registrar and
shall be sufficiently given to him if so mailed within the time prescribed. In
addition, a copy of each such notice or communication shall be mailed to the
Trustee at the address specified above.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it. If the Company or the Guarantor
mails a notice or communication to Securityholders, it shall mail a copy of such
notice to the Trustee and each agent at the same time.
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).
45
<PAGE>
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.
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.
46
<PAGE>
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.
SIGNATURES
Dated: FIRST HUNTINGDON FINANCE CORP., as Issuer
By:
-------------------------------------
Name:
Title:
(SEAL)
Attest:
- -----------------------------
Name:
Title:
47
<PAGE>
Dated: TOLL BROTHERS, INC., as Guarantor
By:
-------------------------------------
Name:
Title:
(SEAL)
Attest:
- -----------------------------
Name:
Title:
Dated: [Name of Trustee]
as Trustee
By:
-------------------------------------
Name:
Title:
(SEAL)
Attest:
- -----------------------------
Name:
Title:
48
EXHIBIT 4.3
TOLL FINANCE CORP., as Issuer
TOLL BROTHERS, INC., as Guarantor
Debt Securities
Indenture
Dated as of
BANK ONE TRUST COMPANY, NA
Trustee
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
------- ---------
<S> <C> <C>
310(a)(1)............................................. 9.10
(a)(2)............................................. 9.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(b)................................................ 9.08; 9.10; 13.02
(c)................................................ N.A.
311(a)................................................ 9.11
(b)................................................ 9.11
(c)................................................ N.A.
312(a)................................................ 2.07
(b)................................................ 13.03
(c)................................................ 13.03
313(a)................................................ 9.06
(b)(1)............................................. N.A.
(b)(2)............................................. 9.06
(c)................................................ 9.06; 13.02
(d)................................................ 9.06
314(a)................................................ 4.03; 13.02
(b)................................................ N.A.
(c)(1)............................................. 13.04
(c)(2)............................................. 13.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 13.05
(f)................................................ N.A.
315(a)................................................ 9.01(b)
(b)................................................ 9.05; 13.02
(c)................................................ 9.01(a)
(d)................................................ 9.01(c)
(e)................................................ 8.11
316(a)(last sentence)................................. 13.06
(a)(1)(A).......................................... 8.05
(a)(1)(B).......................................... 8.04
(a)(2)............................................. N.A.
(b)................................................ 8.07
317(a)(1)............................................. 8.08
(a)(2)............................................. 8.09
(b)................................................ 2.06
318(a)................................................ 13.01
</TABLE>
<PAGE>
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>
<CAPTION>
TABLE OF CONTENTS
Article Section Heading Page
- ----------------------- ----
<S> <C> <C>
ARTICLE 1. Definitions and Incorporation by Reference......................................................1
1.01. Definitions.....................................................................................1
1.02. Incorporation by Reference of Trust Indenture Act...............................................5
1.03. Incorporation by Reference of Provisions of Securities..........................................6
1.04. Rules of Construction...........................................................................6
ARTICLE 2. The Securities..................................................................................6
2.01. Forms Generally.................................................................................6
2.02. Form of Trustee's Certificate of Authentication.................................................7
2.03. Amount Unlimited, Issuable in Series............................................................7
2.04. Execution and Authentication....................................................................9
2.05. Registrar and Paying Agent......................................................................9
2.06. Paying Agent To Hold Money in Trust............................................................10
2.07. Securityholder Lists...........................................................................10
2.08. Transfer and Exchange..........................................................................10
2.09. Replacement Securities.........................................................................10
2.10. Outstanding Securities.........................................................................11
2.11. Temporary Securities...........................................................................11
2.12. Cancellation...................................................................................11
2.13. Defaulted Interest.............................................................................12
2.14. Global Securities..............................................................................12
ARTICLE 3. Redemption.....................................................................................12
3.01. Notices to Trustee.............................................................................12
3.02. Selection of Securities To Be Redeemed.........................................................13
3.03. Notice of Redemption...........................................................................13
3.04. Effect of Notice of Redemption.................................................................14
3.05. Deposit of Redemption Price....................................................................14
3.06. Securities Redeemed in Part....................................................................14
ARTICLE 4. Covenants......................................................................................14
4.01. Payment of Securities..........................................................................14
4.02. SEC Reports....................................................................................14
4.03. Compliance Certificate.........................................................................15
ARTICLE 5. Successor Corporation..........................................................................15
5.01. When the Company and the Guarantor May Merge, Etc..............................................15
ARTICLE 6. Subordination..................................................................................15
6.01. Agreement To Subordinate.......................................................................15
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C>
6.03. Securities Subordinated to Prior Payment of All Senior Indebtedness of the
Company on Dissolution, Liquidation or Reorganization of the Company...........................16
6.04. Securityholders To Be Subrogated to Rights of Holders of Senior Indebtedness of
the Company....................................................................................17
6.05. Obligation of the Company Unconditional........................................................18
6.06. Knowledge of Trustee...........................................................................18
6.07. Application by Trustee of Monies Deposited With It.............................................18
6.08. Subordination Rights Not Impaired by Acts or Omissions of Company or Holders
of Senior Indebtedness of the Company..........................................................19
6.09. Securityholders Authorize Trustee To Effectuate Subordination of Securities....................19
6.10. Right of Trustee To Hold Senior Indebtedness of the Company....................................19
6.11. Article Six Not To Prevent Events of Default...................................................19
ARTICLE 7. Guarantee......................................................................................19
7.01. Guarantee......................................................................................19
7.02. Agreement To Subordinate.......................................................................21
7.03. Guarantor Not To Make Payments with Respect to Securities in Certain
Circumstances..................................................................................21
7.04. Guarantee Subordinated to Prior Payment of All Senior Indebtedness of the
Guarantor on Dissolution, Liquidation or Reorganization of the Guarantor.......................22
7.05. Securityholders To Be Subrogated to Rights of Holders of Senior Indebtedness of
the Guarantor..................................................................................23
7.06. Obligation of the Guarantor Unconditional......................................................23
7.07. Knowledge of Trustee...........................................................................24
7.08. Application by Trustee of Monies Deposited With It.............................................24
7.09. Subordination Rights Not Impaired by Acts or Omissions of Guarantor or Holders
of Senior Indebtedness of the Guarantor........................................................24
7.10. Securityholders Authorize Trustee To Effectuate Subordination of Guarantee.....................24
7.11. Right of Trustee To Hold Senior Indebtedness of the Guarantor..................................25
7.12. Article 7 Not To Prevent Events of Default.....................................................25
7.13. Execution and Delivery of Guarantee............................................................25
7.14. Subordination of Indebtedness Owed by the Company to the Guarantor.............................25
7.15. Officers' Certificate..........................................................................25
ARTICLE 8. Defaults and Remedies..........................................................................26
8.01. Events of Default..............................................................................26
8.02. Acceleration...................................................................................28
8.03. Other Remedies.................................................................................28
8.04. Waiver of Past Defaults........................................................................29
8.05. Control by Majority............................................................................29
8.06. Limitation on Suits............................................................................29
8.07. Rights of Holders To Receive Payment...........................................................29
8.08. Collection Suit by Trustee.....................................................................29
8.09. Trustee May File Proofs of Claim...............................................................30
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8.10. Priorities.....................................................................................30
8.11. Undertaking for Costs..........................................................................30
ARTICLE 9. Trustee........................................................................................30
9.01. Duties of Trustee..............................................................................30
9.02. Rights of Trustee..............................................................................31
9.03. Individual Rights of Trustee...................................................................32
9.04. Trustee Disclaimer.............................................................................32
9.05. Notice of Defaults.............................................................................32
9.06. Reports by Trustee to Holders..................................................................32
9.07. Compensation and Indemnity.....................................................................32
9.08. Replacement of Trustee.........................................................................33
9.09. Successor Trustee by Merger, etc...............................................................34
9.10. Eligibility; Disqualification..................................................................34
9.11. Preferential Collection of Claims Against Company..............................................34
ARTICLE 10. Conversion of Securities.......................................................................34
10.01. Applicability of Article.......................................................................34
10.02. Conversion Privilege...........................................................................34
10.03. Manner of Exercise of Conversion Privilege.....................................................34
10.04. Payment in Lieu of Fractional Shares...........................................................35
10.05. Adjustment of Conversion Price.................................................................36
10.06. Notice of Certain Corporate Action.............................................................38
10.07. Guarantor To Provide Stock.....................................................................39
10.08. Taxes on Conversions...........................................................................39
10.09. Covenant as to Stock...........................................................................39
10.10. Consolidation or Merger........................................................................39
10.11. Disclaimer of Responsibility for Certain Matters...............................................40
ARTICLE 11. Discharge of Indenture.........................................................................41
11.01. Termination of the Company's and the Guarantor's Obligations...................................41
11.02. Application of Trust Money.....................................................................41
11.03. Repayment to Company...........................................................................41
ARTICLE 12. Amendments, Supplements and Waivers............................................................42
12.01. Without Consent of Holders.....................................................................42
12.02. With Consent of Holders........................................................................42
12.03. Compliance with Trust Indenture Act............................................................43
12.04. Revocation and Effect of Consents..............................................................43
12.05. Notation on or Exchange of Securities..........................................................43
12.06. Trustee To Sign Amendments, etc................................................................43
ARTICLE 13. Miscellaneous..................................................................................43
13.01. Trust Indenture Act Controls...................................................................43
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13.02. Notices........................................................................................44
13.03. Communication by Holders with Other Holders....................................................44
13.04. Certificate and Opinion as to Conditions Precedent.............................................44
13.05. Statements Required in Certificate or Opinion..................................................45
13.06. When Treasury Securities Disregarded...........................................................45
13.07. Rules by Trustee, Paying Agent, Registrar......................................................45
13.08. Legal Holidays.................................................................................45
13.09. Governing Law..................................................................................45
13.10. No Adverse Interpretation of Other Agreements..................................................45
13.11. No Recourse Against Others.....................................................................46
13.12. Successors.....................................................................................46
13.13. Duplicate Originals............................................................................46
13.14. Counterparts...................................................................................46
SIGNATURES.......................................................................................................46
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INDENTURE dated as of __________ among TOLL FINANCE CORP., a Delaware
corporation (the "Company"), TOLL BROTHERS, INC., a Delaware corporation (the
"Guarantor"), and Bank One Trust Company, NA (the "Trustee").
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its bonds,
debentures, notes and/or other evidences of indebtedness (herein called the
"Securities"), which may be senior secured, senior unsecured, senior
subordinated or subordinated, to be issued in one or more series as in this
Indenture provided.
The Guarantor has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unconditional
guarantee of the Securities (herein called the "Guarantee"), which may be senior
secured, senior unsecured, senior subordinated or subordinated, as in this
Indenture provided.
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
ratable benefit of the Holders of the Securities or of each series thereof as
follows:
ARTICLE 1.
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 8.02.
"Affiliate" has the meaning provided in Rule 405 promulgated under the
Securities Act of 1933, as amended and in effect on the date hereof.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities. An Authorizing Resolution shall be so
adopted by both the Company and the Guarantor.
"Bankruptcy Law" has the meaning provided in Section 8.01.
"Board of Directors" means the Board of Directors of the Company or the
Guarantor, as the case may be, or any authorized committee of the Board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or the Guarantor, as the case may be,
to have been duly
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adopted by the Board of Directors and to be in full force and effect on the date
of such certification and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means the classes of capital stock of a Person as they
exist on the date of this Indenture or as they may be constituted from time to
time and warrants, options and similar rights to acquire such capital stock.
"Common Stock" means the Common Stock ($.01 par value) of the Guarantor as
the same exists at the date of this Indenture as originally executed or as such
stock may be constituted from time to time.
"Company" means the party named as such in this Indenture until a successor
replaces it and thereafter means the successor or any other obligor on the
Securities. "Company" shall also mean the Guarantor in the event the Company
fails to perform those duties required by Sections 312 through 317 of the TIA.
"Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, as determined in accordance with generally accepted
accounting principles.
"Conversion Price" means the initial conversion price of Securities of a
Series specified in the Authorizing Resolution establishing the terms of such
Series Security, as adjusted in accordance with the provisions of Article 10.
"Current Market Price" for any relevant date means, (a) except for purposes
of Section 10.04, the average of the last reported sale prices of the Common
Stock for the 30 consecutive Business Days commencing 45 Business Days before
the day in question and (b) for purposes of Section 10.04 only, the last
reported sale price of the Common Stock, in either such case as reported on the
composite tape, or similar reporting system, for issues listed on the New York
Stock Exchange (or if the Common Stock is not then listed on that exchange, for
issues listed on such other national securities exchange upon which the Common
Stock is listed as may be designated by the Board of Directors for the purposes
hereof) or, if there is no such reported sale on the day or days in question, on
the basis of the average of the closing bid and asked quotations as so reported,
or, if the Common Stock is not listed on any national securities exchange, on
the basis of the average of the high bid and low asked quotations on the day or
days in question in the over-the-counter market as reported by the National
Association of Securities Dealers' Automated Quotations System, or if not so
quoted, as reported by National Quotation Bureau, Incorporated, or any similar
organization, or if not so reported as determined in good faith by the Board.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
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"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.
"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
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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.
"Original Issue Discount Security" means any Security which provides that
an amount less than its principal amount is due and payable upon acceleration
after an Event of Default.
"Paying Agent" has the meaning provided in Section 2.05.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"Principal" of a debt security means the principal of the security plus the
premium, if any, on the security.
"Record Date" for the interest payable on any Interest Payment Date on the
Securities has the meaning provided in Section 1 of the Securities.
"Registrar" has the meaning provided in Section 2.05.
"Restricted Subsidiary," if applicable, has the meaning provided in the
Authorizing Resolution.
["Revolving Credit Agreement" means the Credit Agreement dated as of
February 25, 1998 among First Huntingdon Finance Corp., Toll Brothers, Inc., The
First National Bank of Chicago (now known as Bank One National Association)
(Administrative Agent); Bank of America National Trust and Savings Association
(Co-Agents); 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,
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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 2.13.
"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, Assistant Vice President, Trust Officer or any
other officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made
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*If applicable.
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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.
ARTICLE 2.
The Securities
Section 2.01. Forms Generally. The Securities and the Guarantee,
respectively, of each series shall be in such forms (including global form) as
shall be established by or pursuant to an Authorizing Resolution or in one or
more supplemental indentures hereto, in each case with such appropriate
provisions as are required or permitted by this Indenture, and may have such
letters,
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numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or depositary therefor or as may, consistent herewith, be determined appropriate
by the Officers executing such Securities, as evidenced by their execution
thereof. If the form of any series of Securities is established by action taken
pursuant to an Authorizing Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or any Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of a written
order of the Company signed by two Officers or an Officer and an Assistant
Treasurer of the Company for the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, provided that
such method is permitted by the rules of any securities exchange on which such
Securities may be listed, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities.
The terms and provisions in the Securities shall constitute, and are hereby
expressly made, a part of this Indenture.
Section 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
BANK ONE TRUST COMPANY, NA
As Trustee
By
------------------------------
Authorized Signatory
Section 2.03. Amount Unlimited, Issuable in Series. The aggregate principal
amount of Securities that may be issued under this Indenture is unlimited. The
Securities may be issued from time to time in one or more Series. Each Series
shall be created by an Authorizing Resolution or a supplemental indenture that
establishes the terms of the Series, which may include the following:
(1) the title of the Series;
(2) any limit upon the aggregate principal amount of the Series which may
be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of other Securities which, pursuant to Sections 2.08, 2.09, 2.11
or 10.05 and except for any Securities which, pursuant to Section 2.04, are
deemed never to have been authenticated and delivered hereunder);
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(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 respective forms of the Securities and the Guarantees;
(19) whether the Securities of such Series will be convertible into Common
Stock of the Guarantor and the terms thereof (including without limitation the
Conversion Price, the conversion period and any other provision in addition to
or in lieu of those set forth in this Indenture);
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(20) whether the Securities and Guarantees of such Series shall be
subordinated to any obligations of the Company or the Guarantor, and the
obligations to which such subordination will apply;
(21) whether the Securities of such Series and/or the Guarantees of such
Series will be secured and, if applicable, any provisions for securing all or
any potion of the indebtedness evidenced by the Securities of such Series and/or
the Guarantees of such Series;
(22) any terms that may be required by or advisable under applicable law;
and
(23) any other terms not inconsistent with this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and delivery
thereof are not subject to any conditions precedent.
Section 2.04. Execution and Authentication. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be reproduced on the Securities. Two Officers of the Guarantor shall sign
the notation of the Guarantee by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon a written
order of the Company signed by two Officers or by an Officer and an Assistant
Treasurer of the Company. Each Security shall be dated the date of its
authentication. In authenticating Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to the TIA) shall be fully
protected in relying upon, an Opinion of Counsel stating that all conditions
precedent to the authentication and delivery of the Securities have been
complied with and that the Securities have been duly executed and, when the
Securities have been duly authenticated and delivered by the Trustee, will be
duly issued and delivered and will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to any applicable bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and subject to the
effect of general principles of equity,
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including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether enforcement is considered in a
proceeding in equity or at law).
Section 2.05. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer,
for exchange or, if applicable, for conversion (in the case of conversion, as
agent for the Guarantor) ("Registrar") and an office or agency where Securities
may be presented for payment ("Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such.
The Company initially appoints the Trustee as Registrar and Paying Agent.
Section 2.06. Paying Agent To Hold Money in Trust. Each Paying Agent shall
hold in trust for the benefit of the Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal or interest on the
Securities, and shall notify the Trustee of any default by the Company (or any
other obligor on the Securities) in making any such payment. While any such
default continues, the Trustee shall require a Paying Agent to pay all money
held by it to the Trustee. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate the money and hold it as a separate trust fund. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon doing so the Paying Agent shall have no further liability for the
money.
Section 2.07. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee on or before each Interest
Payment Date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
Section 2.08. Transfer and Exchange. Where a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register its transfer as requested if its reasonable requirements are met.
Where Securities are presented to the Registrar or a co-registrar with a request
to exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met. To permit transfers and exchanges, the Trustee shall
authenticate Securities at the Registrar's request. The Registrar need not
transfer or exchange any Security selected for redemption, except the unredeemed
part thereof if the Security is redeemed in part, or transfer or exchange any
Securities
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for a period of 15 days before a selection of Securities to be redeemed. The
Company may charge a reasonable fee for any transfer or exchange (including the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any such transfer or exchange and any other
expenses in connection therewith) but not for any exchange pursuant to Section
2.11, 3.06 or 12.05. This Section 2.08 is subject to the provisions of any
series of the Securities providing for the subordination or seniority of such
series and the related Guarantees of such series in right of payment to other
indebtedness of the Company and the Guarantor, respectively.
Section 2.09. Replacement Securities. If the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Security and the
Guarantor shall endorse the Guarantee thereon if the Trustee's reasonable
requirements are met. An indemnity bond must be sufficient in the judgment of
the Company, the Guarantor and the Trustee to protect the Company, the
Guarantor, the Trustee, the Paying Agent, the Registrar or any co-registrar from
any loss which any of them may suffer if a Security is replaced. The Company may
charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company and
the Guarantor.
Section 2.10. Outstanding Securities. Securities outstanding at any time
are all Securities authenticated by the Trustee except for those presented to it
by the Company or its designee for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company, the Guarantor or one of their Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a redemption date or maturity date money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
If a Security is called for redemption or if it matures in less than six
months and if the Company has satisfied its obligation to pay the Security, or
if a Security has been converted in accordance with the provisions of Article
10, the Company and the Trustee need not treat the Security as outstanding in
determining whether Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent.
For each series of Original Issue Discount Securities, the principal amount
of such Securities that shall be deemed to be outstanding and used to determine
whether the necessary Holders have given any request, demand, authorization,
direction, notice, consent or waiver shall be the principal amount of such
Securities that could be declared to be due and payable upon acceleration upon
an Event of Default as of the date of such determination. When requested by the
Trustee, the Company will advise the Trustee of such amount, showing its
computations in reasonable detail.
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Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.11. Temporary Securities. Until definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities and the Guarantor shall endorse the Guarantee thereon.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities and the Guarantor shall endorse
the Guarantee thereon in exchange for temporary Securities.
Section 2.12. Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange, conversion or payment. The Trustee and no one else shall cancel and
destroy all Securities surrendered for transfer, exchange, conversion, payment
or cancellation in accordance with its customary procedure. Unless the
Authorizing Resolution so provides, the Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation.
Section 2.13. Defaulted Interest. If the Company defaults in a payment of
interest on the Securities, it shall pay the defaulted interest in any lawful
manner. It may pay the defaulted interest, plus any interest payable on the
interest (to the extent lawful) if an Event of Default has occurred and is
continuing, to the Persons who are Securityholders on a subsequent special
record date (the "Special Record Date"). The Company shall fix the subsequent
Special Record Date and payment date. At least 15 days before such Special
Record Date, the Company shall give notice to the Trustee and shall mail to each
Securityholder a notice that states the subsequent Special Record Date, the
payment date, and the amount of defaulted interest to be paid.
Section 2.14. Global Securities. Unless the Authorizing Resolution provides
otherwise, the Company may issue some or all of the Securities of a Series in
temporary or permanent global form. A global Security shall represent that
amount of Securities of a Series as specified in the global Security or as
endorsed thereon from time to time. At the Company's request, the Registrar
shall endorse a global Security to reflect the amount of any increase or
decrease in the Securities represented thereby.
The Company may issue a global Security only to a depositary designated by
the Company. A depositary may transfer a global Security only as a whole to its
nominee or to a successor depositary.
The Authorizing Resolution may establish, among other things, the manner of
paying principal and interest on a global Security and whether and upon what
terms a beneficial owner of an interest in a global Security may exchange such
interest for definitive Securities.
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The Company and the Trustee shall not be responsible for any acts or
omissions of a depositary, for any depositary records of beneficial ownership
interests or for any transactions between the depositary and beneficial owners.
ARTICLE 3.
Redemption
Section 3.01. Notices to Trustee. Securities of a Series that are
redeemable prior to maturity shall be redeemable in accordance with their terms
and, unless the Authorizing Resolution provides otherwise, in accordance with
this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the redemption date and
the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed, retired
or acquired against any redemption pursuant to Paragraph 6 of the Securities, it
shall notify the Trustee of the amount of the credit and it shall deliver any
Securities not previously delivered to the Trustee for cancellation with such
notice.
The Company shall give each notice provided for in this Section 3.01 at
least 10 Business Days before the notice of any such redemption is to be mailed
to Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities To Be Redeemed. If less than all the
Securities of a Series are to be redeemed, the Trustee shall select the
Securities to be redeemed, if the Securities of such Series are listed on a
national securities exchange, in accordance with the rules of such exchange, or
if the Securities of such Series are not so listed, on either a pro rata basis
or by lot or by such method as the Trustee shall deem fair and appropriate. The
Trustee shall make the selection from Securities outstanding and not previously
called for redemption. Securities in denominations of $1,000 may only be
redeemed in whole. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
Section 3.03. Notice of Redemption. At least 30 days but not more than 60
days before a redemption date, the Company shall mail a notice of redemption by
first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
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(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.
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
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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; and (ii) immediately after giving effect to such transaction no
Default or Event of Default shall have occurred and be continuing. Thereafter
all such obligations of the predecessor corporation shall terminate.
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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.
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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
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that Holders of the Securities would be entitled to receive securities that are
subordinated to Senior Indebtedness of the Company to at least the same extent
as the Securities.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company.
Section 6.04. Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness of the Company. Subject to the payment in full of all Senior
Indebtedness of the Company, the Holders of the Securities shall be subrogated
equally and ratably to the rights of the holders of the Senior Indebtedness of
the Company to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness of the Company until all amounts owing on
the Securities shall be paid in full, and for the purpose of such subrogation no
payments or distributions to the holders of the Senior Indebtedness of the
Company by or on behalf of the Company or by or on behalf of the Holders of the
Securities by virtue of this Article 6 which otherwise would have been made to
the Holders of the Securities shall, as among the Company, its creditors other
than holders of the Senior Indebtedness of the Company and the Holders of the
Securities, be deemed to be payment by the Company to or on account of the
Senior Indebtedness of the Company, it being understood that the provisions of
this Article 6 are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of the
Senior Indebtedness of the Company, on the other hand.
Section 6.05. Obligation of the Company Unconditional. Nothing contained in
this Article 6 or elsewhere in this Indenture or in any Security is intended to
or shall impair, as between the Company and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of and interest on the Securities as and
when the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Securities
and creditors of the Company other than the holders of the Senior Indebtedness
of the Company, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article 6 of the holders of Senior Indebtedness of the Company in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy. Upon any distribution of assets of the Company
referred to in this Article 6, the Trustee, subject to the provisions of
Sections 9.01 and 9.02, and the Holders of the Securities shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding up, liquidation or reorganization proceedings
are pending, or a certificate of the liquidating trustee or agent or other
Person making any distribution to the Trustee or the Holders of the Securities,
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness of the Company and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 6.
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Nothing contained in this Article 6 or elsewhere in this Indenture or in
any Security is intended to or shall affect the obligation of the Company to
make, or prevent the Company from making, at any time except during the pendency
of any dissolution, winding up, liquidation or reorganization proceeding, and
except during the continuance of any default specified in Section 6.02 (not
cured or waived), payments at any time of the principal of or interest on the
Securities.
Section 6.06. Knowledge of Trustee. Notwithstanding any provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of monies to or by the
Trustee until two Business Days after the Trustee shall have received written
notice thereof from the Company, any Securityholder or any Paying Agent or the
holder or representative of any class of Senior Indebtedness of the Company.
Section 6.07. Application by Trustee of Monies Deposited With It. If at
least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may become
payable for any purpose (including, without limitation, the payment of either
the principal of or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 6.06,
then the Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section shall be construed solely for the benefit of the Trustee
and such Paying Agent and shall not otherwise affect the rights of holders of
Senior Indebtedness of the Company.
Section 6.08. Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Indebtedness of the Company. No right of any
present or future holders of any Senior Indebtedness of the Company to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The holders
of Senior Indebtedness of the Company may extend, renew, modify or amend the
terms of the Senior Indebtedness of the Company or any security therefor and
release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders. No provision in any supplemental indenture which
affects the superior position of the holders of Senior Indebtedness of the
Company shall be effective against the holders of Senior Indebtedness of the
Company who have not consented thereto.
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
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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.
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
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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
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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
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are entitled to receive any payment on account of the principal of or interest
on the Securities pursuant to the Guarantee;
(b) any payment or distribution of assets of the Guarantor of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee on behalf of the Holders of the Securities would be
entitled except for the provisions of this Article 7, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other indebtedness of the Guarantor being subordinated to the payment of the
Securities, shall be paid by the liquidating trustee or agent or other Person
making such payment or distribution directly to the holders of the Senior
Indebtedness of the Guarantor or their representative, or to the trustee under
any indenture under which Senior Indebtedness of the Guarantor may have been
issued (pro rata as to each such holder, representative or trustee on the basis
of the respective amounts of unpaid Senior Indebtedness of the Guarantor held or
represented by each), to the extent necessary to make payment in full of all
Senior Indebtedness of the Guarantor remaining unpaid, after giving effect to
any concurrent payment or distribution or provision therefor to the holders of
such Senior Indebtedness of the Guarantor, except that Holders of the Securities
would be entitled to receive securities that are subordinated to Senior
Indebtedness of the Guarantor to at least the same extent as the Securities; and
(c) in the event that, notwithstanding the foregoing provisions of this
Section 7.04, any payment or distribution of assets of the Guarantor of any kind
or character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Guarantor being subordinated to the
payment of the Securities, shall be received by the Trustee or the Holders of
the Securities on account of principal of or interest on the Securities before
all Senior Indebtedness of the Guarantor is paid in full, or effective provision
made for its payment, such payment or distribution (subject to the provisions of
Sections 7.07 and 7.08) shall be received and held in trust for and shall be
paid over to the holders of the Senior Indebtedness of the Guarantor remaining
unpaid or unprovided for or their representative, or to the trustee under any
indenture under which such Senior Indebtedness of the Guarantor may have been
issued (pro rata as provided in subsection (b) above), for application to the
payment of such Senior Indebtedness of the Guarantor until all such Senior
Indebtedness of the Guarantor shall have been paid in full, after giving effect
to any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness of the Guarantor, except that Holders of the
Securities would be entitled to receive securities that are subordinated to
Senior Indebtedness of the Guarantor to at least the same extent as the
Securities.
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
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amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 7.
The Guarantor shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Guarantor.
Section 7.05. Securityholders To Be Subrogated to Rights of Holders of
Senior Indebtedness of the Guarantor. Subject to the payment in full of all
Senior Indebtedness of the Guarantor, the Holders of the Securities shall be
subrogated equally and ratably to the rights of the holders of the Senior
Indebtedness of the Guarantor to receive payments or distributions of assets of
the Guarantor applicable to the Senior Indebtedness of the Guarantor until all
amounts owing on the Securities shall be paid in full, and for the purpose of
such subrogation no payments or distributions to the holders of the Senior
Indebtedness of the Guarantor by or on behalf of the Guarantor or by or on
behalf of the Holders of the Securities by virtue of this Article 7 which
otherwise would have been made to the Holders of the Securities shall, as among
the Guarantor, its creditors other than holders of Senior Indebtedness of the
Guarantor and the Holders of the Securities, be deemed to be payment by the
Guarantor to or on account of the Senior Indebtedness of the Guarantor, it being
understood that the provisions of this Article 7 are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on the
one hand, and the holders of the Senior Indebtedness of the Guarantor, on the
other hand.
Section 7.06. Obligation of the Guarantor Unconditional. Nothing contained
in this Article 7 or elsewhere in this Indenture or in any Security is intended
to or shall impair, as between the Guarantor and the Holders of the Securities,
the obligation of the Guarantor, which is absolute and unconditional, to pay to
the Holders of the Securities the principal of and interest on the Securities as
and when the same shall become due and payable in accordance with the terms of
the Guarantee, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors of the Guarantor other than the holders
of the Senior Indebtedness of the Guarantor, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon Default under this
Indenture, subject to the rights, if any, under this Article 7 of the holders of
Senior Indebtedness of the Guarantor in respect of cash, property or securities
of the Guarantor received upon the exercise of any such remedy.
Nothing contained in this Article 7 or elsewhere in this Indenture or in
any Security is intended to or shall affect the obligation of the Guarantor to
make, or prevent the Guarantor from making, at any time except during the
pendency of any dissolution, winding up, liquidation or reorganization
proceeding, and except during the continuance of any default specified in
Section 7.03 (not cured or waived), payments at any time of the principal of or
interest on the Securities pursuant to the Guarantee.
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
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shall have received written notice thereof from the Guarantor, any
Securityholder or any Paying Agent or the holder or representative of any class
of Senior Indebtedness of the Guarantor.
Section 7.08. Application by Trustee of Monies Deposited With It. If at
least two Business Days prior to the date on which by the terms of this
Indenture any monies deposited with the Trustee or any Paying Agent may become
payable for any purpose (including, without limitation, the payment of either
the principal of or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 7.07,
then the Trustee shall have full power and authority to receive such monies and
to apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section shall be construed solely for the benefit of the Trustee
and such Paying Agent and shall not otherwise affect the rights of holders of
Senior Indebtedness of the Guarantor.
Section 7.09. Subordination Rights Not Impaired by Acts or Omissions of
Guarantor or Holders of Senior Indebtedness of the Guarantor. No right of any
present or future holders of any Senior Indebtedness of the Guarantor to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Guarantor with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The holders
of Senior Indebtedness of the Guarantor may extend, renew, modify or amend the
terms of the Senior Indebtedness of the Guarantor, or any security therefor and
release, sell or exchange such security and otherwise deal freely with the
Guarantor, all without affecting the liabilities and obligations of the parties
to the Indenture or the Holders. No provision in any supplemental indenture
which affects the superior position of the holders of Senior Indebtedness of the
Guarantor shall be effective against the holders of Senior Indebtedness of the
Guarantor who have not consented thereto.
Section 7.10. Securityholders Authorize Trustee To Effectuate Subordination
of Guarantee. Each Holder of Securities by acceptance thereof authorizes and
expressly directs the Trustee on its, his or her behalf to take such action as
may be necessary or appropriate to effectuate the subordination provided in this
Article 7 and appoints the Trustee its, his or her attorney-in-fact for such
purpose, including, in the event of any dissolution, winding up, liquidation or
reorganization of the Guarantor (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets of the
Guarantor, the immediate filing of a claim for the unpaid balance, pursuant to
the Guarantee, of its, his or her Securities, in the form required in said
proceedings and cause said claim to be approved. If the Trustee does not file a
proper claim or proof of debt in the form required in such proceeding prior to
30 days before the expiration of the time to file such claim or claims, then the
holders of Senior Indebtedness of the Guarantor have the right to file and are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of said Securities.
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
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of the Guarantor at any time held by it to the same extent as any other holder
of Senior Indebtedness of the Guarantor, and nothing in this Indenture shall be
construed to deprive the Trustee of any of its rights as such holder.
Section 7.12. Article 7 Not To Prevent Events of Default. The failure to
make a payment on account of principal or interest by reason of any provision in
this Article 7 shall not be construed as preventing the occurrence of an Event
of Default under Section 8.01.
Section 7.13. Execution and Delivery of Guarantee. To evidence the
Guarantee set forth in this Article 7, the Guarantor hereby agrees that a
notation of the Guarantee, substantially in the form established by or pursuant
to an Authorizing Resolution or in one or more supplemental indentures in
accordance with Section 2.01, shall be endorsed on each Security authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of the Guarantor by the Chairman of the Board, its President or one of its Vice
Presidents under a facsimile of its seal reproduced thereon.
The Guarantor hereby agrees that its Guarantee shall remain in full force
and effect notwithstanding any failure to endorse on each Security a notation of
the Guarantee.
If an Officer whose signature is on this Indenture or on the Securities no
longer holds that office at the time the Trustee authenticates the Security on
which a notation of the Guarantee is endorsed, the Guarantee shall be valid
nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantor.
Section 7.14. Subordination of Indebtedness Owed by the Company to the
Guarantor. Any indebtedness owed by the Company to the Guarantor shall be
subordinate to all obligations of the Company with respect to the Securities and
this Indenture to the same extent as the Securities are subordinated to Senior
Indebtedness of the Company.
Section 7.15. Officers' Certificate. If there occurs an event referred to
in the first sentence of Section 7.04(c) or the first sentence of Section 7.04,
the Guarantor shall promptly give to the Trustee an Officers' Certificate (on
which the Trustee may conclusively rely) identifying all holders of Senior
Indebtedness of the Guarantor and the principal amount of Senior Indebtedness of
the Guarantor then outstanding held by each such holder and stating the reasons
why such Officers' Certificate is being delivered to the Trustee.
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ARTICLE 8.
Defaults and Remedies
Section 8.01. Events of Default. An "Event of Default" on a Series occurs
if:
(1) the Company or the Guarantor defaults in the payment of interest on any
Security of the Series when the same becomes due and payable and the default
continues for a period of 30 days whether or not such payment shall be
prohibited by the provisions of Article 6 or Article 7; or
(2) the Company or the Guarantor defaults in the payment of the principal
of any Security of the Series when the same becomes due and payable at maturity
or upon redemption, whether or not such payment shall be prohibited by the
provisions of Article 6 or Article 7; or
(3) the Company or the Guarantor fails to comply with any of its other
agreements in the Securities, the Guarantee or this Indenture applicable to the
Series and such failure continues for the period and after the notice specified
below; or
(4) there occurs a default in the payment of indebtedness of the Company,
the Guarantor or any Subsidiary under the terms of the instrument evidencing or
securing such indebtedness permitting the holder thereof to accelerate the
payment of in excess of an aggregate of $5,000,000 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
$5,000,000 in aggregate principal amount, whether or not the Guarantor is so
diligently contesting); or
(5) a final judgment for the payment of money in an amount in excess of
$5,000,000 shall be entered against the Company, the Guarantor or any
Subsidiary, and shall remain undischarged for a period (during which execution
shall not be effectively stayed) of 60 days after the date on which the right to
appeal has expired; provided the term "final judgment" shall not include a
Non-Recourse Judgment unless the book value of all property (net of any previous
write-downs or reserves in respect of such property) subject to such
Non-Recourse Judgment exceeds the amount of such Non-Recourse Judgment by more
than $10,000,000;
(6) there occurs an "Event of Default," as that term is defined in the
indenture relating to the 8-3/4% Senior Subordinated Notes due 2006 issued by
Toll Corp., a Delaware corporation ("Toll Corp."), the 7-3/4% Senior
Subordinated Notes due 2007 issued by Toll Corp., the 8-1/8% Senior Subordinated
Notes due 2009 issued by Toll Corp., or the 8% Senior Subordinated Notes due
2009 issued by Toll Corp. (each such series being hereinafter referred to as a
"Previously Issued Series"); provided that on the date of the occurrence, the
outstanding principal amount of at least one Previously Issued Series to which
the occurrence relates exceeds $5,000,000; or
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(7) 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
(8) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) provides for relief against the Company and the Guarantor in an
involuntary case,
(B) appoints a Custodian of the Company and the Guarantor for all or
substantially all of its property, or
(C) orders the liquidation of the Company and the Guarantor and the
order or decree remains unstayed and in effect for 90 days; or
(9) the Guarantee shall for any reason (other than pursuant to its terms)
cease to be in full force and effect.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
A default under clause (3) is not an Event of Default until the Trustee or
the Holders of at least 25% in principal amount of the Securities of the Series
affected notify the Company of the default and the Company does not cure the
default within 60 days after receipt of the notice. The notice must specify the
default, demand that it be remedied and state that the notice is a "Notice of
Default."
Section 8.02. Acceleration. If an Event of Default (other than an Event of
Default under Section 8.01(7) or 8.01(8)) on a Series occurs and is continuing,
the Trustee by notice to the Company [and the Person or Persons designated to
receive notices for the Agent (or other Person acting on behalf of the banks)
under the Revolving Credit Agreement],* or the Holders of at least
- --------
*If applicable.
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25% in principal amount of the outstanding Securities of the Series by notice to
the Company, the Trustee and such Person or Persons (either such notice is
referred to herein as an "Acceleration Notice") may declare the unpaid principal
of and accrued and unpaid interest on all the Securities of the Series to be due
and payable if, with respect to such Series, (i)(a) no Designated Senior Debt of
the Company or the Guarantor is outstanding, or (b) if the Securities of the
Series are not subordinated to other indebtedness of the Company, immediately,
or (ii) if Designated Senior Debt of the Company or the Guarantor is outstanding
and the Securities of the Series are subordinated to other indebtedness of the
Company, upon the earlier of (A) ten days after such Acceleration Notice is
received by the Company and (B) the acceleration of any Senior Indebtedness of
the Company or the Guarantor. If an Event of Default specified in Section
8.01(7) or 8.01(8) occurs, the unpaid principal of and accrued and unpaid
interest on the Securities then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholder. The Holders of a majority in principal amount
of the Securities of the Series by notice to the Trustee may rescind such
declaration or acceleration and its consequences if all existing Events of
Default have been cured or waived (except nonpayment of principal or interest
that has become due solely because of the acceleration) and if the rescission
would not conflict with any judgment or decree.
[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.
- ----------
*If applicable.
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Section 8.05. Control by Majority. The Holders of a majority in principal
amount of the Securities of a Series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it with respect to such Series. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that is unduly prejudicial to the rights of another Securityholder,
or that would involve the Trustee in personal liability.
Section 8.06. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Series unless:
(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.
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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.
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,
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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.
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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 acceptance or administration of this
trust or the performance of its duties hereunder. The Trustee shall notify the
Company and the Guarantor promptly of any claim for which it may seek indemnity.
The Company and the Guarantor shall defend the claim and the Trustee shall
cooperate in the defense. In the event that counsel to the Trustee shall advise
counsel to the Company and the Guarantor that there may be defenses reasonably
available to the Trustee different than or additional to those available to the
Company and the Guarantor, then in such event the Trustee shall be permitted to
employ counsel of its choosing at the expense of the Company and the Guarantor.
The Company and the Guarantor need not pay for any settlement made without their
consent. The Company and the Guarantor need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence, bad faith or with willful misconduct. The indemnity contained in
this Section 9.07 shall survive the resignation or removal of the Trustee and
the termination of this Indenture.
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To ensure the Company's and the Guarantor's payment obligations in this
Section, the Trustee shall have a claim prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 8.01(7) or (8) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 9.08. Replacement of Trustee. The Trustee may resign by so
notifying the Company. The Holders of a majority in principal amount of the
Securities may remove the Trustee by so notifying the Trustee to be removed and
may appoint a successor Trustee with the Company's and the Guarantor's consent.
The Company or the Guarantor may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee (subject to the prior claim provided by Section 9.07). Any resignation
or removal of the Trustee and any appointment of a successor Trustee shall
become effective upon acceptance of appointment by the successor Trustee. The
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the expense of
the Company), the Company or the Holders of a majority in principal amount of
the Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10, any Securityholder may,
subject to Section 8.11, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Section 9.09. Successor Trustee by Merger, etc. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust assets to, another
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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
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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
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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.
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(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,
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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.
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Section 10.07. Guarantor To Provide Stock. The Guarantor covenants that it
will at all times reserve and keep available, free from preemptive rights, out
of the aggregate of its authorized but unissued shares of Common Stock or its
issued shares of Common Stock held in its treasury, or both, for the purpose of
effecting conversions of Securities, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding Securities not theretofore
converted. For purposes of this Section 10.07, the number of shares of Common
Stock which shall be deliverable upon the conversion of all outstanding
Securities shall be computed as if at the time of computation all outstanding
Securities were held by a single Holder.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Common Stock
deliverable upon conversions of the Securities, the Guarantor will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Guarantor may validly and legally issue fully paid and non-assessable
shares of Common Stock at such adjusted Conversion Price.
The Guarantor will endeavor to list the shares of Common Stock required to
be delivered upon conversion of Securities prior to such delivery upon each
national securities exchange, if any, upon which the outstanding Common Stock is
listed at the time of such delivery.
Prior to the delivery of any securities which the Guarantor shall be
obligated to deliver upon conversion of the Securities, the Guarantor will
endeavor to comply with all federal and state laws and regulations thereunder
requiring the registration of such securities with, or any approval of or
consent to the delivery thereof by, any governmental authority.
Section 10.08. Taxes on Conversions. The Company and/or the Guarantor will
pay any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on conversions of
Securities pursuant hereto; provided, however, that neither the Company nor the
Guarantor shall be required to pay any tax which may be payable in respect of
any transfer involved in the issue or delivery of shares of Common Stock in a
name other than that of the Holder of the Securities to be converted and no such
issue or delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Company and/or the Guarantor the amount of any
such tax or has established, to the satisfaction of the Company and the
Guarantor, that such tax has been paid.
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
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(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.
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ARTICLE 11.
Discharge of Indenture
Section 11.01. Termination of the Company's and the Guarantor's
Obligations. Securities of a Series may be defeased in accordance with their
terms and, unless the Authorizing Resolution provides otherwise, in accordance
with this Article.
The Company may terminate all of its obligations under the Securities of a
Series and this Indenture, to the extent its obligations under this Indenture
relate to that Series, and the obligations of the Guarantor shall terminate if
all Securities of a Series previously authenticated and delivered (other than
destroyed, lost or stolen Securities which have been replaced or paid) have been
delivered to the Trustee for cancellation or if:
(1) the Securities mature within one year or all of them are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the Trustee money
sufficient to pay principal of and interest on the outstanding Securities to
maturity or redemption, as the case may be. The Company may make the deposit
only if Article 6 permits it. Immediately after making the deposit, the Company
shall give notice of such event and proposed date of payment to each
Securityholder.
The Company's obligations and, to the extent applicable, the
Guarantor's obligations, in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 9.07,
9.08 and 11.03 and Article 10, however, shall survive until the Securities are
no longer outstanding. Thereafter, the Company's obligations and, to the extent
applicable, the Guarantor's obligations, in Sections 9.07 and 11.03 shall
survive.
After a deposit, the Trustee upon request shall acknowledge in writing the
discharge of the Company's obligations under the Securities, the Guarantor's
obligations under the Guarantee and their obligations under the Indenture except
for those surviving obligations specified above.
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
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remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication or mailing, any unclaimed
balance of such money then remaining will be repaid to the Company. After
payment to the Company, Securityholders entitled to any of such money must look
to the Company or, if applicable, the Guarantor for payment as general creditors
unless applicable abandoned property law designates another person and all
liability of the Trustee or Paying Agent with respect to such money shall
thereupon cease.
ARTICLE 12.
Amendments, Supplements and Waivers
Section 12.01. Without Consent of Holders. The Company may amend or
supplement this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01;
(3) to provide for uncertificated Securities in addition to or in place of
certificated Securities; or
(4) to make any change that does not adversely affect the rights of any
Securityholder.
Section 12.02. With Consent of Holders. The Company may amend or supplement
this Indenture or the Securities without notice to any Securityholder but with
the written consent of the Holders of at least a majority in principal amount of
the Securities of all Series affected by the amendment voting as a class. The
Holders of a majority in principal amount of the Securities may waive compliance
by the Company with any provision of this Indenture or the Securities without
notice to any Securityholder. However, without the consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 8.04, may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(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;
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(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.
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.
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ARTICLE 13.
Miscellaneous
Section 13.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA or the TIA as amended after
the date hereof, the required provision shall control.
Section 13.02. Notices. Any notice or communication shall be sufficiently
given if in writing and delivered in person or mailed by first-class mail
addressed as follows: if to the Company or the Guarantor:
<TABLE>
<S> <C>
Toll Brothers, Inc., 3103 Philmont Avenue, Huntingdon Valley, Pennsylvania 19006
Attention: Chief Financial Officer
</TABLE>
with a copy to:
Mark K. Kessler, Esquire
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street, 22nd Floor
Philadelphia, PA 19103-2097
if to the Trustee:
Bank One Trust Company, NA
611 Woodward Avenue, 11th Floor
Detroit, Michigan 48226
Attention: Corporate Trust Securities Division
The Company, the Guarantor or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be mailed to
him at his address as it appears on the registration books of the Registrar and
shall be sufficiently given to him if so mailed within the time prescribed. In
addition, a copy of each such notice or communication shall be mailed to the
Trustee at the address specified above.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it. If the Company or the Guarantor
mails a notice or communication to Securityholders, it shall mail a copy of such
notice to the Trustee and each agent at the same time.
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).
-45-
<PAGE>
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.
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.
-46-
<PAGE>
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.
SIGNATURES
Dated: TOLL FINANCE CORP., as Issuer
By:
-------------------------
Name:
Title:
(SEAL)
Attest:
- ------------------------
Name:
Title:
-47-
<PAGE>
Dated: TOLL BROTHERS, INC., as Guarantor
By:
-------------------------
Name:
Title:
(SEAL)
Attest:
Name:
Title:
Dated: [Name of Trustee]
as Trustee
By:
-------------------------
Name:
Title:
(SEAL)
Attest:
- ------------------------
Name:
Title:
-48-
EXHIBIT 5
[FORM OF OPINION OF WOLF, BLOCK, SCHORR AND SOLIS-COHEN LLP]
, 1999
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
3103 Philmont Avenue
Huntingdon Valley, PA 19006
RE: Registration Statement on Form S-3
----------------------------------
Gentlemen:
As counsel for Toll Brothers, Inc., a Delaware corporation (the "Company"),
and its wholly owned subsidiaries, Toll Corp., a Delaware corporation ("Toll"),
Toll Finance Corp., a Delaware corporation ("TFC"), and First Huntingdon Finance
Corp., a Delaware corporation ("FHFC"), we have assisted in the preparation of a
Registration Statement on Form S-3 (together with all exhibits thereto and
documents incorporated by reference therein, the "Registration Statement") in
the form proposed to be filed by the Company, Toll, TFC and FHFC (collectively,
the "Registrants") with the Securities and Exchange Commission (the
"Commission"). The Registration Statement relates to the issuance and sale from
time to time, pursuant to Rule 415 of the General Rules and Regulations of the
Commission promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), of the following securities of the Registrants with an
aggregate initial public offering price of up to $500,000,000 or the equivalent
thereof in one or more foreign currencies or composite currencies: (i) debt
securities of Toll ("Toll Debt Securities"), TFC ("TFC Debt Securities") and
FHFC ("FHFC Debt Securities" and, collectively with the Toll Debt Securities and
the TFC Debt Securities, the "Debt Securities"), which may be any of senior
secured debt securities, senior unsecured debt securities, senior subordinated
debt securities or subordinated debt securities, in one or more series, which in
each case are to be issued under an indenture (an "Indenture" and, collectively
with any other indentures relating to other Debt Securities and/or Additional
Debt Securities (as defined), the "Indentures") to be entered into among the
issuer of the Debt Securities, the Company and Banc One Trust Company, NA or
another institution designated prior to the issuance of any Debt Securities
under such Indenture to serve as trustee thereunder (a "Trustee" and,
collectively with the trustees, if any, under other Indentures, the "Trustees");
(ii) the Company's unconditional and irrevocable
<PAGE>
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
, 1999
Page 2
guarantees of Debt Securities (the "Guarantees"); (iii) shares of the Company's
Common Stock, $.01 par value (the "Common Stock"); (iv) shares of the Company's
Preferred Stock, $.01 par value (the "Preferred Stock"), in one or more series;
(v) warrants to purchase Debt Securities (the "Debt Warrants") to be issued
pursuant to a warrant agreement relating to Debt Warrants and/or Additional Debt
Warrants (as defined), as the case may be (the "Debt Warrant Agreement"),
between the issuer of Debt Securities and/or the Additional Debt Securities, as
the case may be, to which the Debt Warrants and/or the Additional Debt Warrants
relate, the Company and a warrant agent (the "Debt Warrant Agent") to be
appointed prior to the issuance of Debt Warrants or Additional Debt Warrants;
(vi) warrants to purchase Common Stock (the "Common Stock Warrants") to be
issued pursuant to a warrant agreement relating to Common Stock Warrants and/or
Additional Common Stock Warrants (as defined), as the case may be (the "Common
Stock Warrant Agreement"), between the Company and a warrant agent (the "Common
Stock Warrant Agent") to be appointed prior to the issuance of Common Stock
Warrants or Additional Common Stock Warrants; and (vii) warrants to purchase
Preferred Stock (the "Preferred Stock Warrants", and, together with the Debt
Warrants and the Common Stock Warrants, the "Warrants") to be issued pursuant to
a warrant agreement relating to Preferred Stock Warrants and/or Additional
Preferred Stock Warrants (as defined), as the case may be (the "Preferred Stock
Warrant Agreement"), between the Company and a warrant agent (the "Preferred
Stock Warrant Agent") to be appointed prior to the issuance of Preferred Stock
Warrants or Additional Preferred Stock Warrants. The Debt Securities, the
Guarantees, the Common Stock, the Preferred Stock and the Warrants are
collectively referred to herein as the "Offered Securities."
This opinion is being delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K promulgated under the Securities Act.
For the purpose of rendering this opinion, we have examined (i) the
Registration Statement relating to the Offered Securities; (ii) the respective
forms of Indenture relating to the Toll Debt Securities and related Guarantees
(the "Toll Indenture"), the TFC Debt Securities and related Guarantees (the "TFC
Indenture") and the FHFC Debt Securities and related Guarantees (the "FHFC
Indenture"), each of which is being filed as an exhibit to the Registration
Statement; (iii) the Restated Articles of Incorporation of the Company, as
amended to date (the "Articles of Incorporation"); (iv) the Bylaws of the
Company as currently in effect (the "Bylaws"); and (v) certain resolutions
adopted by the respective Boards of Directors of the Company (the "Company
Board"), Toll (the "Toll Board"), TFC (the "TFC Board") and FHFC (the "FHFC
Board" and, collectively with the Company Board, the Toll Board and the TFC
Board, the "Registrants' Boards") relating to the issuance of the Offered
Securities and the authorization of the filing of an additional registration
statement (the "Additional Registration Statement") for the purpose of
registering for issuance and sale an additional amount of Offered Securities
pursuant to Rule 462(b) under the Securities Act (the "Additional Offered
Securities"). The Additional Offered Securities may consist of one or more of
the following: additional Debt Securities ("Additional
<PAGE>
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
, 1999
Page 3
Debt Securities"), which may consist of additional Toll Debt Securities
("Additional Toll Debt Securities"), additional TFC Debt Securities ("Additional
TFC Debt Securities") or additional FHFC Debt Securities ("Additional FHFC Debt
Securities"), additional Guarantees ("Additional Guarantees"), additional Common
Stock ("Additional Common Stock"), additional Preferred Stock ("Additional
Preferred Stock"), additional Debt Warrants ("Additional Debt Warrants"),
additional Common Stock Warrants ("Additional Common Stock Warrants") and
additional Preferred Stock Warrants ("Additional Preferred Stock Warrants"). We
have also examined originals or copies, certified or otherwise identified to our
satisfaction, of such records of the Registrants and such agreements,
certificates of public officials, certificates of officers or other
representatives of the Registrants and others and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed without independent verification (i)
the legal capacity of all natural persons, (ii) the genuineness of all
signatures, (iii) the authenticity of all documents submitted to us as
originals, (iv) the conformity to original documents of all documents submitted
to us as certified, conformed or photostatic copies and the authenticity of the
originals of such latter documents and (v) the power and authority of all
persons other than the Registrants signing such documents to execute, deliver
and perform such documents, and the valid authorization, execution and delivery
of such documents by such other persons. As to any facts material to the
opinions expressed herein which were not independently established or verified,
we have relied upon oral or written statements and representations of officers
or other representatives of the Registrants and others.
We are admitted to practice before the bar in the Commonwealth of
Pennsylvania and in the States of Delaware, New Jersey and New York and we do
not express any opinion as to the laws of any other jurisdiction other than the
federal laws of the United States of America to the extent referred to
specifically herein. The Offered Securities and any Additional Offered
Securities may be issued from time to time on a delayed or continuous basis, and
this opinion is limited to the laws, including applicable rules and regulations,
in effect on the date hereof. We assume no obligation to update this opinion.
Based upon and subject to the foregoing, such examinations of law and such
other matters as we have deemed relevant under the circumstances, we are of the
opinion that, as of the date hereof:
1. The form of Toll Indenture filed as an exhibit to the Registration
Statement (the "Basic Toll Indenture") has been duly authorized by the Toll
Board. The Basic Toll Indenture and each other Indenture in the form of the
Basic Toll Indenture, as modified in accordance with duly adopted resolutions of
the Toll Board and the Company Board (in each case, including any appropriate
committee appointed thereby) to reflect the additional terms applicable to the
<PAGE>
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
, 1999
Page 4
Toll Debt Securities and/or any Additional Toll Debt Securities and Guarantees
and/or any Additional Guarantees to which such Indenture relates, when executed
and delivered by Toll and the Company, will be a valid and binding agreement,
enforceable against Toll and the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally, (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), (c)
requirements that a claim with respect to any Toll Debt Securities and/or any
Additional Toll Debt Securities or the related Guarantees and/or any Additional
Guarantees denominated other than in United States dollars (or a judgment
denominated other than in United States dollars in respect of such claim) be
converted into United States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law and (d) governmental authority to limit,
delay or prohibit the making of payments outside the United States or in foreign
currency or composite currency.
2. The form of TFC Indenture filed as an exhibit to the Registration
Statement (the "Basic TFC Indenture") has been duly authorized by the TFC Board.
The Basic TFC Indenture and each other Indenture in the form of the Basic TFC
Indenture, as modified in accordance with duly adopted resolutions of the TFC
Board and the Company Board (in each case, including any appropriate Committee
appointed thereby) to reflect the additional terms applicable to the TFC Debt
Securities and/or any Additional TFC Debt Securities and Guarantees and/or any
Additional Guarantees to which such Indenture relates, when executed and
delivered by TFC and the Company, will be a valid and binding agreement,
enforceable against TFC and the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally, (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), (c)
requirements that a claim with respect to any TFC Debt Securities and/or any
Additional TFC Debt Securities or the related Guarantees and/or any Additional
Guarantees denominated other than in United States dollars (or a judgment
denominated other than in United States dollars in respect of such claim) be
converted into United States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law and (d) governmental authority to limit,
delay or prohibit the making of payments outside the United States or in foreign
currency or composite currency.
3. The form of FHFC Indenture filed as an exhibit to the Registration
Statement (the "Basic FHFC Indenture") has been duly authorized by the FHFC
Board. The Basic FHFC Indenture and each other Indenture in the form of the
Basic FHFC Indenture, as modified in accordance with duly adopted resolutions of
the FHFC Board and the Company Board (in each case, including any appropriate
committee appointed thereby) to reflect the additional terms
<PAGE>
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
, 1999
Page 5
applicable to the FHFC Debt Securities and/or any Additional FHFC Debt
Securities and Guarantees and/or any Additional Guarantees to which such
Indenture relates, when executed and delivered by FHFC and the Company, will be
a valid and binding agreement, enforceable against FHFC and the Company in
accordance with its terms, except to the extent that enforcement thereof may be
limited by (a) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally, (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity), (c) requirements that a claim with respect to any FHFC Debt Securities
and/or any Additional FHFC Debt Securities or the related Guarantees and/or any
Additional Guarantees denominated other than in United States dollars (or a
judgment denominated other than in United States dollars in respect of such
claim) be converted into United States dollars at a rate of exchange prevailing
on a date determined pursuant to applicable law and (d) governmental authority
to limit, delay or prohibit the making of payments outside the United States or
in foreign currency or composite currency.
4. With respect to any series of Debt Securities and/or Additional Debt
Securities and the related Guarantees and/or Additional Guarantees
(collectively, the "Offered Debt Securities"), when (i) if the Offered Debt
Securities are to be sold pursuant to a firm commitment underwritten offering,
the underwriting agreement with respect to the Offered Debt Securities (the
"Debt Underwriting Agreement") has been duly authorized, executed and delivered
by the issuer of the applicable Debt Securities and/or Additional Debt
Securities, the Company and the other parties thereto; (ii) if the Offered Debt
Securities are to be sold on an agency basis, the distribution agreement with
respect to the Offered Debt Securities (the "Debt Distribution Agreement") has
been duly authorized, executed and delivered by the issuer of the applicable
Debt Securities and/or Additional Debt Securities, the Company and the other
parties thereto; (iii) the Board of Directors of the issuer of the applicable
Debt Securities and/or Additional Debt Securities and the Company Board,
including in each case any appropriate committee appointed thereby, and
appropriate officers of the issuer of the applicable Debt Securities and/or
Additional Debt Securities and the Company have taken all necessary corporate
action to approve the issuance and terms of the Offered Debt Securities and
related matters; (iv) the terms of the Offered Debt Securities and of their
issuance and sale have been duly established in conformity with the Indenture
relating thereto so as not to violate any applicable law, the Articles of
Incorporation or Bylaws of the issuer of the applicable Debt Securities and/or
Additional Debt Securities or the Company or result in a default under or breach
of any agreement or instrument binding upon the issuer of the applicable Debt
Securities and/or Additional Debt Securities or the Company and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the issuer of the applicable Debt Securities and/or
Additional Debt Securities or the Company; (v) the applicable Indenture has been
duly executed and delivered by the issuer of the applicable Debt Securities
and/or Additional Debt Securities, the Company and the Trustee thereunder; and
(vi) the Offered Debt Securities have been duly
<PAGE>
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
, 1999
Page 6
executed and authenticated in accordance with the provisions of the applicable
Indenture and duly delivered to the purchasers thereof upon payment of the
agreed-upon consideration therefor, the Offered Debt Securities, when issued and
sold in accordance with the applicable Indenture and the related Debt
Underwriting Agreement or Debt Distribution Agreement, if any, or any other duly
authorized, executed and delivered applicable purchase agreement, will be valid
and binding obligations of the issuer of the applicable Debt Securities and/or
Additional Debt Securities and the Company, enforceable against the issuer of
the applicable Debt Securities and/or Additional Debt Securities and the Company
in accordance with their respective terms, except to the extent that enforcement
thereof may be limited by (a) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally, (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity), (c) requirements that a claim with respect to any of the Offered Debt
Securities denominated other than in United States dollars (or a judgment
denominated other than in United States dollars in respect of such claim) be
converted into United States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law and (d) governmental authority to limit,
delay or prohibit the making of payments outside the United States or in foreign
currency or composite currency.
We note that, as of the date hereof, a judgment for money in an action
based on an Offered Debt Security denominated in a foreign currency, currency
unit or composite currency in a federal or state court in the United States
ordinarily would be enforced in the United States only in United States dollars.
The date used to determine the rate of conversion of the foreign currency,
currency unit or composite currency in which a particular Offered Debt Security
is denominated into United States dollars will depend upon various factors,
including which court renders the judgment.
5. With respect to any shares of Common Stock and/or Additional Common
Stock (collectively, the "Offered Common Stock"), when (i) if the Offered Common
Stock is to be sold pursuant to a firm commitment underwritten offering, the
underwriting agreement with respect to the Offered Common Stock (the "Common
Stock Underwriting Agreement") has been duly authorized, executed and delivered
by the Company and the other parties thereto; (ii) if the Offered Common Stock
is to be sold on an agency basis, the distribution agreement with respect to the
Offered Common Stock (the "Common Stock Distribution Agreement") has been duly
authorized, executed and delivered by the Company and the other parties thereto;
(iii) the Company Board, including any appropriate committee appointed thereby,
and the appropriate officers of the Company have taken all necessary corporate
action to approve the issuance and terms of issuance of the shares of Offered
Common Stock in conformity with the Company's Articles of Incorporation and
Bylaws, so as not to violate any applicable law, the Company's Articles of
Incorporation or Bylaws or result in a default under or breach of any agreement
or instrument binding upon the Company and so as to comply with any requirement
or restriction
<PAGE>
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
, 1999
Page 7
imposed by any court or governmental body having jurisdiction over the Company;
and (iv) certificates representing the shares of the Offered Common Stock are
duly executed, countersigned, registered and delivered upon payment of the
agreed-upon consideration therefor, the shares of the Offered Common Stock, when
issued and sold in accordance with the related Common Stock Underwriting
Agreement or Common Stock Distribution Agreement, if any, or any other duly
authorized, executed and delivered applicable purchase agreement, will be duly
authorized, validly issued, fully paid and nonassessable, provided that the
consideration therefor is not less than the par value thereof.
6. With respect to the shares of any series of Preferred Stock and/or
Additional Preferred Stock (collectively, the "Offered Preferred Stock"), when
(i) if the Offered Preferred Stock is to be sold pursuant to a firm commitment
underwritten offering, the underwriting agreement with respect to the shares of
the Offered Preferred Stock (the "Preferred Stock Underwriting Agreement") has
been duly authorized, executed and delivered by the Company and the other
parties thereto; (ii) if the Offered Preferred Stock is to be sold on an agency
basis, the distribution agreement with respect to the Offered Preferred Stock
(the "Preferred Stock Distribution Agreement") has been duly authorized,
executed and delivered by the Company and the other parties thereto; (iii) the
Company Board, including any appropriate committee appointed thereby, and the
appropriate officers of the Company have taken all necessary corporate action to
approve the issuance and terms of the shares of the Offered Preferred Stock and
related matters, including the adoption of a certificate of designation for the
Offered Preferred Stock in the form required by applicable law (the "Certificate
of Designation"); (iv) the filing of the Certificate of Designation with the
Secretary of State of the State of Delaware has duly occurred; (v) the terms of
the Offered Preferred Stock and of their issuance and sale have been duly
established in conformity with the Company's Articles of Incorporation, the
Certificate of Designation and the Company's Bylaws, so as not to violate any
applicable law, the Company's Articles of Incorporation, the Certificate of
Designation or the Company's Bylaws or result in a default under or breach of
any agreement or instrument binding upon the Company and so as to comply with
any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company; and (vi) certificates representing the shares of
the Offered Preferred Stock are duly executed, countersigned, registered and
delivered upon payment of the agreed-upon consideration therefor, the shares of
the Offered Preferred Stock, when issued and sold in accordance with the related
Preferred Stock Underwriting Agreement or Preferred Stock Distribution
Agreement, if any, or any other duly authorized, executed and delivered
applicable purchase agreement, will be duly authorized, validly issued, fully
paid and nonassessable, provided that the consideration therefor is not less
than the par value thereof.
7. With respect to any Debt Warrants and/or Additional Debt Warrants
(collectively, the "Offered Debt Warrants"), when (i) if the Offered Debt
Warrants are to be sold pursuant to a
<PAGE>
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
, 1999
Page 8
firm commitment underwritten offering, the Debt Underwriting Agreement with
respect to the Offered Debt Warrants has been duly authorized, executed and
delivered by the issuer of the Debt Securities and/or Additional Debt Securities
to which the Offered Debt Warrants relate, the Company and the other parties
thereto; (ii) if the Offered Debt Warrants are to be sold on an agency basis,
the distribution agreement with respect to the Offered Debt Warrants (the "Debt
Warrant Distribution Agreement") has been duly authorized, executed and
delivered by the issuer of the Debt Securities and/or Additional Debt Securities
to which the Offered Debt Warrants relate, the Company and the other parties
thereto; (iii) the Board of Directors of the issuer of the Debt Securities
and/or Additional Debt Securities to which the Offered Debt Warrants relate and
the Company Board, including in each case any appropriate committee appointed
thereby, and appropriate officers of the issuer of the Debt Securities and/or
Additional Debt Securities to which the Offered Debt Warrants relate and the
Company have taken all necessary corporate action to approve the issuance and
terms of the Offered Debt Warrants and related matters; (iv) the terms of the
Offered Debt Warrants and of their issuance and sale have been duly established
in conformity with the Debt Warrant Agreement so as not to violate any
applicable law, the Articles of Incorporation or the Bylaws of the issuer of the
Debt Securities and/or Additional Debt Securities to which the Offered Debt
Warrants relate or the Company or result in a default under or breach of any
agreement or instrument binding upon the issuer of the Debt Securities and/or
Additional Debt Securities to which the Offered Debt Warrants relate or the
Company and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the issuer of the Debt
Securities and/or Additional Debt Securities to which the Offered Debt Warrants
relate or the Company; (v) the Debt Warrant Agreement has been duly authorized,
executed and delivered by the issuer of the Debt Securities and/or Additional
Debt Securities to which the Offered Debt Warrants relate and the Company to the
Debt Warrant Agent; (vi) the Debt Warrant Agreement has been duly authorized,
delivered and executed by the Debt Warrant Agent; and (vii) the Offered Debt
Warrants have been duly executed and authenticated in accordance with the
provisions of the Debt Warrant Agreement and duly delivered to the purchasers
thereof upon payment of the agreed-upon consideration therefor, the Offered Debt
Warrants, when issued and sold in accordance with the Debt Warrant Agreement and
the related Debt Underwriting Agreement or Debt Warrant Distribution Agreement,
if any, or any other duly authorized, executed and delivered applicable purchase
agreement, will be valid and binding obligations of the issuer of the Debt
Securities and/or Additional Debt Securities to which the Offered Debt Warrants
relate and the Company, enforceable against the issuer of the Debt Securities
and/or Additional Debt Securities to which the offered Debt Warrants relate and
the Company in accordance with their respective terms, except to the extent that
enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally, (b)
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity), (c) requirements that a claim with respect
to any Debt Warrants or Additional Debt Warrants to purchase Debt
<PAGE>
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
, 1999
Page 9
Securities or Additional Debt Securities denominated other than in United States
dollars (or a judgment denominated other than in United States dollars in
respect of such claim) be converted into United States dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law and (d)
governmental authority to limit, delay or prohibit the making of payments
outside the United States or in foreign currency or composite currency.
We note that, as of the date hereof, a judgment for money in an action
based on a Debt Warrant or an Additional Debt Warrant to purchase a Debt
Security or an Additional Debt Security denominated in a foreign currency,
currency unit or composite currency in a federal or state court in the United
States ordinarily would be enforced in the United States only in United States
dollars. The date used to determine the rate of conversion of the foreign
currency, currency unit or composite currency in which a particular Debt
Security or Additional Debt Security is denominated into United States dollars
will depend upon various factors, including which court renders the judgment.
8. With respect to any Preferred Stock Warrants and/or Additional Preferred
Stock Warrants (collectively, the "Offered Preferred Stock Warrants"), when (i)
if the Offered Preferred Stock Warrants are to be sold pursuant to a firm
commitment underwritten offering, the Preferred Stock Underwriting Agreement
with respect to the Offered Preferred Stock Warrants has been duly authorized,
executed and delivered by the Company and the other parties thereto; (ii) if the
Offered Preferred Stock Warrants are to be sold on an agency basis, the
distribution agreement with respect to the Offered Preferred Stock Warrants (the
"Preferred Stock Warrant Distribution Agreement") has been duly authorized,
executed and delivered by the Company and the other parties thereto; (iii) the
Company Board, including any appropriate committee appointed thereby, and
appropriate officers of the Company have taken all necessary corporate action to
approve the issuance and terms of the Offered Preferred Stock Warrants and
related matters; (iv) the terms of the Offered Preferred Stock Warrants and of
their issuance and sale have been duly established in conformity with the
Preferred Stock Warrant Agreement so as not to violate any applicable law, the
Company's Articles of Incorporation or Bylaws or result in a default under or
breach of any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company; (v) the Preferred Stock Warrant
Agreement has been duly authorized, executed and delivered by the Company to the
Preferred Stock Warrant Agent; (vi) the Preferred Stock Warrant Agreement has
been duly authorized, executed and delivered by the Preferred Stock Warrant
Agent; and (vii) the Offered Preferred Stock Warrants have been duly executed
and authenticated in accordance with the provisions of the Preferred Stock
Warrant Agreement and duly delivered to the purchasers thereof upon payment of
the agreed-upon consideration therefor, the Offered Preferred Stock Warrants,
when issued and sold in accordance with the Preferred Stock Warrant Agreement
and the related Preferred Stock Underwriting Agreement or Preferred Stock
Warrant Distribution Agreement, if any, or any other duly authorized, executed
and delivered applicable
<PAGE>
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
, 1999
Page 10
purchase agreement, will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except to the extent that enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), provided that
the per share consideration payable upon the exercise of the Offered Preferred
Stock Warrants is not less than the par value of the Preferred Stock.
9. With respect to any Common Stock Warrants and/or Additional Common Stock
Warrants (collectively, the "Offered Common Stock Warrants"), when (i) if the
Offered Common Stock Warrants are to be sold pursuant to a firm commitment
underwritten offering, the Common Stock Underwriting Agreement with respect to
the Offered Common Stock Warrants has been duly authorized, executed and
delivered by the Company and the other parties thereto; (ii) if the Offered
Common Stock Warrants are to be sold on an agency basis, the distribution
agreement with respect to the Offered Common Stock Warrants (the "Common Stock
Warrant Distribution Agreement") has been duly authorized, executed and
delivered by the Company and the other parties thereto; (iii) the Company Board,
including any appropriate committee appointed thereby, and appropriate officers
of the Company have taken all necessary corporate action to approve the issuance
and terms of the Offered Common Stock Warrants and related matters; (iv) the
terms of the Offered Common Stock Warrants and of their issuance and sale have
been duly established in conformity with the Common Stock Warrant Agreement so
as not to violate any applicable law, the Company's Articles of Incorporation or
Bylaws or result in a default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any requirement or restriction
imposed by any court or governmental body having jurisdiction over the Company;
(v) the Common Stock Warrant Agreement has been duly authorized, executed and
delivered by the Company to the Common Stock Warrant Agent; (vi) the Common
Stock Warrant Agreement has been duly authorized, executed and delivered by the
Common Stock Warrant Agent; and (vii) the Offered Common Stock Warrants have
been duly executed and authenticated in accordance with the provisions of the
Common Stock Warrant Agreement and duly delivered to the purchasers thereof upon
payment of the agreed-upon consideration therefor, the Offered Common Stock
Warrants, when issued and sold in accordance with the Common Stock Warrant
Agreement and the related Common Stock Underwriting Agreement or Common Stock
Warrant Distribution Agreement, if any, or any other duly authorized, executed
and delivered applicable purchase agreement, will be valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except to the extent that enforcement thereof may be
limited by (a) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity),
<PAGE>
Toll Brothers, Inc.
Toll Corp.
Toll Finance Corp.
First Huntingdon Finance Corp.
, 1999
Page 11
provided that the per share consideration payable upon the exercise of the
Offered Common Stock Warrants is not less than the par value of the Common
Stock.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the reference to our
firm under the heading "Legal Matters" in the Registration Statement. In giving
this consent, I do not admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act or the Rules and
Regulations of the Commission.
Very truly yours,
EXHIBIT 12
STATEMENT RE: COMPUTATION OF RATIOS
TOLL BROTHERS, INC. AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
(Amounts in thousands, except ratios)
<TABLE>
<CAPTION>
Year Ended October 31, Nine Months
------------------------------------------------------------ Ended
1994 1995 1996 1997 1998 July 31, 1999
------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income taxes and extraordinary
loss and change in accounting ....................... $56,840 $ 79,739 $ 85,793 $107,646 $134,293 $109,831
Homebuilding:
Interest expense: .................................... 20,136 22,473 24,646 29,746 36,052 28,159
Rent expense ......................................... 71 93 151 193 293 280
Amortization ......................................... 785 801 705 667 610 457
Collateralized mortgage financing:
Interest expense ..................................... 624 376 300 233 184 82
Amortization ......................................... 157 29 -- -- -- --
------- -------- -------- -------- -------- --------
$78,613 $103,511 $111,595 $138,485 $171,432 $138,809
======= ======== ======== ======== ======== ========
Fixed charges:
Homebuilding:
Interest incurred: ................................... $21,701 $ 25,780 $ 27,695 $ 35,242 $ 38,331 $ 37,390
Rent expense ......................................... 71 93 151 193 293 280
Amortization ........................................... 785 801 705 667 610 457
Collateralized mortgage financing:
Interest incurred .................................... 624 376 300 233 184 82
Amortization ......................................... 157 29 -- -- -- --
------- -------- -------- -------- -------- --------
$23,338 $ 27,079 $ 28,851 $ 36,335 $ 39,418 $ 38,209
======= ======== ======== ======== ======== ========
Ratio, including collateralized mortgage financing(1)... 3.37 3.82 3.87 3.81 4.35 3.63
======= ======== ======== ======== ======== ========
</TABLE>
- ----------
(1) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income before income taxes, extraordinary loss and change in
accounting plus interest expense and fixed charges except interest
incurred. Fixed charges consist of interest incurred (whether expensed or
capitalized), the portion of rent expense that is representative of the
interest factor, and amortization of debt discount and issuance costs.
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 Nos. 333-00000, 333-00000-01, 333-00000-02 and
333-00000-03) and related Prospectus of Toll Brothers, Inc., Toll Corp., First
Huntingdon Finance Corp., and Toll Finance Corp. for the registration of Debt
Securities of Toll Corp., First Huntingdon Finance Corp., and Toll Finance Corp.
and Common Stock, Preferred Stock, Warrants and Guarantees of Debt Securities of
Toll Brothers, Inc. and to the incorporation by reference therein of our report
dated December 8, 1998, with respect to the consolidated financial statements
and schedule of Toll Brothers, Inc. included in the Annual Report (Form 10-K) of
Toll Brothers, Inc. for the year ended October 31, 1998, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
Philadelphia, Pennsylvania
November 22, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
-------------------
BANK ONE TRUST COMPANY, NA
---------------------------------------------------
(Exact name of trustee as specified in its charter)
A National Banking Association 31-0838515
----------------------
(I.R.S. employer
identification number)
100 East Broad Street, Columbus, Ohio 43271-0181
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
-------------------
BANK ONE TRUST COMPANY, NA
100 East Broad Street
Columbus, Ohio 43271-0181
Attn: Linda J. Patterson, Senior Managing Director, (614) 248-5193
------------------------------------------------------------------
(Name, address and telephone number of agent for service)
Toll Corp.
Toll Brothers, Inc.
---------------------------------------------------
(Exact name of obligor as specified in its charter)
Delaware 22-2485860
Delaware 22-2416878
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
3103 Philmont Avenue
Huntingdon Valley, Pennsylvania 19006
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Debt Securities
Guarantee of Debt Securities of Toll Corp.
------------------------------------------
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C.;
Federal Deposit Insurance Corporation,
Washington, D.C.; The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.
2. A copy of the certificates of authority of the trustee to
commence business.
3. A copy of the authorization of the trustee to exercise corporate
trust powers.
4. A copy of the existing by-laws of the trustee.
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority.
8. Not Applicable.
2
<PAGE>
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bank One Trust Company, NA, a national banking
association organized and existing under the laws of the United States
of America, has duly caused this Statement of Eligibility to be signed
on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois on the 18th day of November,
1999.
BANK ONE TRUST COMPANY, NA
Trustee
By /s/ John R. Prendiville
-------------------
John R. Prendiville
Vice President
3
<PAGE>
EXHIBIT 1
A COPY OF THE ARTICLES OF ASSOCIATION OF THE
TRUSTEE NOW IN EFFECT
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
of
BANK ONE TRUST COMPANY, NA
FIRST. The title of this Association shall be BANK ONE TRUST COMPANY, NA.
SECOND. The main office of the Association shall be in the City of Columbus,
County of Franklin, State of Ohio.
The business of the Association will be limited to the fiduciary powers and the
support of activities incidental to the exercise of those powers. The
Association will not expand or alter its business beyond that stated in this
article without the prior approval of the Comptroller of the Currency.
THIRD. The Board of Directors of this Association shall consist of not less than
five nor more than twenty-five persons, the exact number to be fixed and
determined from time to time by resolution of a majority of the full Board of
Directors or by resolution of a majority of the shareholders at any annual or
special meeting thereof. Each director shall own common or preferred stock of
the Association, or of a holding company owning the Association, with an
aggregate par, fair market or equity value of not less than $1,000, as of either
(i) the date of purchase, (ii) the date the person became a director, or (iii)
the date of that person's most recent election to the Board of Directors,
whichever is more recent. Any combination of common or preferred stock of the
Association or holding company may be used.
Any vacancy in the Board of Directors may be filled by action of a majority of
the remaining directors between meetings of shareholders. The Board of Directors
may not increase the number of directors between meetings of shareholders to a
number which: (1) exceeds by more than two the number of directors last elected
by shareholders where the number was 15 or less; or (2) exceeds by more than
four the number of directors last elected by shareholders where the number was
16 or more, but in no event shall the number of directors exceed 25.
Terms of directors, including directors selected to fill vacancies, shall expire
at the next regular meeting of shareholders at which directors are elected,
unless the directors resign or are removed from office.
Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.
Honorary or advisory members of the Board of Directors, without voting power or
power of final decision in matters concerning the business of the Association,
may be appointed by resolution of a majority of the full Board of Directors, or
by resolution of shareholders at any annual or special
4
<PAGE>
meeting. Honorary or advisory directors shall not be counted to determine the
number of directors of the Association or the presence of a quorum in connection
with any board action, and shall not be required to own qualifying shares.
FOURTH. There shall be an annual meeting of the shareholders to elect directors
and transact whatever other business may be brought before the meeting. It shall
be held at the main office or any other convenient place the Board of Directors
may designate, on the day of each year specified therefor in the Bylaws or, if
that day falls on a legal holiday in the state in which the Association is
located, on the next following banking day. If no election is held on the day
fixed or in the event of a legal holiday on the following banking day, an
election may be held on any subsequent day within 60 days of the day fixed, to
be designated by the Board of Directors or, if the directors fail to fix the
day, by shareholders representing two-thirds of the shares issued and
outstanding. In all cases at least 10 days advance notice of the meeting shall
be given to the shareholders by first class mail.
In all elections of directors, the number of votes each common shareholder may
cast will be determined by multiplying the number of shares such shareholder
owns by the number of directors to be elected. Those votes may be cumulated and
cast for a single candidate or may be distributed among two or more candidates
in the manner selected by the shareholder. On all other questions, each common
shareholder shall be entitled to one vote for each share of stock held by such
shareholder. If the issuance of preferred stock with voting rights has been
authorized by a vote of shareholders owning a majority of the common stock of
the association, preferred shareholders will have cumulative voting rights and
will be included within the same class as common shareholders, for purposes of
elections of directors.
A director may resign at any time by delivering written notice to the Board of
Directors, its chairperson, or to the Association, which resignation shall be
effective when the notice is delivered unless the notice specifies a later
effective date.
A director may be removed by shareholders at a meeting called to remove him or
her, when notice of the meeting stating that the purpose or one of the purposes
is to remove him or her is provided, if there is a failure to fulfill one of the
affirmative requirements for qualification, or for cause, provided, however,
that a director may not be removed if the number of votes sufficient to elect
him or her under cumulative voting is voted against his or her removal.
FIFTH. The authorized amount of capital stock of this Association shall be
eighty thousand shares of common stock of the par value of ten dollars ($10.00)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion, may from time to time determine and at such
price as the Board of Directors may from time to time fix.
Unless otherwise specified in the Articles of Association or required by law,
(1) all matters requiring shareholder action, including amendments to the
Articles of Association, must be
5
<PAGE>
approved by shareholders owning a majority voting interest in the outstanding
voting stock, and (2) each shareholder shall be entitled to one vote per share.
Unless otherwise specified in the Articles of Association or required by law,
all shares of voting stock shall be voted together as a class on any matters
requiring shareholder approval. If a proposed amendment would affect two or more
classes or series in the same or a substantially similar way, all the classes or
series so affected must vote together as a single voting group on the proposed
amendment.
Shares of the same class or series may be issued as a dividend on a pro rata
basis and without consideration. Shares of another class or series may be issued
as share dividends in respect of a class or series of stock if approved by a
majority of the votes entitled to be cast by the class or series to be issued
unless there are no outstanding shares of the class or series to be issued.
Unless otherwise provided by the Board of Directors, the record date for
determining shareholders entitled to a share dividend shall be the date the
Board of Directors authorizes the share dividend.
Unless otherwise provided in the Bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close of
business on the day before the first notice is mailed or otherwise sent to the
shareholders, provided that in no event may a record date be more than 70 days
before the meeting.
If a shareholder is entitled to fractional shares pursuant to preemptive rights,
a stock dividend, consolidation or merger, reverse stock split or otherwise, the
Association may: (a) issue fractional shares or; (b) in lieu of the issuance of
fractional shares, issue script or warrants entitling the holder to receive a
full share upon surrendering enough script or warrants to equal a full share;
(c) if there is an established and active market in the Association's stock,
make reasonable arrangements to provide the shareholder with an opportunity to
realize a fair price through sale of the fraction, or purchase of the additional
fraction required for a full share; (d) remit the cash equivalent of the
fraction to the shareholder; or (e) sell full shares representing all the
fractions at public auction or to the highest bidder after having solicited and
received sealed bids from at least three licensed stock brokers, and distribute
the proceeds pro rata to shareholders who otherwise would be entitled to the
fractional shares. The holder of a fractional share is entitled to exercise the
rights for shareholder, including the right to vote, to receive dividends, and
to participate in the assets of the Association upon liquidation, in proportion
to the fractional interest. The holder of script or warrants is not entitled to
any of these rights unless the script or warrants explicitly provide for such
rights. The script or warrants may be subject to such additional conditions as:
(1) that the script or warrants will become void if not exchanged for full
shares before a specified date; and (2) that the shares for which the script or
warrants are exchangeable may be sold at the option of the Association and the
proceeds paid to scriptholders.
The Association, at any time and from time to time, may authorize and issue debt
obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt, whether or not subordinated, which
may be issued by the Association without the approval of shareholders, do not
carry voting rights on any issue, including an increase or decrease in the
aggregate number of the securities, or the exchange or reclassification of all
or part of securities into securities of another class or series.
6
<PAGE>
SIXTH. The Board of Directors shall appoint one of its members president of this
Association, and one of its members chairperson of the board and shall have the
power to appoint one or more vice presidents, a secretary who shall keep minutes
of the directors' and shareholders' meetings and be responsible for
authenticating the records of the Association, and such other officers and
employees as may be required to transact the business of this Association. A
duly appointed officer may appoint one or more officers or assistant officers if
authorized by the Board of Directors in accordance with the Bylaws.
The Board of Directors shall have the power to:
(1) Define the duties of the officers, employees, and agents of the
Association.
(2) Delegate the performance of its duties, but not the responsibility for its
duties, to the officers, employees, and agents of the Association.
(3) Fix the compensation and enter into employment contracts with its officers
and employees upon reasonable terms and conditions consistent with
applicable law.
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and to fix the penalty thereof.
(6) Ratify written policies authorized by the Association's management or
committees of the board.
(7) Regulate the manner in which any increase or decrease of the capital of the
Association shall be made, provided that nothing herein shall restrict the
power of shareholders to increase or decrease the capital of the
association in accordance with law, and nothing shall raise or lower from
two-thirds the percentage for shareholder approval to increase or reduce
the capital.
(8) Manage and administer the business and affairs of the Association.
(9) Adopt initial Bylaws, not inconsistent with law or the Articles of
Association, for managing the business and regulating the affairs of the
Association.
(10) Amend or repeal Bylaws, except to the extent that the Articles of
Association reserve this power in whole or in part to shareholders.
(11) Make contracts.
(12) Generally perform all acts that are legal for a Board of Directors to
perform.
SEVENTH. The Board of Directors shall have the power to change the location of
the main office of this Association to any other place within the limits of the
City of Columbus, State of Ohio, without the approval of the shareholders; and
shall have the power to change the location of the main office of this
Association to any other place outside the limits of the City of Columbus, State
of Ohio, but not more than thirty miles beyond such limits, with the affirmative
vote of shareholders owning two-thirds of the stock of the Association, subject
to receipt of a
7
<PAGE>
certificate of approval from the Comptroller of the Currency. The Board of
Directors shall have the power to establish or change the location of any branch
or branches of the Association to any other location permitted under applicable
law without the approval of the shareholders, subject to approval by the Office
of the Comptroller of the Currency. The Board of Directors shall have the power
to establish or change the location of any nonbranch office or facility of the
Association without the approval of the shareholders.
EIGHTH. The corporate existence of this Association shall continue until
termination according to the laws of the United States.
NINTH. The Board of Directors of this Association, or any shareholders owning,
in the aggregate, not less than 20 percent of the stock of this Association, may
call a special meeting of shareholders at any time. Unless otherwise provided by
the Bylaws or the laws of the United States, or waived by shareholders, a notice
of the time, place, and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage prepaid, mailed at
least 10, and no more than 60, days prior to the date of the meeting to each
shareholder of record at his/her address as shown upon the books of this
Association. Unless otherwise provided by the Bylaws, any action requiring
approval of shareholders must be effected at a duly called annual or special
meeting.
TENTH. The Association shall provide indemnification as set forth below:
Every person who is or was a Director, officer or employee of the Association or
of any other corporation which he served as a Director, officer or employee at
the request of the Association as part of his regularly assigned duties may be
indemnified by the Association in accordance with the provisions of this Article
against all liability (including, without limitation, judgments, fines,
penalties, and settlements) and all reasonable expenses (including, without
limitation, attorneys' fees and investigative expenses) that may be incurred or
paid by him in connection with any claim, action, suit or proceeding, whether
civil, criminal or administrative (all referred to hereafter in this Article as
"Claims") or in connection with any appeal relating thereto in which he may
become involved as a party or otherwise or with which he may be threatened by
reason of his being or having been a Director, officer or employee of the
Association or such other corporation, or by reason of any action taken or
omitted by him in his capacity as such Director, officer or employee, whether or
not he continues to be such at the time such liability or expenses are incurred;
provided that nothing contained in this Article shall be construed to permit
indemnification of any such person who is adjudged guilty of, or liable for,
willful misconduct, gross neglect of duty or criminal acts, unless, at the time
such indemnification is sought, such indemnification in such instance is
permissible under applicable law and regulations, including published rulings of
the Comptroller of the Currency or other appropriate supervisory or regulatory
authority; and provided further that there shall be no indemnification of
Directors, officers, or employees against expenses, penalties, or other payments
incurred in an administrative proceeding or action instituted by an appropriate
regulatory agency which proceeding or action results in a final order assessing
civil money penalties or requiring affirmative action by an individual or
individuals in the form of payments to the Association.
Every person who may be indemnified under the provisions of this Article and who
has been wholly successful on the merits with respect to any Claim shall be
entitled to indemnification as of right. Except as provided in the preceding
sentence, any indemnification under this Article shall be at the sole discretion
of the Board of Directors and shall be made only if the Board of
8
<PAGE>
Directors or the Executive Committee acting by a quorum consisting of Directors
who are not parties to such Claim shall find or if independent legal counsel
(who may be the regular counsel of the Association) selected by the Board of
Directors or Executive Committee whether or not a disinterested quorum exists
shall render their opinion that in view of all of the circumstances then
surrounding the Claim, such indemnification is equitable and in the best
interests of the Association. Among the circumstances to be taken into
consideration in arriving at such a finding or opinion is the existence or
non-existence of a contract of insurance or indemnity under which the
Association would be wholly or partially reimbursed for such indemnification,
but the existence or non-existence of such insurance is not the sole
circumstance to be considered nor shall it be wholly determinative of whether
such indemnification shall be made. In addition to such finding or opinion, no
indemnification under this Article shall be made unless the Board of Directors
or the Executive Committee acting by a quorum consisting of Directors who are
not parties to such Claim shall find or if independent legal counsel (who may be
the regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that the Directors, officer or employee acted in good faith in
what he reasonably believed to be the best interests of the Association or such
other corporation and further in the case of any criminal action or proceeding,
that the Director, officer or employee reasonably believed his conduct to be
lawful. Determination of any Claim by judgment adverse to a Director, officer or
employee by settlement with or without Court approval or conviction upon a plea
of guilty or of nolo contendere or its equivalent shall not create a presumption
that a Director, officer or employee failed to meet the standards of conduct set
forth in this Article. Expenses incurred with respect to any Claim may be
advanced by the Association prior to the final disposition thereof upon receipt
of an undertaking satisfactory to the Association by or on behalf of the
recipient to repay such amount unless it is ultimately determined that he is
entitled to indemnification under this Article.
The rights of indemnification provided in this Article shall be in addition to
any rights to which any Director, officer or employee may otherwise be entitled
by contract or as a matter of law. Every person who shall act as a Director,
officer or employee of this Association shall be conclusively presumed to be
doing so in reliance upon the right of indemnification provided for in this
Article.
ELEVENTH. These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of this Association, unless the vote of the holders of a greater
amount of stock is required by law, and in that case by the vote of the holders
of such greater amount. The Association's Board of Directors may propose one or
more amendments to the Articles of Association for submission to the
shareholders.
9
<PAGE>
EXHIBIT 2
A COPY OF THE CERTIFICATE OF AUTHORITY OF THE
TRUSTEE TO COMMENCE BUSINESS
CERTIFICATE
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "Bank One Trust Company, National Association," Columbus, Ohio, (Charter No.
16235) is a National Banking Association formed under the laws of the United
States and is authorized thereunder to transact the business of banking on the
date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at the
Treasury Department in the City of
Washington and District of Columbia, this
24th day of March, 1999.
/s/ John D. Hawke, Jr.
---------------------------
Comptroller of the Currency
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EXHIBIT 3
A COPY OF THE AUTHORIZATION OF THE TRUSTEE
TO EXERCISE CORPORATE TRUST POWERS
CERTIFICATE
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "Bank One Trust Company, National Association," Columbus, Ohio, (Charter No.
16235) was granted, under the hand and seal of the Comptroller, the right to act
in all fiduciary capacities authorized under the provisions of the Act of
Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and that the
authority so granted remains in full force and effect on the date of this
Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at the
Treasury Department in the City of
Washington and District of Columbia, this
24th day of March, 1999.
/s/ John D. Hawke, Jr.
---------------------------
Comptroller of the Currency
11
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EXHIBIT 4
A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE
BANK ONE TRUST COMPANY, N.A.
BY-LAWS
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1.01. ANNUAL MEETING. The regular annual meeting of the shareholders of
the Bank for the election of Directors and for the transaction of such business
as may properly come before the meeting shall be held at its main office, or
other convenient place duly authorized by the Board of Directors, on the same
day upon which any regular or special Board meeting is held from and including
the first Monday of January to, and including, the fourth Monday of February of
each year, or on the next succeeding banking day, if the day fixed falls on a
legal holiday. If from any cause, an election of Directors is not made on the
day fixed for the regular meeting of the shareholders or, in the event of a
legal holiday, on the next succeeding banking day, the Board of Directors shall
order the election to be held on some subsequent day, as soon thereafter as
practicable, according to the provisions of law; and notice thereof shall be
given in the manner herein provided for the annual meeting. Notice of such
annual meeting shall be given by or under the direction of the Secretary, or
such other officer as may be designated by the Chief Executive Officer, by
first-class mail, postage prepaid, to all shareholders of record of the Bank at
their respective addresses as shown upon the books of the Bank mailed not less
than ten days prior to the date fixed for such meeting.
SECTION 1.02. SPECIAL MEETINGS. A special meeting of the shareholders of the
Bank may be called at any time by the Board of Directors or by any three or more
shareholders owning, in the aggregate, not less than ten percent of the stock of
the Bank. Notice of any special meeting of the shareholders called by the Board
of Directors, stating the time, place and purpose of the meeting, shall be given
by or under the direction of the Secretary, or such other officer as is
designated by the Chief Executive Officer, by first-class mail, postage prepaid,
to all shareholders of record of the Bank at their respective addresses as shown
upon the books of the Bank mailed not less than ten days prior to the date fixed
for such meeting. Any special meeting of shareholders shall be conducted and its
proceedings recorded in the manner prescribed in these By-Laws for annual
meetings of shareholders.
SECTION 1.03. SECRETARY OF MEETING OF SHAREHOLDERS. The Board of Directors may
designate a person to be the secretary of the meeting of shareholders. In the
absence of a presiding officer, as designated by these By-Laws, the Board of
Directors may designate a person to act as the presiding officer. In the event
the Board of Directors fails to designate a person to preside at a meeting of
shareholders and a secretary of such meeting, the shareholders present or
represented shall elect a person to preside and a person to serve as secretary
of the meeting. The secretary of the meeting of shareholders shall cause the
returns made by the judges of election and other proceedings to be recorded in
the minute books of the Bank. The presiding officer
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shall notify the Directors-elect of their election and to meet forthwith for the
organization of the new Board of Directors. The minutes of the meeting shall be
signed by the presiding officer and the secretary designated for the meeting.
SECTION 1.04. JUDGES OF ELECTION. The Board of Directors may appoint as many as
three shareholders to be judges of the election, who shall hold and conduct the
same, and who shall, after the election has been held, notify, in writing over
their signatures, the secretary of the meeting of shareholders of the result
thereof and the names of the Directors elected; provided, however, that upon
failure for any reason of any judge or judges of election, so appointed by the
Directors, to serve, the presiding officer of the meeting shall appoint other
shareholders or their proxies to fill the vacancies. The judges of election, at
the request of the chairman of the meeting, shall act as tellers of any other
vote by ballot taken at such meeting, and shall notify, in writing over their
signature, the secretary of the Board of Directors of the result thereof.
SECTION 1.05. PROXIES. In all elections of Directors, each shareholder of
record, who is qualified to vote under the provisions of Federal Law, shall have
the right to vote the number of shares of record in such shareholder's name for
as many persons as there are Directors to be elected, or to cumulate such shares
as provided by Federal Law. In deciding all other questions at meetings of
shareholders, each shareholder shall be entitled to one vote on each share of
stock of record in such shareholder's name. Shareholders may vote by proxy duly
authorized in writing. All proxies used at the annual meeting shall be secured
for that meeting only, or any adjournment thereof, and shall be dated, if not
dated by the shareholder, as of the date of the receipt thereof. No officer or
employee of this Bank may act as proxy.
SECTION 1.06. QUORUM. Holders of record of a majority of the shares of the
capital stock of the Bank, eligible to be voted, present either in person or by
proxy, shall constitute a quorum for the transaction of business at any meeting
of shareholders, but shareholders present at any meeting and constituting less
than a quorum may, without further notice, adjourn the meeting from time to time
until a quorum is obtained. A majority of the votes cast shall decide every
question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.
ARTICLE II
DIRECTORS
SECTION 2.01. QUALIFICATIONS. Each Director shall have the qualifications
prescribed by law. No person elected as a Director may exercise any of the
powers of office until such Director has taken the oath of such office.
SECTION 2.02. VACANCIES. Directors of the Bank shall hold office for one year or
until their successors are elected and qualified. Any vacancy in the Board shall
be filled by appointment of the remaining Directors, and any Director so
appointed shall hold office until the next election.
SECTION 2.03. ORGANIZATION MEETING. The Directors elected by the shareholders
shall meet for organization of the new Board of Directors at the time and place
fixed by the presiding officer of the annual meeting. If at the time fixed for
such meeting there is no quorum present,
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the Directors in attendance may adjourn from time to time until a quorum is
obtained. A majority of the number of Directors elected by the shareholders
shall constitute a quorum for the transaction of business.
SECTION 2.04. REGULAR MEETINGS. The regular meetings of the Board of Directors
shall be held at such date, time and place as the Board may previously
designate, or should the Board fail to so designate, at such date, time and
place as the Chairman of the Board, Chief Executive Officer, or President may
fix. Whenever a quorum is not present, the Directors in attendance shall adjourn
the meeting to a time not later than the date fixed by the By-Laws for the next
succeeding regular meeting of the Board. Members of the Board of Directors may
participate in such meetings through use of conference telephone or similar
communications equipment, so long as all members participating in such meetings
can hear one another.
SECTION 2.05. SPECIAL MEETINGS. Special meetings of the Board of Directors shall
be held at the call of the Chairman of the Board, Chief Executive Officer, or
President, or at the request of two or more Directors. Any special meeting may
be held at such place and at such time as may be fixed in the call. Written or
oral notice shall be given to each Director not later than the day next
preceding the day on which the special meeting is to be held, which notice may
be waived in writing. The presence of a Director at any meeting of the Board of
Directors shall be deemed a waiver of notice thereof by such Director. Whenever
a quorum is not present, the Directors in attendance shall adjourn the special
meeting from day to day until a quorum is obtained. Members of the Board of
Directors may participate in such meetings through use of conference telephone
or similar communications equipment, so long as all members participating in
such meetings can hear one another.
SECTION 2.06. QUORUM. A majority of the Directors shall constitute a quorum at
any meeting, except when otherwise provided by law; but a lesser number may
adjourn any meeting, from time-to-time, and the meeting may be held, as
adjourned, without further notice. When, however, less than a quorum as herein
defined, but at least one-third and not less than two of the authorized number
of Directors are present at a meeting of the Directors, business of the Bank may
be transacted and matters before the Board approved or disapproved by the
unanimous vote of the Directors present.
SECTION 2.07. COMPENSATION. Each member of the Board of Directors shall receive
such fees for attendance at Board and Board committee meetings and such fees for
service as a Director, irrespective of meeting attendance, as from time to time
are fixed by resolution of the Board; provided, however, that payment hereunder
shall not be made to a Director for meetings attended and/or Board service which
are not for the Bank's sole benefit and which are concurrent and duplicative
with meetings attended or Board service for an affiliate of the Bank for which
the Director receives payment; and provided further that fees hereunder shall
not be paid in the case of any Director in the regular employment of the Bank or
of one of its affiliates. Each member of the Board of Directors, whether or not
such Director is in the regular employment of the Bank or of one of its
affiliates, shall be reimbursed for travel expenses incident to attendance at
Board and Board committee meetings.
SECTION 2.08. EXECUTIVE COMMITTEE. There may be a standing committee of the
Board of Directors known as the Executive Committee which shall possess and
exercise, when the Board is not in session, all the powers of the Board that may
lawfully be delegated. The
14
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Executive Committee shall consist of at least three Board members, one of whom
shall be the Chairman of the Board, Chief Executive Officer or the President.
The other members of the Executive Committee shall be appointed by the Chairman
of the Board, the Chief Executive Officer, or the President, with the approval
of the Board, and who shall continue as members of the Executive Committee until
their successors are appointed, provided, however, that any member of the
Executive Committee may be removed by the Board upon a majority vote thereof at
any regular or special meeting of the Board. The Chairman, Chief Executive
Officer, or President shall fill any vacancy in the Executive Committee by the
appointment of another Director, subject to the approval of the Board of
Directors. The Executive Committee shall meet at the call of the Chairman, Chief
Executive Officer, or President or any two members thereof at such time or times
and place as may be designated. In the event of the absence of any member or
members of the Executive Committee, the presiding member may appoint a member or
members of the Board to fill the place or places of such absent member or
members to serve during such absence. Two members of the Executive Committee
shall constitute a quorum. When neither the Chairman of the Board, the Chief
Executive Officer, nor President are present, the Executive Committee shall
appoint a presiding officer. The Executive Committee shall report its
proceedings and the action taken by it to the Board of Directors.
SECTION 2.09. OTHER COMMITTEES. The Board of Directors may appoint such special
committees from time to time as are in its judgment necessary in the interest of
the Bank.
ARTICLE III
OFFICERS, MANAGEMENT STAFF AND EMPLOYEES
SECTION 3.01. OFFICERS AND MANAGEMENT STAFF.
(a) The executive officers of the Bank shall include a Chairman of the Board,
Chief Executive Officer, President, Chief Financial Officer, Secretary, Security
Officer, and may include one or more Senior Managing Directors or Managing
Directors. The Chairman of the Board, Chief Executive Officer, President, any
Senior Managing Director, any Managing Director, Chief Financial Officer,
Secretary, and Security Officer shall be elected by the Board. The Chairman of
the Board, Chief Executive Officer, and the President shall be elected by the
Board from their own number. Such officers as the Board shall elect from their
own number shall hold office from the date of their election as officers until
the organization meeting of the Board of Directors following the next annual
meeting of shareholders, provided, however, that such officers may be relieved
of their duties at any time by action of the Board of Directors, in which event
all the powers incident to their office shall immediately terminate. The
Chairman of the Board, Chief Executive Officer, or the President shall preside
at all meetings of shareholders and meetings of the Board of Directors.
(b) The management staff of the Bank shall include officers elected by the
Board, officers appointed by the Chairman of the Board, the Chief Executive
Officer, the President, any Senior Managing Director, any Managing Director, the
Chief Financial Officer, and such other persons in the employment of the Bank
who, pursuant to authorization by a duly authorized officer of the Bank, perform
management functions and have management responsibilities. Any two or more
offices may be held by the same person except that no person shall hold the
office of Chairman of the Board, Chief Executive Officer and/or President and at
the same time also hold the office of Secretary.
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(c) Except as provided in the case of the elected officers who are members of
the Board, all officers and employees, whether elected or appointed, shall hold
office at the pleasure of the Board. Except as otherwise limited by law or these
By-Laws, the Board assigns to the Chairman of the Board, the Chief Executive
Officer, the President, any Senior Managing Director, any Managing Director, the
Chief Financial Officer, and/or each of their respective designees the authority
to control all personnel, including elected and appointed officers and employees
of the Bank, to employ or direct the employment of such officers and employees
as he or she may deem necessary, including the fixing of salaries and the
dismissal of such officers and employees at pleasure, and to define and
prescribe the duties and responsibilities of all officers and employees of the
Bank, subject to such further limitations and directions as he or she may from
time to time deem appropriate.
(d) The Chairman of the Board, the Chief Executive Officer, the President, any
Senior Managing Director, any Managing Director, the Chief Financial Officer,
and any other officer of the Bank, to the extent that such officer is authorized
in writing by the Chairman of the Board, the Chief Executive Officer, the
President, any Senior Managing Director, any Managing Director, or the Chief
Financial Officer may appoint persons other than officers who are in employment
of the Bank to serve in management positions and in connection therewith, the
appointing officer may assign such title, salary, responsibilities and functions
as are deemed appropriate, provided, however, that nothing contained herein
shall be construed as placing any limitation on the authority of the Chairman of
the Board, the Chief Executive Officer, the President, any Senior Managing
Director, any Managing Director, or the Chief Financial Officer as provided in
this and other sections of these By-Laws.
(e) The Senior Managing Directors and the Managing Directors of the Bank shall
have general and active authority over the management of the business of the
Bank, shall see that all orders and resolutions of the Board of Directors are
carried into effect, and shall do or cause to be done all things necessary or
proper to carry on the business of the Bank in accordance with provisions of
applicable law and regulations. Each Senior Managing Director and Managing
Director shall perform all duties incident to his or her office and such other
and further duties, as may from time to time be required by the Chief Executive
Officer, the President, the Board of Directors, or the shareholders. The
specification of authority in these By-Laws wherever and to whomever granted
shall not be construed to limit in any manner the general powers of delegation
granted to a Senior Managing Director or a Managing Director in conducting the
business of the Bank. In the absence of a Senior Managing Director or a Managing
Director, such officer as is designated by the Senior Managing Director or the
Managing Director shall be vested with all the powers and perform all the duties
of the Senior Managing Director or the Managing Director as defined by these
By-Laws.
(f) Each Managing Director who is assigned oversight of one or more trust
service offices shall appoint a management committee known as the Investment
Management and Trust Committee consisting of the Managing Director of the trust
service offices and at least three other members who shall be capable and
experienced officers of the Bank appointed from time to time by the Managing
Director and who shall continue as members of the Investment Management and
Trust Committee until their successors are appointed, provided, however, that
any member of the Investment Management and Trust Committee may be removed by
the Managing Director as provided in this and other sections of these By-Laws.
The Managing Director shall fill any
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vacancy in the Investment Management and Trust Committee by the appointment of
another capable and experienced officer of the Bank. Each Investment Management
and Trust Committee shall meet at such date, time and place as the Managing
Director shall fix. In the event of the absence of any member or members of the
Investment Management and Trust Committee, the Managing Director may, in his or
her discretion, appoint another officer of the Bank to fill the place or places
of such absent member or members to serve during such absence. A majority of
each Investment Management and Trust Committee shall constitute a quorum. Each
Investment Management and Trust Committee shall carry out the policies of the
Bank, as adopted by the Board of Directors, which shall be formulated and
executed in accordance with State and Federal Law, Regulations of the
Comptroller of the Currency, and sound fiduciary principles. In carrying out the
policies of the Bank, each Investment Management and Trust Committee is hereby
authorized to establish management teams whose duties and responsibilities shall
be specifically set forth in the policies of the Bank. Each such management team
shall report such proceedings and the actions taken thereby to the Investment
Management and Trust Committee. Each Managing Director shall then report such
proceedings and the actions taken thereby to the Board of Directors.
SECTION 3.02. POWERS AND DUTIES OF MANAGEMENT STAFF. Pursuant to the fiduciary
powers granted to this Bank under the provisions of Federal Law and Regulations
of the Comptroller of the Currency, the Chairman of the Board, the Chief
Executive Officer, the President, the Senior Managing Directors, the Managing
Directors, the Chief Financial Officer, and those officers so designated and
authorized by the Chairman of the Board, the Chief Executive Officer, the
President, the Senior Managing Directors, the Managing Directors, or the Chief
Financial Officer are authorized for and on behalf of the Bank, and to the
extent permitted by law, to make loans and discounts; to purchase or acquire
drafts, notes, stocks, bonds, and other securities for investment of funds held
by the Bank; to execute and purchase acceptances; to appoint, empower and direct
all necessary agents and attorneys; to sign and give any notice required to be
given; to demand payment and/or to declare due for any default any debt or
obligation due or payable to the Bank upon demand or authorized to be declared
due; to foreclose any mortgages; to exercise any option, privilege or election
to forfeit, terminate, extend or renew any lease; to authorize and direct any
proceedings for the collection of any money or for the enforcement of any right
or obligation; to adjust, settle and compromise all claims of every kind and
description in favor of or against the Bank, and to give receipts, releases and
discharges therefor; to borrow money and in connection therewith to make,
execute and deliver notes, bonds or other evidences of indebtedness; to pledge
or hypothecate any securities or any stocks, bonds, notes or any property real
or personal held or owned by the Bank, or to rediscount any notes or other
obligations held or owned by the Bank, whenever in his or her judgment it is
reasonably necessary for the operation of the Bank; and in furtherance of and in
addition to the powers hereinabove set forth to do all such acts and to take all
such proceedings as in his or her judgment are necessary and incidental to the
operation of the Bank.
SECTION 3.03. SECRETARY. The Secretary or such other officers as may be
designated by the Chief Executive Officer shall have supervision and control of
the records of the Bank and, subject to the direction of the Chief Executive
Officer, shall undertake other duties and functions usually performed by a
corporate secretary. Other officers may be designated by the Secretary as
Assistant Secretary to perform the duties of the Secretary.
17
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SECTION 3.04. EXECUTION OF DOCUMENTS. Any member of the Bank's management staff
or any employee of the Bank designated as an officer on the Bank's payroll
system is hereby authorized for and on behalf of the Bank to sell, assign,
lease, mortgage, transfer, deliver and convey any real or personal property,
including shares of stock, bonds, notes, certificates of indebtedness (including
the assignment and redemption of registered United States obligations) and all
other forms of intangible property now or hereafter owned by or standing in the
name of the Bank, or its nominee, or held by the Bank as collateral security, or
standing in the name of the Bank, or its nominee, in any fiduciary capacity or
in the name of any principal for whom this Bank may now or hereafter be acting
under a power of attorney or as agent, and to execute and deliver such partial
releases from any discharges or assignments of mortgages and assignments or
surrender of insurance policies, deeds, contracts, assignments or other papers
or documents as may be appropriate in the circumstances now or hereafter held by
the Bank in its own name, in a fiduciary capacity, or owned by any principal for
whom this Bank may now or hereafter be acting under a power of attorney or as
agent; provided, however, that, when necessary, the signature of any such person
shall be attested or witnessed in each case by another officer of the Bank.
Any member of the Bank's management staff or any employee of the Bank designated
as an officer on the Bank's payroll system is hereby authorized for and on
behalf of the Bank to execute any indemnity and fidelity bonds, trust
agreements, proxies or other papers or documents of like or different character
necessary, desirable or incidental to the appointment of the Bank in any
fiduciary capacity, the conduct of its business in any fiduciary capacity, or
the conduct of its other banking business; to sign and issue checks, drafts,
orders for the payment of money and certificates of deposit; to sign and endorse
bills of exchange, to sign and countersign foreign and domestic letters of
credit, to receive and receipt for payments of principal, interest, dividends,
rents, fees and payments of every kind and description paid to the Bank, to sign
receipts for money or other property acquired by or entrusted to the Bank, to
guarantee the genuineness of signatures on assignments of stocks, bonds or other
securities, to sign certifications of checks, to endorse and deliver checks,
drafts, warrants, bills, notes, certificates of deposit and acceptances in all
business transactions of the Bank; also to foreclose any mortgage, to execute
and deliver receipts for any money or property; also to sign stock certificates
for and on behalf of this Bank as transfer agent or registrar, and to
authenticate bonds, debentures, land or lease trust certificates or other forms
of security issued pursuant to any indenture under which this Bank now or
hereafter is acting as trustee or in any other fiduciary capacity; to execute
and deliver various forms of documents or agreements necessary to effectuate
certain investment strategies for various fiduciary or custody customers of the
Bank, including, without limitation, exchange funds, options, both listed and
over-the-counter, commodities trading, futures trading, hedge funds, limited
partnerships, venture capital funds, swap or collar transactions and other
similar investment vehicles for which the Bank now or in the future may deem
appropriate for investment of fiduciary customers or in which non-fiduciary
customers may direct investment by the Bank.
Without limitation on the foregoing, the Chief Executive Officer, Chairman of
the Board, or President of the Bank shall have the authority from time to time
to appoint officers of the Bank as Vice President for the sole purpose of
executing releases or other documents incidental to the conduct of the Bank's
business in any fiduciary capacity where required by state law or the governing
document. In addition, other persons in the employment of the Bank or its
affiliates may be authorized by the Chief Executive Officer, Chairman of the
Board, President, Senior Managing Directors, Managing Directors, or Chief
Financial Officer to perform
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acts and to execute the documents described in the paragraph above, subject,
however, to such limitations and conditions as are contained in the
authorization given to such person.
SECTION 3.05. PERFORMANCE BOND. All officers and employees of the Bank shall be
bonded for the honest and faithful performance of their duties for such amount
as may be prescribed by the Board of Directors.
ARTICLE IV
STOCKS AND STOCK CERTIFICATES
SECTION 4.01. STOCK CERTIFICATES. The shares of stock of the Bank shall be
evidenced by certificates which shall bear the signature of the Chairman of the
Board, the Chief Executive Officer, or the President (which signature may be
engraved, printed or impressed), and shall be signed manually by the Secretary,
or any other officer appointed by the Chief Executive Officer for that purpose.
In case any such officer who has signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Bank with the same effect as if
such officer had not ceased to be such at the time of its issue. Each such
certificate shall bear the corporate seal of the Bank, shall recite on its face
that stock represented thereby is transferable only upon the books of the Bank
when properly endorsed and shall recite such other information as is required by
law and deemed appropriate by the Board. The corporate seal may be facsimile
engraved or printed.
SECTION 4.02. STOCK ISSUE AND TRANSFER. The shares of stock of the Bank shall be
transferable only upon the stock transfer books of the Bank and, except as
hereinafter provided, no transfer shall be made or new certificates issued
except upon the surrender for cancellation of the certificate or certificates
previously issued therefor. In the case of the loss, theft, or destruction of
any certificate, a new certificate may be issued in place of such certificate
upon the furnishing of an affidavit setting forth the circumstances of such
loss, theft, or destruction and indemnity satisfactory to the Chairman of the
Board, the Chief Executive Officer, or the President. The Board of Directors or
the Chairman of the Board, Chief Executive Officer, or the President may
authorize the issuance of a new certificate therefor without the furnishing of
indemnity. Stock transfer books, in which all transfers of stock shall be
recorded, shall be provided. The stock transfer books may be closed for a
reasonable period and under such conditions as the Board of Directors may at any
time determine, for any meeting of shareholders, the payment of dividends or any
other lawful purpose. In lieu of closing the transfer books, the Board of
Directors may, in its discretion, fix a record date and hour constituting a
reasonable period prior to the day designated for the holding of any meeting of
the shareholders or the day appointed for the payment of any dividend, or for
any other purpose at the time as of which shareholders entitled to notice of and
to vote at any such meeting or to receive such dividend or to be treated as
shareholders for such other purpose shall be determined, and only shareholders
of record at such time shall be entitled to notice of or to vote at such meeting
or to receive such dividends or to be treated as shareholders for such other
purpose.
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ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.01. SEAL. The seal of the Bank shall be circular in form with "SEAL"
in the center, and the name "BANK ONE TRUST COMPANY, NA" located clockwise
around the upper half of the seal.
SECTION 5.02. MINUTE BOOK. The organization papers of this Bank, the Articles of
Association, the returns of judges of elections, the By-Laws and any amendments
thereto, the proceedings of all regular and special meetings of the shareholders
and of the Board of Directors, and reports of the committees of the Board of
Directors shall be recorded in the minute books of the Bank. The minutes of each
such meeting shall be signed by the presiding officer and attested by the
secretary of the meeting.
SECTION 5.03. CORPORATE POWERS. The corporate existence of the Bank shall
continue until terminated in accordance with the laws of the United States. The
purpose of the Bank shall be to carry on the general business of a commercial
bank trust department and to engage in such activities as are necessary,
incident, or related to such business. The Articles of Association of the Bank
shall not be amended, or any other provision added elsewhere in the Articles
expanding the powers of the Bank, without the prior approval of the Comptroller
of the Currency.
SECTION 5.04. AMENDMENT OF BY-LAWS. The By-Laws may be amended, altered or
repealed, at any regular or special meeting of the Board of Directors, by a vote
of a majority of the Directors.
As amended April 24, 1991 Section 3.01 (Officers and Management Staff)
Section 3.02 (Chief Executive Officer)
Section 3.03 (Powers and Duties of Officers and
Management Staff)
Section 3.05 (Execution of Documents)
As amended January 27, 1995 Section 2.04 (Regular Meetings)
Section 2.05 (Special Meetings)
Section 3.01(f) (Officers and Management Staff)
Section 3.03(e) (Powers and Duties of Officers
and Management Staff)
Section 5.01 (Seal)
Amended and restated in its entirety effective May 1, 1996
As amended August 1, 1996 Section 2.09 (Trust Examining Committee)
Section 2.10 (Other Committees)
As amended October 16, 1997 Section 3.01 (Officers and Management Staff)
Section 3.02 (Powers and Duties of Officers and
Management Staff)
Section 3.04 (Execution of Documents)
As amended January 1, 1998 Section 1.01 (Annual Meeting)
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EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 18, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Toll Corp. and BANK
ONE TRUST COMPANY, NA, as Trustee, and a guarantee agreement between Toll
Brothers, Inc. and BANK ONE TRUST COMPANY, NA, as Trustee, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
BANK ONE TRUST COMPANY, NA
By /s/ John R. Prendiville
-----------------------
John R. Prendiville
Vice President
21
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 7
<S> <C> <C>
Legal Title of Bank: Bank One Trust Company, NA Call Date: 12/31/98 ST-BK: 17-1630 FFIEC 032
Address: 100 Broad Street Page RC-1
City, State Zip: Columbus, OH 43271
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial and State-Chartered
Savings Banks for December 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands
-------------------------------
RCON BIL MIL THOU C300
---- ------------ ----
<S> <C> <C> <C>
ASSETS RCON
1. Cash and balances due from depository institutions (from Schedule RC-A): ----
a. Noninterest-bearing balances and currency and coin(1)............................ 0081 159,911 1.a
b. Interest-bearing balances(2)..................................................... 0071 16,874 1.b
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A)....................... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)..................... 1773 7,403 2.b
3. Federal funds sold and securities purchased under agreements to resell.............. 1350 576,473 3.
RCON
4. Loans and lease financing receivables: ----
a. Loans and leases, net of unearned income (from Schedule RC-C)................... 2122 32,603 4.a
b. LESS: Allowance for loan and lease losses........................................ 3123 10 4.b
c. LESS: Allocated transfer risk reserve............................................ 3128 0 4.c
RCON
d. Loans and leases, net of unearned income, allowance, and reserve ----
(item 4.a minus 4.b and 4.c)..................................................... 2125 32,593 4.d
5. Trading assets (from Schedule RD-D)................................................. 3545 0 5.
6. Premises and fixed assets (including capitalized leases)............................ 2145 18,685 6.
7. Other real estate owned (from Schedule RC-M)........................................ 2150 0 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M)................................................................ 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding ....................... 2155 0 9.
10. Intangible assets (from Schedule RC-M).............................................. 2143 31,392 10.
11. Other assets (from Schedule RC-F)................................................... 2160 127,322 11.
12. Total assets (sum of items 1 through 11)............................................ 2170 970,653 12.
</TABLE>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
22
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/98 ST-BK: 171630 FFIEC 032
Address: 100 East Broad Street Page RC-2
City, State Zip: Columbus, OH 43271
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
<TABLE>
Schedule RC-Continued
Dollar Amounts in Thousands
---------------------------
<S> <C> <C> <C>
LIABILITIES RCON
13. Deposits: ----
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1).............................................. 2200 802,791 13.a
(1) Noninterest-bearing(1)............................................... 6631 727,720 13.a1
(2) Interest-bearing..................................................... 6636 75,071 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs
(from Schedule RC-E, part II)............................................
(1) Noninterest bearing..................................................
(2) Interest-bearing.....................................................
14. Federal funds purchased and securities sold under agreements to repurchase: RCFD 2800 0 14
15. a. Demand notes issued to the U.S. Treasury ................................ RCON 2840 0 15.a
b. Trading Liabilities(from Schedule RC-D).................................. RCFD 3548 0 15.b
RCON
16. Other borrowed money: ----
a. With original maturity of one year or less............................... 2332 0 16.a
b. With original maturity of more than one year............................. A547 0 16.b
c. With original maturity of more than three years ......................... A548 0 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 0 18.
19. Subordinated notes and debentures........................................... 3200 0 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 64,642 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 867,433 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 800 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 35,157 25.
26. a. Undivided profits and capital reserves................................... 3632 67,207 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities... 8434 56 26.b
27. Cumulative foreign currency translation adjustments......................... 3284 0 27.
28. Total equity capital (sum of items 23 through 27)........................... 3210 103,220 28.
29. Total liabilities, limited-life preferred stock, and equity capital
(sum of items 21, 22, and 28)............................................... 3300 970,653 29.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996 ............ RCFD 6724.... | N/A | M.1.
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be
required by state chartering authority)
</TABLE>
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
23
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)__
--------------------
BANK ONE TRUST COMPANY, NA
---------------------------------------------------
(Exact name of trustee as specified in its charter)
A National Banking Association 31-0838515
----------------------
(I.R.S. employer
identification number)
100 East Broad Street, Columbus, Ohio 43271-0181
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
BANK ONE TRUST COMPANY, NA
100 East Broad Street
Columbus, Ohio 43271-0181
Attn: Linda J. Patterson, Senior Managing Director, (614) 248-5193
------------------------------------------------------------------
(Name, address and telephone number of agent for service)
--------------------
First Huntingdon Finance Corp.
Toll Brothers, Inc.
---------------------------------------------------
(Exact name of obligor as specified in its charter)
Delaware 23-2485787
Delaware 22-2416878
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
3103 Philmont Avenue
Huntingdon Valley, Pennsylvania 19006
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Debt Securities
Guarantee of Debt Securities of First Huntingdon Finance Corp.
--------------------------------------------------------------
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.
2. A copy of the certificates of authority of the trustee to
commence business.
3. A copy of the authorization of the trustee to exercise corporate
trust powers.
4. A copy of the existing by-laws of the trustee.
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority.
8. Not Applicable.
2
<PAGE>
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bank One Trust Company, NA, a national banking
association organized and existing under the laws of the United States
of America, has duly caused this Statement of Eligibility to be signed
on its behalf by the undersigned, thereunto duly authorized, all in the
City of Chicago and State of Illinois on the 18th day of November,
1999.
BANK ONE TRUST COMPANY, NA
Trustee
By /s/ John R. Prendiville
-----------------------
John R. Prendiville
Vice President
3
<PAGE>
EXHIBIT 1
A COPY OF THE ARTICLES OF ASSOCIATION OF THE
TRUSTEE NOW IN EFFECT
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
of
BANK ONE TRUST COMPANY, NA
FIRST. The title of this Association shall be BANK ONE TRUST COMPANY, NA.
SECOND. The main office of the Association shall be in the City of Columbus,
County of Franklin, State of Ohio.
The business of the Association will be limited to the fiduciary powers and the
support of activities incidental to the exercise of those powers. The
Association will not expand or alter its business beyond that stated in this
article without the prior approval of the Comptroller of the Currency.
THIRD. The Board of Directors of this Association shall consist of not less than
five nor more than twenty-five persons, the exact number to be fixed and
determined from time to time by resolution of a majority of the full Board of
Directors or by resolution of a majority of the shareholders at any annual or
special meeting thereof. Each director shall own common or preferred stock of
the Association, or of a holding company owning the Association, with an
aggregate par, fair market or equity value of not less than $1,000, as of either
(i) the date of purchase, (ii) the date the person became a director, or (iii)
the date of that person's most recent election to the Board of Directors,
whichever is more recent. Any combination of common or preferred stock of the
Association or holding company may be used.
Any vacancy in the Board of Directors may be filled by action of a majority of
the remaining directors between meetings of shareholders. The Board of Directors
may not increase the number of directors between meetings of shareholders to a
number which: (1) exceeds by more than two the number of directors last elected
by shareholders where the number was 15 or less; or (2) exceeds by more than
four the number of directors last elected by shareholders where the number was
16 or more, but in no event shall the number of directors exceed 25.
Terms of directors, including directors selected to fill vacancies, shall expire
at the next regular meeting of shareholders at which directors are elected,
unless the directors resign or are removed from office.
Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.
Honorary or advisory members of the Board of Directors, without voting power or
power of final decision in matters concerning the business of the Association,
may be appointed by resolution of a majority of the full Board of Directors, or
by resolution of shareholders at any annual or special
4
<PAGE>
meeting. Honorary or advisory directors shall not be counted to determine the
number of directors of the Association or the presence of a quorum in connection
with any board action, and shall not be required to own qualifying shares.
FOURTH. There shall be an annual meeting of the shareholders to elect directors
and transact whatever other business may be brought before the meeting. It shall
be held at the main office or any other convenient place the Board of Directors
may designate, on the day of each year specified therefor in the Bylaws or, if
that day falls on a legal holiday in the state in which the Association is
located, on the next following banking day. If no election is held on the day
fixed or in the event of a legal holiday on the following banking day, an
election may be held on any subsequent day within 60 days of the day fixed, to
be designated by the Board of Directors or, if the directors fail to fix the
day, by shareholders representing two-thirds of the shares issued and
outstanding. In all cases at least 10 days advance notice of the meeting shall
be given to the shareholders by first class mail.
In all elections of directors, the number of votes each common shareholder may
cast will be determined by multiplying the number of shares such shareholder
owns by the number of directors to be elected. Those votes may be cumulated and
cast for a single candidate or may be distributed among two or more candidates
in the manner selected by the shareholder. On all other questions, each common
shareholder shall be entitled to one vote for each share of stock held by such
shareholder. If the issuance of preferred stock with voting rights has been
authorized by a vote of shareholders owning a majority of the common stock of
the association, preferred shareholders will have cumulative voting rights and
will be included within the same class as common shareholders, for purposes of
elections of directors.
A director may resign at any time by delivering written notice to the Board of
Directors, its chairperson, or to the Association, which resignation shall be
effective when the notice is delivered unless the notice specifies a later
effective date.
A director may be removed by shareholders at a meeting called to remove him or
her, when notice of the meeting stating that the purpose or one of the purposes
is to remove him or her is provided, if there is a failure to fulfill one of the
affirmative requirements for qualification, or for cause, provided, however,
that a director may not be removed if the number of votes sufficient to elect
him or her under cumulative voting is voted against his or her removal.
FIFTH. The authorized amount of capital stock of this Association shall be
eighty thousand shares of common stock of the par value of ten dollars ($10.00)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion, may from time to time determine and at such
price as the Board of Directors may from time to time fix.
Unless otherwise specified in the Articles of Association or required by law,
(1) all matters requiring shareholder action, including amendments to the
Articles of Association, must be
5
<PAGE>
approved by shareholders owning a majority voting interest in the outstanding
voting stock, and (2) each shareholder shall be entitled to one vote per share.
Unless otherwise specified in the Articles of Association or required by law,
all shares of voting stock shall be voted together as a class on any matters
requiring shareholder approval. If a proposed amendment would affect two or more
classes or series in the same or a substantially similar way, all the classes or
series so affected must vote together as a single voting group on the proposed
amendment.
Shares of the same class or series may be issued as a dividend on a pro rata
basis and without consideration. Shares of another class or series may be issued
as share dividends in respect of a class or series of stock if approved by a
majority of the votes entitled to be cast by the class or series to be issued
unless there are no outstanding shares of the class or series to be issued.
Unless otherwise provided by the Board of Directors, the record date for
determining shareholders entitled to a share dividend shall be the date the
Board of Directors authorizes the share dividend.
Unless otherwise provided in the Bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close of
business on the day before the first notice is mailed or otherwise sent to the
shareholders, provided that in no event may a record date be more than 70 days
before the meeting.
If a shareholder is entitled to fractional shares pursuant to preemptive rights,
a stock dividend, consolidation or merger, reverse stock split or otherwise, the
Association may: (a) issue fractional shares or; (b) in lieu of the issuance of
fractional shares, issue script or warrants entitling the holder to receive a
full share upon surrendering enough script or warrants to equal a full share;
(c) if there is an established and active market in the Association's stock,
make reasonable arrangements to provide the shareholder with an opportunity to
realize a fair price through sale of the fraction, or purchase of the additional
fraction required for a full share; (d) remit the cash equivalent of the
fraction to the shareholder; or (e) sell full shares representing all the
fractions at public auction or to the highest bidder after having solicited and
received sealed bids from at least three licensed stock brokers, and distribute
the proceeds pro rata to shareholders who otherwise would be entitled to the
fractional shares. The holder of a fractional share is entitled to exercise the
rights for shareholder, including the right to vote, to receive dividends, and
to participate in the assets of the Association upon liquidation, in proportion
to the fractional interest. The holder of script or warrants is not entitled to
any of these rights unless the script or warrants explicitly provide for such
rights. The script or warrants may be subject to such additional conditions as:
(1) that the script or warrants will become void if not exchanged for full
shares before a specified date; and (2) that the shares for which the script or
warrants are exchangeable may be sold at the option of the Association and the
proceeds paid to scriptholders.
The Association, at any time and from time to time, may authorize and issue debt
obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt, whether or not subordinated, which
may be issued by the Association without the approval of shareholders, do not
carry voting rights on any issue, including an increase or decrease in the
aggregate number of the securities, or the exchange or reclassification of all
or part of securities into securities of another class or series.
6
<PAGE>
SIXTH. The Board of Directors shall appoint one of its members president of this
Association, and one of its members chairperson of the board and shall have the
power to appoint one or more vice presidents, a secretary who shall keep minutes
of the directors' and shareholders' meetings and be responsible for
authenticating the records of the Association, and such other officers and
employees as may be required to transact the business of this Association. A
duly appointed officer may appoint one or more officers or assistant officers if
authorized by the Board of Directors in accordance with the Bylaws.
The Board of Directors shall have the power to:
(1) Define the duties of the officers, employees, and agents of the
Association.
(2) Delegate the performance of its duties, but not the responsibility for its
duties, to the officers, employees, and agents of the Association.
(3) Fix the compensation and enter into employment contracts with its officers
and employees upon reasonable terms and conditions consistent with
applicable law.
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and to fix the penalty thereof.
(6) Ratify written policies authorized by the Association's management or
committees of the board.
(7) Regulate the manner in which any increase or decrease of the capital of the
Association shall be made, provided that nothing herein shall restrict the
power of shareholders to increase or decrease the capital of the
association in accordance with law, and nothing shall raise or lower from
two-thirds the percentage for shareholder approval to increase or reduce
the capital.
(8) Manage and administer the business and affairs of the Association.
(9) Adopt initial Bylaws, not inconsistent with law or the Articles of
Association, for managing the business and regulating the affairs of the
Association.
(10) Amend or repeal Bylaws, except to the extent that the Articles of
Association reserve this power in whole or in part to shareholders.
(11) Make contracts.
(12) Generally perform all acts that are legal for a Board of Directors to
perform.
SEVENTH. The Board of Directors shall have the power to change the location of
the main office of this Association to any other place within the limits of the
City of Columbus, State of Ohio, without the approval of the shareholders; and
shall have the power to change the location of the main office of this
Association to any other place outside the limits of the City of Columbus, State
of Ohio, but not more than thirty miles beyond such limits, with the affirmative
vote of shareholders owning two-thirds of the stock of the Association, subject
to receipt of a
7
<PAGE>
certificate of approval from the Comptroller of the Currency. The Board of
Directors shall have the power to establish or change the location of any branch
or branches of the Association to any other location permitted under applicable
law without the approval of the shareholders, subject to approval by the Office
of the Comptroller of the Currency. The Board of Directors shall have the power
to establish or change the location of any nonbranch office or facility of the
Association without the approval of the shareholders.
EIGHTH. The corporate existence of this Association shall continue until
termination according to the laws of the United States.
NINTH. The Board of Directors of this Association, or any shareholders owning,
in the aggregate, not less than 20 percent of the stock of this Association, may
call a special meeting of shareholders at any time. Unless otherwise provided by
the Bylaws or the laws of the United States, or waived by shareholders, a notice
of the time, place, and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage prepaid, mailed at
least 10, and no more than 60, days prior to the date of the meeting to each
shareholder of record at his/her address as shown upon the books of this
Association. Unless otherwise provided by the Bylaws, any action requiring
approval of shareholders must be effected at a duly called annual or special
meeting.
TENTH. The Association shall provide indemnification as set forth below:
Every person who is or was a Director, officer or employee of the Association or
of any other corporation which he served as a Director, officer or employee at
the request of the Association as part of his regularly assigned duties may be
indemnified by the Association in accordance with the provisions of this Article
against all liability (including, without limitation, judgments, fines,
penalties, and settlements) and all reasonable expenses (including, without
limitation, attorneys' fees and investigative expenses) that may be incurred or
paid by him in connection with any claim, action, suit or proceeding, whether
civil, criminal or administrative (all referred to hereafter in this Article as
"Claims") or in connection with any appeal relating thereto in which he may
become involved as a party or otherwise or with which he may be threatened by
reason of his being or having been a Director, officer or employee of the
Association or such other corporation, or by reason of any action taken or
omitted by him in his capacity as such Director, officer or employee, whether or
not he continues to be such at the time such liability or expenses are incurred;
provided that nothing contained in this Article shall be construed to permit
indemnification of any such person who is adjudged guilty of, or liable for,
willful misconduct, gross neglect of duty or criminal acts, unless, at the time
such indemnification is sought, such indemnification in such instance is
permissible under applicable law and regulations, including published rulings of
the Comptroller of the Currency or other appropriate supervisory or regulatory
authority; and provided further that there shall be no indemnification of
Directors, officers, or employees against expenses, penalties, or other payments
incurred in an administrative proceeding or action instituted by an appropriate
regulatory agency which proceeding or action results in a final order assessing
civil money penalties or requiring affirmative action by an individual or
individuals in the form of payments to the Association.
Every person who may be indemnified under the provisions of this Article and who
has been wholly successful on the merits with respect to any Claim shall be
entitled to indemnification as of right. Except as provided in the preceding
sentence, any indemnification under this Article shall be at the sole discretion
of the Board of
8
<PAGE>
Directors and shall be made only if the Board of Directors or the Executive
Committee acting by a quorum consisting of Directors who are not parties to such
Claim shall find or if independent legal counsel (who may be the regular counsel
of the Association) selected by the Board of Directors or Executive Committee
whether or not a disinterested quorum exists shall render their opinion that in
view of all of the circumstances then surrounding the Claim, such
indemnification is equitable and in the best interests of the Association. Among
the circumstances to be taken into consideration in arriving at such a finding
or opinion is the existence or non-existence of a contract of insurance or
indemnity under which the Association would be wholly or partially reimbursed
for such indemnification, but the existence or non-existence of such insurance
is not the sole circumstance to be considered nor shall it be wholly
determinative of whether such indemnification shall be made. In addition to such
finding or opinion, no indemnification under this Article shall be made unless
the Board of Directors or the Executive Committee acting by a quorum consisting
of Directors who are not parties to such Claim shall find or if independent
legal counsel (who may be the regular counsel of the Association) selected by
the Board of Directors or Executive Committee whether or not a disinterested
quorum exists shall render their opinion that the Directors, officer or employee
acted in good faith in what he reasonably believed to be the best interests of
the Association or such other corporation and further in the case of any
criminal action or proceeding, that the Director, officer or employee reasonably
believed his conduct to be lawful. Determination of any Claim by judgment
adverse to a Director, officer or employee by settlement with or without Court
approval or conviction upon a plea of guilty or of nolo contendere or its
equivalent shall not create a presumption that a Director, officer or employee
failed to meet the standards of conduct set forth in this Article. Expenses
incurred with respect to any Claim may be advanced by the Association prior to
the final disposition thereof upon receipt of an undertaking satisfactory to the
Association by or on behalf of the recipient to repay such amount unless it is
ultimately determined that he is entitled to indemnification under this Article.
The rights of indemnification provided in this Article shall be in addition to
any rights to which any Director, officer or employee may otherwise be entitled
by contract or as a matter of law. Every person who shall act as a Director,
officer or employee of this Association shall be conclusively presumed to be
doing so in reliance upon the right of indemnification provided for in this
Article.
ELEVENTH. These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of this Association, unless the vote of the holders of a greater
amount of stock is required by law, and in that case by the vote of the holders
of such greater amount. The Association's Board of Directors may propose one or
more amendments to the Articles of Association for submission to the
shareholders.
9
<PAGE>
EXHIBIT 2
A COPY OF THE CERTIFICATE OF AUTHORITY OF THE
TRUSTEE TO COMMENCE BUSINESS
CERTIFICATE
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "Bank One Trust Company, National Association," Columbus, Ohio, (Charter No.
16235) is a National Banking Association formed under the laws of the United
States and is authorized thereunder to transact the business of banking on the
date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at the
Treasury Department in the City of
Washington and District of Columbia, this
24th day of March, 1999.
/s/ John D. Hawke, Jr.
-------------------------------
Comptroller of the Currency
10
<PAGE>
EXHIBIT 3
A COPY OF THE AUTHORIZATION OF THE TRUSTEE
TO EXERCISE CORPORATE TRUST POWERS
CERTIFICATE
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "Bank One Trust Company, National Association," Columbus, Ohio, (Charter No.
16235) was granted, under the hand and seal of the Comptroller, the right to act
in all fiduciary capacities authorized under the provisions of the Act of
Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and that the
authority so granted remains in full force and effect on the date of this
Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at the
Treasury Department in the City of
Washington and District of Columbia, this
24th day of March, 1999.
/s/ John D. Hawke, Jr.
---------------------------------
Comptroller of the Currency
11
<PAGE>
EXHIBIT 4
A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE
BANK ONE TRUST COMPANY, N.A.
BY-LAWS
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1.01. ANNUAL MEETING. The regular annual meeting of the shareholders of
the Bank for the election of Directors and for the transaction of such business
as may properly come before the meeting shall be held at its main office, or
other convenient place duly authorized by the Board of Directors, on the same
day upon which any regular or special Board meeting is held from and including
the first Monday of January to, and including, the fourth Monday of February of
each year, or on the next succeeding banking day, if the day fixed falls on a
legal holiday. If from any cause, an election of Directors is not made on the
day fixed for the regular meeting of the shareholders or, in the event of a
legal holiday, on the next succeeding banking day, the Board of Directors shall
order the election to be held on some subsequent day, as soon thereafter as
practicable, according to the provisions of law; and notice thereof shall be
given in the manner herein provided for the annual meeting. Notice of such
annual meeting shall be given by or under the direction of the Secretary, or
such other officer as may be designated by the Chief Executive Officer, by
first-class mail, postage prepaid, to all shareholders of record of the Bank at
their respective addresses as shown upon the books of the Bank mailed not less
than ten days prior to the date fixed for such meeting.
SECTION 1.02. SPECIAL MEETINGS. A special meeting of the shareholders of the
Bank may be called at any time by the Board of Directors or by any three or more
shareholders owning, in the aggregate, not less than ten percent of the stock of
the Bank. Notice of any special meeting of the shareholders called by the Board
of Directors, stating the time, place and purpose of the meeting, shall be given
by or under the direction of the Secretary, or such other officer as is
designated by the Chief Executive Officer, by first-class mail, postage prepaid,
to all shareholders of record of the Bank at their respective addresses as shown
upon the books of the Bank mailed not less than ten days prior to the date fixed
for such meeting. Any special meeting of shareholders shall be conducted and its
proceedings recorded in the manner prescribed in these By-Laws for annual
meetings of shareholders.
SECTION 1.03. SECRETARY OF MEETING OF SHAREHOLDERS. The Board of Directors may
designate a person to be the secretary of the meeting of shareholders. In the
absence of a presiding officer, as designated by these By-Laws, the Board of
Directors may designate a person to act as the presiding officer. In the event
the Board of Directors fails to designate a person to preside at a meeting of
shareholders and a secretary of such meeting, the shareholders present or
represented shall elect a person to preside and a person to serve as secretary
of the meeting. The secretary of the meeting of shareholders shall cause the
returns made by the judges of election and other proceedings to be recorded in
the minute books of the Bank. The presiding officer
12
<PAGE>
shall notify the Directors-elect of their election and to meet forthwith for the
organization of the new Board of Directors. The minutes of the meeting shall be
signed by the presiding officer and the secretary designated for the meeting.
SECTION 1.04. JUDGES OF ELECTION. The Board of Directors may appoint as many as
three shareholders to be judges of the election, who shall hold and conduct the
same, and who shall, after the election has been held, notify, in writing over
their signatures, the secretary of the meeting of shareholders of the result
thereof and the names of the Directors elected; provided, however, that upon
failure for any reason of any judge or judges of election, so appointed by the
Directors, to serve, the presiding officer of the meeting shall appoint other
shareholders or their proxies to fill the vacancies. The judges of election, at
the request of the chairman of the meeting, shall act as tellers of any other
vote by ballot taken at such meeting, and shall notify, in writing over their
signature, the secretary of the Board of Directors of the result thereof.
SECTION 1.05. PROXIES. In all elections of Directors, each shareholder of
record, who is qualified to vote under the provisions of Federal Law, shall have
the right to vote the number of shares of record in such shareholder's name for
as many persons as there are Directors to be elected, or to cumulate such shares
as provided by Federal Law. In deciding all other questions at meetings of
shareholders, each shareholder shall be entitled to one vote on each share of
stock of record in such shareholder's name. Shareholders may vote by proxy duly
authorized in writing. All proxies used at the annual meeting shall be secured
for that meeting only, or any adjournment thereof, and shall be dated, if not
dated by the shareholder, as of the date of the receipt thereof. No officer or
employee of this Bank may act as proxy.
SECTION 1.06. QUORUM. Holders of record of a majority of the shares of the
capital stock of the Bank, eligible to be voted, present either in person or by
proxy, shall constitute a quorum for the transaction of business at any meeting
of shareholders, but shareholders present at any meeting and constituting less
than a quorum may, without further notice, adjourn the meeting from time to time
until a quorum is obtained. A majority of the votes cast shall decide every
question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.
ARTICLE II
DIRECTORS
SECTION 2.01. QUALIFICATIONS. Each Director shall have the qualifications
prescribed by law. No person elected as a Director may exercise any of the
powers of office until such Director has taken the oath of such office.
SECTION 2.02. VACANCIES. Directors of the Bank shall hold office for one year or
until their successors are elected and qualified. Any vacancy in the Board shall
be filled by appointment of the remaining Directors, and any Director so
appointed shall hold office until the next election.
SECTION 2.03. ORGANIZATION MEETING. The Directors elected by the shareholders
shall meet for organization of the new Board of Directors at the time and place
fixed by the presiding officer of the annual meeting. If at the time fixed for
such meeting there is no quorum present,
13
<PAGE>
the Directors in attendance may adjourn from time to time until a quorum is
obtained. A majority of the number of Directors elected by the shareholders
shall constitute a quorum for the transaction of business.
SECTION 2.04. REGULAR MEETINGS. The regular meetings of the Board of Directors
shall be held at such date, time and place as the Board may previously
designate, or should the Board fail to so designate, at such date, time and
place as the Chairman of the Board, Chief Executive Officer, or President may
fix. Whenever a quorum is not present, the Directors in attendance shall adjourn
the meeting to a time not later than the date fixed by the By-Laws for the next
succeeding regular meeting of the Board. Members of the Board of Directors may
participate in such meetings through use of conference telephone or similar
communications equipment, so long as all members participating in such meetings
can hear one another.
SECTION 2.05. SPECIAL MEETINGS. Special meetings of the Board of Directors shall
be held at the call of the Chairman of the Board, Chief Executive Officer, or
President, or at the request of two or more Directors. Any special meeting may
be held at such place and at such time as may be fixed in the call. Written or
oral notice shall be given to each Director not later than the day next
preceding the day on which the special meeting is to be held, which notice may
be waived in writing. The presence of a Director at any meeting of the Board of
Directors shall be deemed a waiver of notice thereof by such Director. Whenever
a quorum is not present, the Directors in attendance shall adjourn the special
meeting from day to day until a quorum is obtained. Members of the Board of
Directors may participate in such meetings through use of conference telephone
or similar communications equipment, so long as all members participating in
such meetings can hear one another.
SECTION 2.06. QUORUM. A majority of the Directors shall constitute a quorum at
any meeting, except when otherwise provided by law; but a lesser number may
adjourn any meeting, from time-to-time, and the meeting may be held, as
adjourned, without further notice. When, however, less than a quorum as herein
defined, but at least one-third and not less than two of the authorized number
of Directors are present at a meeting of the Directors, business of the Bank may
be transacted and matters before the Board approved or disapproved by the
unanimous vote of the Directors present.
SECTION 2.07. COMPENSATION. Each member of the Board of Directors shall receive
such fees for attendance at Board and Board committee meetings and such fees for
service as a Director, irrespective of meeting attendance, as from time to time
are fixed by resolution of the Board; provided, however, that payment hereunder
shall not be made to a Director for meetings attended and/or Board service which
are not for the Bank's sole benefit and which are concurrent and duplicative
with meetings attended or Board service for an affiliate of the Bank for which
the Director receives payment; and provided further that fees hereunder shall
not be paid in the case of any Director in the regular employment of the Bank or
of one of its affiliates. Each member of the Board of Directors, whether or not
such Director is in the regular employment of the Bank or of one of its
affiliates, shall be reimbursed for travel expenses incident to attendance at
Board and Board committee meetings.
SECTION 2.08. EXECUTIVE COMMITTEE. There may be a standing committee of the
Board of Directors known as the Executive Committee which shall possess and
exercise, when the Board is not in session, all the powers of the Board that may
lawfully be delegated. The
14
<PAGE>
Executive Committee shall consist of at least three Board members, one of whom
shall be the Chairman of the Board, Chief Executive Officer or the President.
The other members of the Executive Committee shall be appointed by the Chairman
of the Board, the Chief Executive Officer, or the President, with the approval
of the Board, and who shall continue as members of the Executive Committee until
their successors are appointed, provided, however, that any member of the
Executive Committee may be removed by the Board upon a majority vote thereof at
any regular or special meeting of the Board. The Chairman, Chief Executive
Officer, or President shall fill any vacancy in the Executive Committee by the
appointment of another Director, subject to the approval of the Board of
Directors. The Executive Committee shall meet at the call of the Chairman, Chief
Executive Officer, or President or any two members thereof at such time or times
and place as may be designated. In the event of the absence of any member or
members of the Executive Committee, the presiding member may appoint a member or
members of the Board to fill the place or places of such absent member or
members to serve during such absence. Two members of the Executive Committee
shall constitute a quorum. When neither the Chairman of the Board, the Chief
Executive Officer, nor President are present, the Executive Committee shall
appoint a presiding officer. The Executive Committee shall report its
proceedings and the action taken by it to the Board of Directors.
SECTION 2.09. OTHER COMMITTEES. The Board of Directors may appoint such special
committees from time to time as are in its judgment necessary in the interest of
the Bank.
ARTICLE III
OFFICERS, MANAGEMENT STAFF AND EMPLOYEES
SECTION 3.01. OFFICERS AND MANAGEMENT STAFF.
(a) The executive officers of the Bank shall include a Chairman of the Board,
Chief Executive Officer, President, Chief Financial Officer, Secretary, Security
Officer, and may include one or more Senior Managing Directors or Managing
Directors. The Chairman of the Board, Chief Executive Officer, President, any
Senior Managing Director, any Managing Director, Chief Financial Officer,
Secretary, and Security Officer shall be elected by the Board. The Chairman of
the Board, Chief Executive Officer, and the President shall be elected by the
Board from their own number. Such officers as the Board shall elect from their
own number shall hold office from the date of their election as officers until
the organization meeting of the Board of Directors following the next annual
meeting of shareholders, provided, however, that such officers may be relieved
of their duties at any time by action of the Board of Directors, in which event
all the powers incident to their office shall immediately terminate. The
Chairman of the Board, Chief Executive Officer, or the President shall preside
at all meetings of shareholders and meetings of the Board of Directors.
(b) The management staff of the Bank shall include officers elected by the
Board, officers appointed by the Chairman of the Board, the Chief Executive
Officer, the President, any Senior Managing Director, any Managing Director, the
Chief Financial Officer, and such other persons in the employment of the Bank
who, pursuant to authorization by a duly authorized officer of the Bank, perform
management functions and have management responsibilities. Any two or more
offices may be held by the same person except that no person shall hold the
office of Chairman of the Board, Chief Executive Officer and/or President and at
the same time also hold the office of Secretary.
15
<PAGE>
(c) Except as provided in the case of the elected officers who are members of
the Board, all officers and employees, whether elected or appointed, shall hold
office at the pleasure of the Board. Except as otherwise limited by law or these
By-Laws, the Board assigns to the Chairman of the Board, the Chief Executive
Officer, the President, any Senior Managing Director, any Managing Director, the
Chief Financial Officer, and/or each of their respective designees the authority
to control all personnel, including elected and appointed officers and employees
of the Bank, to employ or direct the employment of such officers and employees
as he or she may deem necessary, including the fixing of salaries and the
dismissal of such officers and employees at pleasure, and to define and
prescribe the duties and responsibilities of all officers and employees of the
Bank, subject to such further limitations and directions as he or she may from
time to time deem appropriate.
(d) The Chairman of the Board, the Chief Executive Officer, the President, any
Senior Managing Director, any Managing Director, the Chief Financial Officer,
and any other officer of the Bank, to the extent that such officer is authorized
in writing by the Chairman of the Board, the Chief Executive Officer, the
President, any Senior Managing Director, any Managing Director, or the Chief
Financial Officer may appoint persons other than officers who are in employment
of the Bank to serve in management positions and in connection therewith, the
appointing officer may assign such title, salary, responsibilities and functions
as are deemed appropriate, provided, however, that nothing contained herein
shall be construed as placing any limitation on the authority of the Chairman of
the Board, the Chief Executive Officer, the President, any Senior Managing
Director, any Managing Director, or the Chief Financial Officer as provided in
this and other sections of these By-Laws.
(e) The Senior Managing Directors and the Managing Directors of the Bank shall
have general and active authority over the management of the business of the
Bank, shall see that all orders and resolutions of the Board of Directors are
carried into effect, and shall do or cause to be done all things necessary or
proper to carry on the business of the Bank in accordance with provisions of
applicable law and regulations. Each Senior Managing Director and Managing
Director shall perform all duties incident to his or her office and such other
and further duties, as may from time to time be required by the Chief Executive
Officer, the President, the Board of Directors, or the shareholders. The
specification of authority in these By-Laws wherever and to whomever granted
shall not be construed to limit in any manner the general powers of delegation
granted to a Senior Managing Director or a Managing Director in conducting the
business of the Bank. In the absence of a Senior Managing Director or a Managing
Director, such officer as is designated by the Senior Managing Director or the
Managing Director shall be vested with all the powers and perform all the duties
of the Senior Managing Director or the Managing Director as defined by these
By-Laws.
(f) Each Managing Director who is assigned oversight of one or more trust
service offices shall appoint a management committee known as the Investment
Management and Trust Committee consisting of the Managing Director of the trust
service offices and at least three other members who shall be capable and
experienced officers of the Bank appointed from time to time by the Managing
Director and who shall continue as members of the Investment Management and
Trust Committee until their successors are appointed, provided, however, that
any member of the Investment Management and Trust Committee may be removed by
the Managing Director as provided in this and other sections of these By-Laws.
The Managing Director shall fill any
16
<PAGE>
vacancy in the Investment Management and Trust Committee by the appointment of
another capable and experienced officer of the Bank. Each Investment Management
and Trust Committee shall meet at such date, time and place as the Managing
Director shall fix. In the event of the absence of any member or members of the
Investment Management and Trust Committee, the Managing Director may, in his or
her discretion, appoint another officer of the Bank to fill the place or places
of such absent member or members to serve during such absence. A majority of
each Investment Management and Trust Committee shall constitute a quorum. Each
Investment Management and Trust Committee shall carry out the policies of the
Bank, as adopted by the Board of Directors, which shall be formulated and
executed in accordance with State and Federal Law, Regulations of the
Comptroller of the Currency, and sound fiduciary principles. In carrying out the
policies of the Bank, each Investment Management and Trust Committee is hereby
authorized to establish management teams whose duties and responsibilities shall
be specifically set forth in the policies of the Bank. Each such management team
shall report such proceedings and the actions taken thereby to the Investment
Management and Trust Committee. Each Managing Director shall then report such
proceedings and the actions taken thereby to the Board of Directors.
SECTION 3.02. POWERS AND DUTIES OF MANAGEMENT STAFF. Pursuant to the fiduciary
powers granted to this Bank under the provisions of Federal Law and Regulations
of the Comptroller of the Currency, the Chairman of the Board, the Chief
Executive Officer, the President, the Senior Managing Directors, the Managing
Directors, the Chief Financial Officer, and those officers so designated and
authorized by the Chairman of the Board, the Chief Executive Officer, the
President, the Senior Managing Directors, the Managing Directors, or the Chief
Financial Officer are authorized for and on behalf of the Bank, and to the
extent permitted by law, to make loans and discounts; to purchase or acquire
drafts, notes, stocks, bonds, and other securities for investment of funds held
by the Bank; to execute and purchase acceptances; to appoint, empower and direct
all necessary agents and attorneys; to sign and give any notice required to be
given; to demand payment and/or to declare due for any default any debt or
obligation due or payable to the Bank upon demand or authorized to be declared
due; to foreclose any mortgages; to exercise any option, privilege or election
to forfeit, terminate, extend or renew any lease; to authorize and direct any
proceedings for the collection of any money or for the enforcement of any right
or obligation; to adjust, settle and compromise all claims of every kind and
description in favor of or against the Bank, and to give receipts, releases and
discharges therefor; to borrow money and in connection therewith to make,
execute and deliver notes, bonds or other evidences of indebtedness; to pledge
or hypothecate any securities or any stocks, bonds, notes or any property real
or personal held or owned by the Bank, or to rediscount any notes or other
obligations held or owned by the Bank, whenever in his or her judgment it is
reasonably necessary for the operation of the Bank; and in furtherance of and in
addition to the powers hereinabove set forth to do all such acts and to take all
such proceedings as in his or her judgment are necessary and incidental to the
operation of the Bank.
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<PAGE>
SECTION 3.03. SECRETARY. The Secretary or such other officers as may be
designated by the Chief Executive Officer shall have supervision and control of
the records of the Bank and, subject to the direction of the Chief Executive
Officer, shall undertake other duties and functions usually performed by a
corporate secretary. Other officers may be designated by the Secretary as
Assistant Secretary to perform the duties of the Secretary.
SECTION 3.04. EXECUTION OF DOCUMENTS. Any member of the Bank's management staff
or any employee of the Bank designated as an officer on the Bank's payroll
system is hereby authorized for and on behalf of the Bank to sell, assign,
lease, mortgage, transfer, deliver and convey any real or personal property,
including shares of stock, bonds, notes, certificates of indebtedness (including
the assignment and redemption of registered United States obligations) and all
other forms of intangible property now or hereafter owned by or standing in the
name of the Bank, or its nominee, or held by the Bank as collateral security, or
standing in the name of the Bank, or its nominee, in any fiduciary capacity or
in the name of any principal for whom this Bank may now or hereafter be acting
under a power of attorney or as agent, and to execute and deliver such partial
releases from any discharges or assignments of mortgages and assignments or
surrender of insurance policies, deeds, contracts, assignments or other papers
or documents as may be appropriate in the circumstances now or hereafter held by
the Bank in its own name, in a fiduciary capacity, or owned by any principal for
whom this Bank may now or hereafter be acting under a power of attorney or as
agent; provided, however, that, when necessary, the signature of any such person
shall be attested or witnessed in each case by another officer of the Bank.
Any member of the Bank's management staff or any employee of the Bank designated
as an officer on the Bank's payroll system is hereby authorized for and on
behalf of the Bank to execute any indemnity and fidelity bonds, trust
agreements, proxies or other papers or documents of like or different character
necessary, desirable or incidental to the appointment of the Bank in any
fiduciary capacity, the conduct of its business in any fiduciary capacity, or
the conduct of its other banking business; to sign and issue checks, drafts,
orders for the payment of money and certificates of deposit; to sign and endorse
bills of exchange, to sign and countersign foreign and domestic letters of
credit, to receive and receipt for payments of principal, interest, dividends,
rents, fees and payments of every kind and description paid to the Bank, to sign
receipts for money or other property acquired by or entrusted to the Bank, to
guarantee the genuineness of signatures on assignments of stocks, bonds or other
securities, to sign certifications of checks, to endorse and deliver checks,
drafts, warrants, bills, notes, certificates of deposit and acceptances in all
business transactions of the Bank; also to foreclose any mortgage, to execute
and deliver receipts for any money or property; also to sign stock certificates
for and on behalf of this Bank as transfer agent or registrar, and to
authenticate bonds, debentures, land or lease trust certificates or other forms
of security issued pursuant to any indenture under which this Bank now or
hereafter is acting as trustee or in any other fiduciary capacity; to execute
and deliver various forms of documents or agreements necessary to effectuate
certain investment strategies for various fiduciary or custody customers of the
Bank, including, without limitation, exchange funds, options, both listed and
over-the-counter, commodities trading, futures trading, hedge funds, limited
partnerships, venture capital funds, swap or collar transactions and other
similar investment vehicles for which the Bank now or in the future may deem
appropriate for investment of fiduciary customers or in which non-fiduciary
customers may direct investment by the Bank.
Without limitation on the foregoing, the Chief Executive Officer, Chairman of
the Board, or President of the Bank shall have the authority from time to time
to appoint officers of the Bank as Vice President for the sole purpose of
executing releases or other documents incidental to the conduct of the Bank's
business in any fiduciary capacity where required by state law or the governing
document. In addition, other persons in the employment of the Bank or its
affiliates may be authorized by the Chief Executive Officer, Chairman of the
Board, President, Senior Managing Directors, Managing Directors, or Chief
Financial Officer to perform
18
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acts and to execute the documents described in the paragraph above, subject,
however, to such limitations and conditions as are contained in the
authorization given to such person.
SECTION 3.05. PERFORMANCE BOND. All officers and employees of the Bank shall be
bonded for the honest and faithful performance of their duties for such amount
as may be prescribed by the Board of Directors.
ARTICLE IV
STOCKS AND STOCK CERTIFICATES
SECTION 4.01. STOCK CERTIFICATES. The shares of stock of the Bank shall be
evidenced by certificates which shall bear the signature of the Chairman of the
Board, the Chief Executive Officer, or the President (which signature may be
engraved, printed or impressed), and shall be signed manually by the Secretary,
or any other officer appointed by the Chief Executive Officer for that purpose.
In case any such officer who has signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Bank with the same effect as if
such officer had not ceased to be such at the time of its issue. Each such
certificate shall bear the corporate seal of the Bank, shall recite on its face
that stock represented thereby is transferable only upon the books of the Bank
when properly endorsed and shall recite such other information as is required by
law and deemed appropriate by the Board. The corporate seal may be facsimile
engraved or printed.
SECTION 4.02. STOCK ISSUE AND TRANSFER. The shares of stock of the Bank shall be
transferable only upon the stock transfer books of the Bank and, except as
hereinafter provided, no transfer shall be made or new certificates issued
except upon the surrender for cancellation of the certificate or certificates
previously issued therefor. In the case of the loss, theft, or destruction of
any certificate, a new certificate may be issued in place of such certificate
upon the furnishing of an affidavit setting forth the circumstances of such
loss, theft, or destruction and indemnity satisfactory to the Chairman of the
Board, the Chief Executive Officer, or the President. The Board of Directors or
the Chairman of the Board, Chief Executive Officer, or the President may
authorize the issuance of a new certificate therefor without the furnishing of
indemnity. Stock transfer books, in which all transfers of stock shall be
recorded, shall be provided. The stock transfer books may be closed for a
reasonable period and under such conditions as the Board of Directors may at any
time determine, for any meeting of shareholders, the payment of dividends or any
other lawful purpose. In lieu of closing the transfer books, the Board of
Directors may, in its discretion, fix a record date and hour constituting a
reasonable period prior to the day designated for the holding of any meeting of
the shareholders or the day appointed for the payment of any dividend, or for
any other purpose at the time as of which shareholders entitled to notice of and
to vote at any such meeting or to receive such dividend or to be treated as
shareholders for such other purpose shall be determined, and only shareholders
of record at such time shall be entitled to notice of or to vote at such meeting
or to receive such dividends or to be treated as shareholders for such other
purpose.
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ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.01. SEAL. The seal of the Bank shall be circular in form with "SEAL"
in the center, and the name "BANK ONE TRUST COMPANY, NA" located clockwise
around the upper half of the seal.
SECTION 5.02. MINUTE BOOK. The organization papers of this Bank, the Articles of
Association, the returns of judges of elections, the By-Laws and any amendments
thereto, the proceedings of all regular and special meetings of the shareholders
and of the Board of Directors, and reports of the committees of the Board of
Directors shall be recorded in the minute books of the Bank. The minutes of each
such meeting shall be signed by the presiding officer and attested by the
secretary of the meeting.
SECTION 5.03. CORPORATE POWERS. The corporate existence of the Bank shall
continue until terminated in accordance with the laws of the United States. The
purpose of the Bank shall be to carry on the general business of a commercial
bank trust department and to engage in such activities as are necessary,
incident, or related to such business. The Articles of Association of the Bank
shall not be amended, or any other provision added elsewhere in the Articles
expanding the powers of the Bank, without the prior approval of the Comptroller
of the Currency.
SECTION 5.04. AMENDMENT OF BY-LAWS. The By-Laws may be amended, altered or
repealed, at any regular or special meeting of the Board of Directors, by a vote
of a majority of the Directors.
As amended April 24, 1991 Section 3.01 (Officers and Management Staff)
Section 3.02 (Chief Executive Officer)
Section 3.03 (Powers and Duties of Officers
and Management Staff)
Section 3.05 (Execution of Documents)
As amended January 27, 1995 Section 2.04 (Regular Meetings)
Section 2.05 (Special Meetings)
Section 3.01(f) (Officers and Management Staff)
Section 3.03(e) (Powers and Duties of Officers
and Management Staff)
Section 5.01 (Seal)
Amended and restated in its entirety effective May 1, 1996
As amended August 1, 1996 Section 2.09 (Trust Examining Committee)
Section 2.10 (Other Committees)
As amended October 16, 1997 Section 3.01 (Officers and Management Staff)
Section 3.02 (Powers and Duties of Officers and
Management Staff)
Section 3.04 (Execution of Documents)
As amended January 1, 1998 Section 1.01 (Annual Meeting)
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EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 18, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between First Huntingdon
Finance Corp. and BANK ONE TRUST COMPANY, NA, as Trustee, and a guarantee
agreement between Toll Brothers, Inc. and BANK ONE TRUST COMPANY, NA, as
Trustee, the undersigned, in accordance with Section 321(b) of the Trust
Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities authorized
to make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
BANK ONE TRUST COMPANY, NA
By /s/ John R. Prendiville
-------------------------
John R. Prendiville
Vice President
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EXHIBIT 7
Legal Title of Bank: Bank One Trust Company, NA Call Date: 12/31/98
Address: 100 Broad Street ST-BK: 17-1630 FFIEC 032
City, State Zip: Columbus, OH 43271 Page RC-1
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands
RCON BIL MIL THOU C300
---- ------------ ----
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCON
----
a. Noninterest-bearing balances and currency and coin(1) ................... 0081 159,911 1.a
b. Interest-bearing balances(2)............................................. 0071 16,874 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) ............... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............. 1773 7,403 2.b
3. Federal funds sold and securities purchased
under agreements to resell .............................................. 1350 576,473 3.
4. Loans and lease financing receivables: RCON
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)....................................................................... 2122 32,603 4.a
b. LESS: Allowance for loan and lease losses................................ 3123 10 4.b
c. LESS: Allocated transfer risk reserve.................................... 3128 0 4.c
RCON
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c)..................................... 2125 32,593 4.d
5. Trading assets (from Schedule RD-D).................................... 3545 0 5.
6. Premises and fixed assets (including capitalized leases) .............. 2145 18,685 6.
7. Other real estate owned (from Schedule RC-M) .......................... 2150 0 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)......................................... 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding .......... 2155 0 9.
10. Intangible assets (from Schedule RC-M)................................. 2143 31,392 10.
11. Other assets (from Schedule RC-F)...................................... 2160 127,322 11.
12. Total assets (sum of items 1 through 11)............................... 2170 970,653 12.
</TABLE>
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
22
<PAGE>
Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/98
Address: 100 East Broad Street ST-BK:
City, State Zip: Columbus, OH 43271 17-1630 FFIEC 032
FDIC Certificate No.: 0/3/6/1/8 Page RC-2
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
------------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1).............................................. 2200 802,791 13.a
(1) Noninterest-bearing(1)............................................... 6631 727,720 13.a1
(2) Interest-bearing..................................................... 6636 75,071 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).......................................
(1) Noninterest bearing..................................................
(2) Interest-bearing.....................................................
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 0 14
15. a. Demand notes issued to the U.S. Treasury................................. RCON 2840 0 15.a
b. Trading Liabilities (from Sechedule RC-D)................................ RCFD 3548 0 15.b
RCON
16. Other borrowed money: ----
a. With original maturity of one year or less............................... 2332 0 16.a
b. With original maturity of more than one year............................ A547 0 16.b
c. With original maturity of more than three years ........................ A548 0 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding .................... 2920 0 18.
19. Subordinated notes and debentures........................................... 3200 0 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 64,642 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 867,433 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 800 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 35,157 25.
26. a. Undivided profits and capital reserves................................... 3632 67,207 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities............................................................... 8434 56 26.b
27. Cumulative foreign currency translation adjustments ........................ 3284 0 27.
28. Total equity capital (sum of items 23 through 27) .......................... 3210 103,220 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)....................................... 3300 970,653 29.
</TABLE>
<TABLE>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date during 1996 ............ RCFD 6724.... | N/A | M.1.
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be
required by state chartering authority)
</TABLE>
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
23
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
BANK ONE TRUST COMPANY, NA
(Exact name of trustee as specified in its charter)
A National Banking Association 31-0838515
(I.R.S. employer
identification number)
100 East Broad Street, Columbus, Ohio 43271-0181
(Address of principal executive offices) (Zip Code)
BANK ONE TRUST COMPANY, NA
100 East Broad Street
Columbus, Ohio 43271-0181
Attn: Linda J. Patterson, Senior Managing Director, (614) 248-5193
(Name, address and telephone number of agent for service)
-----------------
Toll Finance Corp.
Toll Brothers, Inc.
(Exact name of obligor as specified in its charter)
Delaware 23-2978196
Delaware 22-2416878
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
3103 Philmont Avenue
Huntingdon Valley, Pennsylvania 19006
(Address of principal executive offices) (Zip Code)
Debt Securities
Guarantee of Debt Securities of Toll Finance Corp.
(Title of Indenture Securities)
1
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.;
Federal Deposit Insurance Corporation,
Washington, D.C.; The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part
of this Statement of Eligibility.
1. A copy of the articles of association of the trustee now
in effect.
2. A copy of the certificates of authority of the trustee to
commence business.
3. A copy of the authorization of the trustee to exercise
corporate trust powers.
4. A copy of the existing by-laws of the trustee.
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
2
<PAGE>
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, Bank One Trust Company, NA, a national banking association organized
and existing under the laws of the United States of America, has duly caused
this Statement of Eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Chicago and State of Illinois on
the 18th day of November, 1999.
BANK ONE TRUST COMPANY, NA
Trustee
By /s/ John R. Prendiville
---------------------------
John R. Prendiville
Vice President
3
<PAGE>
EXHIBIT 1
A COPY OF THE ARTICLES OF ASSOCIATION OF THE
TRUSTEE NOW IN EFFECT
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
of
BANK ONE TRUST COMPANY, NA
FIRST. The title of this Association shall be BANK ONE TRUST COMPANY, NA.
SECOND. The main office of the Association shall be in the City of Columbus,
County of Franklin, State of Ohio.
The business of the Association will be limited to the fiduciary powers and the
support of activities incidental to the exercise of those powers. The
Association will not expand or alter its business beyond that stated in this
article without the prior approval of the Comptroller of the Currency.
THIRD. The Board of Directors of this Association shall consist of not less than
five nor more than twenty-five persons, the exact number to be fixed and
determined from time to time by resolution of a majority of the full Board of
Directors or by resolution of a majority of the shareholders at any annual or
special meeting thereof. Each director shall own common or preferred stock of
the Association, or of a holding company owning the Association, with an
aggregate par, fair market or equity value of not less than $1,000, as of either
(i) the date of purchase, (ii) the date the person became a director, or (iii)
the date of that person's most recent election to the Board of Directors,
whichever is more recent. Any combination of common or preferred stock of the
Association or holding company may be used.
Any vacancy in the Board of Directors may be filled by action of a majority of
the remaining directors between meetings of shareholders. The Board of Directors
may not increase the number of directors between meetings of shareholders to a
number which: (1) exceeds by more than two the number of directors last elected
by shareholders where the number was 15 or less; or (2) exceeds by more than
four the number of directors last elected by shareholders where the number was
16 or more, but in no event shall the number of directors exceed 25.
Terms of directors, including directors selected to fill vacancies, shall expire
at the next regular meeting of shareholders at which directors are elected,
unless the directors resign or are removed from office.
Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.
Honorary or advisory members of the Board of Directors, without voting power or
power of final decision in matters concerning the business of the Association,
may be appointed by resolution of a majority of the full Board of Directors, or
by resolution of shareholders at any annual or special
4
<PAGE>
meeting. Honorary or advisory directors shall not be counted to determine the
number of directors of the Association or the presence of a quorum in connection
with any board action, and shall not be required to own qualifying shares.
FOURTH. There shall be an annual meeting of the shareholders to elect directors
and transact whatever other business may be brought before the meeting. It shall
be held at the main office or any other convenient place the Board of Directors
may designate, on the day of each year specified therefor in the Bylaws or, if
that day falls on a legal holiday in the state in which the Association is
located, on the next following banking day. If no election is held on the day
fixed or in the event of a legal holiday on the following banking day, an
election may be held on any subsequent day within 60 days of the day fixed, to
be designated by the Board of Directors or, if the directors fail to fix the
day, by shareholders representing two-thirds of the shares issued and
outstanding. In all cases at least 10 days advance notice of the meeting shall
be given to the shareholders by first class mail.
In all elections of directors, the number of votes each common shareholder may
cast will be determined by multiplying the number of shares such shareholder
owns by the number of directors to be elected. Those votes may be cumulated and
cast for a single candidate or may be distributed among two or more candidates
in the manner selected by the shareholder. On all other questions, each common
shareholder shall be entitled to one vote for each share of stock held by such
shareholder. If the issuance of preferred stock with voting rights has been
authorized by a vote of shareholders owning a majority of the common stock of
the association, preferred shareholders will have cumulative voting rights and
will be included within the same class as common shareholders, for purposes of
elections of directors.
A director may resign at any time by delivering written notice to the Board of
Directors, its chairperson, or to the Association, which resignation shall be
effective when the notice is delivered unless the notice specifies a later
effective date.
A director may be removed by shareholders at a meeting called to remove him or
her, when notice of the meeting stating that the purpose or one of the purposes
is to remove him or her is provided, if there is a failure to fulfill one of the
affirmative requirements for qualification, or for cause, provided, however,
that a director may not be removed if the number of votes sufficient to elect
him or her under cumulative voting is voted against his or her removal.
FIFTH. The authorized amount of capital stock of this Association shall be
eighty thousand shares of common stock of the par value of ten dollars ($10.00)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion, may from time to time determine and at such
price as the Board of Directors may from time to time fix.
Unless otherwise specified in the Articles of Association or required by law,
(1) all matters requiring shareholder action, including amendments to the
Articles of Association, must be
5
<PAGE>
approved by shareholders owning a majority voting interest in the outstanding
voting stock, and (2) each shareholder shall be entitled to one vote per share.
Unless otherwise specified in the Articles of Association or required by law,
all shares of voting stock shall be voted together as a class on any matters
requiring shareholder approval. If a proposed amendment would affect two or more
classes or series in the same or a substantially similar way, all the classes or
series so affected must vote together as a single voting group on the proposed
amendment.
Shares of the same class or series may be issued as a dividend on a pro rata
basis and without consideration. Shares of another class or series may be issued
as share dividends in respect of a class or series of stock if approved by a
majority of the votes entitled to be cast by the class or series to be issued
unless there are no outstanding shares of the class or series to be issued.
Unless otherwise provided by the Board of Directors, the record date for
determining shareholders entitled to a share dividend shall be the date the
Board of Directors authorizes the share dividend.
Unless otherwise provided in the Bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close of
business on the day before the first notice is mailed or otherwise sent to the
shareholders, provided that in no event may a record date be more than 70 days
before the meeting.
If a shareholder is entitled to fractional shares pursuant to preemptive rights,
a stock dividend, consolidation or merger, reverse stock split or otherwise, the
Association may: (a) issue fractional shares or; (b) in lieu of the issuance of
fractional shares, issue script or warrants entitling the holder to receive a
full share upon surrendering enough script or warrants to equal a full share;
(c) if there is an established and active market in the Association's stock,
make reasonable arrangements to provide the shareholder with an opportunity to
realize a fair price through sale of the fraction, or purchase of the additional
fraction required for a full share; (d) remit the cash equivalent of the
fraction to the shareholder; or (e) sell full shares representing all the
fractions at public auction or to the highest bidder after having solicited and
received sealed bids from at least three licensed stock brokers, and distribute
the proceeds pro rata to shareholders who otherwise would be entitled to the
fractional shares. The holder of a fractional share is entitled to exercise the
rights for shareholder, including the right to vote, to receive dividends, and
to participate in the assets of the Association upon liquidation, in proportion
to the fractional interest. The holder of script or warrants is not entitled to
any of these rights unless the script or warrants explicitly provide for such
rights. The script or warrants may be subject to such additional conditions as:
(1) that the script or warrants will become void if not exchanged for full
shares before a specified date; and (2) that the shares for which the script or
warrants are exchangeable may be sold at the option of the Association and the
proceeds paid to scriptholders.
The Association, at any time and from time to time, may authorize and issue debt
obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt, whether or not subordinated, which
may be issued by the Association without the approval of shareholders, do not
carry voting rights on any issue, including an increase or decrease in the
aggregate number of the securities, or the exchange or reclassification of all
or part of securities into securities of another class or series.
6
<PAGE>
SIXTH. The Board of Directors shall appoint one of its members president of this
Association, and one of its members chairperson of the board and shall have the
power to appoint one or more vice presidents, a secretary who shall keep minutes
of the directors' and shareholders' meetings and be responsible for
authenticating the records of the Association, and such other officers and
employees as may be required to transact the business of this Association. A
duly appointed officer may appoint one or more officers or assistant officers if
authorized by the Board of Directors in accordance with the Bylaws.
The Board of Directors shall have the power to:
(1) Define the duties of the officers, employees, and agents of the
Association.
(2) Delegate the performance of its duties, but not the responsibility for its
duties, to the officers, employees, and agents of the Association.
(3) Fix the compensation and enter into employment contracts with its officers
and employees upon reasonable terms and conditions consistent with
applicable law.
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and to fix the penalty thereof.
(6) Ratify written policies authorized by the Association's management or
committees of the board.
(7) Regulate the manner in which any increase or decrease of the capital of
the Association shall be made, provided that nothing herein shall restrict
the power of shareholders to increase or decrease the capital of the
association in accordance with law, and nothing shall raise or lower from
two-thirds the percentage for shareholder approval to increase or reduce
the capital.
(8) Manage and administer the business and affairs of the Association.
(9) Adopt initial Bylaws, not inconsistent with law or the Articles of
Association, for managing the business and regulating the affairs of the
Association.
(10) Amend or repeal Bylaws, except to the extent that the Articles of
Association reserve this power in whole or in part to shareholders.
(11) Make contracts.
(12) Generally perform all acts that are legal for a Board of Directors to
perform.
SEVENTH. The Board of Directors shall have the power to change the location of
the main office of this Association to any other place within the limits of the
City of Columbus, State of Ohio, without the approval of the shareholders; and
shall have the power to change the location of the main office of this
Association to any other place outside the limits of the City of Columbus, State
of Ohio, but not more than thirty miles beyond such limits, with the affirmative
vote of shareholders owning two-thirds of the stock of the Association, subject
to receipt of a
7
<PAGE>
certificate of approval from the Comptroller of the Currency. The Board of
Directors shall have the power to establish or change the location of any branch
or branches of the Association to any other location permitted under applicable
law without the approval of the shareholders, subject to approval by the Office
of the Comptroller of the Currency. The Board of Directors shall have the power
to establish or change the location of any nonbranch office or facility of the
Association without the approval of the shareholders.
EIGHTH. The corporate existence of this Association shall continue until
termination according to the laws of the United States.
NINTH. The Board of Directors of this Association, or any shareholders owning,
in the aggregate, not less than 20 percent of the stock of this Association, may
call a special meeting of shareholders at any time. Unless otherwise provided by
the Bylaws or the laws of the United States, or waived by shareholders, a notice
of the time, place, and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage prepaid, mailed at
least 10, and no more than 60, days prior to the date of the meeting to each
shareholder of record at his/her address as shown upon the books of this
Association. Unless otherwise provided by the Bylaws, any action requiring
approval of shareholders must be effected at a duly called annual or special
meeting.
TENTH. The Association shall provide indemnification as set forth below:
Every person who is or was a Director, officer or employee of the Association or
of any other corporation which he served as a Director, officer or employee at
the request of the Association as part of his regularly assigned duties may be
indemnified by the Association in accordance with the provisions of this Article
against all liability (including, without limitation, judgments, fines,
penalties, and settlements) and all reasonable expenses (including, without
limitation, attorneys' fees and investigative expenses) that may be incurred or
paid by him in connection with any claim, action, suit or proceeding, whether
civil, criminal or administrative (all referred to hereafter in this Article as
"Claims") or in connection with any appeal relating thereto in which he may
become involved as a party or otherwise or with which he may be threatened by
reason of his being or having been a Director, officer or employee of the
Association or such other corporation, or by reason of any action taken or
omitted by him in his capacity as such Director, officer or employee, whether or
not he continues to be such at the time such liability or expenses are incurred;
provided that nothing contained in this Article shall be construed to permit
indemnification of any such person who is adjudged guilty of, or liable for,
willful misconduct, gross neglect of duty or criminal acts, unless, at the time
such indemnification is sought, such indemnification in such instance is
permissible under applicable law and regulations, including published rulings of
the Comptroller of the Currency or other appropriate supervisory or regulatory
authority; and provided further that there shall be no indemnification of
Directors, officers, or employees against expenses, penalties, or other payments
incurred in an administrative proceeding or action instituted by an appropriate
regulatory agency which proceeding or action results in a final order assessing
civil money penalties or requiring affirmative action by an individual or
individuals in the form of payments to the Association.
Every person who may be indemnified under the provisions of this Article and who
has been wholly successful on the merits with respect to any Claim shall be
entitled to indemnification as of right. Except as provided in the preceding
sentence, any indemnification under this Article shall be at the sole discretion
of the Board of Directors and shall be made only if the Board of
8
<PAGE>
Directors or the Executive Committee acting by a quorum consisting of Directors
who are not parties to such Claim shall find or if independent legal counsel
(who may be the regular counsel of the Association) selected by the Board of
Directors or Executive Committee whether or not a disinterested quorum exists
shall render their opinion that in view of all of the circumstances then
surrounding the Claim, such indemnification is equitable and in the best
interests of the Association. Among the circumstances to be taken into
consideration in arriving at such a finding or opinion is the existence or
non-existence of a contract of insurance or indemnity under which the
Association would be wholly or partially reimbursed for such indemnification,
but the existence or non-existence of such insurance is not the sole
circumstance to be considered nor shall it be wholly determinative of whether
such indemnification shall be made. In addition to such finding or opinion, no
indemnification under this Article shall be made unless the Board of Directors
or the Executive Committee acting by a quorum consisting of Directors who are
not parties to such Claim shall find or if independent legal counsel (who may be
the regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that the Directors, officer or employee acted in good faith in
what he reasonably believed to be the best interests of the Association or such
other corporation and further in the case of any criminal action or proceeding,
that the Director, officer or employee reasonably believed his conduct to be
lawful. Determination of any Claim by judgment adverse to a Director, officer or
employee by settlement with or without Court approval or conviction upon a plea
of guilty or of nolo contendere or its equivalent shall not create a presumption
that a Director, officer or employee failed to meet the standards of conduct set
forth in this Article. Expenses incurred with respect to any Claim may be
advanced by the Association prior to the final disposition thereof upon receipt
of an undertaking satisfactory to the Association by or on behalf of the
recipient to repay such amount unless it is ultimately determined that he is
entitled to indemnification under this Article.
The rights of indemnification provided in this Article shall be in addition to
any rights to which any Director, officer or employee may otherwise be entitled
by contract or as a matter of law. Every person who shall act as a Director,
officer or employee of this Association shall be conclusively presumed to be
doing so in reliance upon the right of indemnification provided for in this
Article.
ELEVENTH. These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of this Association, unless the vote of the holders of a greater
amount of stock is required by law, and in that case by the vote of the holders
of such greater amount. The Association's Board of Directors may propose one or
more amendments to the Articles of Association for submission to the
shareholders.
9
<PAGE>
EXHIBIT 2
A COPY OF THE CERTIFICATE OF AUTHORITY OF THE
TRUSTEE TO COMMENCE BUSINESS
CERTIFICATE
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "Bank One Trust Company, National Association," Columbus, Ohio, (Charter No.
16235) is a National Banking Association formed under the laws of the United
States and is authorized thereunder to transact the business of banking on the
date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at the
Treasury Department in the City of
Washington and District of Columbia, this
24th day of March, 1999.
/s/ John D. Hawke, Jr.
--------------------------------
Comptroller of the Currency
10
<PAGE>
EXHIBIT 3
A COPY OF THE AUTHORIZATION OF THE TRUSTEE
TO EXERCISE CORPORATE TRUST POWERS
CERTIFICATE
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq.,
as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.
2. "Bank One Trust Company, National Association," Columbus, Ohio, (Charter No.
16235) was granted, under the hand and seal of the Comptroller, the right to act
in all fiduciary capacities authorized under the provisions of the Act of
Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and that the
authority so granted remains in full force and effect on the date of this
Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at the
Treasury Department in the City of
Washington and District of Columbia, this
24th day of March, 1999.
/s/ John D. Hawke, Jr.
----------------------------------
Comptroller of the Currency
11
<PAGE>
EXHIBIT 4
A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE
BANK ONE TRUST COMPANY, N.A.
BY-LAWS
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1.01. ANNUAL MEETING. The regular annual meeting of the shareholders of
the Bank for the election of Directors and for the transaction of such business
as may properly come before the meeting shall be held at its main office, or
other convenient place duly authorized by the Board of Directors, on the same
day upon which any regular or special Board meeting is held from and including
the first Monday of January to, and including, the fourth Monday of February of
each year, or on the next succeeding banking day, if the day fixed falls on a
legal holiday. If from any cause, an election of Directors is not made on the
day fixed for the regular meeting of the shareholders or, in the event of a
legal holiday, on the next succeeding banking day, the Board of Directors shall
order the election to be held on some subsequent day, as soon thereafter as
practicable, according to the provisions of law; and notice thereof shall be
given in the manner herein provided for the annual meeting. Notice of such
annual meeting shall be given by or under the direction of the Secretary, or
such other officer as may be designated by the Chief Executive Officer, by
first-class mail, postage prepaid, to all shareholders of record of the Bank at
their respective addresses as shown upon the books of the Bank mailed not less
than ten days prior to the date fixed for such meeting.
SECTION 1.02. SPECIAL MEETINGS. A special meeting of the shareholders of the
Bank may be called at any time by the Board of Directors or by any three or more
shareholders owning, in the aggregate, not less than ten percent of the stock of
the Bank. Notice of any special meeting of the shareholders called by the Board
of Directors, stating the time, place and purpose of the meeting, shall be given
by or under the direction of the Secretary, or such other officer as is
designated by the Chief Executive Officer, by first-class mail, postage prepaid,
to all shareholders of record of the Bank at their respective addresses as shown
upon the books of the Bank mailed not less than ten days prior to the date fixed
for such meeting. Any special meeting of shareholders shall be conducted and its
proceedings recorded in the manner prescribed in these By-Laws for annual
meetings of shareholders.
SECTION 1.03. SECRETARY OF MEETING OF SHAREHOLDERS. The Board of Directors may
designate a person to be the secretary of the meeting of shareholders. In the
absence of a presiding officer, as designated by these By-Laws, the Board of
Directors may designate a person to act as the presiding officer. In the event
the Board of Directors fails to designate a person to preside at a meeting of
shareholders and a secretary of such meeting, the shareholders present or
represented shall elect a person to preside and a person to serve as secretary
of the meeting. The secretary of the meeting of shareholders shall cause the
returns made by the judges of election and other proceedings to be recorded in
the minute books of the Bank. The presiding officer
12
<PAGE>
shall notify the Directors-elect of their election and to meet forthwith for the
organization of the new Board of Directors. The minutes of the meeting shall be
signed by the presiding officer and the secretary designated for the meeting.
SECTION 1.04. JUDGES OF ELECTION. The Board of Directors may appoint as many as
three shareholders to be judges of the election, who shall hold and conduct the
same, and who shall, after the election has been held, notify, in writing over
their signatures, the secretary of the meeting of shareholders of the result
thereof and the names of the Directors elected; provided, however, that upon
failure for any reason of any judge or judges of election, so appointed by the
Directors, to serve, the presiding officer of the meeting shall appoint other
shareholders or their proxies to fill the vacancies. The judges of election, at
the request of the chairman of the meeting, shall act as tellers of any other
vote by ballot taken at such meeting, and shall notify, in writing over their
signature, the secretary of the Board of Directors of the result thereof.
SECTION 1.05. PROXIES. In all elections of Directors, each shareholder of
record, who is qualified to vote under the provisions of Federal Law, shall have
the right to vote the number of shares of record in such shareholder's name for
as many persons as there are Directors to be elected, or to cumulate such shares
as provided by Federal Law. In deciding all other questions at meetings of
shareholders, each shareholder shall be entitled to one vote on each share of
stock of record in such shareholder's name. Shareholders may vote by proxy duly
authorized in writing. All proxies used at the annual meeting shall be secured
for that meeting only, or any adjournment thereof, and shall be dated, if not
dated by the shareholder, as of the date of the receipt thereof. No officer or
employee of this Bank may act as proxy.
SECTION 1.06. QUORUM. Holders of record of a majority of the shares of the
capital stock of the Bank, eligible to be voted, present either in person or by
proxy, shall constitute a quorum for the transaction of business at any meeting
of shareholders, but shareholders present at any meeting and constituting less
than a quorum may, without further notice, adjourn the meeting from time to time
until a quorum is obtained. A majority of the votes cast shall decide every
question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.
ARTICLE II
DIRECTORS
SECTION 2.01. QUALIFICATIONS. Each Director shall have the qualifications
prescribed by law. No person elected as a Director may exercise any of the
powers of office until such Director has taken the oath of such office.
SECTION 2.02. VACANCIES. Directors of the Bank shall hold office for one year or
until their successors are elected and qualified. Any vacancy in the Board shall
be filled by appointment of the remaining Directors, and any Director so
appointed shall hold office until the next election.
SECTION 2.03. ORGANIZATION MEETING. The Directors elected by the shareholders
shall meet for organization of the new Board of Directors at the time and place
fixed by the presiding officer of the annual meeting. If at the time fixed for
such meeting there is no quorum present,
13
<PAGE>
the Directors in attendance may adjourn from time to time until a quorum is
obtained. A majority of the number of Directors elected by the shareholders
shall constitute a quorum for the transaction of business.
SECTION 2.04. REGULAR MEETINGS. The regular meetings of the Board of Directors
shall be held at such date, time and place as the Board may previously
designate, or should the Board fail to so designate, at such date, time and
place as the Chairman of the Board, Chief Executive Officer, or President may
fix. Whenever a quorum is not present, the Directors in attendance shall adjourn
the meeting to a time not later than the date fixed by the By-Laws for the next
succeeding regular meeting of the Board. Members of the Board of Directors may
participate in such meetings through use of conference telephone or similar
communications equipment, so long as all members participating in such meetings
can hear one another.
SECTION 2.05. SPECIAL MEETINGS. Special meetings of the Board of Directors shall
be held at the call of the Chairman of the Board, Chief Executive Officer, or
President, or at the request of two or more Directors. Any special meeting may
be held at such place and at such time as may be fixed in the call. Written or
oral notice shall be given to each Director not later than the day next
preceding the day on which the special meeting is to be held, which notice may
be waived in writing. The presence of a Director at any meeting of the Board of
Directors shall be deemed a waiver of notice thereof by such Director. Whenever
a quorum is not present, the Directors in attendance shall adjourn the special
meeting from day to day until a quorum is obtained. Members of the Board of
Directors may participate in such meetings through use of conference telephone
or similar communications equipment, so long as all members participating in
such meetings can hear one another.
SECTION 2.06. QUORUM. A majority of the Directors shall constitute a quorum at
any meeting, except when otherwise provided by law; but a lesser number may
adjourn any meeting, from time-to-time, and the meeting may be held, as
adjourned, without further notice. When, however, less than a quorum as herein
defined, but at least one-third and not less than two of the authorized number
of Directors are present at a meeting of the Directors, business of the Bank may
be transacted and matters before the Board approved or disapproved by the
unanimous vote of the Directors present.
SECTION 2.07. COMPENSATION. Each member of the Board of Directors shall receive
such fees for attendance at Board and Board committee meetings and such fees for
service as a Director, irrespective of meeting attendance, as from time to time
are fixed by resolution of the Board; provided, however, that payment hereunder
shall not be made to a Director for meetings attended and/or Board service which
are not for the Bank's sole benefit and which are concurrent and duplicative
with meetings attended or Board service for an affiliate of the Bank for which
the Director receives payment; and provided further that fees hereunder shall
not be paid in the case of any Director in the regular employment of the Bank or
of one of its affiliates. Each member of the Board of Directors, whether or not
such Director is in the regular employment of the Bank or of one of its
affiliates, shall be reimbursed for travel expenses incident to attendance at
Board and Board committee meetings.
SECTION 2.08. EXECUTIVE COMMITTEE. There may be a standing committee of the
Board of Directors known as the Executive Committee which shall possess and
exercise, when the Board is not in session, all the powers of the Board that may
lawfully be delegated. The
14
<PAGE>
Executive Committee shall consist of at least three Board members, one of whom
shall be the Chairman of the Board, Chief Executive Officer or the President.
The other members of the Executive Committee shall be appointed by the Chairman
of the Board, the Chief Executive Officer, or the President, with the approval
of the Board, and who shall continue as members of the Executive Committee until
their successors are appointed, provided, however, that any member of the
Executive Committee may be removed by the Board upon a majority vote thereof at
any regular or special meeting of the Board. The Chairman, Chief Executive
Officer, or President shall fill any vacancy in the Executive Committee by the
appointment of another Director, subject to the approval of the Board of
Directors. The Executive Committee shall meet at the call of the Chairman, Chief
Executive Officer, or President or any two members thereof at such time or times
and place as may be designated. In the event of the absence of any member or
members of the Executive Committee, the presiding member may appoint a member or
members of the Board to fill the place or places of such absent member or
members to serve during such absence. Two members of the Executive Committee
shall constitute a quorum. When neither the Chairman of the Board, the Chief
Executive Officer, nor President are present, the Executive Committee shall
appoint a presiding officer. The Executive Committee shall report its
proceedings and the action taken by it to the Board of Directors.
SECTION 2.09. OTHER COMMITTEES. The Board of Directors may appoint such special
committees from time to time as are in its judgment necessary in the interest of
the Bank.
ARTICLE III
OFFICERS, MANAGEMENT STAFF AND EMPLOYEES
SECTION 3.01. OFFICERS AND MANAGEMENT STAFF.
(a) The executive officers of the Bank shall include a Chairman of the Board,
Chief Executive Officer, President, Chief Financial Officer, Secretary, Security
Officer, and may include one or more Senior Managing Directors or Managing
Directors. The Chairman of the Board, Chief Executive Officer, President, any
Senior Managing Director, any Managing Director, Chief Financial Officer,
Secretary, and Security Officer shall be elected by the Board. The Chairman of
the Board, Chief Executive Officer, and the President shall be elected by the
Board from their own number. Such officers as the Board shall elect from their
own number shall hold office from the date of their election as officers until
the organization meeting of the Board of Directors following the next annual
meeting of shareholders, provided, however, that such officers may be relieved
of their duties at any time by action of the Board of Directors, in which event
all the powers incident to their office shall immediately terminate. The
Chairman of the Board, Chief Executive Officer, or the President shall preside
at all meetings of shareholders and meetings of the Board of Directors.
(b) The management staff of the Bank shall include officers elected by the
Board, officers appointed by the Chairman of the Board, the Chief Executive
Officer, the President, any Senior Managing Director, any Managing Director, the
Chief Financial Officer, and such other persons in the employment of the Bank
who, pursuant to authorization by a duly authorized officer of the Bank, perform
management functions and have management responsibilities. Any two or more
offices may be held by the same person except that no person shall hold the
office of Chairman of the Board, Chief Executive Officer and/or President and at
the same time also hold the office of Secretary.
15
<PAGE>
(c) Except as provided in the case of the elected officers who are members of
the Board, all officers and employees, whether elected or appointed, shall hold
office at the pleasure of the Board. Except as otherwise limited by law or these
By-Laws, the Board assigns to the Chairman of the Board, the Chief Executive
Officer, the President, any Senior Managing Director, any Managing Director, the
Chief Financial Officer, and/or each of their respective designees the authority
to control all personnel, including elected and appointed officers and employees
of the Bank, to employ or direct the employment of such officers and employees
as he or she may deem necessary, including the fixing of salaries and the
dismissal of such officers and employees at pleasure, and to define and
prescribe the duties and responsibilities of all officers and employees of the
Bank, subject to such further limitations and directions as he or she may from
time to time deem appropriate.
(d) The Chairman of the Board, the Chief Executive Officer, the President, any
Senior Managing Director, any Managing Director, the Chief Financial Officer,
and any other officer of the Bank, to the extent that such officer is authorized
in writing by the Chairman of the Board, the Chief Executive Officer, the
President, any Senior Managing Director, any Managing Director, or the Chief
Financial Officer may appoint persons other than officers who are in employment
of the Bank to serve in management positions and in connection therewith, the
appointing officer may assign such title, salary, responsibilities and functions
as are deemed appropriate, provided, however, that nothing contained herein
shall be construed as placing any limitation on the authority of the Chairman of
the Board, the Chief Executive Officer, the President, any Senior Managing
Director, any Managing Director, or the Chief Financial Officer as provided in
this and other sections of these By-Laws.
(e) The Senior Managing Directors and the Managing Directors of the Bank shall
have general and active authority over the management of the business of the
Bank, shall see that all orders and resolutions of the Board of Directors are
carried into effect, and shall do or cause to be done all things necessary or
proper to carry on the business of the Bank in accordance with provisions of
applicable law and regulations. Each Senior Managing Director and Managing
Director shall perform all duties incident to his or her office and such other
and further duties, as may from time to time be required by the Chief Executive
Officer, the President, the Board of Directors, or the shareholders. The
specification of authority in these By-Laws wherever and to whomever granted
shall not be construed to limit in any manner the general powers of delegation
granted to a Senior Managing Director or a Managing Director in conducting the
business of the Bank. In the absence of a Senior Managing Director or a Managing
Director, such officer as is designated by the Senior Managing Director or the
Managing Director shall be vested with all the powers and perform all the duties
of the Senior Managing Director or the Managing Director as defined by these
By-Laws.
(f) Each Managing Director who is assigned oversight of one or more trust
service offices shall appoint a management committee known as the Investment
Management and Trust Committee consisting of the Managing Director of the trust
service offices and at least three other members who shall be capable and
experienced officers of the Bank appointed from time to time by the Managing
Director and who shall continue as members of the Investment Management and
Trust Committee until their successors are appointed, provided, however, that
any member of the Investment Management and Trust Committee may be removed by
the Managing Director as provided in this and other sections of these By-Laws.
The Managing Director shall fill any
16
<PAGE>
vacancy in the Investment Management and Trust Committee by the appointment of
another capable and experienced officer of the Bank. Each Investment Management
and Trust Committee shall meet at such date, time and place as the Managing
Director shall fix. In the event of the absence of any member or members of the
Investment Management and Trust Committee, the Managing Director may, in his or
her discretion, appoint another officer of the Bank to fill the place or places
of such absent member or members to serve during such absence. A majority of
each Investment Management and Trust Committee shall constitute a quorum. Each
Investment Management and Trust Committee shall carry out the policies of the
Bank, as adopted by the Board of Directors, which shall be formulated and
executed in accordance with State and Federal Law, Regulations of the
Comptroller of the Currency, and sound fiduciary principles. In carrying out the
policies of the Bank, each Investment Management and Trust Committee is hereby
authorized to establish management teams whose duties and responsibilities shall
be specifically set forth in the policies of the Bank. Each such management team
shall report such proceedings and the actions taken thereby to the Investment
Management and Trust Committee. Each Managing Director shall then report such
proceedings and the actions taken thereby to the Board of Directors.
SECTION 3.02. POWERS AND DUTIES OF MANAGEMENT STAFF. Pursuant to the fiduciary
powers granted to this Bank under the provisions of Federal Law and Regulations
of the Comptroller of the Currency, the Chairman of the Board, the Chief
Executive Officer, the President, the Senior Managing Directors, the Managing
Directors, the Chief Financial Officer, and those officers so designated and
authorized by the Chairman of the Board, the Chief Executive Officer, the
President, the Senior Managing Directors, the Managing Directors, or the Chief
Financial Officer are authorized for and on behalf of the Bank, and to the
extent permitted by law, to make loans and discounts; to purchase or acquire
drafts, notes, stocks, bonds, and other securities for investment of funds held
by the Bank; to execute and purchase acceptances; to appoint, empower and direct
all necessary agents and attorneys; to sign and give any notice required to be
given; to demand payment and/or to declare due for any default any debt or
obligation due or payable to the Bank upon demand or authorized to be declared
due; to foreclose any mortgages; to exercise any option, privilege or election
to forfeit, terminate, extend or renew any lease; to authorize and direct any
proceedings for the collection of any money or for the enforcement of any right
or obligation; to adjust, settle and compromise all claims of every kind and
description in favor of or against the Bank, and to give receipts, releases and
discharges therefor; to borrow money and in connection therewith to make,
execute and deliver notes, bonds or other evidences of indebtedness; to pledge
or hypothecate any securities or any stocks, bonds, notes or any property real
or personal held or owned by the Bank, or to rediscount any notes or other
obligations held or owned by the Bank, whenever in his or her judgment it is
reasonably necessary for the operation of the Bank; and in furtherance of and in
addition to the powers hereinabove set forth to do all such acts and to take all
such proceedings as in his or her judgment are necessary and incidental to the
operation of the Bank.
SECTION 3.03. SECRETARY. The Secretary or such other officers as may be
designated by the Chief Executive Officer shall have supervision and control of
the records of the Bank and, subject to the direction of the Chief Executive
Officer, shall undertake other duties and functions usually performed by a
corporate secretary. Other officers may be designated by the Secretary as
Assistant Secretary to perform the duties of the Secretary.
17
<PAGE>
SECTION 3.04. EXECUTION OF DOCUMENTS. Any member of the Bank's management staff
or any employee of the Bank designated as an officer on the Bank's payroll
system is hereby authorized for and on behalf of the Bank to sell, assign,
lease, mortgage, transfer, deliver and convey any real or personal property,
including shares of stock, bonds, notes, certificates of indebtedness (including
the assignment and redemption of registered United States obligations) and all
other forms of intangible property now or hereafter owned by or standing in the
name of the Bank, or its nominee, or held by the Bank as collateral security, or
standing in the name of the Bank, or its nominee, in any fiduciary capacity or
in the name of any principal for whom this Bank may now or hereafter be acting
under a power of attorney or as agent, and to execute and deliver such partial
releases from any discharges or assignments of mortgages and assignments or
surrender of insurance policies, deeds, contracts, assignments or other papers
or documents as may be appropriate in the circumstances now or hereafter held by
the Bank in its own name, in a fiduciary capacity, or owned by any principal for
whom this Bank may now or hereafter be acting under a power of attorney or as
agent; provided, however, that, when necessary, the signature of any such person
shall be attested or witnessed in each case by another officer of the Bank.
Any member of the Bank's management staff or any employee of the Bank designated
as an officer on the Bank's payroll system is hereby authorized for and on
behalf of the Bank to execute any indemnity and fidelity bonds, trust
agreements, proxies or other papers or documents of like or different character
necessary, desirable or incidental to the appointment of the Bank in any
fiduciary capacity, the conduct of its business in any fiduciary capacity, or
the conduct of its other banking business; to sign and issue checks, drafts,
orders for the payment of money and certificates of deposit; to sign and endorse
bills of exchange, to sign and countersign foreign and domestic letters of
credit, to receive and receipt for payments of principal, interest, dividends,
rents, fees and payments of every kind and description paid to the Bank, to sign
receipts for money or other property acquired by or entrusted to the Bank, to
guarantee the genuineness of signatures on assignments of stocks, bonds or other
securities, to sign certifications of checks, to endorse and deliver checks,
drafts, warrants, bills, notes, certificates of deposit and acceptances in all
business transactions of the Bank; also to foreclose any mortgage, to execute
and deliver receipts for any money or property; also to sign stock certificates
for and on behalf of this Bank as transfer agent or registrar, and to
authenticate bonds, debentures, land or lease trust certificates or other forms
of security issued pursuant to any indenture under which this Bank now or
hereafter is acting as trustee or in any other fiduciary capacity; to execute
and deliver various forms of documents or agreements necessary to effectuate
certain investment strategies for various fiduciary or custody customers of the
Bank, including, without limitation, exchange funds, options, both listed and
over-the-counter, commodities trading, futures trading, hedge funds, limited
partnerships, venture capital funds, swap or collar transactions and other
similar investment vehicles for which the Bank now or in the future may deem
appropriate for investment of fiduciary customers or in which non-fiduciary
customers may direct investment by the Bank.
Without limitation on the foregoing, the Chief Executive Officer, Chairman of
the Board, or President of the Bank shall have the authority from time to time
to appoint officers of the Bank as Vice President for the sole purpose of
executing releases or other documents incidental to the conduct of the Bank's
business in any fiduciary capacity where required by state law or the governing
document. In addition, other persons in the employment of the Bank or its
affiliates may be authorized by the Chief Executive Officer, Chairman of the
Board, President, Senior Managing Directors, Managing Directors, or Chief
Financial Officer to perform
18
<PAGE>
acts and to execute the documents described in the paragraph above, subject,
however, to such limitations and conditions as are contained in the
authorization given to such person.
SECTION 3.05. PERFORMANCE BOND. All officers and employees of the Bank shall be
bonded for the honest and faithful performance of their duties for such amount
as may be prescribed by the Board of Directors.
ARTICLE IV
STOCKS AND STOCK CERTIFICATES
SECTION 4.01. STOCK CERTIFICATES. The shares of stock of the Bank shall be
evidenced by certificates which shall bear the signature of the Chairman of the
Board, the Chief Executive Officer, or the President (which signature may be
engraved, printed or impressed), and shall be signed manually by the Secretary,
or any other officer appointed by the Chief Executive Officer for that purpose.
In case any such officer who has signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Bank with the same effect as if
such officer had not ceased to be such at the time of its issue. Each such
certificate shall bear the corporate seal of the Bank, shall recite on its face
that stock represented thereby is transferable only upon the books of the Bank
when properly endorsed and shall recite such other information as is required by
law and deemed appropriate by the Board. The corporate seal may be facsimile
engraved or printed.
SECTION 4.02. STOCK ISSUE AND TRANSFER. The shares of stock of the Bank shall be
transferable only upon the stock transfer books of the Bank and, except as
hereinafter provided, no transfer shall be made or new certificates issued
except upon the surrender for cancellation of the certificate or certificates
previously issued therefor. In the case of the loss, theft, or destruction of
any certificate, a new certificate may be issued in place of such certificate
upon the furnishing of an affidavit setting forth the circumstances of such
loss, theft, or destruction and indemnity satisfactory to the Chairman of the
Board, the Chief Executive Officer, or the President. The Board of Directors or
the Chairman of the Board, Chief Executive Officer, or the President may
authorize the issuance of a new certificate therefor without the furnishing of
indemnity. Stock transfer books, in which all transfers of stock shall be
recorded, shall be provided. The stock transfer books may be closed for a
reasonable period and under such conditions as the Board of Directors may at any
time determine, for any meeting of shareholders, the payment of dividends or any
other lawful purpose. In lieu of closing the transfer books, the Board of
Directors may, in its discretion, fix a record date and hour constituting a
reasonable period prior to the day designated for the holding of any meeting of
the shareholders or the day appointed for the payment of any dividend, or for
any other purpose at the time as of which shareholders entitled to notice of and
to vote at any such meeting or to receive such dividend or to be treated as
shareholders for such other purpose shall be determined, and only shareholders
of record at such time shall be entitled to notice of or to vote at such meeting
or to receive such dividends or to be treated as shareholders for such other
purpose.
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<PAGE>
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.01. SEAL. The seal of the Bank shall be circular in form with "SEAL"
in the center, and the name "BANK ONE TRUST COMPANY, NA" located clockwise
around the upper half of the seal.
SECTION 5.02. MINUTE BOOK. The organization papers of this Bank, the Articles of
Association, the returns of judges of elections, the By-Laws and any amendments
thereto, the proceedings of all regular and special meetings of the shareholders
and of the Board of Directors, and reports of the committees of the Board of
Directors shall be recorded in the minute books of the Bank. The minutes of each
such meeting shall be signed by the presiding officer and attested by the
secretary of the meeting.
SECTION 5.03. CORPORATE POWERS. The corporate existence of the Bank shall
continue until terminated in accordance with the laws of the United States. The
purpose of the Bank shall be to carry on the general business of a commercial
bank trust department and to engage in such activities as are necessary,
incident, or related to such business. The Articles of Association of the Bank
shall not be amended, or any other provision added elsewhere in the Articles
expanding the powers of the Bank, without the prior approval of the Comptroller
of the Currency.
SECTION 5.04. AMENDMENT OF BY-LAWS. The By-Laws may be amended, altered or
repealed, at any regular or special meeting of the Board of Directors, by a vote
of a majority of the Directors.
As amended April 24, 1991 Section 3.01 (Officers and Management Staff)
Section 3.02 (Chief Executive Officer)
Section 3.03 (Powers and Duties of Officers and
Management Staff)
Section 3.05 (Execution of Documents)
As amended January 27, 1995 Section 2.04 (Regular Meetings)
Section 2.05 (Special Meetings)
Section 3.01(f) (Officers and Management Staff)
Section 3.03(e) (Powers and Duties of Officers
and Management Staff)
Section 5.01 (Seal)
Amended and restated in its entirety effective May 1, 1996
As amended August 1, 1996 Section 2.09 (Trust Examining Committee)
Section 2.10 (Other Committees)
As amended October 16, 1997 Section 3.01 (Officers and Management Staff)
Section 3.02 (Powers and Duties of Officers and
Management Staff)
Section 3.04 (Execution of Documents)
As amended January 1, 1998 Section 1.01 (Annual Meeting)
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<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 18, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Toll Finance Corp.
and BANK ONE TRUST COMPANY, NA, as Trustee, and a guarantee agreement between
Toll Brothers, Inc. and BANK ONE TRUST COMPANY, NA, as Trustee, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
BANK ONE TRUST COMPANY, NA
By /s/ John R. Prendiville
-----------------------------
John R. Prendiville
Vice President
21
<PAGE>
<TABLE>
EXHIBIT 7
<S> <C> <C>
Legal Title of Bank: Bank One Trust Company, NA Call Date: 12/31/98 ST-BK: 17-1630 FFIEC032
Address: 100 Broad Street Page RC-1
City, State Zip: Columbus, OH 43271
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C300
RCON BIL MIL THOU --------
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RCON
RC-A): ----
a. Noninterest-bearing balances and currency and coin(1).................... 0081 159,911 1.a
b. Interest-bearing balances(2)............................................. 0071 16,874 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)................ 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............. 1773 7,403 2.b
3. Federal funds sold and securities purchased under agreements to resell...... 1350 576,473 3.
4. Loans and lease financing receivables: RCON
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)....................................................................... 2122 32,603 4.a
b. LESS: Allowance for loan and lease losses................................ 3123 10 4.b
c. LESS: Allocated transfer risk reserve.................................... 3128 0 4.c
RCON
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c)..................................... 2125 32,593 4.d
5. Trading assets (from Schedule RD-D)......................................... 3545 0 5.
6. Premises and fixed assets (including capitalized leases) 2145 18,685 6.
7. Other real estate owned (from Schedule RC-M)................................ 2150 0 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M).............................................. 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding................ 2155 0 9.
10. Intangible assets (from Schedule RC-M)...................................... 2143 31,392 10.
11. Other assets (from Schedule RC-F)........................................... 2160 127,322 11.
12. Total assets (sum of items 1 through 11).................................... 2170 970,653 12.
</TABLE>
- -----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
22
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/98 ST-BK: 171630 FFIEC 032
Address: 100 East Broad Street Page RC-2
City, State Zip: Columbus, OH 43271
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
<TABLE>
<CAPTION>
Schedule RC-Continued
Dollar Amounts in
Thousands
---------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1).............................................. 2200 802,791 13.a
(1) Noninterest-bearing(1)............................................... 6631 727,720 13.a1
(2) Interest-bearing..................................................... 6636 75,071 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).......................................
(1) Noninterest bearing..................................................
(2) Interest-bearing.....................................................
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 0 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 0 15.a
b. Trading Liabilities(from Sechedule RC-D)................................. RCFD 3548 0 15.b
RCON
16. Other borrowed money: ----
a. With original maturity of one year or less............................... 2332 0 16.a
b. With original maturity of more than one year............................ A547 0 16.b
c. With original maturity of more than three years.......................... A548 0 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 0 18.
19. Subordinated notes and debentures........................................... 3200 0 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 64,642 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 867,433 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock..................................... 3230 800 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 35,157 25.
26. a. Undivided profits and capital reserves................................... 3632 67,207 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.................................... .......................... 8434 56 26.b
27. Cumulative foreign currency translation adjustments......................... 3284 0 27.
28. Total equity capital (sum of items 23 through 27)........................... 3210 103,220 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)....................................... 3300 970,653 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<S> <C>
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external Number auditors as of any date during Number
bank by independent external auditors as of any date during 1996 ............ RCFD 6724.... | N/A | M.1.
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
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(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
23
