As filed with the Securities and Exchange Commission on June 24, 1998
Registration No. 333-51991
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
HOVNANIAN K. HOVNANIAN
ENTERPRISES, INC. ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
Delaware New Jersey
(State or other jurisdiction of incorporation)
22-1851059 22-2423583
(I.R.S. Employer Identification No.)
10 Highway 35 10 Highway 35
P.O. Box 500 P.O. Box 500
Red Bank, New Jersey 07701 Red Bank, New Jersey 07701
(732) 747-7800 (732) 747-7800
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
J. Larry Sorsby
Hovnanian Enterprises, Inc.
10 Highway 35
P.O. Box 500
Red Bank, New Jersey 07701
(732) 747-7800
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copies to:
Vincent Pagano, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
(212) 455-2000
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 being 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, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price per aggregate offering Amount of
securities to be registered registered unit price registration fee
- -------------------------------------- ---------------- ------------------ -------------------- ------------------
Debt Securities, Class A Common Stock,
Preferred Stock, Warrants . . . . $125,000,000 100% $125,000,000 $36,875
Guarantees of Hovnanian Enterprises,
Inc. of Debt Securities and Warrants
of K. Hovnanian Enterprises, Inc. . . None
Class A Common Stock of Hovnanian
Enterprises, Inc. . . . . . . . . . . 7,643,312 shares $9.8125 $75,000,000 $22,125
Total. . . . . . . . . . . . . . . . . $200,000,000 100% $200,000,000 $59,000
____________________
The Debt Securities registered hereby include such additional amount
as may be necessary so that, if Debt Securities are issued with an
original issue discount, the aggregate initial offering prices of all
Debt Securities will equal no more than $125,000,000. The Class A
Common Stock registered hereby includes Preferred Stock Purchase
Rights (the "Rights"). The Rights are associated with and trade with
the Class A Common Stock. The value, if any, attributable to the
Rights is reflected in the market price of the Class A Common Stock.
There are also being registered hereunder an indeterminate number of
shares of Class A Common Stock as shall be issuable upon conversion or
redemption of Preferred Stock or Debt Securities registered hereby.
Estimated solely for the purpose of calculating the registration fee.
A filing fee of $59,000 was paid on May 6, 1998 in conjunction with
the Registration Statement on Form S-3 (Registration No. 333-51991) of
Hovnanian Enterprises, Inc. and K. Hovnanian Enterprises, Inc., to
which this Amendment relates.
No separate consideration will be received for the Guarantees.
In no event will the aggregate initial offering price of all
securities issued from time to time pursuant to this Registration
Statement exceed the sum of $125,000,000 and the market price at the
time of the offering of 7,643,312 shares. Any securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus herein also relates to the remaining $100,000,000 of Debt
Securities registered on Form S-3 (Registration No. 33-61778) of K. Hovnanian
Enterprises, Inc. This Registration Statement also constitutes Post-Effective
Amendment No. 2 to Registration Statement No. 33-61778, and upon the
effectiveness of such Post-Effective Amendment, this Registration Statement
and Registration Statement No. 33-61778 will relate to an aggregate of
$225,000,000 of Class A Common Stock, Preferred Stock, Debt Securities and
Warrants to purchase Debt Securities of Hovnanian Enterprises, Inc., Debt
Securities guaranteed by Hovnanian Enterprises, Inc. of K. Hovnanian
Enterprises, Inc., Warrants guaranteed by Hovnanian Enterprises, Inc. to
purchase Debt Securities of K. Hovnanian Enterprises, Inc. and 7,643,312
shares of Class A Common Stock of Hovnanian Enterprises, Inc.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
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 this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
_____________________________________________________________________________
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.
_____________________________________________________________________________
Subject to Completion, dated June 24, 1998
PROSPECTUS [LOGO]
$225,000,000
Hovnanian Enterprises, Inc.
Preferred Stock
Class A Common Stock
Warrants to Purchase Preferred Stock
Warrants to Purchase Class A Common Stock
Debt Securities
Warrants to Purchase Debt Securities
K. Hovnanian Enterprises, Inc.
Guaranteed Debt Securities
Guaranteed Warrants to Purchase Debt Securities
7,643,312 Shares
Hovnanian Enterprises, Inc.
Class A Common Stock
Hovnanian Enterprises, Inc. ("Hovnanian" or, when referred to together
with its consolidated subsidiaries, the "Company") may offer and sell from
time to time, in one or more series, (i) its preferred stock, par value $.01
per share (the "Preferred Stock"), (ii) its Class A common stock, par value
$.01 per share (the "Class A Common Stock"), (iii) unsecured debt securities
consisting of notes, debentures or other evidences of indebtedness (the
"Hovnanian Debt Securities") which may be senior ("Hovnanian Senior Debt
Securities"), senior subordinated ("Hovnanian Senior Subordinated Debt
Securities") or subordinated ("Hovnanian Subordinated Debt Securities") and
(iv) warrants to purchase Preferred Stock, Class A Common Stock or Hovnanian
Debt Securities (the "Hovnanian Warrants"), or any combination of the
foregoing.
K. Hovnanian Enterprises, Inc. ("K. Hovnanian"), a wholly owned
subsidiary of Hovnanian, may offer and sell from time to time, in one or more
series, (i) its unsecured debt securities consisting of notes, debentures or
other evidences of indebtedness (the "K. Hovnanian Debt Securities," and
together with the Hovnanian Debt Securities, the "Debt Securities") which may
be senior ("K. Hovnanian Senior Debt Securities," and together with the
Hovnanian Senior Debt Securities, the "Senior Debt Securities"), senior
subordinated ("K. Hovnanian Senior Subordinated Debt Securities," and
together with the Hovnanian Senior Subordinated Debt Securities, the "Senior
Subordinated Debt Securities") or subordinated ("K. Hovnanian Subordinated
Debt Securities," and together with the Hovnanian Subordinated Debt
Securities, the "Subordinated Debt Securities") and which will be fully and
unconditionally guaranteed by Hovnanian (the "Debt Guarantee") and (ii)
warrants, which will be fully and unconditionally guaranteed by Hovnanian
(the "Warrant Guarantee," and together with the Debt Guarantee, the
"Guarantee") to purchase K. Hovnanian Debt Securities (the "K Hovnanian
Warrants," and together with the Hovnanian Warrants, the "Warrants"), or any
combination of the foregoing.
Hovnanian or certain selling shareholders (the "Selling Shareholders")
may offer and sell from time to time an aggregate of 7,643,312 shares of
Class A Common Stock. See information under the heading "Selling Shareholders."
The Preferred Stock, Class A Common Stock, Debt Securities, Guarantee
and Warrants are collectively referred to as the "Securities." The Preferred
Stock, Class A Common Stock (other than any sold by the Selling
Shareholders), Debt Securities, Guarantee and Warrants may be offered at an
aggregate initial offering price not to exceed $225,000,000, at prices and on
terms to be determined at or prior to the time of sale.
Specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in an accompanying Prospectus Supplement
("Prospectus Supplement"), together with the terms of the offering of the
Securities and the initial price and the net proceeds to Hovnanian, K.
Hovnanian or the Selling Shareholders, as the case may be, from the sale
thereof. The Prospectus Supplement will set forth with regard to the
particular Securities, without limitation, the following: (i) in the case of
Debt Securities, the specific designation, aggregate principal amount,
ranking as senior debt, senior subordinated debt or subordinated debt,
maturity, rate or rates (or method of determining the same) and time or times
for the payment of interest, if any, any terms for optional or mandatory
redemption or repurchase or sinking fund provisions and any conversion or
exchange rights, (ii) in the case of Preferred Stock, the designation, number
of shares, liquidation preference per share, initial public offering price,
dividend rate (or method of calculation thereof), dates on which dividends
shall be payable and dates from which dividends shall accrue, any redemption
or sinking fund provisions and any conversion or exchange rights, (iii) in
the case of Class A Common Stock, the number of shares of Class A Common
Stock and the terms of the offering and sale thereof and (iv) in the case of
Warrants, the number and terms thereof, the designation and the number of
securities issuable upon their exercise, the exercise price, the terms of the
offering and sale thereof and, where applicable, the duration and
detachability thereof.
The Securities may be sold directly by Hovnanian, K. Hovnanian or the
Selling Shareholders to investors, through agents designated from time to
time or to or through underwriters or dealers. See "Plan of Distribution."
If any agents of Hovnanian, K. Hovnanian or the Selling Shareholders or any
underwriters are involved in the sale of any Securities in respect of which
this Prospectus is being delivered, the names of such agents or underwriters
and any applicable commissions or discounts will be set forth in the
Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _____ __, 1998.
AVAILABLE INFORMATION
As permitted by the rules and regulations of the Securities and Exchange
Commission (the "Commission"), this Prospectus does not contain all the
information set forth in the Registration Statement on Form S-3, as amended
(the "Registration Statement"), of which this Prospectus is a part.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to herein are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, or as previously filed
with the Commission and incorporated by reference, each such statement being
qualified in all respects by such reference. A copy of the Registration
Statement may be inspected by anyone without charge at the Commission's
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of all or any part thereof may be obtained from the Commission upon
payment of certain fees prescribed by the Commission.
Hovnanian is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at its regional offices located at 500 West Madison Street, 14th Floor,
Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of such material also can be obtained by mail from the
Public Reference Section of the Commission, at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, at the prescribed rates. The
Commission also maintains a website that contains reports, proxy and
information statements and other information. The website address is:
http://www.sec.gov. Hovnanian's Class A Common Stock is listed on the
American Stock Exchange, and reports, proxy statements and other information
also can be inspected at the offices of the American Stock Exchange, 86
Trinity Place, New York, New York 10006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Hovnanian with the Commission are
incorporated herein by reference: (i) Annual Report on Form 10-K for the
fiscal year ended October 31, 1997, Registration File No. 1-8551, (ii)
Quarterly Reports on Form 10-Q for the quarters ended January 31, 1998 and
April 30, 1998, Registration File No. 1-8551 and (iii) the "Description of
Registrants' Securities to be Registered" contained in the Company's
Registration Statement on Form 8-A, dated August 23, 1983 (incorporating by
reference the "Description of Securities" in the Company's Registration
Statement on Form S-1, Registration File No. 2-85198.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made by this
Prospectus shall be deemed to be incorporated by reference herein. Any
statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Hovnanian will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the
information incorporated by reference in this Prospectus, other than exhibits
to such information (unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates). Requests
for such copies should be directed to Paul W. Buchanan, Senior Vice
President--Corporate Controller, Hovnanian Enterprises, Inc., 10 Highway 35,
P.O. Box 500, Red Bank, New Jersey 07701 (telephone: (732) 747-7800).
THE COMPANY
Hovnanian primarily designs, constructs and markets multi-family
attached condominium apartments and townhouses and single family detached
homes in planned residential developments in its Northeast Region (comprised
primarily of New Jersey, southern New York state, and eastern Pennsylvania),
southeastern Florida, North Carolina, Metro Washington, D.C. (northern
Virginia), southern California, and Poland. Operations in Poland began for
the first time during the year ended October 31, 1997. Hovnanian markets its
homes to first time buyers, first and second time move-up buyers and active
adult buyers and concentrates on the moderately priced segment of the housing
market. Hovnanian has diversified its business, on a limited scale, through
mortgage banking and title insurance activities. In addition, it has
developed and operates commercial properties as long-term investments in New
Jersey and, to a lesser extent, Florida but is exiting this business.
Hovnanian was originally incorporated in New Jersey in 1967 as successor
to a business founded in 1959 by Kevork S. Hovnanian and became a Delaware
corporation in August 1983. The Company maintains its executive offices at 10
Highway 35, P.O. Box 500, Red Bank, New Jersey 07701, and its telephone
number is (732) 747-7800.
K. Hovnanian was incorporated under the laws of the State of New Jersey
on November 1, 1982, as an indirect wholly-owned consolidated subsidiary of
Hovnanian. K. Hovnanian functions as a management company for the operating
subsidiaries of Hovnanian and borrows funds which it lends to such
subsidiaries. K. Hovnanian has essentially no independent operations and
generates no operating revenues. K. Hovnanian's principal executive offices
are located at 10 Highway 35, P.O. Box 500, Red Bank, New Jersey 07701, and
its telephone number is (732) 747-7800.
SELLING SHAREHOLDERS
Some or all of the shares of Class A Common Stock of Hovnanian being
offered pursuant to this Prospectus may be shares of Class A Common Stock
offered by certain Selling Shareholders. The potential Selling Shareholders
include Kevork S. Hovnanian, Chairman of the Board and Director of the
Company and, until July 1997, Chief Executive Officer of the Company, Ara K.
Hovnanian, President and Director of the Company and, since July 1997, Chief
Executive Officer of the Company and certain relatives of Kevork S.
Hovnanian, including Sossie Najarian, Tavit Najarian, Esto Barry, James
Barry, Lucy Kalian, Mazin Kalian, Rachael Hovnanian, Nadia Rodriguez and
Roberto Rodriguez. At February 19, 1998, Kevork S. Hovnanian beneficially
owned 5,653,737 shares of Class A Common Stock, representing approximately
40.2% of the total number of shares of Class A Common Stock outstanding, and
5,843,837 shares of Class B Common Stock convertible into Class A Common
Stock on a one-for-one basis. See "Description of Capital Stock." On that
same date, Ara K. Hovnanian beneficially owned 1,467,894 shares of Class A
Common Stock, representing approximately 10.2% of the total number of shares
of Class A Common Stock outstanding, and 1,234,096 shares of Class B Common
Stock convertible into Class A Common Stock on a one-for-one basis. The
amount, if any, of Class A Common Stock to be offered by any Selling
Shareholders and the amount and percentage of Class A Common Stock to be
owned by such Selling Shareholders following the offering shall be disclosed
in the applicable Prospectus Supplement.
USE OF PROCEEDS
Unless otherwise provided in the applicable Prospectus Supplement, the
net proceeds from the sale of the Securities offered by this Prospectus and
each Prospectus Supplement (the "Offered Securities") will be used for
general corporate purposes, which may include working capital needs, the
refinancing of existing indebtedness, expansion of the business and
acquisitions. The Company will not receive any net proceeds from the sale of
any shares of Class A Common Stock offered by the Selling Shareholders.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
For purposes of computing the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred dividends, earnings consist
of earnings (loss) from continuing operations before income taxes, minority
interest, extraordinary items and cumulative effect of accounting changes,
plus fixed charges (interest charges and preferred share dividend
requirements of subsidiaries, adjusted to a pretax basis), less interest
capitalized, less preferred share dividend requirements of subsidiaries
adjusted to a pretax basis and less undistributed earnings of affiliates
whose debt is not guaranteed by the Company.
The following table sets forth the ratios of earnings to fixed charges
and earnings to combined fixed charges and preferred dividends for the
Company for the periods indicated:
Eight
Six Months Months
Ended Ended Years Ended
April 30, Years Ended October 31, October 31, February 28,
----------- ------------------------------------------- ------------ --------------------------
1998 1997 1996 1995 1994 1994 1993
------------ ------------ ------------- ------------ ------------ ----------- ------------
Ratio of earnings to
fixed charges . . . 2.4 1.6 1.4 1.8 1.5
Ratio of earnings to
combined fixed
charges and
preferred stock
dividends . . . . . 2.4 1.6 1.4 1.8 1.5
____________________
No ratio is presented for the year ended October 31, 1997 as the
earnings for such period were insufficient to cover fixed charges by
$9,197,000.
No ratio is presented for the eight months ended October 31, 1994 as
the earnings for such period were insufficient to cover fixed charges
by $18,803,000.
DESCRIPTION OF DEBT SECURITIES
The K. Hovnanian Debt Securities will be unsecured senior, senior
subordinated or subordinated debt of K. Hovnanian and will be issued: in the
case of K. Hovnanian Senior Debt Securities, under a Senior Indenture (the
"K. Hovnanian Senior Debt Indenture") among K. Hovnanian, Hovnanian, as
guarantor, and the trustee specified in the applicable Prospectus Supplement;
in the case of K. Hovnanian Senior Subordinated Debt Securities, under a
Senior Subordinated Indenture (the "K. Hovnanian Senior Subordinated Debt
Indenture") among K. Hovnanian, Hovnanian, as guarantor, and the trustee
specified in the applicable Prospectus Supplement; and in the case of K.
Hovnanian Subordinated Debt Securities, under a Subordinated Indenture (the
"K. Hovnanian Subordinated Debt Indenture") among K. Hovnanian, Hovnanian, as
guarantor, and the trustee specified in the applicable Prospectus Supplement.
The K. Hovnanian Senior Debt Indenture, the K. Hovnanian Senior Subordinated
Debt Indenture and the K. Hovnanian Subordinated Debt Indenture are sometimes
hereinafter referred to individually as a "K. Hovnanian Indenture" and
collectively as the "K. Hovnanian Indentures." The Hovnanian Debt Securities
will be unsecured senior, senior subordinated or subordinated debt of
Hovnanian and will be issued: in the case of Hovnanian Senior Debt
Securities, under a Senior Indenture (the "Hovnanian Senior Debt Indenture")
between Hovnanian and the trustee specified in the applicable Prospectus
Supplement; in the case of Hovnanian Senior Subordinated Debt Securities,
under a Senior Subordinated Indenture (the "Hovnanian Senior Subordinated
Debt Indenture") between Hovnanian and the trustee specified in the
applicable Prospectus Supplement; and in the case of Hovnanian Subordinated
Debt Securities, under a Subordinated Indenture (the "Hovnanian Subordinated
Debt Indenture") between Hovnanian and the trustee specified in the
applicable Prospectus Supplement. The Hovnanian Senior Debt Indenture, the
Hovnanian Senior Subordinated Debt Indenture and the Hovnanian Subordinated
Debt Indenture are sometimes hereinafter referred to individually as a
"Hovnanian Indenture" and collectively as the "Hovnanian Indentures." The K.
Hovnanian Senior Indenture and the Hovnanian Senior Indenture are sometimes
collectively referred to individually as a "Senior Debt Indenture" and
collectively as the "Senior Debt Indentures." The K. Hovnanian Senior
Subordinated Debt Indenture and the Hovnanian Senior Subordinated Debt
Indenture are sometimes referred to individually as a "Senior Subordinated
Debt Indenture" and collectively as the "Senior Subordinated Debt
Indentures." The K. Hovnanian Subordinated Debt Indenture and the Hovnanian
Subordinated Debt Indenture are sometimes referred to individually as a
"Subordinated Debt Indenture" and collectively as the "Subordinated Debt
Indentures." The K. Hovnanian Indentures and the Hovnanian Indentures are
sometimes referred to individually as an "Indenture" and collectively as the
"Indentures."
None of the Indentures limits the amount of Debt Securities that may be
issued thereunder, and the Indentures provide that the Debt Securities may be
issued from time to time in one or more series. The Indentures permit the
appointment of a different trustee for each series of Debt Securities. The
Indentures are filed as exhibits to the Registration Statement, of which this
Prospectus is a part. The following summaries of certain provisions of the
Indentures and the Debt Securities do not purport to be complete, and, while
Hovnanian and K. Hovnanian believe the descriptions of the material
provisions of the Indentures and Debt Securities contained in this Prospectus
are accurate summaries of such material provisions, such summaries are
subject to the detailed provisions of the applicable Indenture to which
reference is hereby made for a full description of such provisions, including
the definition of certain terms used herein. Section references in
parentheses below are to sections in each Indenture unless otherwise
indicated. Wherever particular sections or defined terms of the applicable
Indenture are referred to, such sections or defined terms are incorporated
herein by reference as part of the statement made, and the statement is
qualified in its entirety by such reference. The Indentures are substantially
identical, except for provisions relating to the Guarantee and to
subordination. For purposes of the summaries set forth below, the term
"Issuer" shall refer to K. Hovnanian in the case of the K. Hovnanian Debt
Securities and the K. Hovnanian Indentures, and to Hovnanian in the case of
the Hovnanian Debt Securities and the Hovnanian Indentures. The term
"Obligors" shall refer to Hovnanian in the case of the Hovnanian Debt
Securities and the Hovnanian Indentures, and K. Hovnanian and Hovnanian, as
guarantor (the "Guarantor"), in the case of the K. Hovnanian Debt Securities
and the K. Hovnanian Indentures.
Provisions Applicable to Senior, Senior Subordinated
and Subordinated Debt Securities
General. Hovnanian Debt Securities will be unsecured senior, senior
subordinated or subordinated obligations of Hovnanian, and K. Hovnanian Debt
Securities will be unsecured senior, senior subordinated or subordinated
obligations of K. Hovnanian, except that, under certain circumstances, K.
Hovnanian may be released from such obligations. See "--Condition for Release
of K. Hovnanian." Except to the extent set forth in the applicable Prospectus
Supplement, none of the Indentures limits the payment of dividends by or the
acquisition of stock of Hovnanian or K. Hovnanian. Except to the extent set
forth in any Prospectus Supplement, the Indentures do not, and the Debt
Securities will not, contain any covenants or other provisions that are
intended to afford holders of the Debt Securities special protection in the
event of either a change of control of Hovnanian or a highly leveraged
transaction by Hovnanian.
Reference is made to the Prospectus Supplement for the following terms
of and information relating to the Debt Securities being offered (the
"Offered Debt Securities") (to the extent such terms are applicable to such
Offered Debt Securities): (i) the title of the Offered Debt Securities; (ii)
classification as K. Hovnanian Senior Debt Securities, K. Hovnanian Senior
Subordinated Debt Securities, K. Hovnanian Subordinated Debt Securities,
Hovnanian Senior Debt Securities, Hovnanian Senior Subordinated Debt
Securities or Hovnanian Subordinated Debt Securities, aggregate principal
amount, purchase price and denomination; (iii) the date or dates on which the
Offered Debt Securities will mature; (iv) the method by which amounts payable
in respect of principal, premium, if any, or interest, if any, on or upon the
redemption of such Offered Debt Securities may be calculated; (v) the
interest rate or rates (or the method by which such will be determined) and
the date or dates from which such interest, if any, will accrue; (vi) the
date or dates on which such interest, if any, will be payable; (vii) the
place or places where and the manner in which the principal of, premium, if
any, and interest, if any, on the Offered Debt Securities will be payable and
the place or places where the Offered Debt Securities may be presented for
transfer; (viii) the right, if any, or obligation, if any, of the Company to
redeem, repay or purchase the Offered Debt Securities pursuant to any sinking
fund or analogous provisions or at the option of a holder thereof, and the
period or periods within which, the price or prices (or the method by which
such price or prices will be determined, or both) at which, the form or
method of payment therefor if other than in cash and the terms and conditions
upon which the Offered Debt Securities will be redeemed, repaid or purchased
pursuant to any such obligation; (ix) the terms for conversion or exchange,
if any, of the Offered Debt Securities; (x) any provision relating to the
issuance of the Offered Debt Securities at an original issue discount; (xi)
if the amounts of payments of principal of, premium, if any, and interest, if
any, on the Offered Debt Securities are to be determined with reference to an
index, the manner in which such amounts shall be determined; (xii) any
applicable United States federal income tax consequences; (xiii) the currency
or currencies for which the Offered Debt Securities may be purchased and the
currency or currencies in which principal, premium, if any, and interest, if
any, may be payable; (xiv) the trustee with respect to the series of Offered
Debt Securities; and (xv) any other specific terms of the Offered Debt
Securities, including any deleted, modified or additional events of default
or remedies or additional covenants provided with respect to such Offered
Debt Securities, and any terms that may be required by or advisable under
applicable laws or regulations.
Unless otherwise specified in any Prospectus Supplement, the Debt
Securities will be issuable in registered form and in denominations of $1,000
and any integral multiple thereof (Section 2.7). No service charge will be
made for any transfer or exchange of any Debt Securities but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith (Section 2.8).
Debt Securities may bear interest at a fixed rate or a floating rate.
Debt Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate may be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to
certain Debt Securities issued at par that are treated as having been issued
at a discount for United States federal income tax purposes will be described
in the applicable Prospectus Supplement.
In determining whether the holders of the requisite aggregate principal
amount of outstanding Debt Securities of any series have given any request,
demand, authorization, direction, notice, consent or waiver under the
Indentures, the principal amount of any series of Debt Securities originally
issued at a discount from their stated principal amount that will be deemed
to be outstanding for such purposes will be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon a declaration of acceleration of the maturity thereof.
Description of Guarantee. Hovnanian will fully and unconditionally
guarantee, pursuant to the K. Hovnanian Indentures, the due and prompt
payment of the principal of (and premium, if any) and interest on the K.
Hovnanian Debt Securities when and as the same shall become due and payable,
whether at the Stated Maturity, by declaration of acceleration, call for
redemption or otherwise.
Payments with respect to the Guarantee of the K. Hovnanian Senior
Subordinated Debt Securities and K. Hovnanian Subordinated Debt Securities
will be subordinated in right of payment to the prior payment in full of all
Senior Indebtedness of the Guarantor to the same extent and manner that
payments with respect to the K. Hovnanian Senior Subordinated Debt Securities
and K. Hovnanian Subordinated Debt Securities are subordinated in right of
payment to the prior payment in full of all Senior Indebtedness of the Issuer
as described under "Provisions Applicable Solely to Senior Subordinated Debt
Securities and Subordinated Debt Securities" below.
Global Securities. The Debt Securities of a series may be issued in
whole or in part in the form of one or more global securities ("Global
Securities") that will be deposited with or on behalf of a depositary (the
"Depositary") identified in the Prospectus Supplement relating to such
series. Global Securities may be issued only in fully registered form and in
either temporary or permanent form. Unless and until it is exchanged in whole
or in part for the individual Debt Securities represented thereby, a Global
Security (i) may not be transferred except as a whole and (ii) may only be
transferred (A) by the Depositary for such Global Security to its nominee,
(B) by a nominee of such Depositary to such Depositary or another nominee of
such Depositary or (C) by such Depositary or any such nominee to a successor
Depositary or nominee of such successor Depositary (Section 2.8).
The specific terms of the depositary arrangement with respect to a
series of Debt Securities will be described in the Prospectus Supplement
relating to such series. Hovnanian and K. Hovnanian anticipate that the
following provisions generally will apply to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons
that have accounts with such Depositary. Such accounts shall be designated by
the dealers, underwriters or agents with respect to such Debt Securities or
by the Issuer if such Debt Securities are offered and sold directly by the
Issuer. Ownership of beneficial interests in a Global Security will be
limited to persons that have accounts with the applicable Depositary
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Security will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by the applicable Depositary or its nominee (with respect to
interests of participants) and the records of participants (with respect to
interests of persons other than participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Security.
As long as the Depositary for a Global Security or its nominee is the
registered owner of such Global Security, such Depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities of the series represented by such Global Security for all purposes
under the Indenture governing such Debt Securities. Except as provided below,
owners of beneficial interests in a Global Security will not be entitled to
have any of the individual Debt Securities of the series represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of any such Debt Securities in definitive form and
will not be considered the owners or holders thereof under the Indenture
governing such Debt Securities.
Payment of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a 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 Global Security
representing such Debt Securities. Hovnanian and K. Hovnanian expect that the
Depositary for a series of Debt Securities or its nominee, upon receipt of
any payment of principal, premium, if any, and interest, if any, in respect
of a Global Security representing any such Debt Securities, will immediately
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global
Security for such Securities as shown on the records of such Depositary or
its nominee. Hovnanian and K. Hovnanian also expect that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name." Such payments
will be the responsibility of such participants. Neither Hovnanian, K.
Hovnanian, the trustee for such Debt Securities, any paying agent nor the
registrar for such Debt Securities will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of the Global Security for such Debt
Securities or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Issuer within 90 days, such Issuer will
issue individual Debt Securities of such series in exchange for the Global
Security representing such series of Debt Securities. In addition, an Issuer
may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Debt Securities,
determine not to have any Debt Securities of a series represented by a Global
Security and, in such event, will issue individual Debt Securities of such
series in exchange for the Global Security representing such series of Debt
Securities. Further, if an Issuer so specifies with respect to the Debt
Securities of a series, an owner of a beneficial interest in a Global
Security representing Debt Securities of such series may, on terms acceptable
to such Issuer, the trustee and the Depositary for such Global Security,
receive individual Debt Securities of such series in exchange for such
beneficial interests, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities. In any such instance, an owner
of a beneficial interest in a Global Security will be entitled to physical
delivery of individual Debt Securities of the series represented by such
Global Security equal in principal amount to such beneficial interest and to
have such Debt Securities registered in its name. Individual Debt Securities
of such series so issued will be issued in registered form and in
denominations, unless otherwise specified in the applicable Prospectus
Supplement relating to such series of Debt Securities, of $1,000 and integral
multiples thereof.
Events of Default. Unless otherwise specified in the applicable
Prospectus Supplement, an Event of Default is defined under each Indenture
with respect to the Debt Securities of any series issued under such Indenture
as being: (a) default in the payment of principal of or premium, if any, with
respect to Debt Securities of such series when due; (b) default in the
payment of any installment of interest on any of the Debt Securities of such
series when due, continued for 30 days; (c) default in the payment or
satisfaction of any sinking fund or other purchase obligation with respect to
Debt Securities of such series when due; (d) default in the performance of
any other covenant of any of the Obligors applicable to Debt Securities of
such series, continued for 90 days after written notice to the Obligors by
the trustee or to the Obligors and the trustee, by the holders of at least
25% in aggregate principal amount of the Debt Securities of such series then
outstanding requiring the same to be remedied; and (e) certain events of
bankruptcy, insolvency or reorganization of the Issuer (Section 5.1).
If any Event of Default shall occur and be continuing, the trustee or
the holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding, by notice in writing to the
Obligors (and to the trustee, if given by the holders), may declare the
principal (or, in the case of any series of Debt Securities originally issued
at a discount from their stated principal amount, such portion of the
principal amount as may be specified in the terms of such series) of all of
the Debt Securities of such series and the interest, if any, accrued thereon
to be due and payable immediately; provided, however, that the holders of a
majority in aggregate principal amount of the Debt Securities of such series
then outstanding, by notice in writing to the Obligors and the trustee, may
rescind and annul such declaration and its consequences if all defaults under
such Indenture are cured or waived (Section 5.1).
Each Indenture provides that no holder of any series of Debt Securities
then outstanding may institute any suit, action or proceeding with respect
to, or otherwise attempt to enforce, such Indenture, unless (i) such holder
previously shall have given to the trustee written notice of default and of
the continuance thereof, (ii) the holders of not less than 25% in aggregate
principal amount of such series of Debt Securities then outstanding shall
have made written request to the trustee to institute such suit, action or
proceeding and shall have offered to the trustee such reasonable indemnity as
it may require with respect thereto and (iii) the trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding;
provided that, subject to the subordination provisions applicable to the
Senior Subordinated Debt Securities and the Subordinated Debt Securities, the
right of any holder of any Debt Security to receive payment of the principal
of, premium, if any, or interest, if any, on such Debt Security, on or after
the respective due dates, or to institute suit for the enforcement of any
such payment shall not be impaired or affected without the consent of such
holder (Section 5.4). The holders of a majority in aggregate principal amount
of the Debt Securities of such series then outstanding 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 the trustee with
respect to the Debt Securities of such series, provided that the trustee may
decline to follow such direction if the trustee determines that such action
or proceeding is unlawful or would involve the trustee in personal liability
(Section 5.7).
The Obligors are required to furnish to the trustee annually a
certificate as to compliance by the Obligors with all conditions and
covenants under each Indenture (Section 4.3).
Discharge and Defeasance. Unless otherwise specified in the applicable
Prospectus Supplement, the Obligors can discharge or defease their respective
obligations with respect to any series of Debt Securities as set forth below
(Article Ten).
The Obligors may discharge all of their obligations (except those set
forth below) to holders of any series of Debt Securities issued under any
Indenture that have not already been delivered to the trustee for
cancellation and that have either become due and payable, or are by their
terms due and payable within one year (or scheduled for redemption within one
year), by irrevocably depositing with the trustee cash or U.S. Government
Obligations (as defined in such Indenture), or a combination thereof, as
trust funds in an amount certified to be sufficient to pay when due the
principal of, premium, if any, and interest, if any, on all outstanding Debt
Securities of such series and to make any mandatory sinking fund payments, if
any, thereon when due.
Unless otherwise provided in the applicable Prospectus Supplement, the
Obligors may also elect at any time to (a) defease and be discharged from all
of their obligations (except those set forth below) to holders of any series
of Debt Securities issued under each Indenture ("defeasance") or (b) be
released from all of their obligations with respect to certain covenants
applicable to any series of Debt Securities issued under each Indenture
("covenant defeasance"), if, among other things: (i) the Obligors irrevocably
deposit with the trustee cash or U.S. Government Obligations, or a
combination thereof, as trust funds in an amount certified to be sufficient
to pay when due the principal of, premium, if any, and interest, if any, on
all outstanding Debt Securities of such series and to make any mandatory
sinking fund payments, if any, thereon when due and such funds have been so
deposited for 91 days; (ii) such deposit will not result in a breach or
violation of, or cause a default under, any agreement or instrument to which
any of the Obligors is a party or by which it is bound; and (iii) the
Obligors deliver to the trustee an opinion of counsel to the effect that the
holders of such series of Debt Securities will not recognize income, gain or
loss for United States federal income tax purposes as a result of such
defeasance or covenant defeasance and that defeasance or covenant defeasance
will not otherwise alter the United States federal income tax treatment of
such holders' principal of and interest payments, if any, on such series of
Debt Securities. Such opinion in the case of defeasance under clause (a)
above must be based on a ruling of the Internal Revenue Service or a change
in United States federal income tax law occurring after the date of the
Indenture relating to the Debt Securities of such series, since such a result
would not occur under current tax law (Section 10.1).
Notwithstanding the foregoing, no discharge, defeasance or covenant
defeasance described above shall affect the following obligations to or
rights of the holders of any series of Debt Securities: (i) rights of
registration of transfer and exchange of Debt Securities of such series, (ii)
rights of substitution of mutilated, defaced, destroyed, lost or stolen Debt
Securities of such series, (iii) rights of holders of Debt Securities of such
series to receive payments of principal thereof, premium, if any, and
interest, if any, thereon, upon the original due dates therefor (but not upon
acceleration), and to receive mandatory sinking fund payments thereon when
due, if any, (iv) rights, obligations, duties and immunities of the trustee,
(v) rights of holders of Debt Securities of such series as beneficiaries with
respect to property so deposited with the trustee payable to all or any of
them and (vi) obligations of the Obligors to maintain an office or agency in
respect of Debt Securities of such series (Section 10.1).
The Obligors may exercise the defeasance option with respect to any
series of Debt Securities notwithstanding the prior exercise of the covenant
defeasance option with respect to any series of Debt Securities. If the
Obligors exercise the defeasance option with respect to any series of Debt
Securities, payment of such series of Debt Securities may not be accelerated
because of an Event of Default with respect to such series of Debt
Securities. If the Obligors exercise the covenant defeasance option with
respect to any series of Debt Securities, payment of such series of Debt
Securities may not be accelerated by reason of an Event of Default with
respect to the covenants to which such covenant defeasance is applicable.
However, if such acceleration were to occur by reason of another Event of
Default, the realizable value at the acceleration date of the cash and U.S.
Government Obligations in the defeasance trust could be less than the
principal of, premium, if any, and interest, if any, and any mandatory
sinking fund payments, if any, then due on such series of Debt Securities, in
that the required deposit in the defeasance trust is based upon scheduled
cash flow rather than market value, which will vary depending upon interest
rates and other factors.
Modification of the Indenture. Each Indenture provides that the Obligors
and the trustee may enter into supplemental indentures without the consent of
the holders of the Debt Securities to (a) evidence the assumption by a
successor entity of the obligations of any of the Obligors under such
Indenture, (b) add covenants or new events of default for the protection of
the holders of such Debt Securities, (c) cure any ambiguity or correct any
inconsistency in the Indenture, (d) establish the form and terms of Debt
Securities of any series, (e) evidence the acceptance of appointment by a
successor trustee, (f) in the case of Senior Debt Securities, secure such
Debt Securities, (g) designate a bank or trust company other than the trustee
specified in the applicable Prospectus Supplement to act as trustee for a
series of Debt Securities, (h) modify the existing covenants and events of
default solely in respect of, or add new covenants and events of default that
apply solely to, Debt Securities not yet issued and outstanding on the date
of such supplemental indenture, (i) provide for the issuance of Debt
Securities of any series in coupon form and exchangeability of such Debt
Securities for fully registered Debt Securities, (j) modify, eliminate or add
to the provisions of such Indenture as necessary to effect the qualification
of such Indenture under the Trust Indenture Act of 1939 and to add certain
provisions expressly permitted by such Act and (k) modify the provisions to
provide for the denomination of Debt Securities in foreign currencies which
shall not adversely affect the interests of the holders of such Debt
Securities in any material respect. (Section 8.1).
Each Indenture also contains provisions permitting the Obligors and the
trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of each series then outstanding
and affected, to add any provisions to, or change in any manner or eliminate
any of the provisions of, such Indenture or any supplemental indenture or
modify in any manner the rights of the holders of the Debt Securities of such
series; provided that the Obligors and the trustee may not, without the
consent of the holder of each outstanding Debt Security affected thereby, (a)
extend the stated final maturity of any Debt Security, reduce the principal
amount thereof, reduce the rate or extend the time of payment of interest, if
any, thereon, reduce or alter the method of computation of any amount payable
on redemption, repayment or purchase by the Issuer, change the coin or
currency in which principal, premium, if any, and interest, if any, are
payable, reduce the amount of the principal of any original issue discount
security payable upon acceleration or provable in bankruptcy, impair or
affect the right to institute suit for the enforcement of any payment or
repayment thereof or, if applicable, adversely affect any right of prepayment
at the option of the holder or, in the case of K. Hovnanian Indentures, make
any change adverse to the interests of the holders in the terms and
conditions of the Guarantee or (b) reduce the aforesaid percentage in
aggregate principal amount of Debt Securities of any series issued under such
Indenture (Section 8.2).
Consolidation, Merger, Sale or Conveyance. Except as otherwise provided
in the applicable Prospectus Supplement, the K. Hovnanian Indentures provide
that K. Hovnanian or the Guarantor may, and the Hovnanian Indentures provide
that Hovnanian may, without the consent of the holders of Debt Securities,
consolidate with, merge into or transfer, exchange or dispose of all of its
properties to, any other corporation or partnership organized under the laws
of the United States, provided that (i) the successor corporation assumes all
obligations of K. Hovnanian or Hovnanian, as the case may be, by supplemental
indenture satisfactory in form to the applicable trustee executed and
delivered to such trustee, under the Indentures and the Debt Securities, (ii)
immediately after giving effect to such consolidation, merger, exchange or
other disposition, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred
and be continuing and (iii) certain other conditions are met. (Section 9.1).
Condition for Release of K. Hovnanian. Except as otherwise provided in
the applicable Prospectus Supplement, each K. Hovnanian Indenture provides
that K. Hovnanian may be released from its obligations under such K.
Hovnanian Indenture and the K. Hovnanian Debt Securities, without the consent
of the holders of the K. Hovnanian Debt Securities of any series, if
Hovnanian or any successor to Hovnanian has assumed the obligations of K.
Hovnanian under such K. Hovnanian Debt Securities. In the event of such
release, a taxable sale or exchange of a Debt Security for a new Debt
Security will be deemed to occur. As a result, a holder of a Debt Security
may recognize gain or loss on the sale or exchange and may be required to
include in income different amounts during the remaining term of the Debt
Security than would have been included absent such release.
Certain Definitions. Except as otherwise provided in the applicable
Prospectus Supplement, the following definitions are applicable to the
discussions of the Indentures (Article One).
"Consolidated Net Tangible Assets" means the aggregate amount of
assets included on the most recent consolidated balance sheet of
Hovnanian and its Restricted Subsidiaries, less applicable reserves and
other properly deductible items and after deducting therefrom (a) all
current liabilities and (b) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like
intangibles, all in accordance with generally accepted accounting
principles consistently applied.
"Indebtedness," with respect to any person, means, without
duplication:
(a)(i) the principal of, premium, if any, and interest, if
any, on indebtedness for money borrowed of such person,
indebtedness of such person evidenced by bonds, notes, debentures
or similar obligations, and any guaranty by such person of any
indebtedness for money borrowed or indebtedness evidenced by bonds,
notes, debentures or similar obligations of any other person,
whether any such indebtedness or guaranty is outstanding on the
date of the Indenture or is thereafter created, assumed or
incurred, (ii) obligations of such person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar
credit transaction, (iii) the principal of and premium, if any, and
interest, if any, on indebtedness incurred, assumed or guaranteed
by such person in connection with the acquisition by it or any of
its subsidiaries of any other businesses, properties or other
assets, (iv) lease obligations that such person capitalized in
accordance with Statement of Financial Accounting Standards No. 13
promulgated by the Financial Accounting Standards Board or such
other generally accepted accounting principles as may be from time
to time in effect, (v) any indebtedness of such person representing
the balance deferred and unpaid of the purchase price of any
property or interest therein (except any such balance that
constitutes an accrued expense or trade payable) and any guaranty,
endorsement or other contingent obligation of such person in
respect of any indebtedness of another that is outstanding on the
date of the Indenture or is thereafter created, assumed or incurred
by such person and (vi) obligations of such person under interest
rate, commodity or currency swaps, caps, collars, options and
similar arrangements; and
(b) any amendments, modifications, refundings, renewals or
extensions of any indebtedness or obligation described as
Indebtedness in clause (a) above.
"Restricted Subsidiary" means (a) any Subsidiary of Hovnanian other
than an Unrestricted Subsidiary, and (b) any Subsidiary of Hovnanian
which was an Unrestricted Subsidiary but which, subsequent to the date
of the Indentures, is designated by the Board of Directors of Hovnanian
to be a Restricted Subsidiary; provided, however, that Hovnanian may not
designate any such Subsidiary to be a Restricted Subsidiary if Hovnanian
would thereby breach any covenant or agreement contained in the
Indentures (on the assumptions that any outstanding Indebtedness of such
Subsidiary was incurred at the time of such designation).
"Subsidiary" of any specified Person means any corporation of which
such Person, or such Person and one or more Subsidiaries of such Person,
or any one or more Subsidiaries of such Person, directly or indirectly
own voting securities entitling any one or more of such Person and its
Subsidiaries to elect a majority of the directors, either at all times,
or so long as there is no default or contingency which permits the
holders of any other class or classes of securities to vote for the
election of one or more directors.
"Unrestricted Subsidiary" means (a) any Subsidiary of Hovnanian
acquired or organized after the date of the Indentures, provided,
however, that such Subsidiary shall not be a successor, directly or
indirectly, to any Restricted Subsidiary and (b) any Subsidiary of
Hovnanian substantially all the assets of which consist of stock or
other securities of a Subsidiary or Subsidiaries of the character
described in clause (a) above, unless and until such Subsidiary shall
have been designated to be a Restricted Subsidiary.
Provisions Applicable Solely to Senior Debt Securities
General. Senior Debt Securities will be issued under a Senior Debt
Indenture and will rank pari passu with all other unsecured and
unsubordinated debt of the Issuer of such Senior Debt Securities. At April
30, 1998, the Company had an aggregate of $190 million of Indebtedness
outstanding which would be subordinated to Senior Debt Securities.
Limitations on Liens. The Senior Debt Indentures provide that, so long
as any Senior Debt Securities are outstanding, the Issuer will not, and will
not permit any Restricted Subsidiary to, pledge, mortgage, hypothecate or
grant a security interest in, or permit any mortgage, pledge, security
interest or other lien upon, any property or assets owned by the Issuer or
any Restricted Subsidiary to secure any Indebtedness, without making
effective provision whereby outstanding Senior Debt Securities shall be
equally and ratably secured.
Under the terms of the Senior Debt Indentures, the foregoing limitation
does not apply to (a) any mortgage, pledge, security interest, lien or
encumbrance upon any property or assets created at the time of the
acquisition of such property or assets by the Issuer or any Restricted
Subsidiary or within one year after such time to secure all or a portion of
the purchase price for such property or assets; (b) any mortgage, pledge,
security interest, lien or encumbrance upon any property or assets existing
thereon at the time of the acquisition thereof by the Issuer or any
Restricted Subsidiary (whether or not the obligations secured thereby are
assumed by the Issuer or any Restricted Subsidiary); (c) any mortgage,
pledge, security interest, lien or encumbrance upon any property or assets,
whenever acquired, of any corporation or other entity that becomes a
Restricted Subsidiary after the date of the Senior Debt Indenture, provided
that (i) the instrument creating such mortgage, pledge, security interest,
lien or encumbrance shall be in effect prior to the time such corporation or
other entity becomes a Restricted Subsidiary and (ii) such mortgage, pledge,
security interest, lien or encumbrance shall only apply to properties or
assets owned by such corporation or other entity at the time it becomes a
Restricted Subsidiary or thereafter acquired by it from sources other than
the Issuer or another Restricted Subsidiary; (d) any mortgage, pledge,
security interest, lien or encumbrance in favor of the Issuer or any wholly-
owned Subsidiary of Hovnanian; (e) any mortgage, pledge, security interest,
lien or encumbrance created or assumed by the Issuer or a Restricted
Subsidiary in connection with the issuance of debt securities the interest on
which is excludable from gross income of the holder of such security pursuant
to the Internal Revenue Code of 1986, as amended, for the purpose of
financing, in whole or in part, the acquisition or construction of property
or assets to be used by the Issuer or a Subsidiary; (f) any extension,
renewal or refunding of any mortgage, pledge, security interest, lien or
encumbrance described in the foregoing subparagraphs (a) through (e) on
substantially the same property or assets theretofore subject thereto; (g)
any mortgage, pledge, security interest, lien or encumbrance securing any
Indebtedness in an amount which, together with all other Indebtedness secured
by a mortgage, pledge, security interest, lien or encumbrance that is not
otherwise permitted by the foregoing provisions, does not at the time of the
incurrence of the Indebtedness so secured exceed 20% of Consolidated Net
Tangible Assets; (h) deposits or pledges to secure the payment of workmen's
compensation, unemployment insurance or other social security benefits or
obligations, or to secure the performance of trade contracts, leases, public
or statutory obligations, surety or appeal bonds or other obligations of a
like general nature incurred in the ordinary course of business; (i)
mechanics', materialmen's, warehousemen's, carriers' or other like liens
arising in the ordinary course of business securing obligations which are not
overdue for a period longer than 30 days or which are being contested in good
faith by appropriate proceedings; (j) liens for taxes, assessments or other
governmental charges not yet payable or being contested in good faith and as
to which adequate reserves shall have been established in accordance with
generally accepted accounting principles; (k) non-recourse mortgages on
Income Producing Properties securing Indebtedness; (l) liens on assets of a
Mortgage Subsidiary to secure only a Warehouse Line of Credit provided to
such Subsidiary; (m) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business or (n) liens in
connection with capital leases or sale leaseback transactions not securing
any other indebtedness. For the purpose of this provision, "security
interest" will include the interest of the lessor under a lease with a term
of three years or more that should be, in accordance with generally accepted
accounting principles, recorded as a capital lease, and any such lease of
property or assets not acquired from the Issuer or any Restricted Subsidiary
in contemplation of such lease shall be treated as though the lessee had
purchased such property or assets from the lessor. (Section 3.6 of the Senior
Debt Indentures).
Provisions Applicable Solely to Senior Subordinated Debt Securities and
Subordinated Debt Securities
Subordination. The Subordinated Debt Securities will be subordinate and
junior in right of payment, to the extent set forth in the Subordinated Debt
Indentures, to all Senior Indebtedness. The Senior Subordinated Debt
Securities will be subordinate and junior in right of payment, to the extent
set forth in the Senior Subordinated Debt Indentures, to all Senior
Indebtedness of the Issuer. The Senior Subordinated Debt Securities will rank
senior to all existing and future Indebtedness of the Issuer that is neither
Senior Indebtedness of the Issuer nor Senior Subordinated Indebtedness, and
only Indebtedness of the Issuer that is Senior Indebtedness of the Issuer
will rank senior to the Senior Subordinated Debt Securities in accordance
with the subordination provisions of the Senior Subordinated Debt Indentures.
"Senior Indebtedness" of the Issuer is defined in the Subordinated Debt
Indentures and the Senior Subordinated Debt Indentures as Indebtedness of the
Issuer outstanding at any time (other than the Indebtedness evidenced by the
Debt Securities of any series) except (a) any Indebtedness as to which, by
the terms of the instrument creating or evidencing the same, it is provided
that such Indebtedness is not senior or prior in right of payment to the Debt
Securities or is pari passu or subordinate by its terms in right of payment
to the Debt Securities, (b) renewals, extensions and modifications of any
such Indebtedness, (c) any Indebtedness of the Company to a wholly-owned
Subsidiary of the Issuer, (d) interest accruing after the filing of a
petition initiating certain events of bankruptcy or insolvency unless such
interest is an allowed claim enforceable against the Issuer in a proceeding
under federal or state bankruptcy laws and (e) trade payables.
"Senior Subordinated Indebtedness" is defined in the Hovnanian Senior
Subordinated Debt Indenture as the Hovnanian Senior Subordinated Debt
Securities and any other Indebtedness of Hovnanian that ranks pari passu with
the Hovnanian Senior Subordinated Debt Securities. Any Indebtedness of
Hovnanian that is subordinate or junior by its terms in right of payment to
any other Indebtedness of Hovnanian shall be subordinate to Senior
Subordinated Indebtedness of Hovnanian unless the instrument creating or
evidencing the same or pursuant to which the same is outstanding specifically
provides that such Indebtedness (i) is to rank pari passu with other Senior
Subordinated Indebtedness of Hovnanian and (ii) is not subordinated by its
terms to any Indebtedness of Hovnanian which is not Senior Indebtedness of
Hovnanian.
"Senior Subordinated Indebtedness" is defined in the K. Hovnanian Senior
Subordinated Debt Indenture as the K. Hovnanian Senior Subordinated Debt
Securities, the Guarantee and any other Indebtedness of K. Hovnanian or the
Guarantor that ranks pari passu with the K. Hovnanian Senior Subordinated
Debt Securities. Any Indebtedness of K. Hovnanian or the Guarantor that is
subordinate or junior by its terms in right of payment to any other
Indebtedness of K. Hovnanian or the Guarantor shall be subordinate to Senior
Subordinated Indebtedness unless the instrument creating or evidencing the
same or pursuant to which the same is outstanding specifically provides that
such Indebtedness (i) is to rank pari passu with other Senior Subordinated
Indebtedness and (ii) is not subordinated by its terms to any Indebtedness of
K. Hovnanian or the Guarantor which is not Senior Indebtedness of K.
Hovnanian or Senior Indebtedness of the Guarantor.
"Subordinated Indebtedness" of the Obligors means the Senior
Subordinated Debt Securities, the Guarantees, any other Senior Subordinated
Indebtedness of such Obligor and any other Indebtedness that is subordinate
or junior in right of payment to Senior Indebtedness of such Obligor.
If (i) the Issuer should default in the payment of any principal of,
premium, if any, or interest, if any, on any Senior Indebtedness of the
Issuer when the same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration of acceleration or otherwise or
(ii) any other default with respect to Senior Indebtedness of the Issuer
shall occur and the maturity of the Senior Indebtedness has been accelerated
in accordance with its terms, then, upon written notice of such default to
the Issuer by the holders of such Senior Indebtedness or any trustee
therefor, unless and until such default shall have been cured or waived or
shall have ceased to exist or such acceleration shall have been rescinded, no
direct or indirect payment (in cash, property, securities, by set-off or
otherwise) will be made or agreed to be made for principal of, premium, if
any, or interest, if any, on any of the Senior Subordinated Debt Securities
or the Subordinated Debt Securities, or in respect of any redemption,
retirement, purchase or other acquisition of the Senior Subordinated Debt
Securities or the Subordinated Debt Securities other than those made in
capital stock of Hovnanian (or cash in lieu of fractional shares thereof)
(Sections 13.1 and 13.4 of the Senior Subordinated Debt Indentures and
Sections 13.1 and 13.4 of the Subordinated Debt Indentures).
If any default (other than a default described in the preceding
paragraph) occurs under the Senior Indebtedness of the Issuer, pursuant to
which the maturity thereof may be accelerated immediately or the expiration
of any applicable grace periods occurs (a "Senior Nonmonetary Default"),
then, upon the receipt by the Issuer and the trustee of written notice
thereof (a "Payment Notice") from or on behalf of holders of 25% or more of
the aggregate principal amount of Senior Indebtedness specifying an election
to prohibit such payment and other action by the Issuer in accordance with
the following provisions of this paragraph, the Issuer may not make any
payment or take any other action that would be prohibited by the immediately
preceding paragraph during the period (the "Payment Blockage Period")
commencing on the date of receipt of such Payment Notice and ending on the
earlier of (i) the date, if any, on which the holders of such Senior
Indebtedness or their representative notify the trustee that such Senior
Nonmonetary Default is cured or waived or ceases to exist or the Senior
Indebtedness to which such Senior Nonmonetary Default relates is discharged
or (ii) the 179th day after the date of receipt of such Payment Notice.
Notwithstanding the provisions described in the immediately preceding
sentence, the Issuer may resume payments on the Senior Subordinated Debt
Securities and the Subordinated Debt Securities after such Payment Blockage
Period.
If (i) (A) without the consent of the Issuer a receiver, conservator,
liquidator or trustee of the Issuer or of any of its property is appointed by
the order or decree of any court or agency or supervisory authority having
jurisdiction, and such decree or order remains in effect for more than 60
days or (B) the Issuer is adjudicated bankrupt or insolvent or (C) any of its
property is sequestered by court order and such order remains in effect for
more than 60 days or (D) a petition is filed against the Issuer under any
state or federal bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution, liquidation or receivership law of any
jurisdiction whether now or hereafter in effect, and is not dismissed within
60 days after such filing; (ii) the Issuer (A) commences a voluntary case or
other proceeding seeking liquidation, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, liquidation or other relief
with respect to itself or its debt or other liabilities under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or (B) consents to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
(C) fails generally to, or cannot, pay its debts generally as they become due
or (D) takes any corporate action to authorize or effect any of the
foregoing; or (iii) any Subsidiary of the Issuer takes, suffers or permits to
exist any of the events or conditions referred to in the foregoing clause (i)
or (ii), then all Senior Indebtedness of the Issuer (including any interest
thereon accruing after the commencement of any such proceedings) will first
be paid in full before any payment or distribution, whether in cash,
securities or other property, is made by the Issuer to any holder of Senior
Subordinated Debt Securities or Subordinated Debt Securities on account of
the principal of, premium, if any, or interest, if any, on such Senior
Subordinated Debt Securities or Subordinated Debt Securities, as the case may
be. Any payment or distribution, whether in cash, securities or other
property (other than securities of the Issuer or any other corporation
provided for by a plan of reorganization or readjustment the payment of which
is subordinate, at least to the extent provided in the subordination
provisions with respect to the indebtedness evidenced by the Senior
Subordinated Debt Securities or the Subordinated Debt Securities, to the
payment of all Senior Indebtedness of the Issuer then outstanding and to any
securities issued in respect thereof under any such plan of reorganization or
readjustment) that would otherwise (but for the subordination provisions) be
payable or deliverable in respect of the Senior Subordinated Debt Securities
or the Subordinated Debt Securities of any series will be paid or delivered
directly to the holders of Senior Indebtedness of the Issuer in accordance
with the priorities then existing among such holders until all Senior
Indebtedness of the Issuer (including any interest thereon accruing after the
commencement of any such proceedings) has been paid in full. In the event of
any such proceeding, after payment in full of all sums owing with respect to
Senior Indebtedness of the Issuer, the holders of Senior Subordinated Debt
Securities, together with the holders of any obligations of the Issuer
ranking on a parity with the Senior Subordinated Debt Securities, will be
entitled to be repaid from the remaining assets of the Issuer the amounts at
that time due and owing on account of unpaid principal of, premium, if any,
or interest, if any, on the Senior Subordinated Debt Securities and such
other obligations before any payment or other distribution, whether in cash,
property or otherwise, shall be made on account of any capital stock or
obligations of the Issuer ranking junior to the Senior Subordinated Debt
Securities (including the Subordinated Debt Securities) and such other
obligations (Section 13.1 of the Senior Subordinated Debt Indentures and
Section 13.1 of the Subordinated Debt Indentures).
If any payment or distribution of any character, whether in cash,
securities or other property (other than securities of the Issuer or any
other corporation provided for by a plan of reorganization or readjustment
the payment of which is subordinate, at least to the extent provided in the
subordination provisions with respect to the Senior Subordinated Debt
Securities or the Subordinated Debt Securities, to the payment of all Senior
Indebtedness of the Issuer then outstanding and to any securities issued in
respect thereof under any such plan of reorganization or readjustment), shall
be received by the trustee, or any holder of any Senior Subordinated Debt
Securities or Subordinated Debt Securities in contravention of any of the
terms of the Senior Subordinated Debt Indenture or the Subordinated Debt
Indenture, as the case may be, such payment or distribution of securities
will be received in trust for the benefit of, and will be paid over or
delivered and transferred to, the holders of the Senior Indebtedness of the
Issuer then outstanding in accordance with the priorities then existing among
such holders for application to the payment of all Senior Indebtedness of the
Issuer remaining unpaid to the extent necessary to pay all such Senior
Indebtedness of the Issuer in full (Section 13.1 of the Senior Subordinated
Debt Indentures and Section 13.1 of the Subordinated Debt Indentures).
By reason of such subordination, in the event of the insolvency of the
Issuer, holders of Senior Indebtedness of the Issuer may receive more,
ratably, than holders of the Senior Subordinated Debt Securities or
Subordinated Debt Securities of the Issuer. Such subordination will not
prevent the occurrence of any Event of Default (as defined in the Indentures)
or limit the right of acceleration in respect of the Senior Subordinated Debt
Securities or Subordinated Debt Securities.
Concerning the Trustee
Information concerning the trustee for a series of Debt Securities will
be set forth in the Prospectus Supplement relating to such series of Debt
Securities. Any of the trustees under the Indentures may make loans to
Hovnanian or K. Hovnanian in the normal course of business.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company is 100,100,000 shares
consisting of 87,000,000 shares of Class A Common Stock, par value $.01 per
share, 13,000,000 shares of Class B Common Stock, par value $.01 per share
the "Class B Common Stock") and 100,000 shares of Preferred Stock, par value
$.01 per share (the "Preferred Stock") in such series and with such voting
powers, designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
thereof, as may be fixed from time to time by the Board of Directors for each
series. The following summary description of certain provisions of the
Company's Restated Certificate of Incorporation (the "Certificate of
Incorporation") and By-laws does not purport to be complete and is qualified
in its entirety by reference to said provisions.
Common Stock
As of May 29, 1998, 14,065,557 shares of Class A Common Stock and
7,715,259 shares of Class B Common Stock were issued and outstanding. The
Class A Common Stock is traded on the American Stock Exchange. There is no
established public trading market for the Class B Common Stock. In order to
trade Class B Common Stock, the shares must be converted into Class A Common
Stock on a one-for-one basis. The outstanding Class A Common Stock is, and
any Class A Common Stock offered pursuant to this Prospectus and any
Prospectus Supplement when issued and paid for will be, fully paid and non-
assessable.
Dividends. Dividends on the Class A Common Stock will be paid if, when
and as determined by the Board of Directors of the Company out of funds
legally available for this purpose. Certain debt instruments to which the
Company is a party contain restrictions on the payment of cash dividends. At
October 31, 1997, $41,578,000 of retained earnings were free of such
restrictions. The amount of any regular cash dividend payable on a share of
Class A Common Stock will be an amount equal to 110% of the corresponding
regular cash dividend payable on a share of Class B Common Stock. The Company
has never paid dividends nor does it currently intend to pay dividends.
Voting Rights. Holders of Class A Common Stock are entitled to one vote
for each share held by them on all matters presented to shareholders. Holders
of Class B Common Stock are entitled to ten votes per share.
Liquidation Rights. After satisfaction of the preferential liquidation
rights of any Preferred Stock, the holders of the Class A Common Stock and
Class B Common Stock are entitled to share ratably as a single class in the
distribution of all remaining net assets.
Preemptive and Other Rights. The holders of Class A Common Stock do not
have preemptive rights as to additional issues of Common Stock or conversion
rights. The shares of Class A Common Stock are not subject to redemption or
to any further calls or assessments and are not entitled to the benefit of
any sinking fund provisions. The rights, preferences and privileges of
holders of Class A Common Stock are subject to, and may be adversely affected
by, the rights of the holder of shares of any series of Preferred Stock which
the Company may designate and issue in the future.
Preferred Stock
The Certificate of Incorporation authorizes the Board of Directors to
issue from time to time up to 100,000 shares of Preferred Stock, in one or
more series, and with such voting powers, designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as may be fixed from
time to time by the Board of Directors for each series. No shares of
Preferred Stock have been issued and the Company has no present plans to
issue any shares of Preferred Stock. The Preferred Stock, however, could be
used without further action by the Board of Directors as an anti-takeover
device.
DESCRIPTION OF WARRANTS
Hovnanian may issue Warrants, including Warrants to purchase Class A
Common Stock or Preferred Stock and Warrants to purchase Hovnanian Debt
Securities. K. Hovnanian may issue Warrants to purchase K. Hovnanian Debt
Securities. All obligations of K. Hovnanian under the K. Hovnanian Warrants
will be fully and unconditionally guaranteed by Hovnanian. Warrants may be
issued independently of or together with any other Securities and may be
attached to or separate from such Securities. Each series of Warrants will be
issued under a separate Warrant Agreement (each a "Warrant Agreement") to be
entered into between Hovnanian and/or K. Hovnanian and a warrant agent (the
"Warrant Agent"). The Warrant Agent will act solely as an agent of Hovnanian
and/or K. Hovnanian in connection with the Warrants of such series and will
not assume any obligation or relationship of agency or trust for or with
holders or beneficial owners of Warrants. The following sets forth certain
general terms and provisions of the Warrants offered hereby. Further terms of
the Warrants and the applicable Warrant Agreement will be set forth in the
applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the following terms,
where applicable, of the Warrants in respect of which this Prospectus is
being delivered: (i) the title of such Warrants; (ii) the aggregate number of
such Warrants; (iii) the price or prices at which such Warrants will be
issued; (iv) the designation, aggregate principal amount and terms of the
securities purchasable upon exercise of such Warrants; (v) the designation
and terms of the Securities with which such Warrants are issued and the
number of such Warrants issued with each such security; (vi) if applicable,
the date on and after which such Warrants and the related securities will be
separately transferable; (vii) the price at which the securities purchasable
upon exercise of such Warrants may be purchased; (viii) the date on which the
right to exercise such Warrants shall commence and the date on which such
right shall expire; (ix) the minimum or maximum amount of such Warrants which
may be exercised at any one time; (x) information with respect to book-entry
procedures, if any; (xi) a discussion of certain United States Federal income
tax considerations; and (xii) any other terms of such Warrants, including
terms, procedures and limitations relating to the exercise of such Warrants.
PLAN OF DISTRIBUTION
Hovnanian, K. Hovnanian and the Selling Shareholders may sell the
Securities to or through underwriters or dealers, and also may sell the
Securities directly to one or more other purchasers or through agents. The
applicable Prospectus Supplement will set forth the names of any underwriters
or agents involved in the sale of the Offered Securities and any applicable
commissions or discounts.
Underwriters, dealers or agents may offer and sell the Offered
Securities at a fixed price or prices, which may be changed, or from time to
time at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. In connection with the
sale of the Securities, underwriters or agents may be deemed to have received
compensation from Hovnanian, K. Hovnanian or the Selling Shareholders in the
form of underwriting discounts or commissions and may also receive
commissions from purchasers of the Securities for whom they may act as agent.
Underwriters or agents may sell the Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions
or commissions from the underwriters or commissions from the purchasers for
whom they may act as agent.
The Securities (other than the Class A Common Stock), when first issued,
will have no established trading market. Any underwriters or agents to or
through whom Securities are sold by Hovnanian or K. Hovnanian for public
offering and sale may make a market in such Securities, but such underwriters
or agents will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the
liquidity of the trading market for any Securities.
Any underwriters, dealers or agents participating in the distribution of
the Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Securities may be deemed to be underwriting discounts and commissions under
the Securities Act. Underwriters, dealers or agents may be entitled, under
agreements entered into with Hovnanian, K. Hovnanian or the Selling
Shareholders, to indemnification against or contribution toward certain civil
liabilities, including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, Hovnanian, K. Hovnanian or
the Selling Shareholders will authorize underwriters or other persons acting
as its agents to solicit offers by certain institutions to purchase
Securities from it pursuant to contracts providing for payment and delivery
on a future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all
cases will be subject to the condition that the purchase of the Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such
agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Securities
will be passed upon for Hovnanian and K. Hovnanian by Simpson Thacher &
Bartlett, New York, New York. Simpson Thacher & Bartlett will rely, as to
matters of New Jersey law, on the opinion of Peter S. Reinhart, Esq., Senior
Vice President and General Counsel for the Company. Certain legal matters in
connection with the Securities may also be passed upon for any agents or
underwriters by counsel specified in the Prospectus Supplement.
EXPERTS
The consolidated financial statements of Hovnanian Enterprises, Inc.
appearing in the Company's Annual Report (Form 10-K) for the fiscal year
ended October 31, 1997, 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 are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy the shares
by anyone in any jurisdiction in which such offer or solicitation is not
authorized, or in which the person making the offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make such
offer or solicitation. Neither the delivery of this Prospectus nor any sale
made hereunder shall create any implication that the information contained
herein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . 6
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed
Charges and Preferred Dividends . . . . . . . . . . . . . . . . . . 9
Description of Debt Securities . . . . . . . . . . . . . . . . . . . . . 11
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . 27
Description of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . 29
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
HOVNANIAN
ENTERPRISES, INC.
K. HOVNANIAN
ENTERPRISES, INC.
______________________
PROSPECTUS
______________________
, 1998
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses payable by the Company in connection with the offering
described in this Registration Statement are as follows:
Total
---------------
Registration Fee . . . . . . . . . . . $59,000
Legal fees and expenses . . . . . . . 100,000
Blue Sky fees and expenses . . . . . . 20,000
Accounting fees and expenses . . . . . 100,000
Printing and duplicating expenses . . 100,000
Miscellaneous expenses . . . . . . . . 21,000
-------
Total . . . . . . . . . . . . . . . $400,000
========
All figures, except the SEC registration fee, are estimates.
Item 15. Indemnification of Directors and Officers.
Hovnanian is a Delaware corporation. Section 145 of the General
Corporation Law of the State of Delaware grants each corporation organized
thereunder the power to indemnify any person who is or was a director,
officer, employee or agent of another corporation or enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with 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 being or having been in any such
capacity, if he acted in good faith in a manner 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 his
conduct was unlawful. Section 102(b)(7) of the General Corporation Law of the
State of Delaware enables a corporation in its certificate of incorporation
or an amendment thereto validly approved by stockholders to limit or
eliminate the personal liability of the members of its board of directors for
violations of the directors' fiduciary duty care.
Article EIGHTH of Hovnanian's Restated Certificate of Incorporation
contains the following provisions with respect to indemnification:
No director of the Company shall be personally liable to the Company
or its stockholders for monetary damages for breach of fiduciary duty as
a director; provided, however, that this Article shall not eliminate or
limit the liability of a director (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. This Article shall not
eliminate or limit the liability of a director for any act or omission
occurring prior to the date on which this Article becomes effective. Any
repeal or modification of this Article Eighth shall not adversely affect
any right or protection of a director of the Company existing hereunder
with respect to any act or omission occurring prior to the time of such
repeal or modification.
Hovnanian maintains a liability insurance policy providing coverage for
its directors and officers in an amount up to an aggregate limit of
$10,000,000 for any single occurrence.
Item 16. Exhibits.
See Exhibit Index.
Item 17. Undertakings.
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, as amended (the "Securities Act");
(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 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 from of prospectus filed
with the Commission pursuant to Rule 462(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; and
(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 (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the 1934 Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
Hovnanian annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions set forth in response to Item 15, 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 registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant 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.
The undersigned registrants hereby undertake to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
SIGNATURES
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
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Red Bank, State of
New Jersey, on June 17, 1998.
Hovnanian Enterprises, Inc.
By /s/ Kevork S. Hovnanian
Kevork S. Hovnanian, Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Kevork S. Hovnanian Chairman of the Board June 17, 1998
Kevork S. Hovnanian
* Chief Executive Officer, June 17, 1998
Ara K. Hovnanian President
and Director
/s/ Paul W. Buchanan Senior Vice President-- June 17, 1998
Paul W. Buchanan Corporate
Controller and Director
* Senior Vice President, June 17, 1998
Peter S. Reinhart General Counsel and Director
Signature Title Date
Senior Vice President,
* Treasurer, Chief Financial June 17, 1998
J. Larry Sorsby Officer
and Director
* Senior Vice President,
William L. Carpitella Organizational Development June 17, 1998
*By/s/ Paul W. Buchanan
Paul W. Buchanan
Attorney-in-fact June 17, 1998
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, K. Hovnanian
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 Amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Red Bank, State of New Jersey, on
June 17, 1998.
Hovnanian Enterprises, Inc.
By /s/ Kevork S. Hovnanian
Kevork S. Hovnanian, Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Kevork S. Hovnanian Chairman of the Board June 17, 1998
Kevork S. Hovnanian
* Chief Executive Officer, June 17, 1998
Ara K. Hovnanian President
and Director
/s/ Paul W. Buchanan Senior Vice President-- June 17, 1998
Paul W. Buchanan Corporate
Controller and Director
* Senior Vice President, June 17, 1998
Peter S. Reinhart General Counsel and Director
Signature Title Date
* Senior Vice President,
J. Larry Sorsby Treasurer, Chief Financial June 17, 1998
Officer
and Director
* Senior Vice President,
William L. Carpitella Organizational Development June 17, 1998
*By / s/ Paul W. Buchanan June 17, 1998
Paul W. Buchanan
Attorney-in-fact
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibits
- -------- -----------------------
**1.1 - Underwriting Agreement (Hovnanian Debt Securities and
Warrants to Purchase Hovnanian Debt Securities).
**1.2 - Underwriting Agreement (K. Hovnanian Debt Securities and
Warrants to Purchase K. Hovnanian Debt Securities).
**1.3 - Underwriting Agreement (Equity Securities and Warrants to
Purchase Equity Securities).
*4.1 - Form of Hovnanian Debt Securities.
*4.2 - Form of K. Hovnanian Debt Securities.
*4.3 - Form of Hovnanian Senior Debt Indenture.
*4.4 - Form of Hovnanian Senior Subordinated Debt Indenture.
*4.5 - Form of Hovnanian Subordinated Debt Indenture.
*4.6 - Form of K. Hovnanian Senior Debt Indenture.
*4.7 - Form of K. Hovnanian Senior Subordinated Debt Indenture.
*4.8 - Form of K. Hovnanian Subordinated Debt Indenture.
*4.9 - Form of Warrant Agreement for Preferred Stock and Common
Stock (including Form of Warrant Certificate).
*4.10 - Form of Warrant Agreement for Hovnanian Debt Securities
(including form of Warrant Certificate).
*4.11 - Form of Warrant Agreement for K. Hovnanian Debt Securities
(including form of Warrant Certificate).
*5.1 - Opinion of Simpson Thacher & Bartlett.
*5.2 - Opinion of Peter S. Reinhart, Senior Vice President and
General Counsel of Hovnanian and
K. Hovnanian.
*12.1 - Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Dividends.
*23.1 - Consent of Ernst & Young LLP.
*23.2 - Consent of Simpson Thacher & Bartlett (included in Exhibit
5.1).
Exhibit
Number Description of Exhibits
- -------- -----------------------
*24.1 - Powers of Attorney of Board of Directors of Hovnanian
(included on signature page).
***25.1 - Statement of Eligibility of Trustee under the Hovnanian
Senior Debt Indenture.
***25.2 - Statement of Eligibility of Trustee under the Hovnanian
Senior Subordinated Debt Indenture.
***25.3 - Statement of Eligibility of Trustee under the Hovnanian
Subordinated Debt Indenture.
***25.4 - Statement of Eligibility of Trustee under K. Hovnanian
Senior Debt Indenture.
***25.5 - Statement of Eligibility of Trustee under K. Hovnanian
Senior Subordinated Debt Indenture.
***25.6 - Statement of Eligibility of Trustee under K. Hovnanian
Subordinated Debt Indenture.
______________________
* Filed herewith.
** To be incorporated by reference, as necessary, as an exhibit to one or
more reports on Form 8-K.
*** To be provided in accordance with Section 305(b)(2) of the Trust
Indenture Act of 1939.
Exhibit 4.1
[FORM OF FACE OF SECURITY]
HOVNANIAN ENTERPRISES, INC.
[Title of Series of Securities]
No. ____ $__________
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS REGISTERED GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]
HOVNANIAN ENTERPRISES, INC., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Company"), for value received, hereby promises to
pay to _____________, or registered assigns, the principal sum of
_____________ at the office or agency of the Company referred to below, on
___________, and to pay interest, semi-annually on _________ and _________,
of each year, on said principal sum at said office or agency, at the rate of
____% per annum, from the ___________ or ___________, as the case may be,
next preceding the date of this Security to which interest has been paid,
unless the date hereof is the date to which interest has been paid, in which
case from the date of this Security, or unless no interest has been paid on
the Securities, in which case from _________, until payment of said principal
sum has been made or duly provided for. Notwithstanding the foregoing, if
the date hereof is after the ____ day of the calendar month preceding any
__________ or __________, as the case may be, and prior to such __________ or
__________, this Security shall bear interest from such __________ or
__________; provided, however, that if and to the extent that the Company
shall default in the payment of interest due on such __________ or
__________, then this Security shall bear interest from the next preceding
__________ or __________ to which interest has been paid, or, if no interest
has been paid on the Securities, from ____________. The interest so payable
on any _________ or __________ will, subject to certain exceptions provided
in the Indenture referred to on the reverse hereof, be paid to the person in
whose name this Security is registered at the close of business on the ____
day of the calendar month preceding such _________ or __________.
Reference is made to the further provisions of this Security set forth
on the reverse hereof. Such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
The Security shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed in its name and on its behalf by the signature of its
_______________ and by signature of its _______________ and has caused its
corporate seal to be affixed hereunto or imprinted hereon.
Dated: _______________
TRUSTEE'S CERTIFICATE OF [SEAL] HOVNANIAN ENTERPRISES, INC.
AUTHENTICATION
This is one of the Securities
of the series designated
herein referred to in the
within mentioned Indenture.
____________, as Trustee By:________________________
By: _________________________ By:________________________
Authorized Officer
[FORM OF REVERSE OF SECURITY]
HOVNANIAN ENTERPRISES, INC.
[Title of Series of Securities]
This Security is one of a duly authorized issue of Securities of the
Company, designated as its ____________________ (herein called the
"Securities"), limited (except as otherwise provided in the Indenture
referred to below) to the aggregate principal amount of $_____________, all
issued or to be issued under and pursuant to an Indenture, dated as of
___________ (herein called the "Indenture"), duly executed and delivered by
the Company and __________, as Trustee (herein called the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Company, the Trustee and the
holders of the Securities, and of the terms upon which the Securities are,
and are to be, authenticated and delivered. The Securities are issuable in
registered form only, without coupons, in denominations of $______ and
integral multiples thereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal hereof and interest hereon may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Securities at any time by the
Company and the Trustee with the consent of the holders of a majority in
aggregate principal amount of the outstanding Securities. The Indenture also
contains provisions permitting the holders of a majority in aggregate
principal amount of the outstanding Securities, on behalf of the holders of
all the Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by or on behalf of the holder
of this Security shall be conclusive and binding upon such holder and upon
all future holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Security.
Subject to the terms of the Indenture, the Company may elect [either
(i)] to defease and be discharged from any and all obligations with respect
to the Securities [or (ii) to be released from their obligations with respect
to certain covenants applicable to the Securities], upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.
[Discussion of provisions relating to redemption, if applicable.]
[Discussion of provisions relating to subordination, if applicable.]
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligations of the Company,
which are absolute and unconditional, to pay the principal of and interest on
this Security at the place, at the respective times, at the rate and in the
coin or currency prescribed herein.
Upon the presentment for registration of transfer of this Security at
the office or agency of the Company at ____________________, a new Security
or Securities of authorized denominations for an equal aggregate principal
amount will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Indenture, without charge except for any tax or
other governmental charge imposed in connection therewith.
Prior to due presentment for registration of transfer of this Security,
the Company, the Trustee or any Security registrar, co-registrar, paying
agent or authenticating agent, may deem and treat the registered holder
hereof as the absolute owner of this Security, for the purpose of receiving
payment hereof, or on account hereof, and for all other purposes, and the
Company or the Trustee or any Security registrar, co-registrar, paying agent
or authenticating agent shall not be affected by any notice to the contrary.
Exhibit 4.2
[FORM OF FACE OF SECURITY]
K. HOVNANIAN ENTERPRISES, INC.
[Title of Series of Securities]
No. ____ $__________
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS REGISTERED GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]
K. HOVNANIAN ENTERPRISES, INC., a New Jersey corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), for value received, hereby
promises to pay to _____________, or registered assigns, the principal sum of
_____________ at the office or agency of the Company referred to below, on
___________, and to pay interest, semi-annually on _________ and _________,
of each year, on said principal sum at said office or agency, at the rate of
____% per annum, from the ___________ or ___________, as the case may be,
next preceding the date of this Security to which interest has been paid,
unless the date hereof is the date to which interest has been paid, in which
case from the date of this Security, or unless no interest has been paid on
the Securities, in which case from _________, until payment of said principal
sum has been made or duly provided for. Notwithstanding the foregoing, if
the date hereof is after the ____ day of the calendar month preceding any
__________ or __________, as the case may be, and prior to such __________ or
__________, this Security shall bear interest from such __________ or
__________; provided, however, that if and to the extent that the Company
shall default in the payment of interest due on such __________ or
__________, then this Security shall bear interest from the next preceding
__________ or __________ to which interest has been paid, or, if no interest
has been paid on the Securities, from ____________. The interest so payable
on any _________ or __________ will, subject to certain exceptions provided
in the Indenture referred to on the reverse hereof, be paid to the person in
whose name this Security is registered at the close of business on the ____
day of the calendar month preceding such _________ or __________.
Reference is made to the further provisions of this Security set forth
on the reverse hereof. Such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
The Security shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed in its name and on its behalf by the signature of its
_______________ and by signature of its _______________ and has caused its
corporate seal to be affixed hereunto or imprinted hereon.
Dated: _______________
TRUSTEE'S CERTIFICATE OF [SEAL] K. HOVNANIAN ENTERPRISES, INC.
AUTHENTICATION
This is one of the Securities
of the series designated herein
referred to in the within
mentioned Indenture.
___________________, By:__________________________
as Trustee
By:________________________ By:__________________________
Authorized Officer
[FORM OF REVERSE OF SECURITY]
K. HOVNANIAN ENTERPRISES, INC.
[Title of Series of Securities]
This Security is one of a duly authorized issue of Securities of the
Company, designated as its ____________________ (herein called the
"Securities"), limited (except as otherwise provided in the Indenture
referred to below) to the aggregate principal amount of $_____________, all
issued or to be issued under and pursuant to an Indenture, dated as of
___________ (herein called the "Indenture"), duly executed and delivered by
the Company and __________, as Trustee (herein called the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Company, the Trustee and the
holders of the Securities, and of the terms upon which the Securities are,
and are to be, authenticated and delivered. The Securities are issuable in
registered form only, without coupons, in denominations of $______ and
integral multiples thereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal hereof and interest hereon may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Securities at any time by the
Company and the Trustee with the consent of the holders of a majority in
aggregate principal amount of the outstanding Securities. The Indenture also
contains provisions permitting the holders of a majority in aggregate
principal amount of the outstanding Securities, on behalf of the holders of
all the Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by or on behalf of the holder
of this Security shall be conclusive and binding upon such holder and upon
all future holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Security.
Subject to the terms of the Indenture, the Company may elect [either
(i)] to defease and be discharged from any and all obligations with respect
to the Securities [or (ii) to be released from their obligations with respect
to certain covenants applicable to the Securities], upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.
[Discussion of provisions relating to redemption, if applicable.]
[Discussion of provisions relating to subordination, if applicable.]
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligations of the Company,
which are absolute and unconditional, to pay the principal of and interest on
this Security at the place, at the respective times, at the rate and in the
coin or currency prescribed herein.
Upon the presentment for registration of transfer of this Security at
the office or agency of the Company at ____________________, a new Security
or Securities of authorized denominations for an equal aggregate principal
amount will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Indenture, without charge except for any tax or
other governmental charge imposed in connection therewith.
Prior to due presentment for registration of transfer of this Security,
the Company, the Trustee or any Security registrar, co-registrar, paying
agent or authenticating agent, may deem and treat the registered holder
hereof as the absolute owner of this Security, for the purpose of receiving
payment hereof, or on account hereof, and for all other purposes, and the
Company or the Trustee or any Security registrar, co-registrar, paying agent
or authenticating agent shall not be affected by any notice to the contrary.
[FORM OF NOTATION OF SECURITY
RELATING TO GUARANTEE]
GUARANTEE
Hovnanian Enterprises, Inc. (hereinafter referred to as the "Guarantor",
which term includes any successor person under the Indenture (the
"Indenture") referred to in the Security upon which this notation is
endorsed), has unconditionally guaranteed (i) the due and punctual payment of
the principal of, premium, if any, and interest on the Securities, whether at
maturity, by acceleration or otherwise, the due and punctual payment of
interest on the overdue principal of, premium, if any, and interest, if any,
on the Securities, to the extent lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article 13 of the Indenture and (ii)
in case of any extension of time of payment or renewal of any Securities or
any of such other obligations, that the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantor to the Holders and to the Trustee
pursuant to the Guarantee and the Indenture are expressly set forth in
Article 13 of the Indenture and reference is hereby made to such Indenture
for the terms of the Guarantee.
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Guarantor shall have any personal liability under
the Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication of the Securities upon which this Guarantee is
endorsed shall have been executed by the Trustee under the Indenture by the
manual signature of one of its authorized officers.
Guarantor
[SEAL] HOVNANIAN ENTERPRISES, INC.
By_______________________________
By_______________________________
Exhibit 4.3
=============================================================================
HOVNANIAN ENTERPRISES, INC.
AND
___________________________
as Trustee
Form of Senior Indenture
Dated as of ___________
=============================================================================
CROSS REFERENCE SHEET*
___________
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of between Hovnanian Enterprises, Inc. and
, Trustee:
Section of the Act Section of Indenture
310(a)(1), (2) and (5) . . 6.9
310(a)(3) and (4) . . . . . Inapplicable
310(b) . . . . . . . . . . 6.8 and 6.10(a), (b) and (d)
310(c) . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . 6.13
311(b) . . . . . . . . . . 6.13
311(c) . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . 4.2(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . 4.4(a)(i), (ii), (iii), (iv), (v), (vi) and (vii)
313(a)(5) . . . . . . . . . Inapplicable
313(b)(1) . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . 4.4(b)
313(c) . . . . . . . . . . 4.4(c)
313(d) . . . . . . . . . . 4.4(d)
314(a) . . . . . . . . . . 4.3
314(b) . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . 11.5
314(c)(3) . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . 11.5
314(f) . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . 6.1
315(b) . . . . . . . . . . 5.8
315(e) . . . . . . . . . . 5.9
316(a)(1) . . . . . . . . . 5.7
316(a)(2) . . . . . . . . . Not required
316(a) (last sentence) . . 7.4
316(b) . . . . . . . . . . 5.4
317(a) . . . . . . . . . . 5.2
317(b) . . . . . . . . . . 3.5(a)
318(a) . . . . . . . . . . 11.7
_____________________
*This Cross Reference Sheet is not part of the Indenture.
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS . . . . . . . . . . . . . . 7
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 8
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . 8
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 8
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 8
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . 8
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 9
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 9
Global Security . . . . . . . . . . . . . . . . . . . . . . . . 9
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Holder of Securities . . . . . . . . . . . . . . . . . . . . . . 9
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . 9
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 10
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 10
original issue date . . . . . . . . . . . . . . . . . . . . . . 10
original issue discount . . . . . . . . . . . . . . . . . . . . 11
Original Issue Discount Security . . . . . . . . . . . . . . . . 11
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . 11
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 12
principal . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
principal amount . . . . . . . . . . . . . . . . . . . . . . . . 12
record date . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 12
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . 12
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . 12
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . 12
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . 13
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . 13
U.S. Government Obligations . . . . . . . . . . . . . . . . . . 13
vice president . . . . . . . . . . . . . . . . . . . . . . . . . 13
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE TWO
SECURITIES . . . . . . . . . . . . . . 13
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . 13
SECTION 2.2 Form of Trustee's Certificate of Authentication . . 14
SECTION 2.3 Amount Unlimited, Issuable in Series . . . . . . . 14
SECTION 2.4 Authentication and Delivery of Securities . . . . . 17
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . . 20
SECTION 2.6 Certificate of Authentication . . . . . . . . . . . 20
SECTION 2.7 Denomination and Date of Securities; Payments
of Interest . . . . . . . . . . . . . . . . . . 20
SECTION 2.8 Registration, Transfer and Exchange . . . . . . . . 21
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and
Stolen Securities . . . . . . . . . . . . . . . 23
SECTION 2.10 Cancellation of Securities; Disposition
Thereof . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . 24
SECTION 2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . 25
ARTICLE THREE
COVENANTS OF THE ISSUER . . . . . . . . . . . 25
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . 25
SECTION 3.2 Offices for Notices and Payments, etc . . . . . . . 25
SECTION 3.3 No Interest Extension . . . . . . . . . . . . . . . 25
SECTION 3.4 Appointments to Fill Vacancies in Trustee's
Office . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.5 Provision as to Paying Agent . . . . . . . . . . . 26
SECTION 3.6 Limitation on Liens . . . . . . . . . . . . . . . . 27
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE . . . . . . . . . . . 29
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders . . . . 29
SECTION 4.2 Preservation and Disclosure of Securityholders
Lists . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . 30
SECTION 4.4 Reports by the Trustee . . . . . . . . . . . . . . 31
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT . . . . . . . . . . . . 32
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . 32
SECTION 5.2 Payment of Securities on Default; Suit Therefor . . 34
SECTION 5.3 Application of Moneys Collected by Trustee . . . . 35
SECTION 5.4 Proceedings by Securityholders . . . . . . . . . . 36
SECTION 5.5 Proceedings by Trustee . . . . . . . . . . . . . . 37
SECTION 5.6 Remedies Cumulative and Continuing . . . . . . . . 37
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by
Majority of Securityholders . . . . . . . . . . 37
SECTION 5.8 Notice of Defaults . . . . . . . . . . . . . . . . 38
SECTION 5.9 Undertaking to Pay Costs . . . . . . . . . . . . . 38
ARTICLE SIX
CONCERNING THE TRUSTEE . . . . . . . . . . . 39
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default . . . . . . . 39
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . . 40
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of
Proceeds Thereof . . . . . . . . . . . . . . . 41
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc . . . . . . . . . . . . . . . 41
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . 41
SECTION 6.6 Compensation and Indemnification of Trustee and
Its Prior Claim . . . . . . . . . . . . . . . . 41
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc . . . . . . . . . . . . . . . 42
SECTION 6.8 Qualification of Trustee; Conflicting Interests . . 42
SECTION 6.9 Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series. . . . 42
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee . . . . . . . . . . . . . . . 43
SECTION 6.11 Acceptance of Appointment by Successor Trustee . . 44
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . 45
SECTION 6.13 Preferential Collection of Claims Against the
Issuer . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . 46
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS . . . . . . . . . 47
SECTION 7.1 Evidence of Action Taken by Securityholders . . . . 47
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities . . . . . . . . . . . . . 47
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . . 47
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . . 48
SECTION 7.5 Right of Revocation of Action Taken . . . . . . . . 48
SECTION 7.6 Record Date for Consents and Waivers . . . . . . . 48
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES . . . . . . . . . . . 49
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders . . . . . . . . . . . . . . . . 49
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders . . . . . . . . . . . . . . . . 51
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . 52
SECTION 8.4 Documents to Be Given to Trustee . . . . . . . . . 52
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures . . . . . . . . . . . . 52
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER
DISPOSITION . . . . . . . . . . . . . . 53
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms . . 53
SECTION 9.2 Successor Corporation to be Substituted . . . . . . 53
SECTION 9.3 Opinion of Counsel to be Given Trustee . . . . . . 54
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS . . . . . . . 54
SECTION 10.1 Satisfaction and Discharge of Indenture;
Covenant Defeasance . . . . . . . . . . . . . . 54
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities . . . . . . . . . . . . . 57
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . . 57
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years . . . . . . . . . 57
SECTION 10.5 Indemnity for U.S. Government Obligations . . . . 57
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS . . . . . . . . . . 57
SECTION 11.1 Partners, Incorporators, Stockholders,
Officers and Directors of Issuer Exempt
from Individual Liability . . . . . . . . . . . 57
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities . . . . . 58
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture . . . . . . . . . . . . . . . . . . . 58
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Holders of Securities . . . . . . . . . . . . . 58
SECTION 11.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained
Therein . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays . . . . . . . . . . . . . . . . . . . 59
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939 . . . . . . . . . . 60
SECTION 11.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . 60
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . . 60
SECTION 11.10 Effect of Headings . . . . . . . . . . . . . . . 60
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS . . . . . . 60
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . 60
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . 60
SECTION 12.3 Payment of Securities Called for Redemption . . . 61
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption . . . 62
SECTION 12.5 Mandatory and Optional Sinking Funds . . . . . . . 62
FORM OF SENIOR INDENTURE
THIS SENIOR INDENTURE, dated as of ________________________ between
Hovnanian Enterprises, Inc., a Delaware corporation (the "Issuer"), and
_______________, a _____________________________ as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issuance from time to
time of its unsecured debentures, notes or other evidences of indebtedness to
be issued in one or more series (the "Securities") up to such principal
amount or amounts as may from time to time be authorized in accordance with
the terms of this Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication,
delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been undertaken and
completed;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the Holders (as hereinafter defined) thereof, the Issuer and the Trustee
mutually covenant and agree for the equal and proportionate benefit of the
respective Holders from time to time of the Securities as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 For all purposes of this Indenture and of any indenture
supplemental hereto the following terms shall have the respective meanings
specified in this Section 1.1 (except as otherwise expressly provided herein
or in any indenture supplemental hereto or unless the context otherwise
clearly requires). All other terms used in this Indenture that are defined
in the Trust Indenture Act of 1939, including terms defined therein by
reference to the Securities Act of 1933, as amended (the "Securities Act"),
shall have the meanings assigned to such terms in said Trust Indenture Act of
1939 and in said Securities Act as in force at the date of this Indenture
(except as herein otherwise expressly provided herein or in any indenture
supplemental hereto or unless the context otherwise clearly requires).
All accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted on the
date of this Indenture.
The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision. The expressions "date of this
Indenture", "date hereof", "date as of which this Indenture is dated" and
"date of execution and delivery of this Indenture" and other expressions of
similar import refer to the effective date of the original execution and
delivery of this Indenture, viz. as of ______________________.
The terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
States Code Sections 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of the
Issuer or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means one or more resolutions, certified by the
secretary or an assistant secretary of the Issuer to have been duly adopted
or consented to by the Board of Directors and to be in full force and effect,
and delivered to the Trustee.
"Business Day" means, with respect to any Security, unless otherwise
specified in a Board Resolution and an Officers' Certificate with respect to
a particular series of Securities, a day that (a) in the Place of Payment (or
in any of the Places of Payment, if more than one) in which amounts are
payable, as specified in the form of such Security, and (b) in the city in
which the Corporate Trust Office is located, is not a day on which banking
institutions are authorized or required by law or regulation to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
as amended, or, if at any time after the execution and delivery of this
Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act of 1939, then the body
performing such duties on such date.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets included on the most recent consolidated balance sheet of the Issuer
and its Restricted Subsidiaries, less applicable reserves and other properly
deductible items and after deducting therefrom (a) all current liabilities
and (b) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all in accordance with
generally accepted accounting principles consistently applied.
"Corporate Trust Office" means the office of the Trustee of a series
of Securities at which the trust created by this Indenture shall, at any
particular time, be principally administered, which office is, at the date as
of which this Indenture is dated, located at [address].
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or
include each Person who is then a Depositary hereunder, and, if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with respect to the
Global Securities of such series.
"Dollars" and the sign "$" means the coin and currency of the United
States of America as at the time of payment is legal tender for the payment
of public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Global Security" means a Security evidencing all or a part of a
series of Securities issued to the Depositary for such series in accordance
with Section 2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean, in the case of any Security, the Person in whose name such
Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof.
"Indebtedness" with respect to any Person means, without duplication:
(a) (i) the principal of and premium, if any, and
interest, if any, on indebtedness for money borrowed of such Person,
indebtedness of such Person evidenced by bonds, notes, debentures or
similar obligations, and any guaranty by such Person of any
indebtedness for money borrowed or indebtedness evidenced by bonds,
notes, debentures or similar obligations of any other Person, whether
any such indebtedness or guaranty is outstanding on the date of this
Indenture or is thereafter created, assumed or incurred, (ii)
obligations of such Person for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit
transaction; (iii) the principal of and premium, if any, and
interest, if any, on indebtedness incurred, assumed or guaranteed by
such Person in connection with the acquisition by it or any of its
subsidiaries of any other businesses, properties or other assets;
(iv) lease obligations which such Person capitalized in accordance
with Statement of Financial Accounting Standards No. 13 promulgated
by the Financial Accounting Standards Board or such other generally
accepted accounting principles as may be from time to time in effect;
(v) any indebtedness of such Person representing the balance deferred
and unpaid of the purchase price of any property or interest therein
(except any such balance that constitutes an accrued expense or trade
payable) and any guaranty, endorsement or other contingent obligation
of such Person in respect of any indebtedness of another that is
outstanding on the date of this Indenture or is thereafter created,
assumed or incurred by such Person; and (vi) obligations of such
Person under interest rate, commodity or currency swaps, caps,
collars, options and similar arrangements; and
(b) any amendments, modifications, refundings,
renewals or extensions of any indebtedness or obligation described as
Indebtedness in clause (a) above.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, including, for all purposes of this instrument and any
such supplement, the provisions of the Trust Indenture Act of 1939 that are
deemed to be a part of and govern this instrument and any such supplement,
respectively, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
"interest" means, when used with respect to non-interest bearing
Securities (including, without limitation, any Original Issue Discount
Security that by its terms bears interest only after maturity or upon default
in any other payment due on such Security), interest payable after maturity
(whether at stated maturity, upon acceleration or redemption or otherwise) or
after the date, if any, on which the Issuer becomes obligated to acquire a
Security, whether upon conversion, by purchase or otherwise.
"Issuer" means Hovnanian Enterprises, Inc., a Delaware corporation,
and, subject to Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer which is signed in its name by the chairman of the Board of Directors,
the president or any vice president of the Issuer, and delivered to the
Trustee.
"Officers' Certificate", when used with respect to the Issuer, means
a certificate signed by the chairman of the Board of Directors, the
president, or any vice president and by the treasurer, any assistant
treasurer, the controller, any assistant controller, the secretary or any
assistant secretary of the Issuer. Each such certificate shall include the
statements provided for in Section 11.5 if and to the extent required by the
provisions of such Section 11.5. One of the officers signing an Officers'
Certificate given pursuant to Section 4.3 shall be the principal executive,
financial or accounting officer of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by the chief
counsel of the Issuer or by such other legal counsel who may be an employee
of or counsel to the Issuer and who shall be reasonably satisfactory to the
Trustee. Each such opinion shall include the statements provided for in
Section 11.5, if and to the extent required by the provisions of such Section
11.5.
"original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly)
on registration of transfer, exchange or substitution.
"original issue discount" of any debt security, including any
Original Issue Discount Security, means the difference between the principal
amount of such debt security and the initial issue price of such debt
security (as set forth in the case of an Original Issue Discount Security on
the face of such Security).
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the maturity thereof pursuant to
Article Five.
"Outstanding" when used with reference to Securities, shall, subject
to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(b) Securities (other than Securities of any series
as to which the provisions of Article Ten hereof shall not be
applicable), or portions thereof, for the payment or redemption of
which moneys or U.S. Government Obligations (as provided for in
Section 10.1) in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the
Issuer) or shall have been set aside, segregated and held in trust by
the Issuer for the Holders of such Securities (if the Issuer shall
act as its own paying agent), provided that, if such Securities, or
portions thereof, are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as herein provided,
or provision satisfactory to the Trustee shall have been made for
giving such notice; and
(c) Securities which shall have been paid or in
substitution for which other Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.9 (except with
respect to any such Security as to which proof satisfactory to the
Trustee is presented that such Security is held by a Person in whose
hands such Security is a legal, valid and binding obligation of the
Issuer).
In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding for such purposes shall be the portion of
the principal amount thereof that would be due and payable as of the date of
such determination (as certified by the Issuer to the Trustee) upon a
declaration of acceleration of the maturity thereof pursuant to Article Five.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Issuer or its agents upon the
issuance of such Securities.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
estate, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and interest, if
any, on the Securities of such series are payable as determined in accordance
with Section 2.3.
"principal" of a debt security, including any Security, means the
amount (including, without limitation, if and to the extent applicable, any
premium and, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect
to such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, if any, upon any redemption
at the option of the Issuer, upon any purchase or exchange at the option of
the Issuer or the holder of such debt security and upon any acceleration of
the maturity of such debt security).
"principal amount" of a debt security, including any Security, means
the principal amount as set forth on the face of such debt security.
"record date" shall have the meaning set forth in Section 2.7.
"Responsible Officer", when used with respect to the Trustee of a
series of Securities, means any officer of the Trustee with direct
responsibility for the administration of the trust created by this Indenture.
"Restricted Subsidiary" means (a) any Subsidiary of the Issuer other
than an Unrestricted Subsidiary, and (b) any Subsidiary of the Issuer which
was an Unrestricted Subsidiary but which, subsequent to the date hereof, is
designated by the Issuer (by Board Resolution) to be a Restricted Subsidiary;
provided, however, that the Issuer may not designate any such Subsidiary to
be a Restricted Subsidiary if the Issuer would thereby breach any covenant or
agreement herein contained (on the assumptions that any outstanding
Indebtedness of such Subsidiary was incurred at the time of such
designation).
"Securities Act" shall have the meaning set forth in Section 1.1.
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture or, as the case may be, Securities that have been
authenticated and delivered pursuant to this Indenture.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Issuer within the meaning of Rule 1.02(w) of Regulation S-
K promulgated by the Commission as in effect on the date of this Indenture.
"Subsidiary" of any specified Person means any corporation of which
such Person, or such Person and one or more Subsidiaries of such Person, or
any one or more Subsidiaries of such Person, directly or indirectly own
voting securities entitling any one or more of such Persons and its
Subsidiaries to elect a majority of the directors, either at all times or, so
long as there is no default or contingency which permits the holders of any
other class or classes of securities to vote for the election of one or more
directors.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which
this Indenture is originally executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each
Person who is then a trustee hereunder and, if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of such series.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Issuer
acquired or organized after the date hereof, provided, however, that such
Subsidiary shall not be a successor, directly or indirectly, to any
Restricted Subsidiary, and (b) any Subsidiary of the Issuer substantially all
the assets of which consist of stock or other securities of a Subsidiary or
Subsidiaries of the character described in clause (a) of this paragraph,
unless and until such Subsidiary shall have been designated to be a
Restricted Subsidiary pursuant to clause (b) of the definition of "Restricted
Subsidiary".
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(B).
"vice president," when used with respect to the Issuer or the
Trustee, means any vice president, regardless of whether designated by a
number or a word or words added before or after the title "vice president."
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series,
and calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall be
substantially in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as set forth in
a Board Resolution or, to the extent established pursuant to rather than set
forth in a Board Resolution, an Officers' Certificate detailing such
establishment) or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have
imprinted or otherwise reproduced thereon such legend or legends or
endorsements, not inconsistent with the provisions of this Indenture, as may
be required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be
substantially as follows:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
_____________________, as Trustee
By________________________________
Authorized Signatory
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Securities of such series shall
bear, in addition to the Trustee's certificate of authentication, an
alternate Certificate of Authentication which shall be substantially as
follows:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
_____________________, as Trustee
By________________________________
as Authenticating Agent
By________________________________
Authorized Signatory
SECTION 2.3 Amount Unlimited, Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series and the Securities
of each such series shall rank equally and pari passu with the Securities of
each other series and with all other unsecured and unsubordinated debt of the
Issuer. There shall be established in or pursuant to one or more Board
Resolutions (and, to the extent established pursuant to rather than set forth
in a Board Resolution, in an Officers' Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the initial issuance of Securities of any series:
(1) the designation of the Securities of the
series, which shall distinguish the Securities of such series from
the Securities of all other series;
(2) any limit upon the aggregate principal amount
of the Securities of the series that may be authenticated and
delivered under this Indenture (except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for,
or in lieu of, other Securities of the series pursuant to Section
2.8, 2.9, 2.11, 8.5 or 12.3);
(3) the date or dates on which the principal of the
Securities of the series is payable;
(4) the rate or rates at which the Securities of
the series shall bear interest, if any, the date or dates from which
any such interest shall accrue, on which any such interest shall be
payable and on which a record shall be taken for the determination of
Holders to whom any such interest is payable or the method by which
such rate or rates or date or dates shall be determined or both;
(5) the place or places where and the manner in
which the principal of, premium, if any, and interest, if any, on
Securities of the series shall be payable (if other than as provided
in Section 3.2) and the office or agency for the Securities of the
series maintained by the Issuer pursuant to Section 3.2;
(6) the right, if any, of the Issuer to redeem,
purchase or repay Securities of the series, in whole or in part, at
its option and the period or periods within which, the price or
prices (or the method by which such price or prices shall be
determined or both) at which, the form or method of payment therefor
if other than in cash and any terms and conditions upon which and the
manner in which (if different from the provisions of Article Twelve)
Securities of the series may be so redeemed, purchased or repaid, in
whole or in part, pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to
redeem, purchase or repay Securities of the series in whole or in
part pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which the price or prices (or the method by which such
price or prices shall be determined or both) at which, the form or
method of payment therefor if other than in cash and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities of
the series shall be issuable;
(9) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon acceleration of the maturity thereof;
(10) whether Securities of the series will be
issuable as Global Securities;
(11) if the Securities of such series are to be
issuable in definitive form (whether upon original issue or upon
exchange of a temporary Security of such series) only upon receipt of
certain certificates or other documents or satisfaction of other
conditions, the form and terms of such certificates, documents or
conditions;
(12) any trustees, depositaries, authenticating or
paying agents, transfer agents or registrars or any other agents with
respect to the Securities of such series;
(13) any deleted, modified or additional events of
default or remedies or any deleted, modified or additional covenants
with respect to the Securities of such series;
(14) whether the provisions of Section 10.1(C) will
be applicable to Securities of such series;
(15) any provision relating to the issuance of
Securities of such series at an original issue discount (including,
without limitation, the issue price thereof, the rate or rates at
which such original issue discount shall accrete, if any, and the
date or dates from or to which or period or periods during which such
original issue discount shall accrete at such rate or rates);
(16) if other than Dollars, the foreign currency in
which payment of the principal of, premium, if any, and interest, if
any, on the Securities of such series shall be payable;
(17) if other than ________________________________
is to act as Trustee for the Securities of such series, the name and
Corporate Trust Office of such Trustee;
(18) if the amounts of payments of principal of,
premium, if any, and interest, if any, on the Securities of such
series are to be determined with reference to an index, the manner in
which such amounts shall be determined;
(19) the terms for conversion or exchange, if any,
with respect to the Securities of such series; and
(20) any other terms of the series (which terms
shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical,
except as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above
or as set forth in any such indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by
or pursuant to such Board Resolution, such Officers' Certificate or in any
such indenture supplemental hereto.
Any such Board Resolution or Officers' Certificate referred to above
with respect to Securities of any series filed with the Trustee on or before
the initial issuance of the Securities of such series shall be incorporated
herein by reference with respect to Securities of such series and shall
thereafter be deemed to be a part of the Indenture for all purposes relating
to Securities of such series as fully as if such Board Resolution or
Officers' Certificate were set forth herein in full.
SECTION 2.4 Authentication and Delivery of Securities. The Issuer
may deliver Securities of any series executed by the Issuer to the Trustee
for authentication together with the applicable documents referred to below
in this Section 2.4, and the Trustee shall thereupon authenticate and deliver
such Securities to, or upon the order of, the Issuer (contained in the Issuer
Order referred to below in this Section 2.4) or pursuant to such procedures
acceptable to the Trustee and to such recipients as may be specified from
time to time by an Issuer Order. The maturity date, original issue date,
interest rate, if any, and any other terms of the Securities of such series
shall be determined by or pursuant to such Issuer Order and procedures. If
provided for in such procedures and agreed to by the Trustee, such Issuer
Order may authorize authentication and delivery pursuant to oral instructions
from the Issuer or its duly authorized agent, which instructions shall be
promptly confirmed in writing. In authenticating the Securities of such
series and accepting the additional responsibilities under this Indenture in
relation to such Securities, the Trustee shall be entitled to receive (in the
case of subparagraphs (2), (3) and (4) below only at or before the time of
the first request of the Issuer to the Trustee to authenticate Securities of
such series) and (subject to Section 6.1) shall be fully protected in relying
upon, unless and until such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication
and setting forth delivery instructions provided that, with respect
to Securities of a series subject to a Periodic Offering, (a) such
Issuer Order may be delivered by the Issuer to the Trustee prior to
the delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities
of such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or pursuant
to procedures acceptable to the Trustee as may be specified from time
to time by an Issuer Order, (c) the maturity date or dates, original
issue date or dates, interest rate or rates, if any, and any other
terms of Securities of such series shall be determined by an Issuer
Order or pursuant to such procedures, (d) if provided for in such
procedures, such Issuer Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Issuer
or its duly authorized agent or agents, which oral instructions shall
be promptly confirmed in writing and (e) after the original issuance
of the first Security of such series to be issued, any separate
request by the Issuer that the Trustee authenticate Securities of
such series for original issuance will be deemed to be a
certification by the Issuer that it is in compliance with all
conditions precedent provided for in this Indenture relating to the
authentication and delivery of such Securities;
(2) the Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3
by or pursuant to which the forms and terms of the Securities of such
series were established;
(3) an Officers' Certificate setting forth the form
or forms and terms of the Securities stating that the form or forms
and terms of the Securities have been established pursuant to
Sections 2.1 and 2.3 and comply with this Indenture and covering such
other matters as the Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion
of Counsel, or a letter from legal counsel addressed to the Trustee
permitting it to rely on an Opinion of Counsel, substantially to the
effect that:
(a) the form or forms of the
Securities of such series have been duly authorized
and established in conformity with the provisions of
this Indenture;
(b) in the case of an
underwritten offering, the terms of the Securities
of such series have been duly authorized and
established in conformity with the provisions of
this Indenture, and, in the case of an offering that
is not underwritten, certain terms of the Securities
of such series have been established pursuant to a
Board Resolution, an Officers' Certificate or a
supplemental indenture in accordance with this
Indenture, and when such other terms as are to be
established pursuant to procedures set forth in an
Issuer Order shall have been established, all such
terms will have been duly authorized by the Issuer
and will have been established in conformity with
the provisions of this Indenture;
(c) when the Securities of
such series have been executed by the Issuer and
authenticated by the Trustee in accordance with the
provisions of this Indenture and delivered to and
duly paid for by the purchasers thereof, they will
have been duly issued under this Indenture and will
be valid and legally binding obligations of the
Issuer, enforceable in accordance with their
respective terms, and will be entitled to the
benefits of this Indenture; and
(d) the execution and
delivery by the Issuer of, and the performance by
the Issuer of its obligations under, the Securities
of such series will not contravene any provision of
applicable law or the articles of incorporation or
bylaws of the Issuer or any agreement or other
instrument binding upon the Issuer or any of its
Subsidiaries that is material to the Issuer and its
Subsidiaries, considered as one enterprise, or, to
such counsel's knowledge after the inquiry indicated
therein, any judgment, order or decree of any
governmental agency or any court having jurisdiction
over the Issuer or any Subsidiary of the Issuer, and
no consent, approval or authorization of any
governmental body or agency is required for the
performance by the Issuer of its obligations under
the Securities, except such as are specified and
have been obtained and such as may be required by
the securities or blue sky laws of the various
states in connection with the offer and sale of the
Securities.
In addition, if the authentication and delivery relates to a new
series of Securities created by an indenture supplemental hereto, such
Opinion of Counsel shall also state that all laws and requirements with
respect to the form and execution by the Issuer of the supplemental indenture
with respect to the series of Securities have been complied with, the Issuer
has corporate power to execute and deliver any such supplemental indenture
and has taken all necessary corporate action for those purposes and any such
supplemental indenture has been executed and delivered and constitutes the
legal, valid and binding obligation of the Issuer enforceable in accordance
with its terms.
In rendering such opinions, such counsel may qualify any opinions as
to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the State of
Delaware and the federal law of the United States, upon opinions of other
counsel (copies of which shall be delivered to the Trustee), who shall be
counsel reasonably satisfactory to the Trustee, in which case the opinion
shall state that such counsel believes that both such counsel and the Trustee
are entitled so to rely. Such counsel may also state that, insofar as such
opinion involves factual matters, such counsel has relied, to the extent such
counsel deems proper, upon certificates of officers of the Issuer and its
Subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of any series under this Section 2.4 if the Trustee,
being advised by counsel, determines that such action may not lawfully be
taken by the Issuer or if the Trustee in good faith by its board of directors
or board of trustees, executive committee or a trust committee of directors
or trustees or Responsible Officers shall determine that such action would
expose the Trustee to personal liability to existing Holders or would
adversely affect the Trustee's own rights, duties or immunities under the
Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section 2.4 and the Issuer Order with respect to such
series, authenticate and deliver one or more Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series to be issued in the
form of Global Securities and not yet cancelled, (ii) shall be registered in
the name of the Depositary for such Global Security or Securities or the
nominee of such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instructions, and (iv) shall bear
a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for Securities in definitive registered form,
this Security may not be transferred except as a whole by the Depositary to
the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time
of its designation and at all times while it serves as Depositary, be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and any other applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall be signed
on behalf of the Issuer by the chairman of the Board of Directors, the
president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one
of its assistant secretaries. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the
Issuer may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Securities. Typographical
and other minor errors or defects in any such reproduction of a seal or any
such signature shall not affect the validity or enforceability of any
Security that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall
be authenticated and delivered by the Trustee or disposed of by the Issuer,
such Security nevertheless may be authenticated and delivered or disposed of
as though the person who signed such Security had not ceased to be such
officer of the Issuer; and any Security may be signed on behalf of the Issuer
by such persons as, at the actual date of the execution of such Security,
shall be the proper officers of the Issuer, although at the date of the
execution and delivery of this Indenture any such person was not such an
officer.
SECTION 2.6 Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one
of its authorized signatories, or its Authenticating Agent, shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
The execution of such certificate by the Trustee or its Authenticating Agent
upon any Security executed by the Issuer shall be conclusive evidence that
the Security so authenticated has been duly authenticated and delivered
hereunder and that the Holder is entitled to the benefits of this Indenture.
Each reference in this Indenture to authentication by the Trustee includes
authentication by an agent appointed pursuant to Section 6.14.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable in registered form
in denominations established as contemplated by Section 2.3 or, with respect
to the Securities of any series, if not so established, in denominations of
$1,000 and any integral multiple thereof. The Securities of each series
shall be numbered, lettered or otherwise distinguished in such manner or in
accordance with such plan as the officers of the Issuer executing the same
may determine with the approval of the Trustee, as evidenced by the execution
and authentication thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and
such interest, if any, shall be payable on the dates, established as
contemplated by Section 2.3.
The Person in whose name any Security of any series is registered at
the close of business on any record date applicable to a particular series
with respect to any interest payment date for such series shall be entitled
to receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the
extent the Issuer shall default in the payment of the interest due on such
interest payment date for such series, in which case such defaulted interest
shall be paid to the Persons in whose names Outstanding Securities for such
series are registered (a) at the close of business on a subsequent record
date (which shall be not less than five Business Days prior to the date of
payment of such defaulted interest) established by notice given by mail by or
on behalf of the Issuer to the Holders of Securities not less than 15 days
preceding such subsequent record date or (b) as determined by such other
procedure as is mutually acceptable to the Issuer and the Trustee. The term
"record date" as used with respect to any interest payment date (except a
date for payment of defaulted interest) for the Securities of any series
shall mean the date specified as such in the terms of the Securities of such
series established as contemplated by Section 2.3, or, if no such date is so
established, if such interest payment date is the first day of a calendar
month, the fifteenth day of the next preceding calendar month or, if such
interest payment date is the fifteenth day of a calendar month, the first day
of such calendar month, whether or not such record date is a Business Day.
SECTION 2.8 Registration, Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register or registers in which,
subject to such reasonable regulations as it may prescribe, it will provide
for the registration of Securities of each series and the registration of
transfer of Securities of such series. Each such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times
such register or registers shall be open for inspection and available for
copying by the Trustee.
Upon due presentation for registration of transfer of any Security of
any series at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities of the same series, maturity date, interest rate, if
any, and original issue date in authorized denominations for a like aggregate
principal amount.
All Securities presented for registration of transfer shall (if so
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to
the Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
At the option of the Holder thereof, Securities of any series (other
than a Global Security, except as set forth below) may be exchanged for a
Security or Securities of such series having authorized denominations and an
equal aggregate principal amount, upon surrender of such Securities to be
exchanged at the agency of the Issuer that shall be maintained for such
purpose in accordance with Section 3.2.
The Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
registration of transfer of Securities. No service charge shall be made for
any such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a transfer
of (a) any Securities of any series for a period of 15 days next preceding
the first mailing or publication of notice of redemption of Securities of
such series to be redeemed, (b) any Securities selected, called or being
called for redemption, in whole or in part, except, in the case of any
Security to be redeemed in part, the portion thereof not so to be redeemed or
(c) any Security if the Holder thereof has exercised his right, if any, to
require the Issuer to repurchase such Security in whole or in part, except
the portion of such Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a part of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor Depositary for such
series or a nominee of such successor Depositary.
If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Issuer that it is
unwilling or unable to continue as Depositary for such Securities or if at
any time the Depositary for such Securities shall no longer be eligible under
Section 2.4, the Issuer shall appoint a successor Depositary with respect to
such Securities. If a successor Depositary for such Securities is not
appointed by the Issuer within 90 days after the Issuer receives such notice
or becomes aware of such ineligibility, the Issuer's election pursuant to
Section 2.3 that such Securities be represented by one or more Global
Securities shall no longer be effective and the Issuer shall execute, and the
Trustee, upon receipt of an Issuer Order for the authentication and delivery
of definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount
of the Global Security or Securities representing such Securities in exchange
for such Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Securities.
In such event, the Issuer shall execute, and the Trustee, upon receipt of an
Issuer Order for the authentication and delivery of definitive Securities of
such series, shall authenticate and deliver, Securities of such series in
definitive registered form, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such Securities, in exchange for such Global Security
or Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part
for Securities of the same series in definitive registered form on such terms
as are acceptable to the Issuer and such Depositary. Thereupon, the Issuer
shall execute, and the Trustee shall authenticate and deliver, without
service charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
cancelled by the Trustee or an agent of the Trustee. Securities in
definitive registered form issued in exchange for a Global Security pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of
the Issuer. The Trustee or such agent shall deliver at its office such
Securities to or as directed by the Persons in whose names such Securities
are so registered.
All Securities issued upon any registration of transfer or exchange
of Securities shall be valid and legally binding obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer
or exchange.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated or defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of the Issuer, the
Trustee shall authenticate and deliver a new Security of the same series,
maturity date, interest rate, if any, and original issue date, bearing a
number or other distinguishing symbol not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Security, or in lieu
of and in substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substitute Security shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as may be required by the Trustee or the Issuer or any
such agent to indemnify and defend and to save each of the Trustee and the
Issuer and any such agent harmless and, in every case of destruction, loss or
theft, evidence to their satisfaction of the destruction, loss or theft of
such Security and of the ownership thereof and in the case of mutilation or
defacement, shall surrender the Security to the Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee or its agent) connected therewith. In case
any Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the
case of a mutilated or defaced Security), if the applicant for such payment
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as any of them may require to hold
each of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and the Trustee and any agent of
the Issuer or the Trustee evidence to the Trustee's satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights
set forth in) this Indenture equally and proportionately with any and all
other Securities of such series duly authenticated and delivered hereunder.
All Securities shall be held and owned upon the express condition that, to
the extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, destroyed, lost
or stolen Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Disposition Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or
analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee or any agent of the Trustee, shall be delivered to the Trustee or
its agent for cancellation or, if surrendered to the Trustee, shall be
cancelled by it; and no Securities shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall dispose of all cancelled Securities in accordance with its standard
procedures and shall deliver a certificate of such disposition to the
Company. If the Issuer or its agent shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee or its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable in any authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by
the execution and authentication thereof. Temporary Securities may contain
such references to any provisions of this Indenture as may be appropriate.
Every temporary Security shall be executed by the Issuer and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Securities. Without unreasonable
delay the Issuer shall execute and shall furnish definitive Securities of
such series and thereupon temporary Securities of such series may be
surrendered in exchange therefor without charge at each office or agency to
be maintained by the Issuer for that purpose pursuant to Section 3.2 and the
Trustee shall authenticate and deliver in exchange for such temporary
Securities of such series an equal aggregate principal amount of definitive
Securities of the same series having authorized denominations. Until so
exchanged, the temporary Securities of any series shall be entitled to the
same benefits under this Indenture as definitive Securities of such series,
unless otherwise established pursuant to Section 2.3.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of, premium, if any, and interest, if any, on each of the
Securities at the place, at the respective times and in the manner provided
in the Securities.
SECTION 3.2 Offices for Notices and Payments, etc. So long as any
of the Securities are Outstanding, the Issuer will maintain in each Place of
Payment, an office or agency where the Securities may be presented for
payment, an office or agency where the Securities may be presented for
registration of transfer and for exchange as provided in this Indenture, and
an office or agency where notices and demands to or upon the Issuer in
respect of the Securities or of this Indenture may be served. In case the
Issuer shall at any time fail to maintain any such office or agency, or shall
fail to give notice to the Trustee of any change in the location thereof,
presentation may be made and notice and demand may be served in respect of
the Securities or of this Indenture at the Corporate Trust Office. The
Issuer hereby initially designates the Corporate Trust Office for each such
purpose and appoints the Trustee as registrar and paying agent and as the
agent upon whom notices and demands may be served with respect to the
Securities.
SECTION 3.3 No Interest Extension. In order to prevent any
accumulation of claims for interest after maturity thereof, the Issuer will
not directly or indirectly extend or consent to the extension of the time for
the payment of any claim for interest on any of the Securities and will not
directly or indirectly be a party to or approve any such arrangement by the
purchase or funding of said claims or in any other manner; provided, however,
that this Section 3.3 shall not apply in any case where an extension shall be
made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 3.5 Provision as to Paying Agent. (a) If the Issuer shall
appoint a paying agent other than the Trustee, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such
paying agent shall agree with the Trustee, subject to the provisions of this
Section 3.5,
(1) that it will hold all sums held by it as such
paying agent for the payment of the principal of or interest, if any,
on the Securities (whether such sums have been paid to it by the
Issuer or by any other obligor on the Securities) in trust for the
benefit of the Holders of the Securities and the Trustee; and
(2) that it will give the Trustee notice of any
failure by the Issuer (or by any other obligor on the Securities) to
make any payment of the principal of, premium, if any, or interest,
if any, on the Securities when the same shall be due and payable; and
(3) that it will, at any time during the
continuance of any such failure, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by
such paying agent.
(b) If the Issuer shall act as its own paying agent, it will, on or
before each due date of the principal of or interest, if any, on the
Securities, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities a sum sufficient to pay such principal, premium, if
any, or interest, if any, so becoming due and will notify the Trustee of any
failure to take such action and of any failure by the Issuer (or by any other
obligor under the Securities) to make any payment of the principal of,
premium, if any, or interest, if any, on the Securities when the same shall
become due and payable.
(c) Anything in this Section 3.5 to the contrary notwithstanding,
the Issuer may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid
to the Trustee all sums held in trust by it, or any paying agent hereunder,
as required by this Section 3.5, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 3.5 to the contrary notwithstanding,
any agreement of the Trustee or any paying agent to hold sums in trust as
provided in this Section 3.5 is subject to Sections 10.3 and 10.4.
(e) Whenever the Issuer shall have one or more paying agents, it
will, on or before each due date of the principal of or interest, if any, on
any Securities, deposit with a paying agent a sum sufficient to pay the
principal, premium, if any, or interest, if any, so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal,
premium, if any, or interest, if any, and (unless such paying agent is the
Trustee) the Issuer will promptly notify the Trustee of its action or failure
so to act.
SECTION 3.6 Limitation on Liens. So long as any of the Securities
are Outstanding, the Issuer will not, and will not permit any Restricted
Subsidiary to, pledge, mortgage, hypothecate or grant a security interest in,
or permit any mortgage, pledge, security interest or other lien upon, any
property or assets owned by the Issuer or any Restricted Subsidiary to secure
any Indebtedness, without making effective provision whereby the Securities
then Outstanding shall (so long as such other Indebtedness shall be so
secured) be equally and ratably secured with any and all such other
Indebtedness and any other indebtedness similarly entitled to be equally and
ratably secured; provided, however, that this restriction shall not apply to
nor prevent the creation or existence of:
(a) any mortgage, pledge, security interest, lien
or encumbrance upon any property or assets created at the time of the
acquisition of such property or assets by the Issuer or any
Restricted Subsidiary or within one year after such time to secure
all or a portion of the purchase price for such property or assets;
(b) any mortgage, pledge, security interest, lien
or encumbrance upon any property or assets existing thereon at the
time of the acquisition thereof by the Issuer or any Restricted
Subsidiary (whether or not the obligations secured thereby are
assumed by the Issuer or any Subsidiary of the Issuer);
(c) any mortgage, pledge, security interest, lien
or encumbrance upon any property or assets, whenever acquired, of any
corporation or other entity that becomes a Restricted Subsidiary
after the date hereof, provided that (i) the instrument creating such
mortgage, pledge, security interest, lien or encumbrance shall be in
effect prior to the time such corporation or other entity becomes a
Restricted Subsidiary and (ii) such mortgage, pledge, security
interest, lien or encumbrance shall only apply to properties or
assets owned by such corporation or other entity at the time it
becomes a Restricted Subsidiary or thereafter acquired by it from
sources other than the Issuer or another Restricted Subsidiary;
(d) any mortgage, pledge, security interest, lien
or encumbrance in favor of the Issuer or any wholly-owned Subsidiary
of the Issuer;
(e) any mortgage, pledge, security interest, lien
or encumbrance created or assumed by the Issuer or a Restricted
Subsidiary in connection with the issuance of debt securities the
interest on which is excludable from gross income of the holder of
such security pursuant to the Internal Revenue Code of 1986, as
amended, for the purpose of financing, in whole or in part, the
acquisition or construction of property or assets to be used by the
Issuer or a Subsidiary;
(f) any extension, renewal or refunding of any
mortgage, pledge, security interest, lien or encumbrance permitted by
the foregoing subparagraphs (a) through (e) above on substantially
the same property or assets theretofore subject thereto;
(g) any mortgage, pledge, security interest, lien
or encumbrance securing any Indebtedness in an amount which, together
with all other Indebtedness secured by a mortgage, pledge, security
interest, lien or encumbrance that is not otherwise permitted by the
provisions of this Section 3.6, does not at the time of the
incurrence of the Indebtedness so secured exceed 20% of Consolidated
Net Tangible Assets;
(h) deposits or pledges to secure the payment of
workmen's compensation, unemployment insurance or other social
security benefits or obligations, or to secure the performance of
trade contracts, leases, public or statutory obligations, surety or
appeal bonds or other obligations of a like general nature incurred
in the ordinary course of business;
(i) mechanics', materialmen's, warehousemen's,
carriers' or other like liens arising in the ordinary course of
business securing obligations which are not overdue for a period
longer than 30 days or which are being contested in good faith by
appropriate proceedings;
(j) liens for taxes, assessments or other
governmental charges not yet payable or being contested in good faith
and as to which adequate reserves shall have been established in
accordance with generally accepted accounting principles;
(k) non-recourse mortgages on Income Producing
Properties securing Indebtedness;
(l) liens on assets of a Mortgage Subsidiary to
secure only a Warehouse Line of Credit provided to such Subsidiary;
(m) easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of
business; or
(n) liens in connection with capital leases or sale
leaseback transactions not securing any other indebtedness.
In case the Issuer or any Restricted Subsidiary shall propose to
pledge, mortgage, hypothecate or grant a security interest in any property or
assets owned by the Issuer or any Restricted Subsidiary to secure any
Indebtedness, other than as permitted by subdivisions (a) to (n), inclusive,
of this Section 3.6, the Issuer will prior thereto give written notice
thereof to the Trustee, and the Issuer will, or will cause such Restricted
Subsidiary to, prior to or simultaneously with such pledge, mortgage,
hypothecation or grant of security interest, by supplemental indenture
executed to the Trustee (or to the extent legally necessary to another
trustee or additional or separate trustee), in form satisfactory to the
Trustee, effectively secure (for so long as such other Indebtedness shall be
so secured) all the Securities equally and ratably with such Indebtedness and
with any other indebtedness similarly entitled to be equally and ratably
secured. Such supplemental indenture shall contain the provisions concerning
the possession, control, release and substitution of mortgaged and pledged
property and securities and other appropriate matters which are required by
the Trust Indenture Act of 1939 (as in effect at the date of execution of
such supplemental indenture) to be included in a secured indenture qualified
under the Trust Indenture Act of 1939, and may also contain such additional
and amendatory provisions permitted by the Trust Indenture Act of 1939 as the
Issuer and the Trustee shall deem advisable or appropriate or as the Trustee
shall deem necessary in connection with such pledge, mortgage, hypothecation
or grant of security interest.
For purpose of this Section 3.6, "security interest" shall include
the interest of the lessor under a lease with a term of three years or more
that should be, in accordance with generally accepted accounting principles,
recorded as a capital lease, and any such lease of property or assets not
acquired from the Issuer or any Restricted Subsidiary in contemplation of
such lease shall be treated as though the lessee had purchased such property
or assets from the lessor.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the
Securities covenant and agree that they will furnish or cause to be furnished
to the Trustee a list in such form as the Trustee may reasonably require of
the names and addresses of the Holders of the Securities of each series:
(a) semiannually and not more than 15 days after
each January 1 and July 1, and
(b) at such other times as the Trustee may request
in writing, within 15 days after receipt by the Issuer of any such
request,
provided that if and so long as the Trustee shall be the registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Securities (i) contained in the most recent list furnished to
it as provided in Section 4.1, and (ii) received by it in the capacity of
registrar or paying agent for such series, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 4.1 upon receipt of a
new list so furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to
the Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application,
and such application states that the applicants desire to communicate with
other Holders of Securities of a particular series (in which case the
applicants must all hold Securities of such series) or with Holders of all
Securities with respect to their rights under this Indenture or under such
Securities and such application is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, or
(ii) inform such applicants as to the approximate number
of Holders of Securities of such series or of all Securities, as the
case may be, whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the
provisions of subsection (a) of this Section 4.2, and as to the
approximate cost of mailing to such Securityholders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy
or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders
of Securities of such series or of all Securities, as the case may be, or
would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for
a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met, and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Securityholders
with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by receiving and holding
the same, agrees with the Issuer and the Trustee that neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Securities in accordance with the
provisions of subsection (b) of this Section 4.2, regardless of the source
from which such information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant to a request made
under such subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Issuer may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if the Issuer is not required to file information, documents or
reports pursuant to either of such Sections, then to file with the Trustee
and the Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section
13 of the Exchange Act, in respect of a debt security listed and registered
on a national securities exchange as may be prescribed from time to time in
such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Issuer with the conditions and covenants provided for in this Indenture
as may be required from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 4.4(c), such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to subsections (a) and
(b) of this Section 4.3 as may be required to be transmitted to such Holders
by rules and regulations prescribed from time to time by the Commission; and
(d) to furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his knowledge of the Issuer's
compliance with all conditions and covenants under this Indenture. For
purposes of this subsection (d), such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
SECTION 4.4 Reports by the Trustee. (a) The Trustee shall transmit
to Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act of 1939 at
the times and in the manner provided pursuant thereto. To the extent that
any such report is required by the Trust Indenture Act of 1939 with respect
to any 12 month period, such report shall cover the 12 month period ending
July 15 and shall be transmitted by the next succeeding September 15.
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by
the Trustee with each stock exchange upon which the Securities of any
applicable series are listed and also with the Commission. The Issuer agrees
to promptly notify the Trustee with respect to any series when and as the
Securities of such series become admitted to trading on any national
securities exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default", wherever used
herein with respect to Securities of any series, means any one or more of the
following events (whatever the reason for such Event of Default), unless it
is either inapplicable to a particular series or it is specifically deleted
or modified in or pursuant to the Board Resolution or supplemental indenture
establishing such series of Securities or in the form of Security, for such
series:
(a) default in the payment of the principal of or
premium, if any, of the Securities of such series as and when the
same shall become due and payable either at maturity, upon
redemption, by declaration or otherwise; or
(b) default in the payment of any installment of
interest on any of the Securities of such series as and when the same
shall become due and payable, and continuance of such default for a
period of 30 days; or
(c) default in the payment or satisfaction of any
sinking fund or other purchase obligation with respect to Securities
of such series, as and when such obligation shall become due and
payable; or
(d) failure on the part of the Issuer duly to
observe or perform any other of the covenants or agreements on the
part of the Issuer in the Securities of such series or in this
Indenture continued for a period of 90 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given by certified or registered mail to the Issuer
by the Trustee, or to the Issuer and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Securities of such
series then Outstanding; or
(e) without the consent of the Issuer a court
having jurisdiction shall enter an order for relief with respect to
the Issuer or any of its Significant Subsidiaries under any
applicable bankruptcy, insolvency or other similar law of the United
States of America, any state thereof or the District of Columbia, or
without the consent of the Issuer a court having jurisdiction shall
enter a judgment, order or decree adjudging the Issuer or any of its
Significant Subsidiaries bankrupt or insolvent, or enter an order for
relief for reorganization, arrangement, adjustment or composition of
or in respect of the Issuer or any of its Significant Subsidiaries
under any applicable bankruptcy, insolvency or other similar law of
the United States of America, any state thereof or the District of
Columbia, and the continuance of any such judgment, order or decree
is unstayed and in effect for a period of 60 consecutive days; or
(f) the Issuer or any of its Significant
Subsidiaries shall institute proceedings for entry of an order for
relief with respect to the Issuer or any of its Significant
Subsidiaries under any applicable bankruptcy, insolvency or other
similar law of the United States of America, any state thereof or the
District of Columbia, or for an adjudication of insolvency, or shall
consent to the institution of bankruptcy or insolvency proceedings
against it, or shall file a petition seeking, or seek or consent to
reorganization, arrangement, composition or relief under any
applicable bankruptcy, insolvency or other similar law of the United
States of America, any state thereof or the District of Columbia, or
shall consent to the filing of such petition or to the appointment of
a receiver, custodian, liquidator, assignee, trustee, sequestrator or
similar official of the Issuer or of substantially all of its
property, or the Issuer shall make a general assignment for the
benefit of creditors as recognized under any applicable bankruptcy,
insolvency or other similar law of the United States of America, any
state thereof or the District of Columbia; or
(g) any other Event of Default provided with
respect to the Securities of such series.
If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given
by Securityholders), may declare the principal (or, if the Securities of such
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all the Securities
of such series and the interest, if any, accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, notwithstanding anything to the
contrary contained in this Indenture or in the Securities of such series.
This provision, however, is subject to the condition that, if at any time
after the unpaid principal amount (or such specified amount) of the
Securities of such series shall have been so declared due and payable and
before any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Issuer shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest, if any, upon all of the Securities of such series
and the principal of any and all Securities of such series which shall have
become due otherwise than by acceleration (with interest on overdue
installments of interest, if any, to the extent that payment of such interest
is enforceable under applicable law and on such principal at the rate borne
by the Securities of such series to the date of such payment or deposit) and
the reasonable compensation, disbursements, expenses and advances of the
Trustee and all other amounts due the Trustee under Section 6.6, and any and
all defaults under this Indenture, other than the nonpayment of such portion
of the principal amount of and accrued interest, if any, on Securities of
such series which shall have become due by acceleration, shall have been
cured or shall have been waived in accordance with Section 5.7 or provision
deemed by the Trustee to be adequate shall have been made therefor, then and
in every such case the Holders of a majority in aggregate principal amount of
the Securities of such series then Outstanding, by written notice to the
Issuer and to the Trustee, may rescind and annul such declaration and its
consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon.
Notwithstanding the previous sentence, no waiver shall be effective against
any Holder for any Event of Default or event which with notice or lapse of
time or both would be an Event of Default with respect to any covenant or
provision which cannot be modified or amended without the consent of the
Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event.
If any Event of Default specified in Section 5.1(e) or 5.1(f) occurs
with respect to the Issuer, all unpaid principal amount (or, if the
Securities of any series then Outstanding are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of each such series) and accrued interest on all Securities of each
series then Outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act by the Trustee or any
Securityholder.
If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Issuer, the Trustee and the Securityholders shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall continue as
though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to Section 5.1
(a), (b) or (c), the Trustee shall not be charged with knowledge of any Event
of Default unless written notice thereof shall have been given to a
Responsible Officer by the Issuer, a paying agent or any Securityholder.
SECTION 5.2 Payment of Securities on Default; Suit Therefor. The
Issuer covenants that (a) if default shall be made in the payment of any
installment of interest upon any of the Securities of any series then
Outstanding as and when the same shall become due and payable, and such
default shall have continued for a period of 30 days, or (b) if default shall
be made in the payment of the principal of any of the Securities of such
series as and when the same shall have become due and payable, whether at
maturity of the Securities of such series or upon redemption or by
declaration or otherwise, then, upon demand of the Trustee, the Issuer will
pay to the Trustee, for the benefit of the Holders of the Securities, the
whole amount that then shall have become due and payable on all such
Securities of such series for principal or interest, if any, or both, as the
case may be, with interest upon the overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) upon the
overdue installments of interest, if any, at the rate borne by the Securities
of such series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel,
and any expenses or liabilities incurred by the Trustee hereunder other than
through its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at
law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or any other
obligor on the Securities of such series and collect in the manner provided
by law out of the property of the Issuer or any other obligor on the
Securities of such series, wherever situated, the moneys adjudged or decreed
to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Issuer or any other obligor on the Securities of any
series then Outstanding under any bankruptcy, insolvency or other similar law
now or hereafter in effect, or if a receiver or trustee or similar official
shall have been appointed for the property of the Issuer or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Issuer or other obligor upon the Securities of such series, or to the
creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of the Securities of such series shall
then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand pursuant
to the provisions of this Section 5.2, shall be entitled and empowered by
intervention in such proceedings or otherwise to file and prove a claim or
claims for the whole amount of principal and interest, if any, owing and
unpaid in respect of the Securities of such series, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Securityholders allowed in such judicial proceedings
relative to the Issuer or any other obligor on the Securities of such series,
its or their creditors, or its or their property, and to collect and receive
any moneys or other property payable or deliverable on any such claims, and
to distribute the same after the deduction of its charges and expenses, and
any receiver, assignee or trustee or similar official in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, if the Trustee shall consent to the making
of such payments directly to the Securityholders, to pay to the Trustee any
amount due it for compensation and expenses or otherwise pursuant to Section
6.6, including counsel fees and expenses incurred by it up to the date of
such distribution. To the extent that such payment of reasonable
compensation, expenses and counsel fees and expenses out of the estate in any
such proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit
of the Holders of the Securities of the series in respect of which such
judgment has been recovered.
SECTION 5.3 Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to Section 5.2 with respect to Securities
of any series then Outstanding shall be applied in the order following, at
the date or dates fixed by the Trustee for the distribution of such moneys,
upon presentation of the several Securities of such series, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:
FIRST: To the payment of costs and expenses of
collection and reasonable compensation to the Trustee, its agents,
attorneys and counsel, and of all other expenses and liabilities
incurred, and all advances made, by the Trustee pursuant to Section
6.6 except as a result of its negligence or bad faith;
SECOND: If the principal of the Outstanding
Securities of such series shall not have become due and be unpaid, to
the payment of interest, if any, on the Securities of such series, in
the order of the maturity of the installments of such interest, if
any, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest,
if any, at the rate borne by the Securities of such series, such
payment to be made ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding
Securities of such series shall have become due, by declaration or
otherwise, to the payment of the whole amount then owing and unpaid
upon the Securities of such series for principal and interest, if
any, with interest on the overdue principal and (to the extent that
such interest has been collected by the Trustee) upon overdue
installments of interest, if any, at the rate borne by the Securities
of such series; and in case such moneys shall be insufficient to pay
in full the whole amounts so due and unpaid upon the Securities of
such series, then to the payment of such principal and interest, if
any, without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any
other installment of interest, or of any Security over any other
Security, ratably to the aggregate of such principal and accrued and
unpaid interest; and
FOURTH: To the payment of any surplus then
remaining to the Issuer, its successors or assigns, or to whomsoever
may be lawfully entitled to receive the same.
No claim for interest which in any manner at or after maturity shall
have been transferred or pledged separate or apart from the Securities to
which it relates, or which in any manner shall have been kept alive after
maturity by an extension (otherwise than pursuant to an extension made
pursuant to a plan proposed by the Issuer to the Holders of all Securities of
any series then Outstanding), purchase, funding or otherwise by or on behalf
or with the consent or approval of the Issuer shall be entitled, in case of a
default hereunder, to any benefit of this Indenture, except after prior
payment in full of the principal of all Securities of any series then
Outstanding and of all claims for interest not so transferred, pledged, kept
alive, extended, purchased or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of any
Securities of any series then Outstanding shall have any right by virtue of
or by availing of any provision of this Indenture to institute any suit,
action or proceeding in equity or at law upon or under or with respect to
this Indenture or for the appointment of a receiver or trustee or similar
official, or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless the Holders of not
less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request to the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
any such action, suit or proceeding, it being understood and intended, and
being expressly covenanted by the Holder of every Security of such series
with every other Holder and the Trustee, that no one or more Holders of
Securities of such series shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture or of the
Securities to affect, disturb or prejudice the rights of any other Holder of
such Securities of such series, or to obtain or seek to obtain priority over
or preference as to any other such Holder, or to enforce any right under this
Indenture or the Securities, except in the manner herein provided and for the
equal, ratable and common benefit of all Holders of Securities of such
series.
Notwithstanding any other provisions in this Indenture, however, the
right of any Holder of any Security to receive payment of the principal of,
premium, if any, and interest, if any, on such Security, on or after the
respective due dates expressed in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates shall not
be impaired or affected without the consent of such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event of Default
hereunder, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any of such rights, either by suit in equity or by action at law or by
proceedings in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.6 Remedies Cumulative and Continuing. All powers and
remedies given by this Article Five to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any thereof or of any other powers and remedies available to the Trustee
or the Securityholders, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Securityholder
to exercise any right or power accruing upon any default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.4, every power and remedy given by
this Article Five or by law to the Trustee or to the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by Majority
of Securityholders. The Holders of a majority in aggregate principal amount
of the Securities of any series then Outstanding shall have the right to
direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to Securities of such series; provided, however,
that (subject to the provisions of Section 6.1) the Trustee shall have the
right to decline to follow any such direction if the Trustee shall determine
upon advice of counsel that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of directors,
its executive committee, or a trust committee of directors or Responsible
Officers or both shall determine that the action or proceeding so directed
would involve the Trustee in personal liability. The Holders of a majority
in aggregate principal amount of the Securities of any series then
Outstanding may on behalf of the Holders of all of the Securities of such
series waive any past default or Event of Default hereunder and its
consequences except a default in the payment of interest, if any, on, or the
principal of, the Securities of such series. Upon any such waiver the
Issuer, the Trustee and the Holders of the Securities of such series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this
Section 5.7, said default or Event of Default shall for all purposes of the
Securities and this Indenture be deemed to have been cured and to be not
continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within 90 days
after the occurrence of a default, with respect to Securities of any series
then Outstanding, mail to all Holders of Securities of such series, as the
names and the addresses of such Holders appear upon the Securities register,
notice of all defaults known to the Trustee with respect to such series,
unless such defaults shall have been cured before the giving of such notice
(the term "defaults" for the purpose of this Section 5.8 being hereby defined
to be the events specified in clauses (a), (b), (c), (d), (e), (f) and (g) of
Section 5.1, not including periods of grace, if any, provided for therein and
irrespective of the giving of the written notice specified in said clause (d)
but in the case of any default of the character specified in said clause (d)
no such notice to Securityholders shall be given until at least 60 days after
the giving of written notice thereof to the Issuer pursuant to said clause
(d)); provided, however, that, except in the case of default in the payment
of the principal of or interest, if any, on any of the Securities, or in the
payment or satisfaction of any sinking fund or other purchase obligation, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of
directors or Responsible Officers or both of the Trustee in good faith
determines that the withholding of such notice is in the best interests of
the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to
pay the cost of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against
any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.9 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount
of the Securities of any series then Outstanding, or to any suit instituted
by any Securityholders for the enforcement of the payment of the principal of
or interest, if any, on any Security against the Issuer on or after the due
date expressed in such Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. In case an Event of Default with respect to the
Securities of a series has occurred (which has not been cured or waived) the
Trustee shall exercise with respect to such series of Securities such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default
with respect to the Securities of any series and after the curing or
waiving of all such Events of Default with respect to such series
which may have occurred:
(i) the duties and obligations of
the Trustee with respect to the Securities of any
series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such
duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or
obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on
the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but in the case
of any such statements, certificates or opinions
which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders pursuant to Section 5.7
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if there shall be reasonable ground for believing
that the repayment of such funds or adequate indemnity against such liability
is not reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officers' Certificate or Issuer
Order (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a Board Resolution;
(c) the Trustee may consult with counsel of its selection and any
advice of such counsel promptly confirmed in writing shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture (including, without limitation, pursuant to Section 5.7), unless
such Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Securities of all series affected then Outstanding; provided that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such investigation
shall be paid by the Issuer or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder;
(h) the Trustee shall not be charged with knowledge of any default
or Event of Default with respect to a series of Securities unless either (i)
a Responsible Officer of the Trustee assigned to the Corporate Trust Office
of the Trustee (or any successor division or department of the Trustee) shall
have actual knowledge of such default or Event of Default or (ii) written
notice of such default or Event of Default shall have been given to the
Trustee by the Issuer or any other obligor on such series of Securities or by
any Holder of Securities of such series; and
(i) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture, of the
Securities or of any prospectus used to sell the Securities. The Trustee
shall not be accountable for the use or application by the Issuer of any of
the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
etc. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and, subject to Sections 6.8 and 6.13, may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer with
the same rights it would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the
extent required by mandatory provisions of law. Neither the Trustee nor any
agent of the Issuer or the Trustee shall be under any liability for interest
on any moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as shall be
agreed to in writing between the Issuer and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad
faith. The Issuer also covenants to indemnify the Trustee and each
predecessor Trustee for, and to hold it harmless against, any and all loss,
liability, damage, claim or expense, including taxes (other than taxes based
on the income of the Trustee), incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in the premises. The obligations of the
Issuer under this Section 6.6 to compensate and indemnify the Trustee and
each predecessor Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee.
Such additional indebtedness shall be a senior claim to that of the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the Holders of particular
Securities. When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1 or in connection
with Article Five hereof, the expenses (including the reasonable fees and
expenses of its counsel) and the compensation for the service in connection
therewith are intended to constitute expenses of administration under any
bankruptcy law. The provisions of this Section 6.6 shall survive the
resignation or removal of the Trustee and the termination of this Indenture.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad
faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered
or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. This
Indenture shall always have a Trustee who satisfies the requirements of
Section 310(a)(1) of the Trust Indenture Act of 1939. The Trustee shall have
a combined capital and surplus of at least $25,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply
with Section 310(b) of the Trust Indenture Act of 1939 regarding
disqualification of a trustee upon acquiring a conflicting interest.
SECTION 6.9 Persons Eligible for Appointment as Trustee; Different
Trustees for Different Series. The Trustee for each series of Securities
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or of any state or the
District of Columbia having a combined capital and surplus of at least
$25,000,000, and which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal, state
or District of Columbia authority, or a corporation or other Person permitted
to act as trustee by the Commission. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. No obligor upon the Securities or any Affiliate
of such obligor shall serve as trustee upon the Securities. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 6.9, the Trustee shall resign immediately in the manner and
with the effect specified in Section 6.10.
A different Trustee may be appointed by the Issuer for each series of
Securities prior to the issuance of such Securities. If the initial Trustee
for any series of Securities is to be a trustee other than
, the Issuer and such Trustee shall, prior to the issuance of such
Securities, execute and deliver an indenture supplemental hereto, which shall
provide for the appointment of such Trustee as Trustee for the Securities of
such series and shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to one or more or all series of
Securities by giving written notice of resignation to the Issuer. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by
written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Section 5.9, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions
of Section 6.8 with respect to any series of Securities after written
request therefor by the Issuer or by any Securityholder who has been
a bona fide Holder of a Security or Securities of such series for at
least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and shall fail to resign after
written request therefor by the Issuer or by any such Securityholder;
or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator of the Trustee or of its
property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the Board of
Directors one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions
of Article Five, any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months may on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee with respect to such series. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series then Outstanding may at any time remove the Trustee
with respect to Securities of such series and appoint a successor trustee
with respect to the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.1 of the action in that regard taken by the
Securityholders. If no successor trustee shall have been so appointed with
respect to any series and have accepted appointment within 30 days after the
delivery of such evidence of removal, the Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Section 5.9, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in
Section 6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and
obligations with respect to such series of its predecessor hereunder, with
like effect as if originally named as trustee for such series hereunder; but,
nevertheless, on the written request of the Issuer or of the successor
trustee, upon payment of its charges then unpaid, the trustee ceasing to act
shall, subject to Section 10.4, pay over to the successor trustee all moneys
at the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Issuer shall
execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and
each successor trustee with respect to the Securities of any applicable
series shall execute and deliver an indenture supplemental hereto which shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the predecessor Trustee
with respect to the Securities of any series as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor
Trustee, and shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such trustees
co-trustees of the same trust and that each such trustee shall be trustee of
a trust or trusts under separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of
such acceptance such successor trustee shall be qualified under the
provisions of Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided
in this Section 6.11, the Issuer shall give notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the Issuer
fails to give such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee (including the trust created by this
Indenture), shall be the successor of the Trustee hereunder, provided that
such corporation shall be qualified under the provisions of Section 6.8 and
eligible under the provisions of Section 6.9, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities of any series
shall have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor
Trustee and deliver such Securities so authenticated; and, in case at that
time any of the Securities of any series shall not have been authenticated,
any successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificate shall have the full force which it is
anywhere in the Securities of such series or in this Indenture provided that
the certificate of the Trustee shall have; provided, that the right to adopt
the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Issuer.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act of
1939, excluding any creditor relationship listed in Section 311(b) of the
Trust Indenture Act of 1939. A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act of 1939 to the
extent indicated therein.
SECTION 6.14 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument
in writing, appoint with the approval of the Issuer an authenticating agent
(the "Authenticating Agent") which shall be authorized to act on behalf of
the Trustee to authenticate Securities, including Securities issued upon
exchange, registration of transfer, partial redemption or pursuant to Section
2.9. Securities of each such series authenticated by such Authenticating
Agent shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee. Whenever
reference is made in this Indenture to the authentication and delivery of
Securities of any series by the Trustee or to the Trustee's Certificate of
Authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent for such series
and a Certificate of Authentication executed on behalf of the Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States
of America or of any state or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least $25,000,000 (determined as provided in Section 6.9 with
respect to the Trustee) and subject to supervision or examination by federal
or state authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
business (including the authenticating agency contemplated by this Indenture)
of any Authenticating Agent, shall continue to be the Authenticating Agent
with respect to all series of Securities for which it served as
Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the Trustee and to
the Issuer. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.14 with
respect to one or more series of Securities, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Issuer and
the Issuer shall provide notice of such appointment to all Holders of
Securities of such series in the manner and to the extent provided in Section
11.4. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. The Issuer agrees to pay to the
Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series
shall have no responsibility or liability for any action taken by it as such
at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in
person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article Seven.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following
manner:
(a) The fact and date of the execution by any
Holder of any instrument may be proved by the certificate of any
notary public or other officer of any jurisdiction authorized to take
acknowledgments of deeds or administer oaths that the person
executing such instruments acknowledged to him the execution thereof,
or by an affidavit of a witness to such execution sworn to before any
such notary or other such officer. Where such execution is by or on
behalf of any legal entity other than an individual, such certificate
or affidavit shall also constitute sufficient proof of the authority
of the person executing the same.
(b) The ownership of Securities shall be proved by
the Security register or by a certificate of the Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and, subject to the provisions of this
Indenture, interest, if any, on such Security and for all other purposes; and
neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee
shall be affected by any notice to the contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount
of Outstanding Securities of any or all series have concurred in any
direction, consent or waiver under this Indenture, Securities which are owned
by the Issuer or any other obligor on the Securities with respect to which
such determination is being made or by any Affiliate of the Issuer or any
other obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction,
consent or waiver only Securities which a Responsible Officer of the Trustee
knows are so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Issuer or any
other obligor upon the Securities or any Affiliate of the Issuer or any other
obligor on the Securities. In case of a dispute as to such right, the advice
of counsel shall be full protection in respect of any decision made by the
Trustee in accordance with such advice. Upon request of the Trustee, the
Issuer shall furnish to the Trustee promptly an Officers' Certificate listing
and identifying all Securities, if any, known by the Issuer to be owned or
held by or for the account of any of the above-described Persons; and,
subject to Sections 6.1 and 6.2, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Securities not listed therein are Outstanding for
the purpose of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have
consented to such action may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Article Seven, revoke
such action so far as concerns such Security provided that such revocation
shall not become effective until three Business Days after such filing.
Except as aforesaid, any such action taken by the Holder of any Security
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified
in this Indenture in connection with such action shall be conclusively
binding upon the Issuer, the Trustee and the Holders of all the Securities
affected by such action.
SECTION 7.6 Record Date for Consents and Waivers. The Issuer may,
but shall not be obligated to, establish a record date for the purpose of
determining the Persons entitled to (i) waive any past default with respect
to the Securities of such series in accordance with Section 5.7 of the
Indenture, (ii) consent to any supplemental indenture in accordance with
Section 8.2 of the Indenture or (iii) waive compliance with any term,
condition or provision of any covenant hereunder. If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and any
such Persons, shall be entitled to waive any such past default, consent to
any such supplemental indenture or waive compliance with any such term,
condition or provision, whether or not such Holder remains a Holder after
such record date; provided, however, that unless such waiver or consent is
obtained from the Holders, or duly designated proxies, of the requisite
principal amount of Outstanding Securities of such series prior to the date
which is the 120th day after such record date, any such waiver or consent
previously given shall automatically and, without further action by any
Holder be cancelled and of no further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of the execution thereof) for
one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge
to the Trustee as security for the Securities of one or more series
any property or assets;
(b) to evidence the succession of another to the
Issuer, or successive successions, and the assumption by the
successor Person of the covenants, agreements and obligations of the
Issuer pursuant to Article Nine;
(c) to add to the covenants of the Issuer such
further covenants, restrictions, conditions or provisions as the
Issuer and the Trustee shall consider to be for the protection of the
Holders of all or any series of Securities (and if such covenants,
restrictions, conditions or provisions are to be for the protection
of less than all series of Securities, stating that the same are
expressly being included solely for the protection of such series),
and to make the occurrence, or the occurrence and continuance, of a
default in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or
any of the several remedies provided in this Indenture as herein set
forth; provided, however, that in respect of any such additional
covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default
(which period may be shorter or longer than that allowed in the case
of other defaults) or may provide for an immediate enforcement upon
such an Event of Default or may limit the remedies available to the
Trustee upon such an Event of Default or may limit the right of the
Holders of a majority in aggregate principal amount of the Securities
of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or
supplement any provision contained herein or in any supplemental
indenture which may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture, or to
make any other provisions as the Issuer may deem necessary or
desirable, provided, however, that no such action shall materially
adversely affect the interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of
any series as permitted by Sections 2.1 and 2.3;
(f) to provide for the issuance of Securities of
any series in coupon form (including Securities registrable as to
principal only) and to provide for exchangeability of such Securities
for the Securities issued hereunder in fully registered form and to
make all appropriate changes for such purpose;
(g) to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the Trust Indenture Act of
1939, or under any similar federal statute hereafter enacted, and to
add to this Indenture such other provisions as may be expressly
permitted by the Trust Indenture Act of 1939, excluding, however, the
provisions referred to in Section 316(a)(2) of the Trust Indenture
Act of 1939 as in effect at the date as of which this instrument was
executed or any corresponding provision provided for in any similar
federal statute hereafter enacted;
(h) to evidence and provide for the acceptance of
appointment hereunder of a Trustee other than
as Trustee for a series of Securities and to add to or change
any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder
by more than one Trustee, pursuant to the requirements of Section 6.9
hereof;
(i) subject to Section 8.2 hereof, to add to or
modify the provisions hereof as may be necessary or desirable to
provide for the denomination of Securities in foreign currencies
which shall not adversely affect the interests of the Holders of the
Securities in any material respect;
(j) to modify the covenants or Events of Default of
the Issuer solely in respect of, or add new covenants or Events of
Default of the Issuer that apply solely to, Securities not
Outstanding on the date of such supplemental indenture; and
(k) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than
one trustee, pursuant to the requirements of Section 6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities then Outstanding, notwithstanding any of the provisions of Section
8.2.
SECTION 8.2 Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Article Seven) of the Holders of
not less than a majority in aggregate principal amount of the Securities then
Outstanding of any series affected by such supplemental indenture, the
Issuer, when authorized by a Board Resolution (which resolution may provide
general terms or parameters for such action and may provide that the specific
terms of such action may be determined in accordance with or pursuant to an
Issuer Order), and the Trustee may, from time to time and at any time, enter
into an indenture or indentures supplemental hereto (which shall conform to
the provisions of the Trust Indenture Act of 1939 as in force at the date of
execution thereof) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the
Holders of the Securities of such series; provided, that no such supplemental
indenture shall (a) extend the stated final maturity of the principal of any
Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest, if any, thereon (or, in the case of
an Original Issue Discount Security, reduce the rate of accretion of original
issue discount thereon), or reduce or alter the method of computation of any
amount payable on redemption, repayment or purchase by the Issuer thereof (or
the time at which any such redemption, repayment or purchase may be made), or
make the principal thereof (including any amount in respect of original issue
discount), or interest, if any, thereon payable in any coin or currency other
than that provided in the Securities or in accordance with the terms of the
Securities, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof pursuant to Section 5.1 or the amount thereof provable in
bankruptcy pursuant to Section 5.2, or impair or affect the right of any
Securityholder to institute suit for the payment thereof or, if the
Securities provide therefor, any right of repayment or purchase at the option
of the Securityholder, in each case without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security
so affected. No consent of any Holder of any Security shall be necessary
under this Section 8.2 to permit the Trustee and the Issuer to execute
supplemental indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any covenant,
Event of Default or other provision of this Indenture which has expressly
been included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of Holders of Securities of such
series, with respect to such covenant or provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Securities of any
other series.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of the Holders of the
Securities as aforesaid and other documents, if any, required by Section 7.1,
the Trustee shall join with the Issuer in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may at its discretion, but shall not be obligated to, enter into
such supplemental indenture.
It shall not be necessary for the consent of the Securityholders
under this Section 8.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Issuer (or the Trustee at the request and expense of the Issuer) shall give
notice thereof to the Holders of then Outstanding Securities of each series
affected thereby, as provided in Section 11.4. Any failure of the Issuer to
give such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer and the
Holders of Securities of each series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and shall be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, shall be entitled to receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant to this Article Eight complies
with the applicable provisions of this Indenture and that all conditions
precedent to the execution and delivery of such supplemental indenture have
been satisfied.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article Eight may bear a notation in form approved by the Trustee for such
series as to any matter provided for by such supplemental indenture or as to
any action taken by Securityholders. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Issuer, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by
the Issuer, and such Securities may be authenticated by the Trustee and
delivered in exchange for the Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER
DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms. Subject
to the provisions of Section 9.2, nothing contained in this Indenture or in
any of the Securities shall prevent any consolidation or merger of the Issuer
with or into any other Person or Persons (whether or not affiliated with the
Issuer), or successive consolidations or mergers in which the Issuer or its
successor or successors shall be a party or parties, or shall prevent any
sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Issuer to any other Person (whether or not
affiliated with the Issuer) authorized to acquire and operate the same;
provided, however, and the Issuer hereby covenants and agrees, that any such
consolidation, merger, sale, lease, exchange or other disposition shall be
upon the conditions that (a) immediately after giving effect to such
consolidation, merger, sale, lease, exchange or other disposition of the
Person (whether the Issuer or such other Person) formed by or surviving any
such consolidation or merger, or to which such sale, lease, exchange or other
disposition shall have been made, no Event of Default, and no event which
after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing; (b) the Person (if other than the
Issuer) formed by or surviving any such consolidation or merger, or to which
such sale, lease, exchange or other disposition shall have been made, shall
be a corporation or partnership organized under the laws of the United States
of America, any state thereof or the District of Columbia; and (c) the due
and punctual payment of the principal of and interest, if any, on all the
Securities, according to their tenor, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Issuer, shall be expressly assumed, by supplemental
indenture satisfactory in form to the Trustee executed and delivered to the
Trustee, by the Person (if other than the Issuer) formed by such
consolidation, or into which the Issuer shall have been merged, or by the
Person which shall have acquired or leased such property.
SECTION 9.2 Successor Corporation to be Substituted. In case of any
such consolidation or merger or any sale, conveyance or lease of all or
substantially all of the property of the Issuer and upon the assumption by
the successor Person, by supplemental indenture executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of, premium, if any, and interest, if any, on all of
the Securities and the due and punctual performance of all of the covenants
and conditions of this Indenture to be performed by the Issuer, such
successor Person shall succeed to and be substituted for the Issuer, with the
same effect as if it had been named herein as the party of the first part,
and the Issuer (including any intervening successor to the Issuer which shall
have become the obligor hereunder) shall be relieved of any further
obligation under this Indenture and the Securities; provided, however, that
in the case of a sale, lease, exchange or other disposition of the property
and assets of the Issuer (including any such intervening successor), the
Issuer (including any such intervening successor) shall continue to be liable
on its obligations under this Indenture and the Securities to the extent, but
only to the extent, of liability to pay the principal of, premium, if any,
and interest, if any, on the Securities at the time, places and rate
prescribed in this Indenture and the Securities. Such successor Person
thereupon may cause to be signed, and may issue either in its own name or in
the name of the Issuer, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such successor Person instead of the Issuer
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of the
Issuer to the Trustee for authentication, and any Securities which such
successor Person thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation or merger or any sale, lease,
exchange or other disposition of all or substantially all of the property and
assets of the Issuer, such changes in phraseology and form (but not in
substance) may be made in the Securities, thereafter to be issued, as may be
appropriate.
SECTION 9.3 Opinion of Counsel to be Given Trustee. The Trustee,
subject to Sections 6.1 and 6.2, shall receive an Officers' Certificate and
Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, lease, exchange or other disposition and any such assumption
complies with the provisions of this Article Nine.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture; Covenant
Defeasance.
(A) If at any time (a) the Issuer shall have paid or caused to be
paid the principal of, premium, if any, and interest, if any, on all the
Securities Outstanding (other than Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.9) as
and when the same shall have become due and payable, or (b) the Issuer shall
have delivered to the Trustee for cancellation all Securities theretofore
authenticated (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9); and
if, in any such case, the Issuer shall also pay or cause to be paid all other
sums payable hereunder by the Issuer (including all amounts, payable to the
Trustee pursuant to Section 6.6), then this Indenture shall cease to be of
further effect, and the Trustee, on demand of the Issuer accompanied by an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the satisfaction and discharge contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging such satisfaction and
discharging this Indenture. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred, and to
compensate the Trustee for any services thereafter reasonably and properly
rendered, by the Trustee in connection with this Indenture or the Securities.
(B) If at any time (a) the Issuer shall have paid or caused to be
paid the principal of, premium, if any, and interest, if any, on all the
Securities of any series Outstanding (other than Securities of such series
which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.9) as and when the same shall have become due
and payable, or (b) the Issuer shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated (other
than any Securities of such series which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.9), or (c) in
the case of any series of Securities with respect to which the exact amount
described in clause (ii) below can be determined at the time of making the
deposit referred to in such clause (ii), (i) all the Securities of such
series not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or by their terms are to become due and payable
within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee as funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
Securities of such series, cash in an amount (other than moneys repaid by the
Trustee or any paying agent to the Issuer in accordance with Section 10.4) or
non-callable, non-prepayable bonds, notes, bills or other similar obligations
issued or guaranteed by the United States government or any agency thereof
the full and timely payment of which are backed by the full faith and credit
of the United States ("U.S. Government Obligations"), maturing as to
principal and interest, if any, at such times and in such amounts as will
insure the availability of cash, or a combination thereof, sufficient in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
(1) the principal of, premium, if any, and interest, if any, on all
Securities of such series on each date that such principal of, premium, if
any, or interest, if any, is due and payable, and (2) any mandatory sinking
fund payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such series;
then the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such series on the date of the deposit
referred to in clause (ii) above and the provisions of this Indenture with
respect to the Securities of such series shall no longer be in effect
(except, in the case of clause (c) of this Section 10.1(B), as to (i) rights
of registration of transfer and exchange of Securities of such series, (ii)
rights of substitution of mutilated, defaced, destroyed, lost or stolen
Securities of such series, (iii) rights of Holders of Securities of such
series to receive payments of principal thereof and premium, if any, and
interest, if any, thereon upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the Holders of Securities of
such series to receive mandatory sinking fund payments thereon, if any, when
due, (iv) the rights, obligations, duties and immunities of the Trustee
hereunder, (v) the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (vi) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same.
(C) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution,
Officers' Certificate or indenture supplemental hereto provided pursuant to
Section 2.3. In addition to discharge of the Indenture pursuant to the next
preceding paragraph, in the case of any series of Securities with respect to
which the exact amount described in subparagraph (a) below can be determined
at the time of making the deposit referred to in such subparagraph (a), the
Issuer shall be deemed to have paid and discharged the entire indebtedness on
all the Securities of such a series on the 91st day after the date of the
deposit referred to in subparagraph (a) below, and the provisions of this
Indenture with respect to the Securities of such series shall no longer be in
effect (except as to (i) rights of registration of transfer and exchange of
Securities of such series, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities of such series, (iii) rights of Holders
of Securities of such series to receive payments of principal thereof,
premium, if any, and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the
Holders of Securities of such series to receive mandatory sinking fund
payments, if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, (v) the rights of the Holders of Securities of such series
as beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (vi) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same, if
(a) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such
series (i) cash in an amount, or (ii) U.S. Government Obligations,
maturing as to principal and interest, if any, at such times and in
such amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A)
the principal of, premium, if any, and interest, if any, on all
Securities of such series on each date that such principal or
interest, if any, is due and payable, and (B) any mandatory sinking
fund payments on the dates on which such payments are due and payable
in accordance with the terms of the Indenture and the Securities of
such series;
(b) such deposit will not result in a breach or
violation of, or constitute a default under, any agreement or
instrument to which the Issuer is a party or by which it is bound;
and
(c) the Issuer has delivered to the Trustee an
Opinion of Counsel based on the fact that (x) the Issuer has received
from, or there has been published by, the Internal Revenue Service a
ruling or (y), since the date hereof, there has been a change in the
applicable United States federal income tax law, in either case to
the effect that, and such opinion shall confirm that, the Holders of
the Securities of such series will not recognize income, gain or loss
for Federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to Federal income tax on
the same amount and in the same manner and at the same times, as
would have been the case if such deposit, defeasance and discharge
had not occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys and U.S. Government
Obligations deposited with the Trustee pursuant to Section 10.1 shall be held
in trust, and such moneys and all moneys from such U.S. Government
Obligations shall be applied by it to the payment, either directly or through
any paying agent (including the Issuer acting as its own paying agent), to
the Holders of the particular Securities of such series for the payment or
redemption of which such moneys and U.S. Government Obligations have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest, if any, but such moneys and U.S. Government
Obligations need not be segregated from other funds except to the extent
required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under
the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of, premium, if any, or
interest, if any, on any Security of any series and not applied but remaining
unclaimed for two years after the date upon which such principal, premium, if
any, or interest, if any, shall have become due and payable, shall, upon the
written request of the Issuer and unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Issuer by the Trustee for such series or such paying agent, and
the Holder of the Securities of such series shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed
property laws, thereafter look only to the Issuer for any payment which such
Holder may be entitled to collect, and all liability of the Trustee or any
paying agent with respect to such moneys shall thereupon cease.
SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect of
such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse under or
upon any obligation, covenant or agreement contained in this Indenture, or in
any Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer, or any partner of
the Issuer or of any successor, either directly or through the Issuer or any
successor, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Holders of Securities. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any Person, other
than the parties hereto and their successors and the Holders of the
Securities, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities. Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Issuer, or as required pursuant to the Trust
Indenture Act of 1939, may be given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein)
addressed (until another address of the Issuer is filed by the Issuer with
the Trustee) to Hovnanian Enterprises, Inc., 10 Highway 35, P.O. Box 500, Red
Bank, New Jersey 07701. Any notice, direction, request or demand by the
Issuer or any Holder of Securities to or upon the Trustee shall be deemed to
have been sufficiently given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee with the
Issuer) to , [address], [attention:
Corporate Trust Administration (Hovnanian Enterprises, Inc. [specify series
of Securities])].
Where this Indenture provides for notice to Holders of Securities,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder entitled thereto, at his last address as it appears in the Security
register. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when
such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be reasonably
satisfactory to the Trustee shall be deemed to be sufficient notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, or as required pursuant to the Trust Indenture Act of 1939, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied
with, except that in the case of any such application or demand as to which
the furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture (other
than a certificate provided pursuant to Section 4.3(d)) and delivered to the
Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
opinion as to whether or not such covenant or condition has been complied
with, and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous. Any certificate, statement or opinion of counsel may be
based, insofar as it relates to factual matters, information with respect to
which is in the possession of the Issuer, upon the certificate, statement or
opinion of or representations by an officer or officers of the Issuer, unless
such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate, statement
or opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of principal of or interest, if any, on the Securities
of any series or the date fixed for redemption, purchase or repayment of any
such Security shall not be a Business Day, then payment of interest, if any,
premium, if any, or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made
on the date of maturity or the date fixed for redemption, purchase or
repayment, and, in the case of payment, no interest shall accrue for the
period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, or is deemed applicable to this Indenture by virtue of the
provisions of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 11.8 GOVERNING LAW. THIS INDENTURE AND EACH SECURITY SHALL
BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR
ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified, as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a
whole or in part at the option of the Issuer shall be given by mailing notice
of such redemption by first class mail, postage prepaid, at least 30 days and
not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear in
the Security register. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or
not the Holder receives the notice. Failure to give notice by mail, or any
defect in the notice to the Holder of any Security of a series designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify (i) the
principal amount of each Security of such series held by such Holder to be
redeemed, (ii) the date fixed for redemption, (iii) the redemption price,
(iv) the place or places of payment, (v) the CUSIP number relating to such
Securities, (vi) that payment will be made upon presentation and surrender of
such Securities, (vii) whether such redemption is pursuant to the mandatory
or optional sinking fund, or both, if such be the case, (viii) whether
interest, if any, (or, in the case of Original Issue Discount Securities,
original issue discount) accrued to the date fixed for redemption will be
paid as specified in such notice and (ix) whether on and after said date
interest, if any, (or, in the case of Original Issue Discount Securities,
original issue discount) thereon or on the portions thereof to be redeemed
will cease to accrue. In case any Security of a series is to be redeemed in
part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date
fixed for redemption, upon surrender of such Security, a new Security or
Securities of such series in principal amount equal to the unredeemed portion
thereof will be issued.
The notice of redemption of Securities of any series to be redeemed
at the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section 12.2, the Issuer will deposit
with the Trustee or with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.5) an amount of money sufficient to redeem on the
redemption date all the Securities of such series so called for redemption at
the appropriate redemption price, together with accrued interest, if any, to
the date fixed for redemption. The Issuer will deliver to the Trustee at
least 45 days prior to the date fixed for redemption (unless a shorter notice
period shall be satisfactory to the Trustee) an Officers' Certificate stating
the aggregate principal amount of Securities to be redeemed. In case of a
redemption at the election of the Issuer prior to the expiration of any
restriction on such redemption, the Issuer shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officers' Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee, within 10 Business Days after the Issuer gives written notice to the
Trustee that such redemption is to occur, shall select, in such manner as it
shall deem appropriate and fair, Securities of such series to be redeemed.
Notice of the redemption shall be given only after such selection has been
made. Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Securities of such series or any multiple
thereof. The Trustee shall promptly notify the Issuer in writing of the
Securities of such series selected for redemption and, in the case of any
Securities of such series selected for partial redemption, the principal
amount thereof to be redeemed. For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to the redemption of
Securities of any series shall relate, in the case of any Security redeemed
or to be redeemed only in part, to the portion of the principal amount of
such Security which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as provided by this Article Twelve, the
Securities or portions of Securities specified in such notice shall become
due and payable on the date and at the place or places stated in such notice
at the applicable redemption price, together with interest, if any accrued to
the date fixed for redemption, and on and after said date (unless the Issuer
shall default in the payment of such Securities at the redemption price,
together with interest, if any, accrued to said date) interest, if any (or,
in the case of Original Issue Discount Securities, original issue discount),
on the Securities or portions of Securities so called for redemption shall
cease to accrue, and such Securities shall cease from and after the date
fixed for redemption (unless an earlier date shall be specified in a Board
Resolution, Officers' Certificate or executed supplemental indenture referred
to in Sections 2.1 and 2.3 by or pursuant to which the form and terms of the
Securities of such series were established) except as provided in Sections
6.5 and 10.4, to be entitled to any benefit or security under this Indenture,
and the Holders thereof shall have no right in respect of such Securities
except the right to receive the redemption price thereof and unpaid interest,
if any, to the date fixed for redemption. On presentation and surrender of
such Securities at a place of payment specified in said notice, said
Securities or the specified portions thereof shall be paid and redeemed by
the Issuer at the applicable redemption price, together with interest, if
any, accrued thereon to the date fixed for redemption; provided that payment
of interest, if any, becoming due on or prior to the date fixed for
redemption shall be payable to the Holders of Securities registered as such
on the relevant record date subject to the terms and provisions of Sections
2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the redemption price shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the
rate of interest or Yield to Maturity (in the case of an Original Issue
Discount Security) borne by such Security.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the
order of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, and of like tenor, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so
presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and
certificate number in an Officers' Certificate delivered to the Trustee at
least 45 days prior to the last date on which notice of redemption may be
given as being owned of record and beneficially by, and not pledged or
hypothecated by either (a) the Issuer, or (b) a Person specifically
identified in such written statement as an Affiliate of the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of the
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by
the terms of the Securities of any series is herein referred to as an
"optional sinking fund payment." The date on which a sinking fund payment is
to be made is herein referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at
its option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of
such series (not previously so credited) theretofore purchased or otherwise
acquired (except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional
sinking fund payments (not previously so credited) made pursuant to this
Section 12.5, or (c) receive credit for Securities of such series (not
previously so credited) redeemed by the Issuer through any optional
redemption provision contained in the terms of such series. Securities so
delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officers'
Certificate (a) specifying the portion of the mandatory sinking fund payment
to be satisfied by payment of cash and the portion to be satisfied by credit
of Securities of such series and the basis for such credit, (b) stating that
none of the Securities of such series to be so credited has theretofore been
so credited, (c) stating that no defaults in the payment of interest or
Events of Default with respect to such series have occurred (which have not
been waived or cured or otherwise ceased to exist) and are continuing, and
(d) stating whether or not the Issuer intends to exercise its right to make
an optional sinking fund payment with respect to such series and, if so,
specifying the amount of such optional sinking fund payment which the Issuer
intends to pay on or before the next succeeding sinking fund payment date.
Any Securities of such series to be credited and required to be delivered to
the Trustee in order for the Issuer to be entitled to credit therefor as
aforesaid which have not theretofore been delivered to the Trustee shall be
delivered for cancellation pursuant to Section 2.10 to the Trustee with such
Officers' Certificate (or reasonably promptly thereafter if acceptable to the
Trustee). Such Officers' Certificate shall be irrevocable and upon its
receipt by the Trustee the Issuer shall become unconditionally obligated to
make all the cash payments or payments therein referred to, if any, on or
before the next succeeding sinking fund payment date. Failure of the Issuer,
on or before any such 60th day, to deliver such Officers' Certificate and
Securities (subject to the parenthetical clause in the second preceding
sentence) specified in this paragraph, if any, shall not constitute a default
but shall constitute, on and as of such date, the irrevocable election of the
Issuer (i) that the mandatory sinking fund payment for such series due on the
next succeeding sinking fund payment date shall be paid entirely in cash
without the option to deliver or credit Securities of such series in respect
thereof, and (ii) that the Issuer will make no optional sinking fund payment
with respect to such series as provided in this Section 12.5.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $50,000, or a lesser sum if the Issuer shall so request with
respect to the Securities of any particular series, such cash shall be
applied on the next succeeding sinking fund payment date to the redemption of
Securities of such series at the sinking fund redemption price together with
accrued interest, if any, to the date fixed for redemption. If such amount
shall be $50,000 or less and the Issuer makes no such request, then it shall
be carried over until a sum in excess of $50,000 is available. The Trustee
shall select, in the manner provided in Section 12.2, for redemption on such
sinking fund payment date a sufficient principal amount of Securities of such
series to absorb said cash, as nearly as may be, and shall (if requested in
writing by the Issuer) inform the Issuer of the serial numbers of the
Securities of such series (or portions thereof) so selected. The Issuer, or
the Trustee, in the name and at the expense of the Issuer (if the Issuer
shall so request the Trustee in writing) shall cause notice of redemption of
the Securities of such series to be given in substantially the manner
provided in Section 12.2 (and with the effect provided in Section 12.3) for
the redemption of Securities of such series in part at the option of the
Issuer. The amount of any sinking fund payments not so applied or allocated
to the redemption of Securities of such series shall be added to the next
cash sinking fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this Section 12.5. Any
and all sinking fund moneys held on the stated maturity date of the
Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of,
and interest, if any, on, the Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all
interest, if any, accrued to the date fixed for redemption on Securities to
be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities
of a series with sinking fund moneys or give any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default with respect to such series except that, where the giving of
notice of redemption of any Securities shall theretofore have been made, the
Trustee shall redeem or cause to be redeemed such Securities, provided that
it shall have received from the Issuer a sum sufficient for such redemption.
Except as aforesaid, any moneys in the sinking fund for such series at the
time when any such default or Event of Default known to a Responsible Officer
of the Trustee shall occur, and any moneys thereafter paid into the sinking
fund, shall, during the continuance of such default or Event of Default, be
deemed to have been collected under Article Five and held for the payment of
all such Securities. In case such Event of Default shall have been waived as
provided in Section 5.7 or the default cured on or before the 60th day
preceding the sinking fund payment date in any year, such moneys shall
thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Securities.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of __________________________.
HOVNANIAN ENTERPRISES, INC.
By: ____________________________
Title:__________________________
___________________, as Trustee
By:_____________________________
Title:__________________________
Exhibit 4.4
=============================================================================
HOVNANIAN ENTERPRISES, INC.
AND
___________________________
as Trustee
Form of Senior Subordinated Indenture
Dated as of _________________________
============================================================================
CROSS REFERENCE SHEET
_______________
Provisions of Trust Indenture Act of 1939 and Indenture to be dated
as of _________________________ between Hovnanian Enterprises, Inc. and
__________________, Trustee:
Section of the Act Section of Indenture
310(a)(1), (2) and (5) . . . . . . 6.9
310(a)(3) and (4) . . . . . . . . . Inapplicable
310(b) . . . . . . . . . . . . . . 6.8 and 6.10(a), (b) and (d)
310(c) . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . 6.13
311(b) . . . . . . . . . . . . . . 6.13
311(c) . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . . . . . 4.2(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . . . . . 4.4(a)(i), (ii), (iii), (iv), (v), (vi)
and (vii)
313(a)(5) . . . . . . . . . . . . . Inapplicable
313(b)(1) . . . . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . . . . 4.4(b)
313(c) . . . . . . . . . . . . . . 4.4(c)
313(d) . . . . . . . . . . . . . . 4.4(d)
314(a) . . . . . . . . . . . . . . 4.3
314(b) . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . . . . 11.5
314(c)(3) . . . . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . 11.5
314(f) . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . . . . 6.1
315(b) . . . . . . . . . . . . . . 5.8
315(e) . . . . . . . . . . . . . . 5.9
316(a)(1) . . . . . . . . . . . . . 5.7
316(a)(2) . . . . . . . . . . . . . Not required
316(a) (last sentence) . . . . . . 7.4
316(b) . . . . . . . . . . . . . . 5.4
317(a) . . . . . . . . . . . . . . 5.2
317(b) . . . . . . . . . . . . . . 3.5(a)
318(a) . . . . . . . . . . . . . . 11.7
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 8
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . 8
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 8
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 8
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . 8
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 8
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 9
Global Security . . . . . . . . . . . . . . . . . . . . . . . . 9
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Holder of Securities . . . . . . . . . . . . . . . . . . . . . . 9
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . 9
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 10
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 10
original issue date . . . . . . . . . . . . . . . . . . . . . . 10
original issue discount . . . . . . . . . . . . . . . . . . . . 10
Original Issue Discount Security . . . . . . . . . . . . . . . . 11
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . 11
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 12
principal . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
principal amount . . . . . . . . . . . . . . . . . . . . . . . . 12
record date . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 12
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . 12
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . 12
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 12
Senior Subordinated Indebtedness . . . . . . . . . . . . . . . . 12
Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . 13
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . 13
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . 13
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . 13
U.S. Government Obligations . . . . . . . . . . . . . . . . . . 13
vice president . . . . . . . . . . . . . . . . . . . . . . . . . 13
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . 14
SECTION 2.2 Form of Trustee's Certificate of Authentication . . 14
SECTION 2.3 Amount Unlimited Issuable in Series . . . . . . . . 15
SECTION 2.4 Authentication and Delivery of Securities . . . . . 17
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . . 20
SECTION 2.6 Certificate of Authentication . . . . . . . . . . . 20
SECTION 2.7 Denomination and Date of Securities; Payments
of Interest . . . . . . . . . . . . . . . . . . . 20
SECTION 2.8 Registration, Transfer and Exchange . . . . . . . . 21
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . 23
SECTION 2.10 Cancellation of Securities; Disposition
Thereof . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . 24
SECTION 2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . 25
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . 25
SECTION 3.2 Offices for Notices and Payments, etc . . . . . . . 25
SECTION 3.3 No Interest Extension . . . . . . . . . . . . . . . 26
SECTION 3.4 Appointments to Fill Vacancies in Trustee's
Office . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.5 Provision as to Paying Agent . . . . . . . . . . . 26
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders . . . . . 27
SECTION 4.2 Preservation and Disclosure of Securityholders
Lists . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . 28
SECTION 4.4 Reports by the Trustee . . . . . . . . . . . . . . 29
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . 29
SECTION 5.2 Payment of Securities on Default; Suit Therefor . . 32
SECTION 5.3 Application of Moneys Collected by Trustee . . . . 33
SECTION 5.4 Proceedings by Securityholders . . . . . . . . . . 34
SECTION 5.5 Proceedings by Trustee . . . . . . . . . . . . . . 35
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by
Majority of Securityholders . . . . . . . . . . . 35
SECTION 5.8 Notice of Defaults . . . . . . . . . . . . . . . . 35
SECTION 5.9 Undertaking to Pay Costs . . . . . . . . . . . . . 36
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default . . . . . . . . 36
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . . 37
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application
of Proceeds Thereof . . . . . . . . . . . . . . . 38
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc . . . . . . . . . . . . . . . . 39
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . 39
SECTION 6.6 Compensation and Indemnification of Trustee
and Its Prior Claim . . . . . . . . . . . . . . . 39
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc . . . . . . . . . . . . . . . . 39
SECTION 6.8 Qualification of Trustee; Conflicting Interests . . 40
SECTION 6.9 Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series . . . . . 40
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee . . . . . . . . . . . . . . . . 40
SECTION 6.11 Acceptance of Appointment by Successor Trustee . . 42
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . . 43
SECTION 6.13 Preferential Collection of Claims Against the
Issuer . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . 43
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders . . . . 44
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities . . . . . . . . . . . . . . 45
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . . 45
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . . . 45
SECTION 7.5 Right of Revocation of Action Taken . . . . . . . . 46
SECTION 7.6 Record Date for Consents and Waivers . . . . . . . 46
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders . . . . . . . . . . . . . . . . . 46
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders . . . . . . . . . . . . . . . . . 48
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . 49
SECTION 8.4 Documents to Be Given to Trustee . . . . . . . . . 50
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures . . . . . . . . . . . . . 50
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms . . 50
SECTION 9.2 Successor Corporation to be Substituted . . . . . . 50
SECTION 9.3 Opinion of Counsel to be Given Trustee . . . . . . 51
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture . . . . . 51
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities . . . . . . . . . . . . . . 54
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . . 54
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years . . . . . . . . . . 54
SECTION 10.5 Indemnity for U . . . . . . . . . . . . . . . . . 54
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders,
Officers and Directors of Issuer Exempt
from Individual Liability . . . . . . . . . . . . 55
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities . . . . . . 55
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Holders of Securities . . . . . . . . . . . . . . 55
SECTION 11.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein . . . 56
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939 . . . . . . . . . . . 57
SECTION 11.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . 57
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . . 57
SECTION 11.10 Effect of Headings . . . . . . . . . . . . . . . 57
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . 57
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . 57
SECTION 12.3 Payment of Securities Called for Redemption . . . 59
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption . . . . 59
SECTION 12.5 Mandatory and Optional Sinking Funds . . . . . . . 59
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior Indebtedness . . 61
SECTION 13.2 Reliance on Certificate of Liquidating Agent;
Further Evidence as to Ownership of Senior
Indebtedness . . . . . . . . . . . . . . . . . . 64
SECTION 13.3 Payment Permitted If No Default . . . . . . . . . 65
SECTION 13.4 Disputes with Holders of Certain Senior
Indebtedness . . . . . . . . . . . . . . . . . . 65
SECTION 13.5 Trustee Not Charged with Knowledge of
Prohibition . . . . . . . . . . . . . . . . . . . 66
SECTION 13.6 Trustee to Effectuate Subordination . . . . . . . 66
SECTION 13.7 Rights of Trustee as Holder of Senior
Indebtedness . . . . . . . . . . . . . . . . . . 66
SECTION 13.8 Article Applicable to Paying Agents . . . . . . . 66
SECTION 13.9 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of
Senior Indebtedness . . . . . . . . . . . . . . . 67
SECTION 13.10 Trustee Not Fiduciary for Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . 67
FORM OF SENIOR SUBORDINATED INDENTURE
FORM OF SENIOR SUBORDINATED INDENTURE, dated as of ___________________
between Hovnanian Enterprises, Inc., a Delaware corporation (the
"Issuer"), and ________________________, a _________________________________,
as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issuance from time to
time of its unsecured senior subordinated debentures, notes or other
evidences of indebtedness to be issued in one or more series (the
"Securities") up to such principal amount or amounts as may from time to time
be authorized in accordance with the terms of this Indenture; and
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication,
delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been undertaken and
completed;
NOW, THEREFORE, in:
consideration of the premises and the purchases of the Securities by
the Holders (as hereinafter defined) thereof, the Issuer and the Trustee
mutually covenant and agree for the equal and proportionate benefit of the
respective Holders from time to time of the Securities as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 For all purposes of this Indenture and of any indenture
supplemental hereto the following terms shall have the respective meanings
specified in this Section 1.1 (except as otherwise expressly provided herein
or in any indenture supplemental hereto or unless the context otherwise
clearly requires). All other terms used in this Indenture that are defined
in the Trust Indenture Act of 1939, including terms defined therein by
reference to the Securities Act of 1933, as amended (the "Securities Act"),
shall have the meanings assigned to such terms in said Trust Indenture Act of
1939 and in said Securities Act as in force at the date of this Indenture
(except as otherwise expressly provided herein or in any indenture
supplemental hereto or unless the context otherwise clearly requires).
All accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted on the
date of this Indenture.
The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision. The expressions "date of this
Indenture", "date hereof", "date as of which this Indenture is dated" and
"date of execution and delivery of this Indenture" and other expressions of
similar import refer to the effective date of the original execution and
delivery of this Indenture, viz. as of ____________________.
The terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
States Code Sections 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of the
Issuer or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means one or more resolutions, certified by the
secretary or an assistant secretary of the Issuer to have been duly adopted
or consented to by the Board of Directors and to be in full force and effect,
and delivered to the Trustee.
"Business Day" means, with respect to any Security, unless otherwise
specified in a Board Resolution and an Officers Certificate with respect to a
particular series of Securities, a day that (a) in the Place of Payment (or
in any of the Places of Payment, if more than one) in which amounts are
payable, as specified in the form of such Security, and (b) in the city in
which the Corporate Trust Office is located, is not a day on which banking
institutions are authorized or required by law or regulation to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
as amended, or, if at any time after the execution and delivery of this
Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act of 1939, then the body
performing such duties on such date.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets included on the most recent consolidated balance sheet of the Issuer
and its Restricted Subsidiaries, less applicable reserves and other properly
deductible items and after deducting therefrom (a) all current liabilities
and (b) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all in accordance with
generally accepted accounting principles consistently applied.
"Corporate Trust Office" means the office of the Trustee of a series
of Securities at which the trust created by this Indenture shall, at any
particular time, be principally administered, which office is, at the date as
of which this Indenture is dated, located at [address].
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or
include each Person who is then a Depositary hereunder, and, if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with respect to the
Global Securities of such series.
"Dollars" and the sign "$" means the coin and currency of the United
States of America as at the time of payment is legal tender for the payment
of public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Global Security" means a Security evidencing all or a part of a
series of Securities issued to the Depositary for such series in accordance
with Section 2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean, in the case of any Security, the Person in whose name such
Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof.
"Indebtedness" with respect to any Person, means, without
duplication:
(a) (i) the principal of and premium, if any, and
interest, if any, on indebtedness for money borrowed of such
Person, indebtedness of such Person evidenced by bonds, notes,
debentures or similar obligations, and any guaranty by such
Person of any indebtedness for money borrowed or indebtedness
evidenced by bonds, notes, debentures or similar obligations of
any other Person, whether any such indebtedness or guaranty is
outstanding on the date of this Indenture or is thereafter
created, assumed or incurred, (ii) obligations of such Person for
the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction; (iii) the
principal of and premium, if any, and interest, if any, on
indebtedness incurred, assumed or guaranteed by such Person in
connection with the acquisition by it or any of its subsidiaries
of any other businesses, properties or other assets; (iv) lease
obligations which such Person capitalizes in accordance with
Statement of Financial Accounting Standards No. 13 promulgated by
the Financial Accounting Standards Board or such other generally
accepted accounting principles as may be from time to time in
effect; (v) any indebtedness of such Person representing the
balance deferred and unpaid of the purchase price of any property
or interest therein (except any such balance that constitutes an
accrued expense or trade payable) and any guaranty, endorsement
or other contingent obligation of such Person in respect of any
indebtedness of another that is outstanding on the date of this
Indenture or is thereafter created, assumed or incurred by such
Person; and (vi) obligations of such Person under interest rate,
commodity or currency swaps, caps, collars, options and similar
arrangements; and
(b) any amendments, modifications, refundings, renewals or
extensions of any indebtedness or obligation described as
Indebtedness in clause (a) above.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, including, for all purposes of this instrument and any
such supplement, the provisions of the Trust Indenture Act of 1939 that are
deemed to be a part of and govern this instrument and any such supplement,
respectively, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
"interest" means, when used with respect to non-interest bearing
Securities (including, without limitation, any Original Issue Discount
Security that by its terms bears interest only after maturity or upon default
in any other payment due on such Security), interest payable after maturity
(whether at stated maturity, upon acceleration or redemption or otherwise) or
after the date, if any, on which the Issuer becomes obligated to acquire a
Security, whether upon conversion, by purchase or otherwise.
"Issuer" means Hovnanian Enterprises, Inc., a Delaware corporation,
and, subject to Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer which is signed in its name by the chairman of the Board of Directors,
the president or any vice president of the Issuer, and delivered to the
Trustee.
"Officers' Certificate", when used with respect to the Issuer, means
a certificate signed by the chairman of the Board of Directors, the
president, or any vice president and by the treasurer, any assistant
treasurer, the controller, any assistant controller, the secretary or any
assistant secretary of the Issuer. Each such certificate shall include the
statements provided for in Section 11.5 if and to the extent required by the
provisions of such Section 11.5. One of the officers signing an Officers'
Certificate given pursuant to Section 4.3 shall be the principal executive,
financial or accounting officer of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by the chief
counsel of the Issuer or by such other legal counsel who may be an employee
of or counsel to the Issuer and who shall be reasonably satisfactory to the
Trustee. Each such opinion shall include the statements provided for in
Section 11.5, if and to the extent required by the provisions of such Section
11.5.
"original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly)
on registration of transfer, exchange or substitution.
"original issue discount" of any debt security, including any
Original Issue Discount Security, means the difference between the principal
amount of such debt security and the initial issue price of such debt
security (as set forth in the case of an Original Issue Discount Security on
the face of such Security).
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the maturity thereof pursuant to
Article Five.
"Outstanding" when used with reference to Securities, shall, subject
to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities (other than Securities of any series as to which the
provisions of Article Ten hereof shall not be applicable), or portions
thereof, for the payment or redemption of which moneys or U.S. Government
Obligations (as provided for in Section 10.1) in the necessary amount
shall have been deposited in trust with the Trustee or with any paying
agent (other than the Issuer) or shall have been set aside, segregated
and held in trust by the Issuer for the Holders of such Securities (if
the Issuer shall act as its own paying agent), provided that, if such
Securities, or portions thereof, are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as herein
provided, or provision satisfactory to the Trustee shall have been made
for giving such notice; and
(c) Securities which shall have been paid or in substitution for
which other Securities shall have been authenticated and delivered
pursuant to the terms of Section 2.9 (except with respect to any such
Security as to which proof satisfactory to the Trustee is presented that
such Security is held by a Person in whose hands such Security is a
legal, valid and binding obligation of the Issuer).
In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding for such purposes shall be the portion of
the principal amount thereof that would be due and payable as of the date of
such determination (as certified by the Issuer to the Trustee) upon a
declaration of acceleration of the maturity thereof pursuant to Article Five.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Issuer or its agents upon the
issuance of such Securities.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
estate, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and interest, if
any, on the Securities of such series are payable as determined in accordance
with Section 2.3.
"principal" of a debt security, including any Security, means the
amount (including, without limitation, if and to the extent applicable, any
premium and, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect
to such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, if any, upon any redemption
at the option of the Issuer, upon any purchase or exchange at the option of
the Issuer or the holder of such debt security and upon any acceleration of
the maturity of such debt security).
"principal amount" of a debt security, including any Security, means
the principal amount as set forth on the face of such debt security.
"record date" shall have the meaning set forth in Section 2.7.
"Responsible Officer", when used with respect to the Trustee of a
series of Securities, means any officer of the Trustee with direct
responsibility for the administration of the trust created by this Indenture.
"Restricted Subsidiary" means (a) any Subsidiary of the Issuer other
than an Unrestricted Subsidiary, and (b) any Subsidiary of the Issuer which
was an Unrestricted Subsidiary but which, subsequent to the date hereof, is
designated by the Issuer (by Board Resolution) to be a Restricted Subsidiary;
provided, however, that the Issuer may not designate any such Subsidiary to
be a Restricted Subsidiary if the Issuer would thereby breach any covenant or
agreement herein contained (on the assumptions that any outstanding
Indebtedness of such Subsidiary was incurred at the time of such
designation).
"Securities Act" shall have the meaning set forth in Section 1.1.
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture or, as the case may be, Securities that have been
authenticated and delivered pursuant to this Indenture.
"Senior Indebtedness" means Indebtedness of the Issuer outstanding at
any time (other than the Indebtedness evidenced by the Securities of any
series) except (a) any Indebtedness as to which, by the terms of the
instrument creating or evidencing such Indebtedness, it is provided that such
Indebtedness is not senior or prior in right of payment to the Securities or
is pari passu or subordinate by its terms in right of payment to the
Securities, (b) renewals, extensions and modifications of any such
Indebtedness, (c) any Indebtedness of the Issuer to a wholly-owned Subsidiary
of the Issuer, (d) interest accruing after the filing of a petition
initiating any proceeding referred to in Sections 5.1(e) and 5.1(f) unless
such interest is an allowed claim enforceable against the Issuer in a
proceeding under federal or state bankruptcy laws and (e) trade payables.
"Senior Subordinated Indebtedness" means the Securities and any other
Indebtedness of the Issuer that ranks pari passu with the Securities. Any
Indebtedness of the Issuer that is subordinate or junior by its terms in
right of payment to any other Indebtedness of the Issuer shall be subordinate
to Senior Subordinated Indebtedness unless the instrument creating or
evidencing the same or pursuant to which the same is outstanding specifically
provides that such Indebtedness (i) is to rank pari passu with other Senior
Subordinated Indebtedness and (ii) is not subordinated by its terms to any
Indebtedness of the Issuer which is not Senior Indebtedness.
"Subordinated Indebtedness" means the Securities, any other Senior
Subordinated Indebtedness and any other Indebtedness that is subordinate or
junior in right of payment to Senior Indebtedness.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Issuer within the meaning of Rule 1.02(w) of Regulation S-
K promulgated by the Commission as in effect on the date of this Indenture.
"Subsidiary" of any specified Person means any corporation of which
such Person, or such Person and one or more Subsidiaries of such Person, or
any one or more Subsidiaries of such Person, directly or indirectly own
voting securities entitling any one or more of such Persons and its
Subsidiaries to elect a majority of the directors, either at all times or, so
long as there is no default or contingency which permits the holders of any
other class or classes of securities to vote for the election of one or more
directors.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which
this Indenture is originally executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each
Person who is then a trustee hereunder and, if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of such series.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Issuer
acquired or organized after the date hereof, provided, however, that such
Subsidiary of the Issuer shall not be a successor, directly or indirectly, to
any Restricted Subsidiary, and (b) any Subsidiary of the Issuer substantially
all the assets of which consist of stock or other securities of a Subsidiary
or Subsidiaries of the Issuer of the character described in clause (a) of
this paragraph, unless and until such Subsidiary shall have been designated
to be a Restricted Subsidiary pursuant to clause (b) of the definition of
"Restricted Subsidiary".
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(B).
"vice president," when used with respect to the Issuer or the
Trustee, means any vice president, regardless of whether designated by a
number or a word or words added before or after the title "vice president."
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series,
and calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall be
substantially in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as set forth in
a Board Resolution or, to the extent established pursuant to rather than set
forth in a Board Resolution, an Officers' Certificate detailing such
establishment) or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have
imprinted or otherwise reproduced thereon such legend or legends or
endorsements, not inconsistent with the provisions of this Indenture, as may
be required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be
substantially as follows:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
_______________________, as Trustee
By_________________________________
Authorized Signatory
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Securities of such series shall
bear, in addition to the Trustee's certificate of authentication, an
alternate Certificate of Authentication which shall be substantially as
follows:
This is one of the Securities of the series designated herein referred to
in the within mentioned Indenture.
_________________________, as Trustee
By___________________________________
as Authenticating Agent
By _________________________________
Authorized Signatory
SECTION 2.3 Amount Unlimited Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series and the Securities
of each such series shall rank equally and pari passu with the Securities of
each other series, but all Securities issued hereunder shall be subordinate
and junior in right of payment, to the extent and in the manner set forth in
Article Thirteen, to all Senior Indebtedness of the Issuer. There shall be
established in or pursuant to one or more Board Resolutions (and, to the
extent established pursuant to rather than set forth in a Board Resolution,
in an Officers' Certificate detailing such establishment) or established in
one or more indentures supplemental hereto, prior to the initial issuance of
Securities of any series:
(1) the designation of the Securities of the series, which shall
distinguish the Securities of such series from the Securities of all
other series;
(2) any limit upon the aggregate principal amount of the Securities
of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5 or
12.3);
(3) the date or dates on which the principal of the Securities of
the series is payable;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which any such interest
shall accrue, on which any such interest shall be payable and on which a
record shall be taken for the determination of Holders to whom any such
interest is payable or the method by which such rate or rates or date or
dates shall be determined or both;
(5) the place or places where and the manner in which the principal
of, premium, if any, and interest, if any, on Securities of the series
shall be payable (if other than as provided in Section 3.2) and the
office or agency for the Securities of the series maintained by the
Issuer pursuant to Section 3.2;
(6) the right, if any, of the Issuer to redeem, purchase or repay
Securities of the series, in whole or in part, at its option and the
period or periods within which, the price or prices (or the method by
which such price or prices shall be determined or both) at which, the
form or method of payment therefor if other than in cash and any terms
and conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series may be so
redeemed, purchased or repaid, in whole or in part pursuant to any
sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series in whole or in part pursuant to any
mandatory redemption, sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which the
price or prices (or the method by which such price or prices shall be
determined or both) at which, the form or method of payment therefor if
other than in cash and any terms and conditions upon which and the manner
in which (if different from the provisions of Article Twelve) Securities
of the series shall be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
acceleration of the maturity thereof;
(10) whether Securities of the series will be issuable as Global
Securities;
(11) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, the
form and terms of such certificates, documents or conditions;
(12) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the
Securities of such series;
(13) any deleted, modified or additional events of default or
remedies or any deleted, modified or additional covenants with respect to
the Securities of such series;
(14) whether the provisions of Section 10.1(C) will be applicable to
Securities of such series;
(15) any provision relating to the issuance of Securities of such
series at an original issue discount (including, without limitation, the
issue price thereof, the rate or rates at which such original issue
discount shall accrete, if any, and the date or dates from or to which or
period or periods during which such original issue discount shall accrete
at such rate or rates);
(16) if other than Dollars, the foreign currency in which payment of
the principal of, premium, if any, and interest, if any, on the
Securities of such series shall be payable;
(17) if other than ____________________________ is to act as Trustee
for the Securities of such series, the name and Corporate Trust Office of
such Trustee;
(18) if the amounts of payments of principal of, premium, if any,
and interest, if any, on the Securities of such series are to be
determined with reference to an index, the manner in which such amounts
shall be determined;
(19) the terms for conversion or exchange, if any, with respect to
the Securities of such series; and
(20) any other terms of the series.
All Securities of any one series shall be substantially identical,
except as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above
or as set forth in any such indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by
or pursuant to such Board Resolution, such Officers' Certificate or in any
such indenture supplemental hereto.
Any such Board Resolution or Officers' Certificate referred to above
with respect to Securities of any series filed with the Trustee on or before
the initial issuance of the Securities of such series shall be incorporated
herein by reference with respect to Securities of such series and shall
thereafter be deemed to be a part of the Indenture for all purposes relating
to Securities of such series as fully as if such Board Resolution or
Officers' Certificate were set forth herein in full.
SECTION 2.4 Authentication and Delivery of Securities. The Issuer
may deliver Securities of any series executed by the Issuer to the Trustee
for authentication together with the applicable documents referred to below
in this Section 2.4, and the Trustee shall thereupon authenticate and deliver
such Securities to, or upon the order of the Issuer (contained in the Issuer
Order referred to below in this Section 2.4) or pursuant to such procedures
acceptable to the Trustee and to such recipients as may be specified from
time to time by an Issuer Order. The maturity date, original issue date,
interest rate, if any, and any other terms of the Securities of such series
shall be determined by or pursuant to such Issuer Order and procedures. If
provided for in such procedures and agreed to by the Trustee, such Issuer
Order may authorize authentication and delivery pursuant to oral instructions
from the Issuer or its duly authorized agent, which instructions shall be
promptly confirmed in writing. In authenticating the Securities of such
series and accepting the additional responsibilities under this Indenture in
relation to such Securities, the Trustee shall be entitled to receive (in the
case of subparagraphs (2), (3) and (4) below only at or before the time of
the first request of the Issuer to the Trustee to authenticate Securities of
such series) and (subject to Section 6.1) shall be fully protected in relying
upon, unless and until such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and setting forth
delivery instructions provided that, with respect to Securities of a
series subject to a Periodic Offering, (a) such Issuer Order may be
delivered by the Issuer to the Trustee prior to the delivery to the
Trustee of such Securities for authentication and delivery, (b) the
Trustee shall authenticate and deliver Securities of such series for
original issue from time to time, in an aggregate principal amount not
exceeding the aggregate principal amount established for such series,
pursuant to an Issuer Order or pursuant to procedures acceptable to the
Trustee as may be specified from time to time by an Issuer Order, (c) the
maturity date or dates, original issue date or dates, interest rate or
rates, if any, and any other terms of Securities of such series shall be
determined by an Issuer Order or pursuant to such procedures, (d) if
provided for in such procedures, such Issuer Order may authorize
authentication and delivery pursuant to oral or electronic instructions
from the Issuer or its duly authorized agent or agents, which oral
instructions shall be promptly confirmed in writing and (e) after the
original issuance of the first Security of such series to be issued, any
separate request by the Issuer that the Trustee authenticate Securities
of such series for original issuance will be deemed to be a certification
by the Issuer that it is in compliance with all conditions precedent
provided for in this Indenture relating to the authentication and
delivery of such Securities;
(2) the Board Resolution, Officers' Certificate or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant
to which the forms and terms of the Securities of such series were
established;
(3) an Officers' Certificate setting forth the form or forms and
terms of the Securities stating that the form or forms and terms of the
Securities have been established pursuant to Sections 2.1 and 2.3 and
comply with this Indenture and covering such other matters as the Trustee
may reasonably request; and
(4) at the option of the Issuers, either an Opinion of Counsel, or a
letter from legal counsel addressed to the Trustee permitting it to rely
on an Opinion of Counsel, substantially to the effect that:
(a) the form or forms of the Securities of such series have been
duly authorized and established in conformity with the provisions of
this Indenture;
(b) in the case of an underwritten offering, the terms of the
Securities of such series have been duly authorized and established
in conformity with the provisions of this Indenture, and, in the case
of an offering that is not underwritten, certain terms of the
Securities of such series have been established pursuant to a Board
Resolution, an Officers' Certificate or a supplemental indenture in
accordance with this Indenture, and when such other terms as are to
be established pursuant to procedures set forth in an Issuer Order
shall have been established, all such terms will have been duly
authorized by the Issuer and will have been established in conformity
with the provisions of this Indenture;
(c) when the Securities of such series have been executed by the
Issuer and the Securities of such series have been authenticated by
the Trustee in accordance with the provisions of this Indenture and
delivered to and duly paid for by the purchasers thereof, they will
have been duly issued under this Indenture and will be valid and
legally binding obligations of the Issuer, enforceable in accordance
with their respective terms, and will be entitled to the benefits of
this Indenture; and
(d) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, the Securities of
such series will not contravene any provision of applicable law or
the articles of incorporation or bylaws of the Issuer or any
agreement or other instrument binding upon the Issuer or any of its
Subsidiaries that is material to the Issuer and its Subsidiaries,
considered as one enterprise, or, to such counsel's knowledge after
the inquiry indicated therein (which shall be reasonable), any
judgment, order or decree of any governmental agency or any court
having jurisdiction over the Issuer or any Subsidiary of the Issuer,
and no consent, approval or authorization of any governmental body or
agency is required for the performance by the Issuer of its
obligations under the Securities, except such as are specified and
have been obtained and such as may be required by the securities or
blue sky laws of the various states in connection with the offer and
sale of the Securities.
In addition, if the authentication and delivery relates to a new
series of Securities created by an indenture supplemental hereto, such
Opinion of Counsel shall also state that all laws and requirements with
respect to the form and execution by the Issuer of the supplemental indenture
with respect to the series of Securities have been complied with, the Issuer
has corporate power to execute and deliver any such supplemental indenture
and has taken all necessary corporate action for those purposes and any such
supplemental indenture has been executed and delivered and constitutes the
legal, valid and binding obligation of the Issuer enforceable in accordance
with its terms.
In rendering such opinions, such counsel may qualify any opinions as
to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the State of
Delaware and the federal law of the United States, upon opinions of other
counsel (copies of which shall be delivered to the Trustee), who shall be
counsel reasonably satisfactory to the Trustee, in which case the opinion
shall state that such counsel believes that both such counsel and the Trustee
are entitled so to rely. Such counsel may also state that, insofar as such
opinion involves factual matters, such counsel has relied, to the extent such
counsel deems proper, upon certificates of officers of the Issuer and its
Subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of any series under this Section 2.4 if the Trustee,
being advised by counsel, determines that such action may not lawfully be
taken by the Issuer, or if the Trustee in good faith by its board of
directors or board of trustees, executive committee or a trust committee of
directors or trustees or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing Holders or
would adversely affect the Trustee's own rights, duties or immunities under
the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section 2.4 and the Issuer Order with respect to such
series, authenticate and deliver one or more Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series to be issued in the
form of Global Securities and not yet cancelled, (ii) shall be registered in
the name of the Depositary for such Global Security or Securities or the
nominee of such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instructions, and (iv) shall bear
a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for Securities in definitive registered form,
this Security may not be transferred except as a whole by the Depositary to
the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time
of its designation and at all times while it serves as Depositary, be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and any other applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall be signed
on behalf of the Issuer by the chairman of the Board of Directors, the
president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one
of its assistant secretaries. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the
Issuer may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Securities. Typographical
and other minor errors or defects in any such reproduction of a seal or any
such signature shall not affect the validity or enforceability of any
Security that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall
be authenticated and delivered by the Trustee or disposed of by the Issuer,
such Security nevertheless may be authenticated and delivered or disposed of
as though the person who signed such Security had not ceased to be such
officer of the Issuer; and any Security may be signed on behalf of the Issuer
by such persons as, at the actual date of the execution of such Security,
shall be the proper officers of the Issuer, although at the date of the
execution and delivery of this Indenture any such person was not such an
officer.
SECTION 2.6 Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one
of its authorized signatories, or its Authenticating Agent, shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
The execution of such certificate by the Trustee or its Authenticating Agent
upon any Security executed by the Issuer shall be conclusive evidence that
the Security so authenticated has been duly authenticated and delivered
hereunder and that the Holder is entitled to the benefits of this Indenture.
Each reference in this Indenture to authentication by the Trustee includes
authentication by an agent appointed pursuant to Section 6.14.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable in registered form
in denominations established as contemplated by Section 2.3 or, with respect
to the Securities of any series, if not so established, in denominations of
$1,000 and any integral multiple thereof. The Securities of each series
shall be numbered, lettered or otherwise distinguished in such manner or in
accordance with such plan as the officers of the Issuer executing the same
may determine with the approval of the Trustee, as evidenced by the execution
and authentication thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and
such interest, if any, shall be payable on the dates, established as
contemplated by Section 2.3.
The Person in whose name any Security of any series is registered at
the close of business on any record date applicable to a particular series
with respect to any interest payment date for such series shall be entitled
to receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the
extent the Issuer shall default in the payment of the interest due on such
interest payment date for such series, in which case such defaulted interest
shall be paid to the Persons in whose names Outstanding Securities for such
series are registered (a) at the close of business on a subsequent record
date (which shall be not less than five Business Days prior to the date of
payment of such defaulted interest) established by notice given by mail by or
on behalf of the Issuer to the Holders of Securities not less than 15 days
preceding such subsequent record date or (b) as determined by such other
procedure as is mutually acceptable to the Issuer and the Trustee. The term
"record date" as used with respect to any interest payment date (except a
date for payment of defaulted interest) for the Securities of any series
shall mean the date specified as such in the terms of the Securities of such
series established as contemplated by Section 2.3, or, if no such date is so
established, if such interest payment date is the first day of a calendar
month, the fifteenth day of the next preceding calendar month or, if such
interest payment date is the fifteenth day of a calendar month, the first day
of such calendar month, whether or not such record date is a Business Day.
SECTION 2.8 Registration, Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register or registers in which,
subject to such reasonable regulations as it may prescribe, it will provide
for the registration of Securities of each series and the registration of
transfer of Securities of such series. Each such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times
such register or registers shall be open for inspection and available for
copying by the Trustee.
Upon due presentation for registration of transfer of any Security of
any series at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities of the same series, maturity date, interest rate, if
any, and original issue date in authorized denominations for a like aggregate
principal amount.
All Securities presented for registration of transfer shall (if so
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to
the Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
At the option of the Holder thereof, Securities of any series (other
than a Global Security, except as set forth below) may be exchanged for a
Security or Securities of such series having authorized denominations and an
equal aggregate principal amount, upon surrender of such Securities to be
exchanged at the agency of the Issuer that shall be maintained for such
purpose in accordance with Section 3.2.
The Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
registration of transfer of Securities. No service charge shall be made for
any such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a transfer
of (a) any Securities of any series for a period of 15 days next preceding
the first mailing or publication of notice of redemption of Securities of
such series to be redeemed, (b) any Securities selected, called or being
called for redemption, in whole or in part, except, in the case of any
Security to be redeemed in part, the portion thereof not so to be redeemed or
(c) any Security if the Holder thereof has exercised his right, if any, to
require the Issuer to repurchase such Security in whole or in part, except
the portion of such Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a part of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor Depositary for such
series or a nominee of such successor Depositary.
If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Issuer that it is
unwilling or unable to continue as Depositary for such Securities or if at
any time the Depositary for such Securities shall no longer be eligible under
Section 2.4, the Issuer shall appoint a successor Depositary with respect to
such Securities. If a successor Depositary for such Securities is not
appointed by the Issuer within 90 days after the Issuer receives such notice
or becomes aware of such ineligibility, the Issuer's election pursuant to
Section 2.3 that such Securities be represented by one or more Global
Securities shall no longer be effective and the Issuer shall execute, and the
Trustee, upon receipt of an Issuer Order for the authentication and delivery
of definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount
of the Global Security or Securities representing such Securities in exchange
for such Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Securities.
In such event the Issuer shall execute, and the Trustee, upon receipt of an
Issuer Order for the authentication and delivery of definitive Securities of
such series, shall authenticate and deliver, Securities of such series in
definitive registered form, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such Securities, in exchange for such Global Security
or Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part
for Securities of the same series in definitive registered form on such terms
as are acceptable to the Issuer and such Depositary. Thereupon, the Issuer
shall execute, and the Trustee shall authenticate and deliver, without
service charge,
(i) to the Person specified by such Depositary, a new Security or
Securities of the same series, of any authorized denominations as
requested by such Person, in an aggregate principal amount equal to and
in exchange for such Person's beneficial interest in the Global Security;
and
(ii) to such Depositary a new Global Security in a denomination
equal to the difference, if any, between the principal amount of the
surrendered Global Security and the aggregate principal amount of
Securities authenticated and delivered pursuant to clause (i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
cancelled by the Trustee or an agent of the Trustee. Securities in
definitive registered form issued in exchange for a Global Security pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of
the Issuer. The Trustee or such agent shall deliver at its office such
Securities to or as directed by the Persons in whose names such Securities
are so registered.
All Securities issued upon any registration of transfer or exchange
of Securities shall be valid and legally binding obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer
or exchange.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver a new Security of the same
series, maturity date, interest rate, if any, and original issue date,
bearing a number or other distinguishing symbol not contemporaneously
outstanding, in exchange and substitution for the mutilated or defaced
Security, or in lieu of and in substitution for the Security so destroyed,
lost or stolen. In every case the applicant for a substitute Security shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the
Trustee such security or indemnity as may be required by the Trustee or the
Issuer or any such agent to indemnify and defend and to save each of the
Trustee and the Issuer and any such agent harmless and, in every case of
destruction, loss or theft, evidence to their satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof and
in the case of mutilation or defacement, shall surrender the Security to the
Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee or its agent) connected therewith. In case
any Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the
case of a mutilated or defaced Security), if the applicant for such payment
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as any of them may require to hold
each of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and the Trustee and any agent of
the Issuer or the Trustee evidence to the Trustee's satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights
set forth in) this Indenture equally and proportionately with any and all
other Securities of such series duly authenticated and delivered hereunder.
All Securities shall be held and owned upon the express condition that, to
the extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, destroyed, lost
or stolen Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Disposition Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or
analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee or any agent of the Trustee, shall be delivered to the Trustee or
its agent for cancellation or, if surrendered to the Trustee, shall be
cancelled by it; and no Securities shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall dispose of all cancelled Securities in accordance with its standard
procedures and shall deliver a certificate of such disposition to the
Company. If the Issuer or its agent shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee or its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable in any authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by
the execution and authentication thereof. Temporary Securities may contain
such references to any provisions of this Indenture as may be appropriate.
Every temporary Security shall be executed by the Issuer and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Securities. Without unreasonable
delay the Issuer shall execute and shall furnish definitive Securities of
such series and thereupon temporary Securities of such series may be
surrendered in exchange therefor without charge at each office or agency to
be maintained by the Issuer for that purpose pursuant to Section 3.2 and the
Trustee shall authenticate and deliver in exchange for such temporary
Securities of such series an equal aggregate principal amount of definitive
Securities of the same series having authorized denominations. Until so
exchanged, the temporary Securities of any series shall be entitled to the
same benefits under this Indenture as definitive Securities of such series,
unless otherwise established pursuant to Section 2.3.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of, premium, if any, and interest, if any, on each of the
Securities at the place, at the respective times and in the manner provided
in the Securities.
SECTION 3.2 Offices for Notices and Payments, etc. So long as any
of the Securities are Outstanding, the Issuer will maintain in each Place of
Payment, an office or agency where the Securities may be presented for
payment, an office or agency where the Securities may be presented for
registration of transfer and for exchange as provided in this Indenture, and
an office or agency where notices and demands to or upon the Issuer in
respect of the Securities or of this Indenture may be served. In case the
Issuer shall at any time fail to maintain any such office or agency, or shall
fail to give notice to the Trustee of any change in the location thereof,
presentation may be made and notice and demand may be served in respect of
the Securities or of this Indenture at the Corporate Trust Office. The
Issuer hereby initially designates the Corporate Trust Office for each such
purpose and appoints the Trustee as registrar and paying agent and as the
agent upon whom notices and demands may be served with respect to the
Securities.
SECTION 3.3 No Interest Extension. In order to prevent any
accumulation of claims for interest after maturity thereof, the Issuer will
not directly or indirectly extend or consent to the extension of the time for
the payment of any claim for interest on any of the Securities and will not
directly or indirectly be a party to or approve any such arrangement by the
purchase or funding of said claims or in any other manner; provided, however,
that this Section 3.3 shall not apply in any case where an extension shall be
made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 3.5 Provision as to Paying Agent. (a) If the Issuer shall
appoint a paying agent other than the Trustee, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such
paying agent shall agree with the Trustee, subject to the provisions of this
Section 3.5,
(1) that it will hold all sums held by it as such paying agent for
the payment of the principal of or interest, if any, on the Securities
(whether such sums have been paid to it by the Issuer or by any other
obligor on the Securities) in trust for the benefit of the Holders of the
Securities and the Trustee; and
(2) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities) to make any payment of
the principal of, premium, if any, or interest, if any, on the Securities
when the same shall be due and payable; and
(3) that it will, at any time during the continuance of any such
failure, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent.
(b) If the Issuer shall act as its own paying agent, it will, on or
before each due date of the principal of or interest, if any, on the
Securities, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities a sum sufficient to pay such principal, premium, if
any, or interest, if any, so becoming due and will notify the Trustee of any
failure to take such action and of any failure by the Issuer (or by any other
obligor under the Securities) to make any payment of the principal of,
premium, if any, or interest, if any, on the Securities when the same shall
become due and payable.
(c) Anything in this Section 3.5 to the contrary notwithstanding,
the Issuer may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid
to the Trustee all sums held in trust by it, or any paying agent hereunder,
as required by this Section 3.5, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 3.5 to the contrary notwithstanding,
any agreement of the Trustee or any paying agent to hold sums in trust as
provided in this Section 3.5 is subject to Sections 10.3 and 10.4.
(e) Whenever the Issuer shall have one or more paying agents, it
will, on or before each due date of the principal of or interest, if any, on
any Securities, deposit with a paying agent a sum sufficient to pay the
principal, premium, if any, or interest, if any, so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal,
premium, if any, or interest, if any, and (unless such paying agent is the
Trustee) the Issuer will promptly notify the Trustee of its action or failure
so to act.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the
Securities covenant and agree that they will furnish or cause to be furnished
to the Trustee a list in such form as the Trustee may reasonably require of
the names and addresses of the Holders of the Securities of each series:
(a) semiannually and not more than 15 days after each January 1 and
July 1, and
(b) at such other times as the Trustee may request in writing,
within 15 days after receipt by the Issuer of any such request,
provided that if and so long as the Trustee shall be the registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Securities (i) contained in the most recent list furnished to
it as provided in Section 4.1, and (ii) received by it in the capacity of
registrar or paying agent for such series, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 4.1 upon receipt of a
new list so furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to
the Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application,
and such application states that the applicants desire to communicate with
other Holders of Securities of a particular series (in which case the
applicants must all hold Securities of such series) or with Holders of all
Securities with respect to their rights under this Indenture or under such
Securities and such application is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, or
(ii) inform such applicants as to the approximate number of
Holders of Securities of such series or of all Securities, as the
case may be, whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the
provisions of subsection (a) of this Section 4.2, and as to the
approximate cost of mailing to such Securityholders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy
or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders
of Securities of such series or of all Securities, as the case may be, or
would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for
a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met, and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Securityholders
with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by receiving and holding
the same, agrees with the Issuer and the Trustee that neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Securities in accordance with the
provisions of subsection (b) of this Section 4.2, regardless of the source
from which such information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant to a request made
under such subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe), if any, which the Issuer may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Issuer is not required to file information,
documents or reports pursuant to either of such Sections, then to file with
the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a debt security listed and
registered on a national securities exchange as may be prescribed from time
to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Issuer with the conditions and covenants provided for in this Indenture
as may be required from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 4.4(c), such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to subsections (a) and
(b) of this Section 4.3 as may be required to be transmitted to such Holders
by rules and regulations prescribed from time to time by the Commission; and
(d) furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his knowledge of the Issuer's
compliance with all conditions and covenants under this Indenture. For
purposes of this subsection (d), such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
SECTION 4.4 Reports by the Trustee. (a) The Trustee shall transmit
to Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act of 1939 at
the times and in the manner provided pursuant thereto. To the extent that
any such report is required by the Trust Indenture Act of 1939 with respect
to any 12 month period, such report shall cover the 12 month period ending
July 15 and shall be transmitted by the next succeeding September 15.
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by
the Trustee with each stock exchange upon which the Securities of any
applicable series are listed and also with the Commission. The Issuer agrees
to promptly notify the Trustee with respect to any series when and as the
Securities of such series become admitted to trading on any national
securities exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default", wherever used
herein with respect to Securities of any series, means any one or more of the
following events (whatever the reason for such Event of Default and whether
it shall be occasioned by the provisions of Article Thirteen or otherwise),
unless it is either inapplicable to a particular series or it is specifically
deleted or modified in or pursuant to the Board Resolution or supplemental
indenture establishing such series of Securities or in the form of Security,
for such series:
(a) default in the payment of the principal of or premium, if any,
of the Securities of such series as and when the same shall become due and
payable either at maturity, upon redemption, by declaration or otherwise; or
(b) default in the payment of any installment of interest on any of
the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(c) default in the payment or satisfaction of any sinking fund or
other purchase obligation with respect to Securities of such series, as and
when such obligation shall become due and payable; or
(d) failure on the part of the Issuer duly to observe or perform any
other of the covenants or agreements on the part of the Issuer in the
Securities of such series or in this Indenture continued for a period of 90
days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given by certified or registered mail to
the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Securities of such series
then Outstanding; or
(e) without the consent of the Issuer a court having jurisdiction
shall enter an order for relief with respect to the Issuer or any of its
Significant Subsidiaries under any applicable bankruptcy, insolvency or other
similar law of the United States of America, any state thereof or the
District of Columbia, or without the consent of the Issuer a court having
jurisdiction shall enter a judgment, order or decree adjudging the Issuer or
any of its Significant Subsidiaries bankrupt or insolvent, or enter an order
for relief for reorganization, arrangement, adjustment or composition of or
in respect of the Issuer or any of its Significant Subsidiaries under any
applicable bankruptcy, insolvency or other similar law of the United States
of America, any state thereof or the District of Columbia, and the
continuance of any such judgment, order or decree is unstayed and in effect
for a period of 60 consecutive days; or
(f) the Issuer or any of its Significant Subsidiaries shall
institute proceedings for entry of an order for relief with respect to the
Issuer or any of its Significant Subsidiaries under any applicable
bankruptcy, insolvency or other similar law of the United States of America,
any state thereof or the District of Columbia or for an adjudication of
insolvency, or shall consent to the institution of bankruptcy or insolvency
proceedings against it, or shall file a petition seeking, or seek or consent
to reorganization, arrangement, composition or relief under any applicable
bankruptcy, insolvency or other similar law of the United States of America,
any state thereof or the District of Columbia, or shall consent to the filing
of such petition or to the appointment of a receiver, custodian, liquidator,
assignee, trustee, sequestrator or similar official of the Issuer or of
substantially all of its property, or the Issuer or any of its Significant
Subsidiaries shall make a general assignment for the benefit of creditors as
recognized under any applicable bankruptcy, insolvency or other similar law
of the United States of America, any state thereof or the District of
Columbia; or
(g) any other Event of Default provided with respect to the
Securities of such series.
If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given
by Securityholders), may declare the principal (or, if the Securities of such
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all the Securities
of such series and the interest, if any, accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, notwithstanding anything to the
contrary contained in this Indenture or in the Securities of such series.
This provision, however, is subject to the condition that, if at any time
after the unpaid principal amount (or such specified amount) of the
Securities of such series shall have been so declared due and payable and
before any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Issuer shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest, if any, upon all of the Securities of such series
and the principal of any and all Securities of such series which shall have
become due otherwise than by acceleration (with interest on overdue
installments of interest, if any, to the extent that payment of such interest
is enforceable under applicable law and on such principal at the rate borne
by the Securities of such series to the date of such payment or deposit) and
the reasonable compensation, disbursements, expenses and advances of the
Trustee and all other amounts due the Trustee under Section 6.6, and any and
all defaults under this Indenture, other than the nonpayment of such portion
of the principal amount of and accrued interest, if any, on Securities of
such series which shall have become due by acceleration, shall have been
cured or shall have been waived in accordance with Section 5.7 or provision
deemed by the Trustee to be adequate shall have been made therefor, then and
in every such case the Holders of a majority in aggregate principal amount of
the Securities of such series then Outstanding, by written notice to the
Issuer and to the Trustee, may rescind and annul such declaration and its
consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon.
Notwithstanding the previous sentence, no waiver shall be effective against
any Holder for any Event of Default or event which with notice or lapse of
time or both would be an Event of Default with respect to any covenant or
provision which cannot be modified or amended without the consent of the
Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event.
If any Event of Default with respect to the Issuer specified in Section
5.1(e) or 5.1(f) occurs, all unpaid principal amount (or, if the Securities
of any series then Outstanding are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of each such
series) and accrued interest on all Securities of each series then
Outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act by the Trustee or any Securityholder.
If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Issuer, the Trustee and the Securityholders shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall continue as
though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to Section 5.1
(a), (b) or (c), the Trustee shall not be charged with knowledge of any Event
of Default unless written notice thereof shall have been given to a
Responsible Officer by the Issuer, a paying agent or any Securityholder.
SECTION 5.2 Payment of Securities on Default; Suit Therefor. The
Issuer covenants that (a) if default shall be made in the payment of any
installment of interest upon any of the Securities of any series then
Outstanding as and when the same shall become due and payable, and such
default shall have continued for a period of 30 days, or (b) if default shall
be made in the payment of the principal of any of the Securities of such
series as and when the same shall have become due and payable, whether at
maturity of the Securities of such series or upon redemption or by
declaration or otherwise, then, upon demand of the Trustee, the Issuer will
pay to the Trustee, for the benefit of the Holders of the Securities, the
whole amount that then shall have become due and payable on all such
Securities of such series for principal or interest, if any, or both, as the
case may be, with interest upon the overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) upon the
overdue installments of interest, if any, at the rate borne by the Securities
of such series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel,
and any expenses or liabilities incurred by the Trustee hereunder other than
through its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at
law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or any other
obligor on the Securities of such series and collect in the manner provided
by law out of the property of the Issuer or any other obligor on the
Securities of such series, wherever situated, the moneys adjudged or decreed
to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Issuer or any other obligor on the Securities of any
series then Outstanding under any bankruptcy, insolvency or other similar law
now or hereafter in effect, or if a receiver or trustee or similar official
shall have been appointed for the property of the Issuer or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Issuer or other obligor upon the Securities of such series, or to the
creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of the Securities of such series shall
then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand pursuant
to the provisions of this Section 5.2, shall be entitled and empowered by
intervention in such proceedings or otherwise to file and prove a claim or
claims for the whole amount of principal and interest, if any, owing and
unpaid in respect of the Securities of such series, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Securityholders allowed in such judicial proceedings
relative to the Issuer or any other obligor on the Securities of such series,
its or their creditors, or its or their property, and to collect and receive
any moneys or other property payable or deliverable on any such claims, and
to distribute the same after the deduction of its charges and expenses, and
any receiver, assignee or trustee or similar official in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, if the Trustee shall consent to the making
of such payments directly to the Securityholders, to pay to the Trustee any
amount due it for compensation and expenses or otherwise pursuant to Section
6.6, including counsel fees and expenses incurred by it up to the date of
such distribution. To the extent that such payment of reasonable
compensation, expenses and counsel fees and expenses out of the estate in any
such proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit
of the Holders of the Securities of the series in respect of which such
judgment has been recovered.
SECTION 5.3 Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to Section 5.2 with respect to Securities
of any series then Outstanding shall be applied in the order following, at
the date or dates fixed by the Trustee for the distribution of such moneys,
upon presentation of the several Securities of such series, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:
FIRST: To the payment of costs and expenses of collection and
reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and liabilities incurred, and all
advances made, by the Trustee pursuant to Section 6.6 except as a result
of its negligence or bad faith;
SECOND: If the principal of the Outstanding Securities of such
series shall not have become due and be unpaid, to the payment of
interest, if any, on the Securities of such series, in the order of the
maturity of the installments of such interest, if any, with interest (to
the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest, if any, at the rate borne by the
Securities of such series, such payment to be made ratably to the Persons
entitled thereto;
THIRD: If the principal of the Outstanding Securities of such series
shall have become due, by declaration or otherwise, to the payment of the
whole amount then owing and unpaid upon the Securities of such series for
principal and interest, if any, with interest on the overdue principal
and (to the extent that such interest has been collected by the Trustee)
upon overdue installments of interest, if any, at the rate borne by the
Securities of such series; and in case such moneys shall be insufficient
to pay in full the whole amounts so due and unpaid upon the Securities of
such series, then to the payment of such principal and interest, if any,
without preference or priority of principal over interest or of interest
over principal, or of any installment of interest over any other
installment of interest, or of any Security over any other Security,
ratably to the aggregate of such principal and accrued and unpaid
interest; and
FOURTH: To the payment of any surplus then remaining to the Issuer,
its successors or assigns, or to whomsoever may be lawfully entitled to
receive the same.
No claim for interest which in any manner at or after maturity shall
have been transferred or pledged separate or apart from the Securities to
which it relates, or which in any manner shall have been kept alive after
maturity by an extension (otherwise than pursuant to an extension made
pursuant to a plan proposed by the Issuer to the Holders of all Securities of
any series then Outstanding), purchase, funding or otherwise by or on behalf
or with the consent or approval of the Issuer shall be entitled, in case of a
default hereunder, to any benefit of this Indenture, except after prior
payment in full of the principal of all Securities of any series then
Outstanding and of all claims for interest not so transferred, pledged, kept
alive, extended, purchased or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of any
Securities of any series then Outstanding shall have any right by virtue of
or by availing of any provision of this Indenture to institute any suit,
action or proceeding in equity or at law upon or under or with respect to
this Indenture or for the appointment of a receiver or trustee or similar
official, or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless the Holders of not
less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request to the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
any such action, suit or proceeding, it being understood and intended, and
being expressly covenanted by the Holder of every Security of such series
with every other Holder and the Trustee, that no one or more Holders of
Securities of such series shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture or of the
Securities to affect, disturb or prejudice the rights of any other Holder of
such Securities of such series, or to obtain or seek to obtain priority over
or preference as to any other such Holder, or to enforce any right under this
Indenture or the Securities, except in the manner herein provided and for the
equal, ratable and common benefit of all Holders of Securities of such
series.
Notwithstanding any other provisions in this Indenture, but subject
to Article Thirteen, the right of any Holder of any Security to receive
payment of the principal of, premium, if any, and interest, if any, on such
Security, on or after the respective due dates expressed in such Security, or
to institute suit for the enforcement of any such payment on or after such
respective dates shall not be impaired or affected without the consent of
such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event of Default
hereunder, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any of such rights, either by suit in equity or by action at law or by
proceedings in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.6 Remedies Cumulative and Continuing. All powers and
remedies given by this Article Five to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any thereof or of any other powers and remedies available to the Trustee
or the Securityholders, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Securityholder
to exercise any right or power accruing upon any default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.4, every power and remedy given by
this Article Five or by law to the Trustee or to the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by Majority
of Securityholders. The Holders of a majority in aggregate principal amount
of the Securities of any series then Outstanding shall have the right to
direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to Securities of such series; provided, however,
that (subject to the provisions of Section 6.1) the Trustee shall have the
right to decline to follow any such direction if the Trustee shall determine
upon advice of counsel that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of directors,
its executive committee, or a trust committee of directors or Responsible
Officers or both shall determine that the action or proceeding so directed
would involve the Trustee in personal liability. The Holders of a majority
in aggregate principal amount of the Securities of any series then
Outstanding may on behalf of the Holders of all of the Securities of such
series waive any past default or Event of Default hereunder and its
consequences except a default in the payment of interest, if any, on, or the
principal of, the Securities of such series. Upon any such waiver the
Issuer, the Trustee and the Holders of the Securities of such series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this
Section 5.7, said default or Event of Default shall for all purposes of the
Securities and this Indenture be deemed to have been cured and to be not
continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within 30 days
after the occurrence of a default, with respect to Securities of any series
then Outstanding, mail to all Holders of Securities of such series, as the
names and the addresses of such Holders appear upon the Securities register,
notice of all defaults known to the Trustee with respect to such series,
unless such defaults shall have been cured before the giving of such notice
(the term "defaults" for the purpose of this Section 5.8 being hereby defined
to be the events specified in clauses (a), (b), (c), (d), (e), (f) and (g) of
Section 5.1, not including periods of grace, if any, provided for therein and
irrespective of the giving of the written notice specified in said clause (d)
but in the case of any default of the character specified in said clause (d)
no such notice to Securityholders shall be given until at least 60 days after
the giving of written notice thereof to the Issuer pursuant to said clause
(d)); provided, however, that, except in the case of default in the payment
of the principal of or interest, if any, on any of the Securities, or in the
payment or satisfaction of any sinking fund or other purchase obligation, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of
directors or Responsible Officers or both, of the Trustee in good faith
determines that the withholding of such notice is in the best interests of
the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to
pay the cost of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against
any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.9 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount
of the Securities of any series then Outstanding, or to any suit instituted
by any Securityholders for the enforcement of the payment of the principal of
or interest, if any, on any Security against the Issuer on or after the due
date expressed in such Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. In case an Event of Default with respect to the
Securities of a series has occurred (which has not been cured or waived) the
Trustee shall exercise with respect to such series of Securities such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any series and after the curing or waiving of all such
Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to
the Securities of any series shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders pursuant to Section 5.7 relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if there shall be reasonable ground for believing
that the repayment of such funds or adequate indemnity against such liability
is not reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officers' Certificate or Issuer
Order (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a Board Resolution;
(c) the Trustee may consult with counsel of its selection and any
advice of such counsel promptly confirmed in writing shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture (including, without limitation, pursuant to Section 5.7), unless
such Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Securities of all series affected then Outstanding; provided that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such investigation
shall be paid by the Issuer or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder;
(h) The Trustee shall not be charged with knowledge of any default
or Event of Default with respect to a series of Securities unless either (i)
a Responsible Officer of the Trustee assigned to the Corporate Trust Office
of the Trustee (or any successor division or department of the Trustee) shall
have actual knowledge of such default or Event of Default or (ii) written
notice of such default or Event of Default shall have been given to the
Trustee by the Issuer or any other obligor on such series of Securities or by
any Holder of Securities of such series; and
(i) The Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture, of the
Securities or of any prospectus used to sell the Securities. The Trustee
shall not be accountable for the use or application by the Issuer of any of
the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
etc. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and, subject to Sections 6.8 and 6.13, may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer with
the same rights it would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the
extent required by mandatory provisions of law. Neither the Trustee nor any
agent of the Issuer or the Trustee shall be under any liability for interest
on any moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as shall be
agreed to in writing between the Issuer and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad
faith. The Issuer also covenants to indemnify the Trustee and each
predecessor Trustee for, and to hold it harmless against, any and all loss,
liability, damage, claim or expense, including taxes (other than taxes based
on the income of the Trustee), incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in the premises. The obligations of the
Issuer under this Section 6.6 to compensate and indemnify the Trustee and
each predecessor Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee and
shall not be subordinate to the payment of Senior Indebtedness pursuant to
Article Thirteen. Such additional indebtedness shall be a senior claim to
that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
particular Securities. When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section 5.1 or in
connection with Article Five hereof, the expenses (including the reasonable
fees and expenses of its counsel) and the compensation for the service in
connection therewith are intended to constitute expenses of administration
under any bankruptcy law. The provisions of this Section 6.6 shall survive
the resignation or removal of the Trustee and the termination of this
Indenture.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad
faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered
or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. This
Indenture shall always have a Trustee who satisfies the requirements of
Section 310(a)(1) of the Trust Indenture Act of 1939. The Trustee shall have
a combined capital and surplus of at least $25,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply
with Section 310(b) of the Trust Indenture Act of 1939 regarding
disqualification of a trustee upon acquiring a conflicting interest.
SECTION 6.9 Persons Eligible for Appointment as Trustee; Different
Trustees for Different Series. The Trustee for each series of Securities
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or of any state or the
District of Columbia having a combined capital and surplus of at least
$25,000,000, and which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal, state
or District of Columbia authority, or a corporation or other Person permitted
to act as trustee by the Commission. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. No obligor upon the Securities or any Affiliate
of such obligor shall serve as trustee upon the Securities. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 6.9, the Trustee shall resign immediately in the manner and
with the effect specified in Section 6.10.
A different Trustee may be appointed by the Issuer for any series of
Securities prior to the issuance of such Securities. If the initial Trustee
for any series of Securities is to be a trustee other than
, the Issuer and such Trustee shall, prior to the issuance of such
Securities, execute and deliver an indenture supplemental hereto, which shall
provide for the appointment of such Trustee as Trustee for the Securities of
such series and shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to one or more or all series of
Securities by giving written notice of resignation to the Issuer. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by
written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Section 5.9, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 6.8 with respect to any series of Securities after written
request therefor by the Issuer or by any Securityholder who has been
a bona fide Holder of a Security or Securities of such series for at
least six months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 6.9 and shall fail to resign after written
request therefor by the Issuer or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting with respect
to any series of Securities, or shall be adjudged a bankrupt or
insolvent, or a receiver or liquidator of the Trustee or of its
property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the Board of
Directors one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions
of Article Five, any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months may on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee with respect to such series. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series then Outstanding may at any time remove the Trustee
with respect to Securities of such series and appoint a successor trustee
with respect to the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.1 of the action in that regard taken by the
Securityholders. If no successor trustee shall have been so appointed with
respect to any series and have accepted appointment within 30 days after the
delivery of such evidence of removal, the Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Article Five, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in
Section 6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and
obligations with respect to such series of its predecessor hereunder, with
like effect as if originally named as trustee for such series hereunder; but,
nevertheless, on the written request of the Issuer or of the successor
trustee, upon payment of its charges then unpaid, the trustee ceasing to act
shall, subject to Section 10.4, pay over to the successor trustee all moneys
at the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Issuer shall
execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and
each successor trustee with respect to the Securities of any applicable
series shall execute and deliver an indenture supplemental hereto which shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the predecessor Trustee
with respect to the Securities of any series as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor
Trustee, and shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such trustees co-
trustees of the same trust and that each such trustee shall be trustee of a
trust or trusts under separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of
such acceptance such successor trustee shall be qualified under the
provisions of Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided
in this Section 6.11, the Issuer shall give notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the Issuer
fails to give such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee (including the trust created by this
Indenture), shall be the successor of the Trustee hereunder, provided that
such corporation shall be qualified under the provisions of Section 6.8 and
eligible under the provisions of Section 6.9, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities of any series
shall have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor
Trustee and deliver such Securities so authenticated; and, in case at that
time any of the Securities of any series shall not have been authenticated,
any successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificate shall have the full force which it is
anywhere in the Securities of such series or in this Indenture provided that
the certificate of the Trustee shall have; provided, that the right to adopt
the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Issuer.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act of
1939, excluding any creditor relationship listed in Section 311(b) of the
Trust Indenture Act of 1939. A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act of 1939 to the
extent indicated therein.
SECTION 6.14 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument
in writing, appoint with the approval of the Issuer an authenticating agent
(the "Authenticating Agent") which shall be authorized to act on behalf of
the Trustee to authenticate Securities, including Securities issued upon
exchange, registration of transfer, partial redemption or pursuant to Section
2.9. Securities of each such series authenticated by such Authenticating
Agent shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee. Whenever
reference is made in this Indenture to the authentication and delivery of
Securities of any series by the Trustee or to the Trustee's Certificate of
Authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent for such series
and a Certificate of Authentication executed on behalf of the Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States
of America or of any state or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least $25,000,000 (determined as provided in Section 6.9 with
respect to the Trustee) and subject to supervision or examination by federal
or state authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
business (including the authenticating agency contemplated by this Indenture)
of any Authenticating Agent, shall continue to be the Authenticating Agent
with respect to all series of Securities for which it served as
Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the Trustee and to
the Issuer. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.14 with
respect to one or more series of Securities, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Issuer and
the Issuer shall provide notice of such appointment to all Holders of
Securities of such series in the manner and to the extent provided in Section
11.4. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. The Issuer agrees to pay to the
Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series
shall have no responsibility or liability for any action taken by it as such
at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in
person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article Seven.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following
manner:
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments acknowledged to
him the execution thereof, or by an affidavit of a witness to such execution
sworn to before any such notary or other such officer. Where such execution
is by or on behalf of any legal entity other than an individual, such
certificate or affidavit shall also constitute sufficient proof of the
authority of the person executing the same.
(b) The ownership of Securities shall be proved by the Security
register or by a certificate of the Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and, subject to the provisions of this
Indenture, interest, if any, on such Security and for all other purposes; and
neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee
shall be affected by any notice to the contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount
of Outstanding Securities of any or all series have concurred in any
direction, consent or waiver under this Indenture, Securities which are owned
by the Issuer or by any other obligor on the Securities with respect to which
such determination is being made or by any Affiliate of the Issuer or any
other obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction,
consent or waiver only Securities which a Responsible Officer of the Trustee
knows are so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Issuer or any
other obligor upon the Securities or any Affiliate of the Issuer or any other
obligor on the Securities. In case of a dispute as to such right, the advice
of counsel shall be full protection in respect of any decision made by the
Trustee in accordance with such advice. Upon request of the Trustee, the
Issuer shall furnish to the Trustee promptly an Officers' Certificate listing
and identifying all Securities, if any, known by the Issuer to be owned or
held by or for the account of any of the above-described Persons; and,
subject to Sections 6.1 and 6.2, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Securities not listed therein are Outstanding for
the purpose of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have
consented to such action may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Article Seven, revoke
such action so far as concerns such Security provided that such revocation
shall not become effective until three Business Days after such filing.
Except as aforesaid, any such action taken by the Holder of any Security
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified
in this Indenture in connection with such action shall be conclusively
binding upon the Issuer, the Trustee and the Holders of all the Securities
affected by such action.
SECTION 7.6 Record Date for Consents and Waivers. The Issuer may,
but shall not be obligated to, establish a record date for the purpose of
determining the Persons entitled to (i) waive any past default with respect
to the Securities of such series in accordance with Section 5.7 of the
Indenture, (ii) consent to any supplemental indenture in accordance with
Section 8.2 of the Indenture or (iii) waive compliance with any term,
condition or provision of any covenant hereunder. If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and any
such Persons, shall be entitled to waive any such past default, consent to
any such supplemental indenture or waive compliance with any such term,
condition or provision, whether or not such Holder remains a Holder after
such record date; provided, however, that unless such waiver or consent is
obtained from the Holders, or duly designated proxies, of the requisite
principal amount of Outstanding Securities of such series prior to the date
which is the 120th day after such record date, any such waiver or consent
previously given shall automatically and without further action by any Holder
be cancelled and of no further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of the execution thereof) for
one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another Person to the Issuer, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Issuer pursuant to Article Nine;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of all or any series of
Securities (and if such covenants, restrictions, conditions or provisions are
to be for the protection of less than all series of Securities, stating that
the same are expressly being included solely for the protection of such
series) and to make the occurrence, or the occurrence and continuance, of a
default in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or any of
the several remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may provide
for a particular period of grace after default (which period may be shorter
or longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may limit
the right of the Holders of a majority in aggregate principal amount of the
Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make any other provisions as the Issuer may deem necessary
or desirable, provided, however, that no such action shall materially
adversely affect the interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 2.3;
(f) to provide for the issuance of Securities of any series in
coupon form (including Securities registrable as to principal only) and to
provide for exchangeability of such Securities for the Securities issued
hereunder in fully registered form and to make all appropriate changes for
such purpose;
(g) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act of 1939, or under any similar federal
statute hereafter enacted, and to add to this Indenture such other provisions
as may be expressly permitted by the Trust Indenture Act of 1939, excluding,
however, the provisions referred to in Section 316(a)(2) of the Trust
Indenture Act of 1939 as in effect at the date as of which this instrument
was executed or any corresponding provision provided for in any similar
federal statute hereafter enacted; or
(h) to evidence and provide for the acceptance of appointment
hereunder of a Trustee other than as
Trustee for a series of Securities and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.9 hereof;
(i) subject to Section 8.2 hereof, to add to or modify the
provisions hereof as may be necessary or desirable to provide for the
denomination of Securities in foreign currencies which shall not adversely
affect the interests of the Holders of the Securities in any material
respect;
(j) to modify the covenants or Events of Default of the Issuer
solely in respect of, or add new covenants or Events of Default of the Issuer
that apply solely to, Securities not Outstanding on the date of such
supplemental indenture; and
(k) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one trustee, pursuant to the requirements of
Section 6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities then Outstanding, notwithstanding any of the provisions of Section
8.2.
SECTION 8.2 Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Article Seven) of the Holders of
not less than a majority in aggregate principal amount of the Securities then
Outstanding of any series affected by such supplemental indenture, the
Issuer, when authorized by a Board Resolution (which resolution may provide
general terms or parameters for such action and may provide that the specific
terms of such action may be determined in accordance with or pursuant to an
Issuer Order), and the Trustee may, from time to time and at any time, enter
into an indenture or indentures supplemental hereto (which shall conform to
the provisions of the Trust Indenture Act of 1939 as in force at the date of
execution thereof) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the
Holders of the Securities of such series; provided, that no such supplemental
indenture shall (a) extend the stated final maturity of the principal of any
Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest, if any, thereon (or, in the case of
an Original Issue Discount Security, reduce the rate of accretion of original
issue discount thereon), or reduce or alter the method of computation of any
amount payable on redemption, repayment or purchase by the Issuer thereof (or
the time at which any such redemption, repayment or purchase may be made), or
make the principal thereof (including any amount in respect of original issue
discount), or interest, if any, thereon payable in any coin or currency other
than that provided in the Securities or in accordance with the terms of the
Securities, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof or the amount thereof provable in bankruptcy in each case
pursuant to Article Five, or impair or affect the right of any Securityholder
to institute suit for the payment thereof or, if the Securities provide
therefor, any right of repayment or purchase at the option of the
Securityholder, in each case without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security
so affected. No consent of any Holder of any Security shall be necessary
under this Section 8.2 to permit the Trustee and the Issuer to execute
supplemental indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any covenant,
Event of Default or other provision of this Indenture which has expressly
been included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of Holders of Securities of such
series, with respect to such covenant or provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Securities of any
other series.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of the Holders of the
Securities as aforesaid and other documents, if any, required by Section 7.1,
the Trustee shall join with the Issuer in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may at its discretion, but shall not be obligated to, enter into
such supplemental indenture.
It shall not be necessary for the consent of the Securityholders
under this Section 8.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Issuer (or the Trustee at the request and expense of the Issuer) shall give
notice thereof to the Holders of then Outstanding Securities of each series
affected thereby, as provided in Section 11.4. Any failure of the Issuer to
give such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer and the
Holders of Securities of each series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and shall be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, shall be entitled to receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant to this Article Eight complies
with the applicable provisions of this Indenture and that all conditions
precedent to the execution and delivery of such supplemental indenture have
been satisfied.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article Eight may bear a notation in form approved by the Trustee for such
series as to any matter provided for by such supplemental indenture or as to
any action taken by Securityholders. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Issuer, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by
the Issuer, authenticated by the Trustee and delivered in exchange for the
Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms. Subject
to the provisions of Section 9.2, nothing contained in this Indenture or in
any of the Securities shall prevent any consolidation or merger of the Issuer
with or into any other Person or Persons (whether or not affiliated with the
Issuer), or successive consolidations or mergers in which the Issuer or its
successor or successors shall be a party or parties, or shall prevent any
sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Issuer to any other Person (whether or not
affiliated with the Issuer) authorized to acquire and operate the same;
provided, however, and the Issuer hereby covenants and agrees, that any such
consolidation, merger, sale, lease, exchange or other disposition shall be
upon the conditions that (a) immediately after giving effect to such
consolidation, merger, sale, lease, exchange or other disposition of the
Person (whether the Issuer or such other Person) formed by or surviving any
such consolidation or merger, or to which such sale, lease, exchange or other
disposition shall have been made, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing; (b) the Person (if other than the
Issuer) formed by or surviving any such consolidation or merger, or to which
such sale, lease, exchange or other disposition shall have been made, shall
be a corporation or partnership organized under the laws of the United States
of America, any state thereof or the District of Columbia; and (c) the due
and punctual payment of the principal of and interest, if any, on all the
Securities, according to their tenor, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Issuer, shall be expressly assumed, by supplemental
indenture satisfactory in form to the Trustee executed and delivered to the
Trustee, by the Person (if other than the Issuer) formed by such
consolidation, or into which the Issuer shall have been merged, or by the
Person which shall have acquired or leased such property.
SECTION 9.2 Successor Corporation to be Substituted. In case of any
such consolidation or merger or any sale, conveyance or lease of all or
substantially all of the property of the Issuer and upon the assumption by
the successor Person, by supplemental indenture executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of, premium, if any, and interest, if any, on all of
the Securities and the due and punctual performance of all of the covenants
and conditions of this Indenture to be performed by the Issuer, such
successor Person shall succeed to and be substituted for the Issuer, with the
same effect as if it had been named herein as the party of the first part,
and the Issuer (including any intervening successor to the Issuer which shall
have become the obligor hereunder) shall be relieved of any further
obligation under this Indenture and the Securities; provided, however, that
in the case of a sale, lease, exchange or other disposition of the property
and assets of the Issuer (including any such intervening successor), the
Issuer (including any such intervening successor) shall continue to be liable
on its obligations under this Indenture and the Securities to the extent, but
only to the extent, of liability to pay the principal of and interest, if
any, on the Securities at the time, places and rate prescribed in this
Indenture and the Securities. Such successor Person thereupon may cause to
be signed, and may issue either in its own name or in the name of the Issuer,
any or all of the Securities issuable hereunder which theretofore shall not
have been signed by the Issuer and delivered to the Trustee; and, upon the
order of such successor Person instead of the Issuer and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall
have been signed and delivered by the officers of the Issuer to the Trustee
for authentication, and any Securities which such successor Person thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though all of such
Securities had been issued at the date of the execution hereof.
In case of any such consolidation or merger or any sale, lease,
exchange or other disposition of all or substantially all of the property and
assets of the Issuer, such changes in phraseology and form (but not in
substance) may be made in the Securities, thereafter to be issued, as may be
appropriate.
SECTION 9.3 Opinion of Counsel to be Given Trustee. The Trustee,
subject to Sections 6.1 and 6.2, shall receive an Officers' Certificate and
Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, lease, exchange or other disposition and any such assumption
complies with the provisions of this Article Nine.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (a) If at
any time (i) the Issuer shall have paid or caused to be paid the principal
of, premium, if any, and interest, if any, on all the Securities Outstanding
(other than Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.9) as and when the same
shall have become due and payable, or (ii) the Issuer shall have delivered to
the Trustee for cancellation all Securities theretofore authenticated (other
than Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.9); and if, in any such case, the
Issuer shall also pay or cause to be paid all other sums payable hereunder by
the Issuer (including all amounts payable to the Trustee pursuant to Section
6.6), then this Indenture shall cease to be of further effect, and the
Trustee, on demand of the Issuer accompanied by an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent relating to
the satisfaction and discharge contemplated by this provision have been
complied with, and at the cost and expense of the Issuer, shall execute
proper instruments acknowledging such satisfaction and discharging this
Indenture. The Issuer agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred, and to compensate the
Trustee for any services thereafter reasonably and properly rendered, by the
Trustee in connection with this Indenture or the Securities.
(b) If at any time (i) the Issuer shall have paid or caused to be
paid the principal of, premium, if any, and interest, if any, on all the
Securities of any series Outstanding (other than Securities of such series
which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.9) as and when the same shall have become due
and payable, or (ii) the Issuer shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated (other
than any Securities of such series which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.9), or (iii) in
the case of any series of Securities with respect to which the exact amount
described in clause (B) below can be determined at the time of making the
deposit referred to in such clause (B), (A) all the Securities of such series
not theretofore delivered to the Trustee for cancellation shall have become
due and payable, or by their terms are to become due and payable within one
year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and (B)
the Issuer shall have irrevocably deposited or caused to be deposited with
the Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such series,
cash in an amount (other than moneys repaid by the Trustee or any paying
agent to the Issuer in accordance with Section 10.4) or non-callable, non-
prepayable bonds, notes, bills or other similar obligations issued or
guaranteed by the United States government or any agency thereof the full and
timely payment of which are backed by the full faith and credit of the United
States ("U.S. Government Obligations"), maturing as to principal and
interest, if any, at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (1) the
principal of, premium, if any, and interest, if any, on all Securities of
such series on each date that such principal of, premium, if any, or
interest, if any, is due and payable, and (2) any mandatory sinking fund
payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such series;
then the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such series on the date of the deposit
referred to in clause (B) above and the provisions of this Indenture with
respect to the Securities of such series shall no longer be in effect
(except, in the case of clause (iii) of this Section 10.1(b), as to (I)
rights of registration of transfer and exchange of Securities of such series,
(II) rights of substitution of mutilated, defaced, destroyed, lost or stolen
Securities of such series, (III) rights of Holders of Securities of such
series to receive payments of principal thereof and premium, if any, and
interest, if any, thereon upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the Holders of Securities of
such series to receive mandatory sinking fund payments thereon, if any, when
due, (IV) the rights, obligations, duties and immunities of the Trustee
hereunder, (V) the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (VI) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same.
(c) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution,
Officers' Certificate or indenture supplemental hereto provided pursuant to
Section 2.3. In addition to discharge of the Indenture pursuant to the next
preceding paragraph, in the case of any series of Securities with respect to
which the exact amount described in subparagraph (A) below can be determined
at the time of making the deposit referred to in such subparagraph (A), the
Issuer shall be deemed to have paid and discharged the entire indebtedness on
all the Securities of such a series on the 91st day after the date of the
deposit referred to in subparagraph (A) below, and the provisions of this
Indenture with respect to the Securities of such series shall no longer be in
effect (except as to (i) rights of registration of transfer and exchange of
Securities of such series, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities of such series, (iii) rights of Holders
of Securities of such series to receive payments of principal thereof,
premium, if any, and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the
Holders of Securities of such series to receive mandatory sinking fund
payments, if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, (v) the rights of the Holders of Securities of such series
as beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (vi) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same, if
(A) with reference to this provision the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as funds
in trust, specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of Securities of such series (1) cash in an
amount, or (2) U.S. Government Obligations, maturing as to principal and
interest, if any, at such times and in such amounts as will insure the
availability of cash, or (3) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay (I) the principal of, premium, if any, and interest, if any, on all
Securities of such series on each date that such principal or interest,
if any, is due and payable, and (II) any mandatory sinking fund payments
on the dates on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such series;
(B) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the
Issuer is a party or by which it is bound; and
(C) the Issuer has delivered to the Trustee an Opinion of Counsel
based on the fact that (1) the Issuer has received from, or there has
been published by, the Internal Revenue Service a ruling or (2), since
the date hereof, there has been a change in the applicable United States
federal income tax law, in either case to the effect that, and such
opinion shall confirm that, the Holders of the Securities of such series
will not recognize income, gain or loss for Federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject
to Federal income tax on the same amount and in the same manner and at
the same times, as would have been the case if such deposit, defeasance
and discharge had not occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys and U.S. Government
Obligations deposited with the Trustee pursuant to Section 10.1 shall be held
in trust, and such moneys and all moneys from such U.S. Government
Obligations shall be applied by it to the payment, either directly or through
any paying agent (including the Issuer acting as its own paying agent), to
the Holders of the particular Securities of such series for the payment or
redemption of which such moneys and U.S. Government Obligations have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest, if any, but such moneys and U.S. Government
Obligations need not be segregated from other funds except to the extent
required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under
the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of, premium, if any, or
interest, if any, on any Security of any series and not applied but remaining
unclaimed for two years after the date upon which such principal, premium, if
any, or interest, if any, shall have become due and payable, shall, upon the
written request of the Issuer and unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Issuer by the Trustee for such series or such paying agent and
the Holder of the Securities of such series shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed
property laws, thereafter look only to the Issuer for any payment which such
Holder may be entitled to collect, and all liability of the Trustee or any
paying agent with respect to such moneys shall thereupon cease.
SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect of
such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse under or
upon any obligation, covenant or agreement contained in this Indenture, or in
any Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer, or any partner of
the Issuer or of any successor, either directly or through the Issuer or any
successor, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Holders of Securities. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any Person, other
than the parties hereto and their successors and the Holders of the Senior
Indebtedness and the Holders of the Securities, any legal or equitable right,
remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole
benefit of the parties hereto and their successors and of the Holders of the
Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities. Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Issuer, or as required pursuant to the Trust
Indenture Act of 1939, may be given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein)
addressed (until another address of the Issuer is filed by the Issuer with
the Trustee) to Hovnanian Enterprises, Inc., 10 Highway 35, P.O. Box 500, Red
Bank, New Jersey 07701. Any notice, direction, request or demand by the
Issuer or any Holder of Securities to or upon the Trustee shall be deemed to
have been sufficiently given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee with the
Issuer) to , [address],
[attention: Corporate Trust Administration (Hovnanian Enterprises, Inc.
[specify series of Securities])].
Where this Indenture provides for notice to Holders of Securities,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder entitled thereto, at his last address as it appears in the Security
register. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when
such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be reasonably
satisfactory to the Trustee shall be deemed to be sufficient notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, or as required pursuant to the Trust Indenture Act of 1939, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied
with, except that in the case of any such application or demand as to which
the furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture (other
than a certificate provided pursuant to Section 4.3(d)) and delivered to the
Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
opinion as to whether or not such covenant or condition has been complied
with, and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous. Any certificate, statement or opinion of counsel may be
based, insofar as it relates to factual matters, on information with respect
to which is in the possession of the Issuer, upon the certificate, statement
or opinion of or representations by an officer or officers of the Issuer,
unless such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate, statement
or opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of principal of or interest, if any, on the Securities
of any series or the date fixed for redemption, purchase or repayment of any
such Security shall not be a Business Day, then payment of interest, if any,
premium, if any, or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made
on the date of maturity or the date fixed for redemption, purchase or
repayment, and, in the case of payment, no interest shall accrue for the
period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, or is deemed applicable to this Indenture by virtue of the
provisions, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 11.8 GOVERNING LAW. THIS INDENTURE AND EACH SECURITY SHALL
BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR
ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified, as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a
whole or in part at the option of the Issuer shall be given by mailing notice
of such redemption by first class mail, postage prepaid, at least 30 days and
not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear in
the Security register. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or
not the Holder receives the notice. Failure to give notice by mail, or any
defect in the notice to the Holder of any Security of a series designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify (i) the
principal amount of each Security of such series held by such Holder to be
redeemed, (ii) the date fixed for redemption, (iii) the redemption price,
(iv) the place or places of payment, (v) the CUSIP number relating to such
Securities, (vi) that payment will be made upon presentation and surrender of
such Securities, (vii) whether such redemption is pursuant to the mandatory
or optional sinking fund, or both, if such be the case, (viii) whether
interest, if any, (or, in the case of Original Issue Discount Securities,
original issue discount) accrued to the date fixed for redemption will be
paid as specified in such notice and (ix) whether on and after said date
interest, if any, (or, in the case of Original Issue Discount Securities,
original issue discount) thereon or on the portions thereof to be redeemed
will cease to accrue. In case any Security of a series is to be redeemed in
part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date
fixed for redemption, upon surrender of such Security, a new Security or
Securities of such series in principal amount equal to the unredeemed portion
thereof will be issued.
The notice of redemption of Securities of any series to be redeemed
at the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section 12.2, the Issuer will deposit
with the Trustee or with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.5) an amount of money sufficient to redeem on the
redemption date all the Securities of such series so called for redemption at
the appropriate redemption price, together with accrued interest, if any, to
the date fixed for redemption. The Issuer will deliver to the Trustee at
least 45 days prior to the date fixed for redemption (unless a shorter notice
period shall be satisfactory to the Trustee) an Officers' Certificate stating
the aggregate principal amount of Securities to be redeemed. In case of a
redemption at the election of the Issuer prior to the expiration of any
restriction on such redemption, the Issuer shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officers' Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee within 10 Business Days after the Issuer gives written notice to the
Trustee that such redemption is to occur, shall select, in such manner as it
shall deem appropriate and fair, Securities of such series to be redeemed.
Notice of the redemption shall be given only after such selection has been
made. Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Securities of such series or any multiple
thereof. The Trustee shall promptly notify the Issuer in writing of the
Securities of such series selected for redemption and, in the case of any
Securities of such series selected for partial redemption, the principal
amount thereof to be redeemed. For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to the redemption of
Securities of any series shall relate, in the case of any Security redeemed
or to be redeemed only in part, to the portion of the principal amount of
such Security which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as provided by this Article Twelve, the
Securities or portions of Securities specified in such notice shall become
due and payable on the date and at the place or places stated in such notice
at the applicable redemption price, together with interest, if any, accrued
to the date fixed for redemption, and on and after said date (unless the
Issuer shall default in the payment of such Securities at the redemption
price, together with interest, if any, accrued to said date) interest, if any
(or, in the case of Original Issue Discount Securities, original issue
discount) on the Securities or portions of Securities so called for
redemption shall cease to accrue, and such Securities shall cease from and
after the date fixed for redemption (unless an earlier date shall be
specified in a Board Resolution, Officers' Certificate or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant to
which the form and terms of the Securities of such series were established)
except as provided in Sections 6.5 and 10.4, to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest, if any, to the date fixed for redemption. On
presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest, if any, accrued thereon to the date fixed for redemption;
provided that payment of interest, if any, becoming due on or prior to the
date fixed for redemption shall be payable to the Holders of Securities
registered as such on the relevant record date subject to the terms and
provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the redemption price shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the
rate of interest or Yield to Maturity (in the case of an Original Issue
Discount Security) borne by such Security.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the
order of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, and of like tenor, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so
presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and
certificate number in an Officers' Certificate delivered to the Trustee at
least 45 days prior to the last date on which notice of redemption may be
given as being owned of record and beneficially by, and not pledged or
hypothecated by either (a) the Issuer, or (b) a Person specifically
identified in such written statement as an Affiliate of the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of the
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by
the terms of the Securities of any series is herein referred to as an
"optional sinking fund payment." The date on which a sinking fund payment is
to be made is herein referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at
its option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of
such series (not previously so credited) theretofore purchased or otherwise
acquired (except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional
sinking fund payments (not previously so, credited) made pursuant to this
Section 12.5, or (c) receive credit for Securities of such series (not
previously so credited) redeemed by the Issuer through any optional
redemption provision contained in the terms of such series. Securities so
delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officers'
Certificate (a) specifying the portion of the mandatory sinking fund payment
to be satisfied by payment of cash and the portion to be satisfied by credit
of Securities of such series and the basis for such credit, (b) stating that
none of the Securities of such series to be so credited has theretofore been
so credited, (c) stating that no defaults in the payment of interest or
Events of Default with respect to such series have occurred (which have not
been waived or cured or otherwise ceased to exist) and are continuing, and
(d) stating whether or not the Issuer intends to exercise its right to make
an optional sinking fund payment with respect to such series and, if so,
specifying the amount of such optional sinking fund payment which the Issuer
intends to pay on or before the next succeeding sinking fund payment date.
Any Securities of such series to be credited and required to be delivered to
the Trustee in order for the Issuer to be entitled to credit therefor as
aforesaid which have not theretofore been delivered to the Trustee shall be
delivered for cancellation pursuant to Section 2.10 to the Trustee with such
Officers' Certificate (or reasonably promptly thereafter if acceptable to the
Trustee). Such Officers' Certificate shall be irrevocable and upon its
receipt by the Trustee the Issuer shall become unconditionally obligated to
make all the cash payments or payments therein referred to, if any, on or
before the next succeeding sinking fund payment date. Failure of the Issuer,
on or before any such 60th day, to deliver such Officers' Certificate and
Securities (subject to the parenthetical clause in the second preceding
sentence) specified in this paragraph, if any, shall not constitute a default
but shall constitute, on and as of such date, the irrevocable election of the
Issuer (i) that the mandatory sinking fund payment for such series due on the
next succeeding sinking fund payment date shall be paid entirely in cash
without the option to deliver or credit Securities of such series in respect
thereof, and (ii) that the Issuer will make no optional sinking fund payment
with respect to such series as provided in this Section 12.5.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $50,000, or a lesser sum if the Issuer shall so request with
respect to the Securities of any particular series, such cash shall be
applied on the next succeeding sinking fund payment date to the redemption of
Securities of such series at the sinking fund redemption price together with
accrued interest, if any, to the date fixed for redemption. If such amount
shall be $50,000 or less and the Issuer makes no such request, then it shall
be carried over until a sum in excess of $50,000 is available. The Trustee
shall select, in the manner provided in Section 12.2, for redemption on such
sinking fund payment date a sufficient principal amount of Securities of such
series to absorb said cash, as nearly as may be, and shall (if requested in
writing by the Issuer) inform the Issuer of the serial numbers of the
Securities of such series (or portions thereof) so selected. The Issuer, or
the Trustee, in the name and at the expense of the Issuer (if the Issuer
shall so request the Trustee in writing) shall cause notice of redemption of
the Securities of such series to be given in substantially the manner
provided in Section 12.2 (and with the effect provided in Section 12.3) for
the redemption of Securities of such series in part at the option of the
Issuer. The amount of any sinking fund payments not so applied or allocated
to the redemption of Securities of such series shall be added to the next
cash sinking fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this Section 12.5. Any
and all sinking fund moneys held on the stated maturity date of the
Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of,
and interest, if any, on, the Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all
interest, if any, accrued to the date fixed for redemption on Securities to
be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities
of a series with sinking fund moneys or give any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default with respect to such series except that, where the giving of
notice of redemption of any Securities shall theretofore have been made, the
Trustee shall redeem or cause to be redeemed such Securities, provided that
it shall have received from the Issuer a sum sufficient for such redemption.
Except as aforesaid, and subject to Article Thirteen, any moneys in the
sinking fund for such series at the time when any such default or Event of
Default known to a Responsible Officer of the Trustee shall occur, and any
moneys thereafter paid into the sinking fund, shall, during the continuance
of such default or Event of Default, be deemed to have been collected under
Article Five and held for the payment of all such Securities. In case such
Event of Default shall have been waived as provided in Article Five or the
default cured on or before the 60th day preceding the sinking fund payment
date in any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this Section to the
redemption of such Securities.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior Indebtedness. (a)
The Issuer covenants and agrees, and each Holder of Securities of each
series, by his acceptance thereof, likewise covenants and agrees, that
anything in this Indenture or the Securities of any series to the contrary
notwithstanding, the indebtedness evidenced by the Securities of each series
is subordinate and junior in right of payment, to the extent provided herein,
to all Senior Indebtedness, whether outstanding on the date of execution of
this Indenture or thereafter created, incurred or assumed, and that the
subordination is for the benefit of the holders of Senior Indebtedness but
the Securities shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Issuer. The Securities shall rank senior to
all existing and future Indebtedness of the Issuer that is neither Senior
Indebtedness nor Senior Subordinated Indebtedness and only Indebtedness of
the Issuer that is Senior Indebtedness shall rank senior to the Securities in
accordance with the provisions set forth herein.
(b) Subject to Section 13.4, if (i) the Issuer shall default in the
payment of any principal of, premium, if any, or interest, if any, on any
Senior Indebtedness when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration of acceleration
or otherwise, or (ii) any other default shall occur with respect to Senior
Indebtedness and the maturity of such Senior Indebtedness has been
accelerated in accordance with its terms, then, upon written notice of such
default to the Issuer and the Trustee by the holders of Senior Indebtedness
or any trustee therefor, unless and until, in either case, the default has
been cured or waived, or has ceased to exist, or any such acceleration has
been rescinded or such Senior Indebtedness has been paid in full, no direct
or indirect payment (in cash, property, securities, by set-off or otherwise)
shall be made or agreed to be made on account of the principal of, premium,
if any, or interest, if any, on any of the Securities, or in respect of any
redemption, retirement, purchase or other acquisition of any of the
Securities other than those made in capital stock of the Issuer (or cash in
lieu of fractional shares thereof).
(c) If any default (other than a default described in paragraph (b)
of this Section 13.1) shall occur under the Senior Indebtedness, pursuant to
which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration) or
the expiration of any applicable grace periods occurs (a "Senior Nonmonetary
Default"), then, upon the receipt by the Issuer and the Trustee of written
notice thereof (a "Payment Notice") from or on behalf of holders of such
Senior Indebtedness specifying an election to prohibit such payment and other
action by the Issuer in accordance with the following provisions of this
paragraph (c), the Issuer may not make any payment or take any other action
that would be prohibited by paragraph (b) of this Section 13.1 during the
period (the "Payment Blockage Period") commencing on the date of receipt of
such Payment Notice and ending on the earlier of (i) the date, if any, on
which the holders of such Senior Indebtedness or their representative notify
the Trustee that such Senior Nonmonetary Default is cured or waived or ceases
to exist or the Senior Indebtedness to which such Senior Nonmonetary Default
relates is discharged or (ii) the 179th day after the date of receipt of such
Payment Notice. Notwithstanding the provisions described in the immediately
preceding sentence, the Issuer may resume payments on the Securities
following such Payment Blockage Period. Any number of Payment Notices may be
given; provided, however, that (i) not more than one Payment Notice shall be
given within a period of any 360 consecutive days, and (ii) no default that
existed upon the date of such Payment Notice or the commencement of such
Payment Blockage Period (whether or not such event of default is on the same
issue of Senior Indebtedness) shall be made the basis for the commencement of
any other Payment Blockage Period.
(d) If (i) (A) without the consent of the Issuer, a receiver,
conservator, liquidator or trustee of the Issuer or of any of its property is
appointed by the order or decree of any court or agency or supervisory
authority having jurisdiction, and such decree or order remains in effect for
more than 60 days or (B) the Issuer is adjudicated bankrupt or insolvent or
(C) any of its property is sequestered by court order and such order remains
in effect for more than 60 days or (D) a petition is filed against the Issuer
under any state or federal bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, liquidation or receivership
law of any jurisdiction whether now or hereafter in effect (including without
limitation the Bankruptcy Code), and is not dismissed within 60 days after
such filing; or (ii) the Issuer (A) commences a voluntary case or other
proceeding seeking liquidation, reorganization, arrangement, insolvency,
readjustment of debt, dissolution, liquidation or other relief with respect
to itself or its debt or other liabilities under any bankruptcy, insolvency
or other similar law now or hereafter in effect (including without limitation
the Bankruptcy Code) or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, or (B) consents to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or (C) fails generally to, or cannot, pay
its debts generally as they become due or (D) takes any corporate action to
authorize or effect any of the foregoing; or (iii) any Subsidiary of the
Issuer takes, suffers or permits to exist any of the events or conditions
referred to in the foregoing clause (i) or (ii), then all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) shall first be paid in full before any payment or distribution,
whether in cash, securities or other property, shall be made to any Holder of
any Securities on account thereof. Any payment or distribution, whether in
cash, securities or other property (other than securities of the Issuer or
any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in these subordination provisions with respect to the indebtedness
evidenced by the Securities to the payment of all Senior Indebtedness then
outstanding and to any securities issued in respect thereof under any such
plan of reorganization or adjustment) which would otherwise (but for these
subordination provisions) be payable or deliverable in respect of the
Securities of any series shall be paid or delivered directly to the holders
of Senior Indebtedness in accordance with the priorities then existing among
such holders until all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings) shall have been paid
in full. In the event of any such proceeding, after payment in full of all
sums owing with respect to Senior Indebtedness, the Holders of the
Securities, together with the holders of any obligations of the Issuer
ranking on a parity with the Securities, shall be entitled to be paid from
the remaining assets of the Issuer the amounts at the time due and owing on
account of unpaid principal of and interest, if any, on the Securities and
such other obligations before any payment or other distribution, whether in
cash, property or otherwise, shall be made on account of any capital stock or
any obligations of the Issuer ranking junior to the Securities and such other
obligations.
(e) If, notwithstanding the foregoing, any payment or distribution
of any character, whether in cash, securities or other property (other than
securities of the Issuer or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least
to the extent provided in the subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), shall be received by
the Trustee or any Holder in contravention of any of the terms hereof, such
payment or distribution of securities shall be received in trust for the
benefit of and shall be paid over or delivered and transferred to the holders
of the Senior Indebtedness then outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any
Holder to endorse or assign any such payment, distribution or security, each
holder of Senior Indebtedness is hereby irrevocably authorized to endorse or
assign the same.
(f) No present or future holder of any Senior Indebtedness shall be
prejudiced in the right to enforce subordination of the indebtedness
evidenced by the Securities by any act or failure to act on the part of the
Issuer or any Holder of Securities. Nothing contained herein shall impair,
as between the Issuer and the Holders of Securities of each series, the
obligation of the Issuer to pay to such Holders the principal of and
interest, if any, on such Securities or prevent the Trustee or the Holder
from exercising all rights, powers and remedies otherwise permitted by
applicable law or hereunder upon a default or Event of Default hereunder, all
subject to the rights of the holders of the Senior Indebtedness to remove
cash, securities or other property otherwise payable or deliverable to the
Holders.
(g) Senior Indebtedness shall not be deemed to have been paid in
full unless the holders thereof shall have received cash, securities or other
property equal to the amount of such Senior Indebtedness then outstanding.
Upon the payment in full of all Senior Indebtedness, the Holders of
Securities of each series shall be subrogated to all rights of any holders of
Senior Indebtedness to receive any further payment or distributions
applicable to the Senior Indebtedness until the indebtedness evidenced by the
Securities of such series shall have been paid in full and such payments or
distributions received by such Holders, by reason of such subrogation, of
cash, securities or other property which otherwise would be paid or
distributed to the holders of Senior Indebtedness, shall, as between the
Issuer and its creditors other than the holders of Senior Indebtedness, on
the one hand, and such Holders, on the other hand, be deemed to be a payment
by the Issuer on account of Senior Indebtedness, and not on account of the
Securities of such series.
(h) The provisions of this Section 13.1 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Issuer in
respect of any security interest the creation of which is not prohibited by
the provisions of this Indenture.
(i) The securing of any obligations of the Issuer, otherwise ranking
on a parity with the Securities or ranking junior to the Securities, shall
not be deemed to prevent such obligations from constituting, respectively,
obligations ranking on a parity with the Securities or ranking junior to the
Securities.
SECTION 13.2 Reliance on Certificate of Liquidating Agent; Further
Evidence as to Ownership of Senior Indebtedness. Upon any payment or
distribution of assets of the Issuer, the Trustee and the Holders shall be
entitled to rely upon an order or decree issued by any court of competent
jurisdiction in which such dissolution or winding up or liquidation or
reorganization or arrangement proceedings are pending or upon a certificate
of the bankruptcy trustee, receiver, assignee for the benefit of creditors or
other Person making such payment or distribution, delivered to the Trustee or
to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Thirteen. In the absence of any such bankruptcy
trustee, receiver, assignee or other Person, the Trustee shall be entitled to
rely upon written notice by a Person representing himself to be a holder of
Senior Indebtedness (or a trustee or representative on behalf of such holder)
as evidence that such Person is a holder of Senior Indebtedness (or is such a
trustee or representative). If the Trustee determines, in good faith, that
further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distributions
pursuant to this Article Thirteen, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, as to the extent to which
such Person is entitled to participate in such payment or distribution, and
to other facts pertinent to the rights of such Person under this Article
Thirteen, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 13.3 Payment Permitted If No Default. Nothing contained in
this Article Thirteen or elsewhere in this Indenture, or in any of the
Securities, shall prevent (a) the Issuer at any time, except during the
pendency of any default with respect to Senior Indebtedness described in
Section 13.1(b) or Section 13.1(c) or of any of the events described in
Section 13.1(d), from making payments of the principal of or interest, if
any, on the Securities, or (b) the application by the Trustee or any paying
agent of any moneys deposited with it hereunder to payments of the principal
of or interest, if any, on the Securities, if, at the time of such deposit,
the Trustee or such paying agent, as the case may be, did not have the
written notice provided for in Section 13.5 of any event prohibiting the
making of such deposit, or if, at the time of such deposit (whether or not in
trust) by the Issuer with the Trustee or paying agent (other than the Issuer)
such payment would not have been prohibited by the provisions of this Article
Thirteen, and the Trustee or any paying agent shall not be affected by any
notice to the contrary received by it on or after such date.
SECTION 13.4 Disputes with Holders of Certain Senior Indebtedness.
Any failure by the Issuer to make any payment on or under any Senior
Indebtedness, other than any Senior Indebtedness as to which the provisions
of this Section 13.4 shall have been waived by the Issuer in the instrument
or instruments by which the Issuer incurred, assumed, guaranteed or otherwise
created such Senior Indebtedness, shall not be deemed a default under Section
13.1 hereof if (i) the Issuer shall be disputing its obligation to make such
payment or perform such obligation, and (ii) either (A) no final judgment
relating to such dispute shall have been issued against the Issuer which is
in full force and effect and is not subject to further review, including a
judgment that has become final by reason of the expiration of the time within
which a party may seek further appeal or review, or (B) if a judgment that is
subject to further review or appeal has been issued, the Issuer shall in good
faith be prosecuting an appeal or other proceeding for review, and a stay of
execution shall have been obtained pending such appeal or review.
SECTION 13.5 Trustee Not Charged with Knowledge of Prohibition.
Anything in this Article Thirteen or elsewhere in this Indenture contained to
the contrary notwithstanding, the Trustee shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making
of any payment of moneys to or by the Trustee and shall be entitled to assume
conclusively that no such facts exist and that no event specified in clauses
(b) and (c) of Section 13.1 has happened unless and until the Trustee shall
have received an Officers' Certificate to the effect or notice in writing to
that effect signed by or on behalf of the holder or holders, or the
representatives, of Senior Indebtedness who shall have been certified by the
Issuer or otherwise established to the reasonable satisfaction of the Trustee
to be such holder or holders or representatives or from any trustee under any
indenture pursuant to which such Senior Indebtedness shall be outstanding;
provided, however, that, if the Trustee shall not have received the Officers'
Certificate or notice provided for in this Section 13.5 at least three
Business Days preceding the date upon which by the terms hereof any moneys
become payable for any purpose (including, without limitation, the payment of
either the principal of or interest, if any, on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such moneys and apply the same to the purpose
for which they were received and shall not be affected by any notice to the
contrary that may be received by it within three Business Days preceding such
date. The Issuer shall give prompt written notice to the Trustee and to each
paying agent of any facts that would prohibit any payment of moneys to or by
the Trustee or any paying agent, and the Trustee shall not be charged with
knowledge of the curing of any default or the elimination of any other fact
or condition preventing such payment or distribution unless and until the
Trustee shall have received an Officers' Certificate to such effect.
SECTION 13.6 Trustee to Effectuate Subordination. Each Holder of
Securities by his acceptance thereof authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as between such Holder and holders of Senior
Indebtedness as provided in this Article Thirteen and appoints the Trustee
its attorney-in-fact for any and all such purposes.
SECTION 13.7 Rights of Trustee as Holder of Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this Article
Thirteen with respect to any Senior Indebtedness which may at the time be
held by it, to the same extent as any other holder of Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder. Nothing in this Article Thirteen shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.6.
SECTION 13.8 Article Applicable to Paying Agents. In case at any
time any paying agent other than the Trustee shall have been appointed by the
Issuer and be then acting hereunder, the term "Trustee" as used in this
Article Thirteen shall in such case (unless the context shall otherwise
require) be construed as extending to and including such paying agent within
its meaning as fully for all intents and purposes as if the paying agent were
named in this Article Thirteen in addition to or in place of the Trustee;
provided, however, that Sections 13.5 and 13.7 shall not apply to the Issuer
if it acts as paying agent.
SECTION 13.9 Subordination Rights Not Impaired by Acts or Omissions
of the Issuer or Holders of Senior Indebtedness. No right of any present or
future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Issuer or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Issuer with
the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof which any such holder may have or be otherwise charged
with. The holders of Senior Indebtedness, may at any time or from time to
time and in their absolute direction, change the manner, place or terms of
payment, change or extend the time of payment of, or renew or alter, any such
Senior Indebtedness, or amend or supplement any instrument pursuant to which
any such Senior Indebtedness is issued or by which it may be secured, or
release any security therefor, or exercise or refrain from exercising any
other of their rights under such Senior Indebtedness, including, without
limitation, the waiver of default thereunder, all without notice to or assent
from the Holders of the Securities or the Trustee and without affecting the
obligations of the Issuer, the Trustee or the Holders of Securities under
this Article Thirteen.
SECTION 13.10 Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of the Senior Indebtedness, and shall not be liable to any such
holders if it shall mistakenly pay over or distribute money or assets to
Securityholders or the Issuer. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of
its covenants or obligations as are specifically set forth in this Article
Thirteen and no implied covenants or obligations with respect to holders of
Senior Indebtedness shall be read into this Indenture against the Trustee.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, as of the date first written above.
HOVNANIAN ENTERPRISES, INC.
By:_________________________________
Title:
_____________________________, as Trustee
By:__________________________________
Title:
____________________
[FN]
This Cross Reference Sheet is not part of the Indenture.
Exhibit 4.5
=============================================================================
HOVNANIAN ENTERPRISES, INC.
AND
___________________________
as Trustee
Form of Subordinated Indenture
Dated as of _________________
=============================================================================
CROSS REFERENCE SHEET
_______________
Provisions of Trust Indenture Act of 1939 and Indenture to be dated
as of __________________ between Hovnanian Enterprises, Inc. and
________________________, Trustee:
Section of the Act Section of Indenture
310(a)(1), (2) and (5) . . . 6.9
310(a)(3) and (4) . . . . . . Inapplicable
310(b) . . . . . . . . . . . 6.8 and 6.10(a), (b) and (d)
310(c) . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . 6.13
311(b) . . . . . . . . . . . 6.13
311(c) . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . . 4.2(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . . 4.4(a)(i), (ii), (iii), (iv), (v), (vi) and
(vii)
313(a)(5) . . . . . . . . . . Inapplicable
313(b)(1) . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . 4.4(b)
313(c) . . . . . . . . . . . 4.4(c)
313(d) . . . . . . . . . . . 4.4(d)
314(a) . . . . . . . . . . . 4.3
314(b) . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . 11.5
314(c)(3) . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . 11.5
314(f) . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . 6.1
315(b) . . . . . . . . . . . 5.8
315(e) . . . . . . . . . . . 5.9
316(a)(1) . . . . . . . . . . 5.7
316(a)(2) . . . . . . . . . . Not required
316(a) (last sentence) . . . 7.4
316(b) . . . . . . . . . . . 5.4
317(a) . . . . . . . . . . . 5.2
317(b) . . . . . . . . . . . 3.5(a)
318(a) . . . . . . . . . . . 11.7
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 9
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 9
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 9
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . 10
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 10
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 10
Global Security . . . . . . . . . . . . . . . . . . . . . . . . 10
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Holder of Securities . . . . . . . . . . . . . . . . . . . . . . 10
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 12
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 12
original issue date . . . . . . . . . . . . . . . . . . . . . . 12
original issue discount . . . . . . . . . . . . . . . . . . . . 12
Original Issue Discount Security . . . . . . . . . . . . . . . . 12
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . 13
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 13
principal . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
principal amount . . . . . . . . . . . . . . . . . . . . . . . . 14
record date . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 14
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . 14
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . 14
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 14
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . 14
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . 15
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . 15
U.S. Government Obligations . . . . . . . . . . . . . . . . . . 15
vice president . . . . . . . . . . . . . . . . . . . . . . . . . 15
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE TWO
SECURITIES . . . . . . . . . . . . . . 15
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . 15
SECTION 2.2 Form of Trustee's Certificate of Authentication . . 16
SECTION 2.3 Amount Unlimited Issuable in Series . . . . . . . . 17
SECTION 2.4 Authentication and Delivery of Securities . . . . . 19
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . . 22
SECTION 2.6 Certificate of Authentication . . . . . . . . . . . 23
SECTION 2.7 Denomination and Date of Securities; Payments
of Interest . . . . . . . . . . . . . . . . . . . 23
SECTION 2.8 Registration, Transfer and Exchange . . . . . . . . 24
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . 26
SECTION 2.10 Cancellation of Securities; Disposition
Thereof . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . 28
SECTION 2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . 28
ARTICLE THREE
COVENANTS OF THE ISSUER . . . . . . . . . . . 28
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . 28
SECTION 3.2 Offices for Notices and Payments, etc . . . . . . . 28
SECTION 3.3 No Interest Extension . . . . . . . . . . . . . . . 29
SECTION 3.4 Appointments to Fill Vacancies in Trustee's
Office . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.5 Provision as to Paying Agent . . . . . . . . . . . 29
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE . . . . . . . . . . . 30
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders . . . . . 30
SECTION 4.2 Preservation and Disclosure of Securityholders
Lists . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . 32
SECTION 4.4 Reports by the Trustee . . . . . . . . . . . . . . 33
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT . . . . . . . . . . . . 33
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . 33
SECTION 5.2 Payment of Securities on Default; Suit Therefor . . 36
SECTION 5.3 Application of Moneys Collected by Trustee . . . . 37
SECTION 5.4 Proceedings by Securityholders . . . . . . . . . . 38
SECTION 5.5 Proceedings by Trustee . . . . . . . . . . . . . . 39
SECTION 5.6 Remedies Cumulative and Continuing . . . . . . . . 39
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by
Majority of Securityholders . . . . . . . . . . . 39
SECTION 5.8 Notice of Defaults . . . . . . . . . . . . . . . . 40
SECTION 5.9 Undertaking to Pay Costs . . . . . . . . . . . . . 40
ARTICLE SIX
CONCERNING THE TRUSTEE . . . . . . . . . . . 41
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default . . . . . . . . 41
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . . 42
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application
of Proceeds Thereof . . . . . . . . . . . . . . . 43
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc . . . . . . . . . . . . . . . . 43
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . 43
SECTION 6.6 Compensation and Indemnification of Trustee and
Its Prior Claim . . . . . . . . . . . . . . . . . 44
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc . . . . . . . . . . . . . . . . 44
SECTION 6.8 Qualification of Trustee; Conflicting Interests . . 45
SECTION 6.9 Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series . . . . . 45
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee . . . . . . . . . . . . . . . . 45
SECTION 6.11 Acceptance of Appointment by Successor Trustee . . 47
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . . 48
SECTION 6.13 Preferential Collection of Claims Against the
Issuer . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . 49
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS . . . . . . . . . 50
SECTION 7.1 Evidence of Action Taken by Securityholders . . . . 50
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities . . . . . . . . . . . . . . 50
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . . 50
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . . . 51
SECTION 7.5 Right of Revocation of Action Taken . . . . . . . . 51
SECTION 7.6 Record Date for Consents and Waivers . . . . . . . 52
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES . . . . . . . . . . . 52
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders . . . . . . . . . . . . . . . . . 52
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders . . . . . . . . . . . . . . . . . 54
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . 55
SECTION 8.4 Documents to Be Given to Trustee . . . . . . . . . 56
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures . . . . . . . . . . . . . 56
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION 56
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms . . 56
SECTION 9.2 Successor Corporation to be Substituted . . . . . . 57
SECTION 9.3 Opinion of Counsel to be Given Trustee . . . . . . 57
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS . . . . . . . 58
SECTION 10.1 Satisfaction and Discharge of Indenture . . . . . 58
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities . . . . . . . . . . . . . . 60
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . . 61
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years . . . . . . . . . . 61
SECTION 10.5 Indemnity for U.S. Government Obligations . . . . 61
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS . . . . . . . . . . 61
SECTION 11.1 Partners, Incorporators, Stockholders,
Officers and Directors of Issuer Exempt
from Individual Liability . . . . . . . . . . . . 61
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities . . . . . . 62
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture . . . . . . . . . . . . . . . . . . . . 62
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Holders of Securities . . . . . . . . . . . . . . 62
SECTION 11.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein . . . 62
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays . . . . . . . . . . . . . . . . . . . . 64
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939 . . . . . . . . . . . 64
SECTION 11.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . 64
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . . 64
SECTION 11.10 Effect of Headings . . . . . . . . . . . . . . . . 64
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS . . . . . . 64
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . 64
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . 64
SECTION 12.3 Payment of Securities Called for Redemption . . . 66
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption . . . . 66
SECTION 12.5 Mandatory and Optional Sinking Funds . . . . . . . 67
ARTICLE THIRTEEN
SUBORDINATION . . . . . . . . . . . . . 69
SECTION 13.1 Securities Subordinated to Senior Indebtedness . . 69
SECTION 13.2 Reliance on Certificate of Liquidating Agent;
Further Evidence as to Ownership of Senior
Indebtedness . . . . . . . . . . . . . . . . . . 72
SECTION 13.3 Payment Permitted If No Default . . . . . . . . . 73
SECTION 13.4 Disputes with Holders of Certain Senior
Indebtedness . . . . . . . . . . . . . . . . . . 73
SECTION 13.5 Trustee Not Charged with Knowledge of
Prohibition . . . . . . . . . . . . . . . . . . . 73
SECTION 13.6 Trustee to Effectuate Subordination . . . . . . . 74
SECTION 13.7 Rights of Trustee as Holder of Senior
Indebtedness . . . . . . . . . . . . . . . . . . 74
SECTION 13.8 Article Applicable to Paying Agents . . . . . . . 74
SECTION 13.9 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . 74
SECTION 13.10 Trustee Not Fiduciary for Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . 75
FORM OF SUBORDINATED INDENTURE
FORM OF SUBORDINATED INDENTURE, dated as of
___________________ between Hovnanian Enterprises, Inc., a Delaware
corporation (the "Issuer"), and ___________________________, a
__________________, as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issuance from
time to time of its unsecured subordinated debentures, notes or other
evidences of indebtedness to be issued in one or more series (the
"Securities") up to such principal amount or amounts as may from time to time
be authorized in accordance with the terms of this Indenture; and
WHEREAS, the Issuer has duly authorized the execution and
delivery of this Indenture to provide, among other things, for the
authentication, delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a
valid indenture and agreement according to its terms have been undertaken and
completed;
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Securities by the Holders (as hereinafter defined) thereof, the Issuer and
the Trustee mutually covenant and agree for the equal and proportionate
benefit of the respective Holders from time to time of the Securities as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 For all purposes of this Indenture and of any
indenture supplemental hereto the following terms shall have the respective
meanings specified in this Section 1.1 (except as otherwise expressly
provided herein or in any indenture supplemental hereto or unless the context
otherwise clearly requires). All other terms used in this Indenture that are
defined in the Trust Indenture Act of 1939, including terms defined therein
by reference to the Securities Act of 1933, as amended (the "Securities
Act"), shall have the meanings assigned to such terms in said Trust Indenture
Act of 1939 and in said Securities Act as in force at the date of this
Indenture (except as otherwise expressly provided herein or in any indenture
supplemental hereto or unless the context otherwise clearly requires).
All accounting terms used herein and not expressly defined
shall have the meanings assigned to such terms in accordance with generally
accepted accounting principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted on the
date of this Indenture.
The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision. The expressions "date of
this Indenture", "date hereof", "date as of which this Indenture is dated"
and "date of execution and delivery of this Indenture" and other expressions
of similar import refer to the effective date of the original execution and
delivery of this Indenture, viz. as of _____________________.
The terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" shall have the meaning set forth in
Section 6.14.
"Bankruptcy Code" means the United States Bankruptcy Code,
11 United Stated Code Sections 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of
the Issuer or any committee of such Board duly authorized to act on its
behalf.
"Board Resolution" means one or more resolutions, certified
by the secretary or an assistant secretary of the Issuer to have been duly
adopted or consented to by the Board of Directors and to be in full force and
effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, unless
otherwise specified in a Board Resolution and an Officers' Certificate with
respect to a particular series of Securities, a day that (a) in the Place of
Payment (or in any of the Places of Payment, if more than one) in which
amounts are payable, as specified in the form of such Security, and (b) in
the city in which the Corporate Trust Office is located, is not a day on
which banking institutions are authorized or required by law or regulation to
close.
"Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Securities Exchange Act
of 1934, as amended, or, if at any time after the execution and delivery of
this Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act of 1939, then the body
performing such duties on such date.
"Consolidated Net Tangible Assets" means the aggregate
amount of assets included on the most recent consolidated balance sheet of
the Issuer and its Restricted Subsidiaries, less applicable reserves and
other properly deductible items and after deducting therefrom (a) all current
liabilities and (b) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all in
accordance with generally accepted accounting principles consistently
applied.
"Corporate Trust Office" means the office of the Trustee of
a series of Securities at which the trust created by this Indenture shall, at
any particular time, be principally administered, which office is, at the
date as of which this Indenture is dated, located at [address].
"Depositary" means, with respect to the Securities of any
series issuable or issued in the form of one or more Global Securities, the
Person designated as Depositary by the Issuer pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or
include each Person who is then a Depositary hereunder, and, if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with respect to the
Global Securities of such series.
"Dollars" and the sign "$" means the coin and currency of
the United States of America as at the time of payment is legal tender for
the payment of public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Event of Default" means any event or condition specified
as such in Section 5.1.
"Global Security" means a Security evidencing all or a part
of a series of Securities issued to the Depositary for such series in
accordance with Section 2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other
similar terms mean, in the case of any Security, the Person in whose name
such Security is registered in the security register kept by the Issuer for
that purpose in accordance with the terms hereof.
"Indebtedness" with respect to any Person, means, without
duplication:
(a) (i) the principal of and premium, if any, and
interest, if any, on indebtedness for money borrowed of
such Person, indebtedness of such Person evidenced by
bonds, notes, debentures or similar obligations, and any
guaranty by such Person of any indebtedness for money
borrowed or indebtedness evidenced by bonds, notes,
debentures or similar obligations of any other Person,
whether any such indebtedness or guaranty is outstanding on
the date of this Indenture or is thereafter created,
assumed or incurred, (ii) obligations of such Person for
the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction; (iii)
the principal of and premium, if any, and interest, if any,
on indebtedness incurred, assumed or guaranteed by such
Person in connection with the acquisition by it or any of
its subsidiaries of any other businesses, properties or
other assets; (iv) lease obligations which such Person
capitalized in accordance with Statement of Financial
Accounting Standards No. 13 promulgated by the Financial
Accounting Standards Board or such other generally accepted
accounting principles as may be from time to time in
effect; (v) any indebtedness of such Person representing
the balance deferred and unpaid of the purchase price of
any property or interest therein (except any such balance
that constitutes an accrued expense or trade payable) and
any guaranty, endorsement or other contingent obligation of
such Person in respect of any indebtedness of another that
is outstanding on the date of this Indenture or is
thereafter created, assumed or incurred by such Person; and
(vi) obligations of such Person under interest rate,
commodity or currency swaps, caps, collars, options and
similar arrangements; and
(b) any amendments, modifications, refundings, renewals or
extensions of any indebtedness or obligation described as
Indebtedness in clause (a) above.
"Indenture" means this instrument as originally executed
and delivered or, if amended or supplemented as herein provided, as so
amended or supplemented or both, including, for all purposes of this
instrument and any such supplement, the provisions of the Trust Indenture Act
of 1939 that are deemed to be a part of and govern this instrument and any
such supplement, respectively, and shall include the forms and terms of
particular series of Securities established as contemplated hereunder.
"interest" means, when used with respect to non-interest
bearing Securities (including, without limitation, any Original Issue
Discount Security that by its terms bears interest only after maturity or
upon default in any other payment due on such Security), interest payable
after maturity (whether at stated maturity, upon acceleration or redemption
or otherwise) or after the date, if any, on which the Issuer becomes
obligated to acquire a Security, whether upon conversion, by purchase or
otherwise.
"Issuer" means Hovnanian Enterprises, Inc., a Delaware
corporation, and, subject to Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request or order
of the Issuer which is signed in its name by the chairman of the Board of
Directors, the president or any vice president of the Issuer, and delivered
to the Trustee.
"Officers' Certificate", when used with respect to the
Issuer, means a certificate signed by the chairman of the Board of Directors,
the president, or any vice president and by the treasurer, any assistant
treasurer, the controller, any assistant controller, the secretary or any
assistant secretary of the Issuer. Each such certificate shall include the
statements provided for in Section 11.5 if and to the extent required by the
provisions of such Section 11.5. One of the officers signing an Officers'
Certificate given pursuant to Section 4.3 shall be the principal executive,
financial or accounting officer of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by
the chief counsel of the Issuer or by such other legal counsel who may be an
employee of or counsel to the Issuer and who shall be reasonably satisfactory
to the Trustee. Each such opinion shall include the statements provided for
in Section 11.5, if and to the extent required by the provisions of such
Section 11.5.
"original issue date" of any Security (or portion thereof)
means the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
"original issue discount" of any debt security, including
any Original Issue Discount Security, means the difference between the
principal amount of such debt security and the initial issue price of such
debt security (as set forth in the case of an Original Issue Discount
Security on the face of such Security).
"Original Issue Discount Security" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant
to Article Five.
"Outstanding" when used with reference to Securities,
shall, subject to the provisions of Section 7.4, mean, as of any particular
time, all Securities authenticated and delivered by the Trustee under this
Indenture, except:
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities (other than Securities of any series as to
which the provisions of Article Ten hereof shall not be applicable),
or portions thereof, for the payment or redemption of which moneys or
U.S. Government Obligations (as provided for in Section 10.1) in the
necessary amount shall have been deposited in trust with the Trustee
or with any paying agent (other than the Issuer) or shall have been
set aside, segregated and held in trust by the Issuer for the Holders
of such Securities (if the Issuer shall act as its own paying agent),
provided that, if such Securities, or portions thereof, are to be
redeemed prior to the maturity thereof, notice of such redemption
shall have been given as herein provided, or provision satisfactory
to the Trustee shall have been made for giving such notice; and
(c) Securities which shall have been paid or in
substitution for which other Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.9 (except with
respect to any such Security as to which proof satisfactory to the
Trustee is presented that such Security is held by a Person in whose
hands such Security is a legal, valid and binding obligation of the
Issuer).
In determining whether the Holders of the requisite
aggregate principal amount of Outstanding Securities of any or all series
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding for such purposes shall be the portion
of the principal amount thereof that would be due and payable as of the date
of such determination (as certified by the Issuer to the Trustee) upon a
declaration of acceleration of the maturity thereof pursuant to Article Five.
"Periodic Offering" means an offering of Securities of a
series from time to time, the specific terms of which Securities, including,
without limitation, the rate or rates of interest, if any, thereon, the
stated maturity or maturities thereof and the redemption provisions, if any,
with respect thereto, are to be determined by the Issuer or its agents upon
the issuance of such Securities.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint stock
company, trust, estate, unincorporated organization or government or any
agency or political subdivision thereof.
"Place of Payment", when used with respect to the
Securities of any series, means the place or places where the principal of
and interest, if any, on the Securities of such series are payable as
determined in accordance with Section 2.3.
"principal" of a debt security, including any Security,
means the amount (including, without limitation, if and to the extent
applicable, any premium and, in the case of an Original Issue Discount
Security, any accrued original issue discount, but excluding interest) that
is payable with respect to such debt security as of any date and for any
purpose (including, without limitation, in connection with any sinking fund,
if any, upon any redemption at the option of the Issuer, upon any purchase or
exchange at the option of the Issuer or the holder of such debt security and
upon any acceleration of the maturity of such debt security).
"principal amount" of a debt security, including any
Security, means the principal amount as set forth on the face of such debt
security.
"record date" shall have the meaning set forth in Section
2.7.
"Responsible Officer", when used with respect to the
Trustee of a series of Securities, means any officer of the Trustee with
direct responsibility for the administration of the trust created by this
Indenture.
"Restricted Subsidiary" means (a) any Subsidiary of the
Issuer other than an Unrestricted Subsidiary, and (b) any Subsidiary of the
Issuer which was an Unrestricted Subsidiary but which, subsequent to the date
hereof, is designated by the Issuer (by Board Resolution) to be a Restricted
Subsidiary; provided, however, that the Issuer may not designate any such
Subsidiary to be a Restricted Subsidiary if the Issuer would thereby breach
any covenant or agreement herein contained (on the assumptions that any
outstanding Indebtedness of such Subsidiary was incurred at the time of such
designation).
"Securities Act" shall have the meaning set forth in
Section 1.1.
"Security" or "Securities" has the meaning stated in the
first recital of this Indenture or, as the case may be, Securities that have
been authenticated and delivered pursuant to this Indenture.
"Senior Indebtedness" means Indebtedness of the Issuer
outstanding at any time (other than the Indebtedness evidenced by the
Securities of any series) except (a) any Indebtedness as to which, by the
terms of the instrument creating or evidencing such Indebtedness, it is
provided that such Indebtedness is not senior or prior in right of payment to
the Securities or is pari passu or subordinate by its terms in right of
payment to the Securities, (b) renewals, extensions and modifications of any
such Indebtedness, (c) any Indebtedness of the Issuer to a wholly-owned
Subsidiary of the Issuer, (d) interest accruing after the filing of a
petition initiating any proceeding referred to in Sections 5.1(e) and 5.1(f)
unless such interest is an allowed claim enforceable against the Issuer in a
proceeding under federal or state bankruptcy laws and (e) trade payables.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" of the Issuer within the meaning of Rule 1.02(w) of
Regulation S-X promulgated by the Commission as in effect on the date of this
Indenture.
"Subsidiary" of any specified Person means any corporation
of which such Person, or such Person and one or more Subsidiaries of such
Person, or any one or more Subsidiaries of such Person, directly or
indirectly own voting securities entitling any one or more of such Persons
and its Subsidiaries to elect a majority of the directors, either at all
times or, so long as there is no default or contingency which permits the
holders of any other class or classes of securities to vote for the election
of one or more directors.
"Trust Indenture Act of 1939" (except as otherwise provided
in Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which
this Indenture is originally executed.
"Trustee" means the Person identified as "Trustee" in the
first paragraph hereof and, subject to the provisions of Article Six, shall
also include any successor trustee. "Trustee" shall also mean or include
each Person who is then a trustee hereunder and, if at any time there is more
than one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of such series.
"Unrestricted Subsidiary" means (a) any Subsidiary of the
Issuer acquired or organized after the date hereof, provided, however, that
such Subsidiary of the Issuer shall not be a successor, directly or
indirectly, to any Restricted Subsidiary, and (b) any Subsidiary of the
Issuer substantially all the assets of which consist of stock or other
securities of a Subsidiary or Subsidiaries of the Issuer of the character
described in clause (a) of this paragraph, unless and until such Subsidiary
shall have been designated to be a Restricted Subsidiary pursuant to clause
(b) of the definition of "Restricted Subsidiary".
"U.S. Government Obligations" shall have the meaning set
forth in Section 10.1(B).
"vice president," when used with respect to the Issuer or
the Trustee, means any vice president, regardless of whether designated by a
number or a word or words added before or after the title "vice president."
"Yield to Maturity" means the yield to maturity on a series
of Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series,
and calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each
series shall be substantially in such form (not inconsistent with this
Indenture) as shall be established by or pursuant to one or more Board
Resolutions (as set forth in a Board Resolution or, to the extent established
pursuant to rather than set forth in a Board Resolution, an Officers'
Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have imprinted or otherwise reproduced thereon such
legend or legends or endorsements, not inconsistent with the provisions of
this Indenture, as may be required to comply with any law or with any rules
or regulations pursuant thereto, or with any rules of any securities exchange
or to conform to general usage, all as may be determined by the officers
executing such Securities, as evidenced by their execution of such
Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities as evidenced by
their execution of such Securities.
SECTION 2.2 Form of Trustee's Certificate of
Authentication. The Trustee's certificate of authentication on all
Securities shall be substantially as follows:
This is one of the Securities of the series designated
herein referred to in the within mentioned Indenture.
_________________________, as Trustee
By_______________________________
Authorized Signatory
If at any time there shall be an Authenticating Agent
appointed with respect to any series of Securities, then the Securities of
such series shall bear, in addition to the Trustee's certificate of
authentication, an alternate Certificate of Authentication which shall be
substantially as follows:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
________________________, as Trustee
By___________________________________
as Authenticating Agent
By___________________________________
Authorized Signatory
SECTION 2.3 Amount Unlimited Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series and the
Securities of each such series shall rank equally and pari passu with the
Securities of each other series, but all Securities issued hereunder shall be
subordinate and junior in right of payment, to the extent and in the manner
set forth in Article Thirteen, to all Senior Indebtedness of the Issuer.
There shall be established in or pursuant to one or more Board Resolutions
(and, to the extent established pursuant to rather than set forth in a Board
Resolution, in an Officers' Certificate detailing such establishment) or
established in one or more indentures supplemental hereto, prior to the
initial issuance of Securities of any series:
(1) the designation of the Securities of the series, which
shall distinguish the Securities of such series from the Securities
of all other series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 2.8, 2.9,
2.11, 8.5 or 12.3);
(3) the date or dates on which the principal of the
Securities of the series is payable;
(4) the rate or rates at which the Securities of the
series shall bear interest, if any, the date or dates from which any
such interest shall accrue, on which any such interest shall be
payable and on which a record shall be taken for the determination of
Holders to whom any such interest is payable or the method by which
such rate or rates or date or dates shall be determined or both;
(5) the place or places where and the manner in which the
principal of, premium, if any, and interest, if any, on Securities of
the series shall be payable (if other than as provided in Section
3.2) and the office or agency for the Securities of the series
maintained by the Issuer pursuant to Section 3.2;
(6) the right, if any, of the Issuer to redeem, purchase
or repay Securities of the series, in whole or in part, at its option
and the period or periods within which, the price or prices (or the
method by which such price or prices shall be determined or both) at
which, the form or method of payment therefor if other than in cash
and any terms and conditions upon which and the manner in which (if
different from the provisions of Article Twelve) Securities of the
series may be so redeemed, purchased or repaid, in whole or in part
pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem,
purchase or repay Securities of the series in whole or in part
pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which the price or prices (or the method by which such
price or prices shall be determined or both) at which, the form or
method of payment therefor if other than in cash and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(9) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon acceleration of the maturity thereof;
(10) whether Securities of the series will be issuable as
Global Securities;
(11) if the Securities of such series are to be issuable
in definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(12) any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars or any other agents with
respect to the Securities of such series;
(13) any deleted, modified or additional events of default
or remedies or any deleted, modified or additional covenants with
respect to the Securities of such series;
(14) whether the provisions of Section 10.1(C) will be
applicable to Securities of such series;
(15) any provision relating to the issuance of Securities
of such series at an original issue discount (including, without
limitation, the issue price thereof, the rate or rates at which such
original issue discount shall accrete, if any, and the date or dates
from or to which or period or periods during which such original
issue discount shall accrete at such rate or rates);
(16) if other than Dollars, the foreign currency in which
payment of the principal of, premium, if any, and interest, if any,
on the Securities of such series shall be payable;
(17) if other than ____________________________ is to act
as Trustee for the Securities of such series, the name and Corporate
Trust Office of such Trustee;
(18) if the amounts of payments of principal of, premium,
if any, and interest, if any, on the Securities of such series are to
be determined with reference to an index, the manner in which such
amounts shall be determined;
(19) the terms for conversion or exchange, if any, with
respect to the Securities of such series; and
(20) any other terms of the series.
All Securities of any one series shall be substantially
identical, except as to denomination and except as may otherwise be provided
by or pursuant to the Board Resolution or Officers' Certificate referred to
above or as set forth in any such indenture supplemental hereto. All
Securities of any one series need not be issued at the same time and may be
issued from time to time, consistent with the terms of this Indenture, if so
provided by or pursuant to such Board Resolution, such Officers' Certificate
or in any such indenture supplemental hereto.
Any such Board Resolution or Officers' Certificate referred
to above with respect to Securities of any series filed with the Trustee on
or before the initial issuance of the Securities of such series shall be
incorporated herein by reference with respect to Securities of such series
and shall thereafter be deemed to be a part of the Indenture for all purposes
relating to Securities of such series as fully as if such Board Resolution or
Officers' Certificate were set forth herein in full.
SECTION 2.4 Authentication and Delivery of Securities.
The Issuer may deliver Securities of any series executed by the Issuer to the
Trustee for authentication together with the applicable documents referred to
below in this Section 2.4, and the Trustee shall thereupon authenticate and
deliver such Securities to, or upon the order of the Issuer (contained in the
Issuer Order referred to below in this Section 2.4) or pursuant to such
procedures acceptable to the Trustee and to such recipients as may be
specified from time to time by an Issuer Order. The maturity date, original
issue date, interest rate, if any, and any other terms of the Securities of
such series shall be determined by or pursuant to such Issuer Order and
procedures. If provided for in such procedures and agreed to by the Trustee,
such Issuer Order may authorize authentication and delivery pursuant to oral
instructions from the Issuer or its duly authorized agent, which instructions
shall be promptly confirmed in writing. In authenticating the Securities of
such series and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive (in the case of subparagraphs (2), (3) and (4) below only at or
before the time of the first request of the Issuer to the Trustee to
authenticate Securities of such series) and (subject to Section 6.1) shall be
fully protected in relying upon, unless and until such documents have been
superseded or revoked:
(1) an Issuer Order requesting such authentication and
setting forth delivery instructions provided that, with respect to
Securities of a series subject to a Periodic Offering, (a) such
Issuer Order may be delivered by the Issuer to the Trustee prior to
the delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities
of such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or pursuant
to procedures acceptable to the Trustee as may be specified from time
to time by an Issuer Order, (c) the maturity date or dates, original
issue date or dates, interest rate or rates, if any, and any other
terms of Securities of such series shall be determined by an Issuer
Order or pursuant to such procedures, (d) if provided for in such
procedures, such Issuer Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Issuer
or its duly authorized agent or agents, which oral instructions shall
be promptly confirmed in writing and (e) after the original issuance
of the first Security of such series to be issued, any separate
request by the Issuer that the Trustee authenticate Securities of
such series for original issuance will be deemed to be a
certification by the Issuer that it is in compliance with all
conditions precedent provided for in this Indenture relating to the
authentication and delivery of such Securities;
(2) the Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3
by or pursuant to which the forms and terms of the Securities of such
series were established;
(3) an Officers' Certificate setting forth the form or
forms and terms of the Securities stating that the form or forms and
terms of the Securities have been established pursuant to Sections
2.1 and 2.3 and comply with this Indenture and covering such other
matters as the Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion of
Counsel, or a letter from legal counsel addressed to the Trustee
permitting it to rely on an Opinion of Counsel, substantially to the
effect that:
(a) the form or forms of the Securities of such series
have been duly authorized and established in conformity
with the provisions of this Indenture;
(b) in the case of an underwritten offering, the terms
of the Securities of such series have been duly authorized
and established in conformity with the provisions of this
Indenture, and, in the case of an offering that is not
underwritten, certain terms of the Securities of such
series have been established pursuant to a Board
Resolution, an Officers' Certificate or a supplemental
indenture in accordance with this Indenture, and when such
other terms as are to be established pursuant to procedures
set forth in an Issuer Order shall have been established,
all such terms will have been duly authorized by the Issuer
and will have been established in conformity with the
provisions of this Indenture;
(c) when the Securities of such series have been
executed by the Issuer and the Securities of such series
have been authenticated by the Trustee in accordance with
the provisions of this Indenture and delivered to and duly
paid for by the purchasers thereof, they will have been
duly issued under this Indenture and will be valid and
legally binding obligations of the Issuer, enforceable in
accordance with their respective terms, and will be
entitled to the benefits of this Indenture; and
(d) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, the
Securities of such series will not contravene any provision
of applicable law or the articles of incorporation or
bylaws of the Issuer or any agreement or other instrument
binding upon the Issuer or any of its Subsidiaries that is
material to the Issuer and its Subsidiaries, considered as
one enterprise, or, to such counsel's knowledge after the
inquiry indicated therein (which shall be reasonable), any
judgment, order or decree of any governmental agency or any
court having jurisdiction over the Issuer or any Subsidiary
of the Issuer, and no consent, approval or authorization of
any governmental body or agency is required for the
performance by the Issuer of its obligations under the
Securities, except such as are specified and have been
obtained and such as may be required by the securities or
blue sky laws of the various states in connection with the
offer and sale of the Securities.
In addition, if the authentication and delivery relates to
a new series of Securities created by an indenture supplemental hereto, such
Opinion of Counsel shall also state that all laws and requirements with
respect to the form and execution by the Issuer of the supplemental indenture
with respect to the series of Securities have been complied with, the Issuer
has corporate power to execute and deliver any such supplemental indenture
and has taken all necessary corporate action for those purposes and any such
supplemental indenture has been executed and delivered and constitutes the
legal, valid and binding obligation of the Issuer enforceable in accordance
with its terms.
In rendering such opinions, such counsel may qualify any
opinions as to enforceability by stating that such enforceability may be
limited by bankruptcy, insolvency, reorganization, liquidation, moratorium
and other similar laws affecting the rights and remedies of creditors and is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Such
counsel may rely, as to all matters governed by the laws of jurisdictions
other than the State of Delaware and the federal law of the United States,
upon opinions of other counsel (copies of which shall be delivered to the
Trustee), who shall be counsel reasonably satisfactory to the Trustee, in
which case the opinion shall state that such counsel believes that both such
counsel and the Trustee are entitled so to rely. Such counsel may also state
that, insofar as such opinion involves factual matters, such counsel has
relied, to the extent such counsel deems proper, upon certificates of
officers of the Issuer and its Subsidiaries and certificates of public
officials.
The Trustee shall have the right to decline to authenticate
and deliver any Securities of any series under this Section 2.4 if the
Trustee, being advised by counsel, determines that such action may not
lawfully be taken by the Issuer, or if the Trustee in good faith by its board
of directors or board of trustees, executive committee or a trust committee
of directors or trustees or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing Holders or
would adversely affect the Trustee's own rights, duties or immunities under
the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that
the Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section 2.4 and the Issuer Order with respect to such
series, authenticate and deliver one or more Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series to be issued in the
form of Global Securities and not yet cancelled, (ii) shall be registered in
the name of the Depositary for such Global Security or Securities or the
nominee of such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instructions, and (iv) shall bear
a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for Securities in definitive registered form,
this Security may not be transferred except as a whole by the Depositary to
the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3 must, at
the time of its designation and at all times while it serves as Depositary,
be a clearing agency registered under the Securities Exchange Act of 1934, as
amended, and any other applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall
be signed on behalf of the Issuer by the chairman of the Board of Directors,
the president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one
of its assistant secretaries. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the
Issuer may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Securities. Typographical
and other minor errors or defects in any such reproduction of a seal or any
such signature shall not affect the validity or enforceability of any
Security that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any
of the Securities shall cease to be such officer before the Security so
signed shall be authenticated and delivered by the Trustee or disposed of by
the Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Security had not ceased to
be such officer of the Issuer; and any Security may be signed on behalf of
the Issuer by such persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Issuer, although at the date of
the execution and delivery of this Indenture any such person was not such an
officer.
SECTION 2.6 Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication
substantially in the form hereinbefore recited, executed by the Trustee by
the manual signature of one of its authorized signatories, or its
Authenticating Agent, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. The execution of such certificate by
the Trustee or its Authenticating Agent upon any Security executed by the
Issuer shall be conclusive evidence that the Security so authenticated has
been duly authenticated and delivered hereunder and that the Holder is
entitled to the benefits of this Indenture. Each reference in this Indenture
to authentication by the Trustee includes authentication by an agent
appointed pursuant to Section 6.14.
SECTION 2.7 Denomination and Date of Securities; Payments
of Interest. The Securities of each series shall be issuable in registered
form in denominations established as contemplated by Section 2.3 or, with
respect to the Securities of any series, if not so established, in
denominations of $1,000 and any integral multiple thereof. The Securities of
each series shall be numbered, lettered or otherwise distinguished in such
manner or in accordance with such plan as the officers of the Issuer
executing the same may determine with the approval of the Trustee, as
evidenced by the execution and authentication thereof.
Each Security shall be dated the date of its
authentication. The Securities of each series shall bear interest, if any,
from the date, and such interest, if any, shall be payable on the dates,
established as contemplated by Section 2.3.
The Person in whose name any Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Security
subsequent to the record date and prior to such interest payment date, except
if and to the extent the Issuer shall default in the payment of the interest
due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the Persons in whose names Outstanding
Securities for such series are registered (a) at the close of business on a
subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice
given by mail by or on behalf of the Issuer to the Holders of Securities not
less than 15 days preceding such subsequent record date or (b) as determined
by such other procedure as is mutually acceptable to the Issuer and the
Trustee. The term "record date" as used with respect to any interest payment
date (except a date for payment of defaulted interest) for the Securities of
any series shall mean the date specified as such in the terms of the
Securities of such series established as contemplated by Section 2.3, or, if
no such date is so established, if such interest payment date is the first
day of a calendar month, the fifteenth day of the next preceding calendar
month or, if such interest payment date is the fifteenth day of a calendar
month, the first day of such calendar month, whether or not such record date
is a Business Day.
SECTION 2.8 Registration, Transfer and Exchange. The
Issuer will keep at each office or agency to be maintained for the purpose as
provided in Section 3.2 for each series of Securities a register or registers
in which, subject to such reasonable regulations as it may prescribe, it will
provide for the registration of Securities of each series and the
registration of transfer of Securities of such series. Each such register
shall be in written form in the English language or in any other form capable
of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for inspection and
available for copying by the Trustee.
Upon due presentation for registration of transfer of any
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Security or Securities of the same series, maturity date, interest rate,
if any, and original issue date in authorized denominations for a like
aggregate principal amount.
All Securities presented for registration of transfer shall
(if so required by the Issuer or the Trustee) be duly endorsed by, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the Holder or
his attorney duly authorized in writing.
At the option of the Holder thereof, Securities of any
series (other than a Global Security, except as set forth below) may be
exchanged for a Security or Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Securities to be exchanged at the agency of the Issuer that shall be
maintained for such purpose in accordance with Section 3.2.
The Issuer may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any registration of transfer of Securities. No service charge shall be made
for any such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a
transfer of (a) any Securities of any series for a period of 15 days next
preceding the first mailing or publication of notice of redemption of
Securities of such series to be redeemed, (b) any Securities selected, called
or being called for redemption, in whole or in part, except, in the case of
any Security to be redeemed in part, the portion thereof not so to be
redeemed or (c) any Security if the Holder thereof has exercised his right,
if any, to require the Issuer to repurchase such Security in whole or in
part, except the portion of such Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8,
unless and until it is exchanged in whole or in part for Securities in
definitive registered form, a Global Security representing all or a part of
the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor Depositary for such
series or a nominee of such successor Depositary.
If at any time the Depositary for any Securities of a
series represented by one or more Global Securities notifies the Issuer that
it is unwilling or unable to continue as Depositary for such Securities or if
at any time the Depositary for such Securities shall no longer be eligible
under Section 2.4, the Issuer shall appoint a successor Depositary with
respect to such Securities. If a successor Depositary for such Securities is
not appointed by the Issuer within 90 days after the Issuer receives such
notice or becomes aware of such ineligibility, the Issuer's election pursuant
to Section 2.3 that such Securities be represented by one or more Global
Securities shall no longer be effective and the Issuer shall execute, and the
Trustee, upon receipt of an Issuer Order for the authentication and delivery
of definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount
of the Global Security or Securities representing such Securities in exchange
for such Global Security or Securities.
The Issuer may at any time and in its sole discretion
determine that the Securities of any series issued in the form of one or more
Global Securities shall no longer be represented by a Global Security or
Securities. In such event, the Issuer shall execute, and the Trustee, upon
receipt of an Issuer Order for the authentication and delivery of definitive
Securities of such series, shall authenticate and deliver, Securities of such
series in definitive registered form, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such Securities, in exchange for such
Global Security or Securities.
If specified by the Issuer pursuant to Section 2.3 with
respect to Securities represented by a Global Security, the Depositary for
such Global Security may surrender such Global Security in exchange in whole
or in part for Securities of the same series in definitive registered form on
such terms as are acceptable to the Issuer and such Depositary. Thereupon,
the Issuer shall execute, and the Trustee shall authenticate and deliver,
without service charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of a Global Security for Securities in
definitive registered form in authorized denominations, such Global Security
shall be cancelled by the Trustee or an agent of the Trustee. Securities in
definitive registered form issued in exchange for a Global Security pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of
the Issuer. The Trustee or such agent shall deliver at its office such
Securities to or as directed by the Persons in whose names such Securities
are so registered.
All Securities issued upon any registration of transfer or
exchange of Securities shall be valid and legally binding obligations of the
Issuer, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Securities surrendered upon such registration of
transfer or exchange.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of the Issuer, the
Trustee shall authenticate and deliver a new Security of the same series,
maturity date, interest rate, if any, and original issue date, bearing a
number or other distinguishing symbol not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Security, or in lieu
of and in substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substitute Security shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as may be required by the Trustee or the Issuer or any
such agent to indemnify and defend and to save each of the Trustee and the
Issuer and any such agent harmless and, in every case of destruction, loss or
theft, evidence to their satisfaction of the destruction, loss or theft of
such Security and of the ownership thereof and in the case of mutilation or
defacement, shall surrender the Security to the Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or its agent)
connected therewith. In case any Security which has matured or is about to
mature or has been called for redemption in full shall become mutilated or
defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a
substitute Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated or defaced Security), if
the applicant for such payment shall furnish to the Issuer and to the Trustee
and any agent of the Issuer or the Trustee such security or indemnity as any
of them may require to hold each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Issuer
and the Trustee and any agent of the Issuer or the Trustee evidence to the
Trustee's satisfaction of the destruction, loss or theft of such Security and
of the ownership thereof.
Every substitute Security of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such Security
is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights
set forth in) this Indenture equally and proportionately with any and all
other Securities of such series duly authenticated and delivered hereunder.
All Securities shall be held and owned upon the express condition that, to
the extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, destroyed, lost
or stolen Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Disposition
Thereof. All Securities surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a
sinking or analogous fund, if surrendered to the Issuer or any agent of the
Issuer or the Trustee or any agent of the Trustee, shall be delivered to the
Trustee or its agent for cancellation or, if surrendered to the Trustee,
shall be cancelled by it; and no Securities shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture.
The Trustee shall dispose of all cancelled Securities in accordance with its
standard procedures and shall deliver a certificate of such disposition to
the Company. If the Issuer or its agent shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee or its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the
preparation of definitive Securities for any series, the Issuer may execute
and the Trustee shall authenticate and deliver temporary Securities for such
series (printed, lithographed, typewritten or otherwise reproduced, in each
case in form satisfactory to the Trustee). Temporary Securities of any
series shall be issuable in any authorized denomination, and substantially in
the form of the definitive Securities of such series but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all
as may be determined by the Issuer with the concurrence of the Trustee as
evidenced by the execution and authentication thereof. Temporary Securities
may contain such references to any provisions of this Indenture as may be
appropriate. Every temporary Security shall be executed by the Issuer and be
authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive
Securities of such series and thereupon temporary Securities of such series
may be surrendered in exchange therefor without charge at each office or
agency to be maintained by the Issuer for that purpose pursuant to Section
3.2 and the Trustee shall authenticate and deliver in exchange for such
temporary Securities of such series an equal aggregate principal amount of
definitive Securities of the same series having authorized denominations.
Until so exchanged, the temporary Securities of any series shall be entitled
to the same benefits under this Indenture as definitive Securities of such
series, unless otherwise established pursuant to Section 2.3.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the
Securities may use "CUSIP" numbers (if then generally in use), and, if so,
the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of, premium, if any, and interest, if any, on each of the
Securities at the place, at the respective times and in the manner provided
in the Securities.
SECTION 3.2 Offices for Notices and Payments, etc. So
long as any of the Securities are Outstanding, the Issuer will maintain in
each Place of Payment, an office or agency where the Securities may be
presented for payment, an office or agency where the Securities may be
presented for registration of transfer and for exchange as provided in this
Indenture, and an office or agency where notices and demands to or upon the
Issuer in respect of the Securities or of this Indenture may be served. In
case the Issuer shall at any time fail to maintain any such office or agency,
or shall fail to give notice to the Trustee of any change in the location
thereof, presentation may be made and notice and demand may be served in
respect of the Securities or of this Indenture at the Corporate Trust Office.
The Issuer hereby initially designates the Corporate Trust Office for each
such purpose and appoints the Trustee as registrar and paying agent and as
the agent upon whom notices and demands may be served with respect to the
Securities.
SECTION 3.3 No Interest Extension. In order to prevent
any accumulation of claims for interest after maturity thereof, the Issuer
will not directly or indirectly extend or consent to the extension of the
time for the payment of any claim for interest on any of the Securities and
will not directly or indirectly be a party to or approve any such arrangement
by the purchase or funding of said claims or in any other manner; provided,
however, that this Section 3.3 shall not apply in any case where an extension
shall be made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's
Office. The Issuer, whenever necessary to avoid or fill a vacancy in the
office of the Trustee, will appoint, in the manner provided in Section 6.10,
a Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 3.5 Provision as to Paying Agent. (a) If the
Issuer shall appoint a paying agent other than the Trustee, it will cause
such paying agent to execute and deliver to the Trustee an instrument in
which such paying agent shall agree with the Trustee, subject to the
provisions of this Section 3.5,
(1) that it will hold all sums held by it as such paying
agent for the payment of the principal of or interest, if any, on the
Securities (whether such sums have been paid to it by the Issuer or
by any other obligor on the Securities) in trust for the benefit of
the Holders of the Securities and the Trustee; and
(2) that it will give the Trustee notice of any failure by
the Issuer (or by any other obligor on the Securities) to make any
payment of the principal of, premium, if any, or interest, if any, on
the Securities when the same shall be due and payable; and
(3) that it will, at any time during the continuance of
any such failure, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such paying agent.
(b) If the Issuer shall act as its own paying agent, it
will, on or before each due date of the principal of or interest, if any, on
the Securities, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities a sum sufficient to pay such principal, premium, if
any, or interest, if any, so becoming due and will notify the Trustee of any
failure to take such action and of any failure by the Issuer (or by any other
obligor under the Securities) to make any payment of the principal of,
premium, if any, or interest, if any, on the Securities when the same shall
become due and payable.
(c) Anything in this Section 3.5 to the contrary
notwithstanding, the Issuer may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by it, or any paying
agent hereunder, as required by this Section 3.5, such sums to be held by the
Trustee upon the trusts herein contained.
(d) Anything in this Section 3.5 to the contrary
notwithstanding, any agreement of the Trustee or any paying agent to hold
sums in trust as provided in this Section 3.5 is subject to Sections 10.3 and
10.4.
(e) Whenever the Issuer shall have one or more paying
agents, it will, on or before each due date of the principal of or interest,
if any, on any Securities, deposit with a paying agent a sum sufficient to
pay the principal, premium, if any, or interest, if any, so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium, if any, or interest, if any, and (unless such paying
agent is the Trustee) the Issuer will promptly notify the Trustee of its
action or failure so to act.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders. The Issuer and any other obligor on
the Securities covenant and agree that they will furnish or cause to be
furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders of the Securities of each
series:
(a) semiannually and not more than 15 days after each
January 1 and July 1, and
(b) at such other times as the Trustee may request in
writing, within 15 days after receipt by the Issuer of any such
request,
provided that if and so long as the Trustee shall be the registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders
Lists. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders of each series of Securities (i) contained in the most recent list
furnished to it as provided in Section 4.1, and (ii) received by it in the
capacity of registrar or paying agent for such series, if so acting. The
Trustee may destroy any list furnished to it as provided in Section 4.1 upon
receipt of a new list so furnished.
(b) In case three or more Holders of Securities
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of a particular series (in which
case the applicants must all hold Securities of such series) or with Holders
of all Securities with respect to their rights under this Indenture or under
such Securities and such application is accompanied by a copy of the form of
proxy or other communication which such applicants propose to transmit, then
the Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, or
(ii) inform such applicants as to the approximate number
of Holders of Securities of such series or of all
Securities, as the case may be, whose names and addresses
appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection
(a) of this Section 4.2, and as to the approximate cost of
mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants
access to such information, the Trustee shall, upon the written request of
such applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy
or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders
of Securities of such series or of all Securities, as the case may be, or
would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for
a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met, and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Securityholders
with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by receiving and
holding the same, agrees with the Issuer and the Trustee that neither the
Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be
held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders of Securities in accordance with the
provisions of subsection (b) of this Section 4.2, regardless of the source
from which such information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant to a request made
under such subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to time
by rules and regulations prescribe), if any, which the Issuer may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Issuer is not required to file information,
documents or reports pursuant to either of such Sections, then to file with
the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a debt security listed and
registered on a national securities exchange as may be prescribed from time
to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants provided for in
this Indenture as may be required from time to time by such rules and
regulations;
(c) to transmit by mail to the Holders of Securities
within 30 days after the filing thereof with the Trustee, in the manner and
to the extent provided in Section 4.4(c), such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to
subsections (a) and (b) of this Section 4.3 as may be required to be
transmitted to such Holders by rules and regulations prescribed from time to
time by the Commission; and
(d) to furnish to the Trustee, not less than annually, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his knowledge of the Issuer's
compliance with all conditions and covenants under this Indenture. For
purposes of this subsection (d), such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
SECTION 4.4 Reports by the Trustee. (a) The Trustee shall
transmit to Holders such reports concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act of 1939
at the times and in the manner provided pursuant thereto. To the extent that
any such report is required by the Trust Indenture Act of 1939 with respect
to any 12 month period, such report shall cover the 12 month period ending
July 15 and shall be transmitted by the next succeeding September 15.
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by
the Trustee with each stock exchange upon which the Securities of any
applicable series are listed and also with the Commission. The Issuer agrees
to promptly notify the Trustee with respect to any series when and as the
Securities of such series become admitted to trading on any national
securities exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default",
wherever used herein with respect to Securities of any series, means any one
or more of the following events (whatever the reason for such Event of
Default and whether it shall be occasioned by the provisions of Article
Thirteen or otherwise), unless it is either inapplicable to a particular
series or it is specifically deleted or modified in or pursuant to the Board
Resolution or supplemental indenture establishing such series of Securities
or in the form of Security, for such series:
(a) default in the payment of the principal of or premium,
if any, of the Securities of such series as and when the same shall become
due and payable either at maturity, upon redemption, by declaration or
otherwise; or
(b) default in the payment of any installment of interest
on any of the Securities of such series as and when the same shall become due
and payable, and continuance of such default for a period of 30 days; or
(c) default in the payment or satisfaction of any sinking
fund or other purchase obligation with respect to Securities of such series,
as and when such obligation shall become due and payable; or
(d) failure on the part of the Issuer duly to observe or
perform any other of the covenants or agreements on the part of the Issuer in
the Securities of such series or in this Indenture continued for a period of
90 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given by certified or registered mail to
the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Securities of such series
then Outstanding; or
(e) without the consent of the Issuer a court having
jurisdiction shall enter an order for relief with respect to the Issuer or
any of its Significant Subsidiaries under any applicable bankruptcy,
insolvency or other similar law of the United States of America, any state
thereof or the District of Columbia, or without the consent of the Issuer a
court having jurisdiction shall enter a judgment, order or decree adjudging
the Issuer or any of its Significant Subsidiaries bankrupt or insolvent, or
enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Issuer or any of its Significant
Subsidiaries under any applicable bankruptcy, insolvency or other similar law
of the United States of America, any state thereof or the District of
Columbia, and the continuance of any such judgment, order or decree is
unstayed and in effect for a period of 60 consecutive days; or
(f) the Issuer or any of its Significant Subsidiaries
shall institute proceedings for entry of an order for relief with respect to
the Issuer or any of its Significant Subsidiaries under any applicable
bankruptcy, insolvency or other similar law of the United States of America,
any state thereof or the District of Columbia, or for an adjudication of
insolvency, or shall consent to the institution of bankruptcy or insolvency
proceedings against it, or shall file a petition seeking, or seek or consent
to reorganization, arrangement, composition or relief under any applicable
bankruptcy, insolvency or other similar law of the United States of America,
any state thereof or the District of Columbia, or shall consent to the filing
of such petition or to the appointment of a receiver, custodian, liquidator,
assignee, trustee, sequestrator or similar official of the Issuer or of
substantially all of its property, or the Issuer or any of its Significant
Subsidiaries shall make a general assignment for the benefit of creditors as
recognized under any applicable bankruptcy, insolvency or other similar law
of the United States of America, any state thereof or the District of
Columbia; or
(g) any other Event of Default provided with respect to
the Securities of such series.
If an Event of Default with respect to Securities of any
series then Outstanding occurs and is continuing, then and in each and every
such case, unless the principal of all of the Securities of such series shall
have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Securities of such series
then Outstanding, by notice in writing to the Issuer (and to the Trustee if
given by Securityholders), may declare the principal (or, if the Securities
of such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all the
Securities of such series and the interest, if any, accrued thereon to be due
and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, notwithstanding anything to the
contrary contained in this Indenture or in the Securities of such series.
This provision, however, is subject to the condition that, if at any time
after the unpaid principal amount (or such specified amount) of the
Securities of such series shall have been so declared due and payable and
before any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Issuer shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest, if any, upon all of the Securities of such series
and the principal of any and all Securities of such series which shall have
become due otherwise than by acceleration (with interest on overdue
installments of interest, if any, to the extent that payment of such interest
is enforceable under applicable law and on such principal at the rate borne
by the Securities of such series to the date of such payment or deposit) and
the reasonable compensation, disbursements, expenses and advances of the
Trustee and all other amounts due the Trustee under Section 6.6, and any and
all defaults under this Indenture, other than the nonpayment of such portion
of the principal amount of and accrued interest, if any, on Securities of
such series which shall have become due by acceleration, shall have been
cured or shall have been waived in accordance with Section 5.7 or provision
deemed by the Trustee to be adequate shall have been made therefor, then and
in every such case the Holders of a majority in aggregate principal amount of
the Securities of such series then Outstanding, by written notice to the
Issuer and to the Trustee, may rescind and annul such declaration and its
consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon.
Notwithstanding the previous sentence, no waiver shall be effective against
any Holder for any Event of Default or event which with notice or lapse of
time or both would be an Event of Default with respect to any covenant or
provision which cannot be modified or amended without the consent of the
Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event.
If any Event of Default with respect to the Issuer specified in
Section 5.1(e) or 5.1(f) occurs, all unpaid principal amount (or, if the
Securities of any series then Outstanding are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of each such series) and accrued interest on all Securities of each
series then Outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act by the Trustee or any
Securityholder.
If the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such
case the Issuer, the Trustee and the Securityholders shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Issuer, the Trustee and the Securityholders shall
continue as though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to
Section 5.1 (a), (b) or (c), the Trustee shall not be charged with knowledge
of any Event of Default unless written notice thereof shall have been given
to a Responsible Officer by the Issuer, a paying agent or any Securityholder.
SECTION 5.2 Payment of Securities on Default; Suit
Therefor. The Issuer covenants that (a) if default shall be made in the
payment of any installment of interest upon any of the Securities of any
series then Outstanding as and when the same shall become due and payable,
and such default shall have continued for a period of 30 days, or (b) if
default shall be made in the payment of the principal of any of the
Securities of such series as and when the same shall have become due and
payable, whether at maturity of the Securities of such series or upon
redemption or by declaration or otherwise, then, upon demand of the Trustee,
the Issuer will pay to the Trustee, for the benefit of the Holders of the
Securities, the whole amount that then shall have become due and payable on
all such Securities of such series for principal or interest, if any, or
both, as the case may be, with interest upon the overdue principal and (to
the extent that payment of such interest is enforceable under applicable law)
upon the overdue installments of interest, if any, at the rate borne by the
Securities of such series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
a reasonable compensation to the Trustee, its agents, attorneys and counsel,
and any expenses or liabilities incurred by the Trustee hereunder other than
through its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at
law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or any other
obligor on the Securities of such series and collect in the manner provided
by law out of the property of the Issuer or any other obligor on the
Securities of such series, wherever situated, the moneys adjudged or decreed
to be payable.
If there shall be pending proceedings for the bankruptcy or
for the reorganization of the Issuer or any other obligor on the Securities
of any series then Outstanding under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or if a receiver or trustee or
similar official shall have been appointed for the property of the Issuer or
such other obligor, or in the case of any other similar judicial proceedings
relative to the Issuer or other obligor upon the Securities of such series,
or to the creditors or property of the Issuer or such other obligor, the
Trustee, irrespective of whether the principal of the Securities of such
series shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any
demand pursuant to the provisions of this Section 5.2, shall be entitled and
empowered by intervention in such proceedings or otherwise to file and prove
a claim or claims for the whole amount of principal and interest, if any,
owing and unpaid in respect of the Securities of such series, and, in case of
any judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Securityholders allowed in such judicial proceedings
relative to the Issuer or any other obligor on the Securities of such series,
its or their creditors, or its or their property, and to collect and receive
any moneys or other property payable or deliverable on any such claims, and
to distribute the same after the deduction of its charges and expenses, and
any receiver, assignee or trustee or similar official in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, if the Trustee shall consent to the making
of such payments directly to the Securityholders, to pay to the Trustee any
amount due it for compensation and expenses or otherwise pursuant to Section
6.6, including counsel fees and expenses incurred by it up to the date of
such distribution. To the extent that such payment of reasonable
compensation, expenses and counsel fees and expenses out of the estate in any
such proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities, or the production thereof at
any trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Securities of the series in respect of
which such judgment has been recovered.
SECTION 5.3 Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee pursuant to Section 5.2 with respect to
Securities of any series then Outstanding shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Securities of such series, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:
FIRST: To the payment of costs and expenses of collection
and reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and liabilities incurred, and all
advances made, by the Trustee pursuant to Section 6.6 except as a
result of its negligence or bad faith;
SECOND: If the principal of the Outstanding Securities of
such series shall not have become due and be unpaid, to the payment
of interest, if any, on the Securities of such series, in the order
of the maturity of the installments of such interest, if any, with
interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest, if any, at the
rate borne by the Securities of such series, such payment to be made
ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding Securities of
such series shall have become due, by declaration or otherwise, to
the payment of the whole amount then owing and unpaid upon the
Securities of such series for principal and interest, if any, with
interest on the overdue principal and (to the extent that such
interest has been collected by the Trustee) upon overdue installments
of interest, if any, at the rate borne by the Securities of such
series; and in case such moneys shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Securities of such
series, then to the payment of such principal and interest, if any,
without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any
other installment of interest, or of any Security over any other
Security, ratably to the aggregate of such principal and accrued and
unpaid interest; and
FOURTH: To the payment of any surplus then remaining to
the Issuer, its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same.
No claim for interest which in any manner at or after
maturity shall have been transferred or pledged separate or apart from the
Securities to which it relates, or which in any manner shall have been kept
alive after maturity by an extension (otherwise than pursuant to an extension
made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding), purchase, funding or otherwise by
or on behalf or with the consent or approval of the Issuer shall be entitled,
in case of a default hereunder, to any benefit of this Indenture, except
after prior payment in full of the principal of all Securities of any series
then Outstanding and of all claims for interest not so transferred, pledged,
kept alive, extended, purchased or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of
any Securities of any series then Outstanding shall have any right by virtue
of or by availing of any provision of this Indenture to institute any suit,
action or proceeding in equity or at law upon or under or with respect to
this Indenture or for the appointment of a receiver or trustee or similar
official, or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless the Holders of not
less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request to the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
any such action, suit or proceeding, it being understood and intended, and
being expressly covenanted by the Holder of every Security of such series
with every other Holder and the Trustee, that no one or more Holders of
Securities of such series shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture or of the
Securities to affect, disturb or prejudice the rights of any other Holder of
such Securities of such series, or to obtain or seek to obtain priority over
or preference as to any other such Holder, or to enforce any right under this
Indenture or the Securities, except in the manner herein provided and for the
equal, ratable and common benefit of all Holders of Securities of such
series.
Notwithstanding any other provisions in this Indenture, but
subject to Article Thirteen, the right of any Holder of any Security to
receive payment of the principal of, premium, if any, and interest, if any,
on such Security, on or after the respective due dates expressed in such
Security, or to institute suit for the enforcement of any such payment on or
after such respective dates shall not be impaired or affected without the
consent of such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event
of Default hereunder, the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or
by proceedings in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in
aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
SECTION 5.6 Remedies Cumulative and Continuing. All
powers and remedies given by this Article Five to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the Securityholders, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the
Trustee or of any Securityholder to exercise any right or power accruing upon
any default occurring and continuing as aforesaid shall impair any such right
or power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 5.4, every
power and remedy given by this Article Five or by law to the Trustee or to
the Securityholders may be exercised from time to time, and as often as shall
be deemed expedient, by the Trustee or by the Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults
by Majority of Securityholders. The Holders of a majority in aggregate
principal amount of the Securities of any series then Outstanding shall have
the right to direct the time, method, and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to Securities of such series; provided,
however, that (subject to the provisions of Section 6.1) the Trustee shall
have the right to decline to follow any such direction if the Trustee shall
determine upon advice of counsel that the action or proceeding so directed
may not lawfully be taken or if the Trustee in good faith by its board of
directors, its executive committee, or a trust committee of directors or
Responsible Officers or both shall determine that the action or proceeding so
directed would involve the Trustee in personal liability. The Holders of a
majority in aggregate principal amount of the Securities of any series then
Outstanding may on behalf of the Holders of all of the Securities of such
series waive any past default or Event of Default hereunder and its
consequences except a default in the payment of interest, if any, on, or the
principal of, the Securities of such series. Upon any such waiver the
Issuer, the Trustee and the Holders of the Securities of such series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this
Section 5.7, said default or Event of Default shall for all purposes of the
Securities and this Indenture be deemed to have been cured and to be not
continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within
30 days after the occurrence of a default, with respect to Securities of any
series then Outstanding, mail to all Holders of Securities of such series, as
the names and the addresses of such Holders appear upon the Securities
register, notice of all defaults known to the Trustee with respect to such
series, unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for the purpose of this Section 5.8 being hereby
defined to be the events specified in clauses (a), (b), (c), (d), (e), (f)
and (g) of Section 5.1, not including periods of grace, if any, provided for
therein and irrespective of the giving of the written notice specified in
said clause (d) but in the case of any default of the character specified in
said clause (d) no such notice to Securityholders shall be given until at
least 60 days after the giving of written notice thereof to the Issuer
pursuant to said clause (d)); provided, however, that, except in the case of
default in the payment of the principal of or interest, if any, on any of the
Securities, or in the payment or satisfaction of any sinking fund or other
purchase obligation, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or
a trust committee of directors or Responsible Officers or both, of the
Trustee in good faith determines that the withholding of such notice is in
the best interests of the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to
pay the cost of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against
any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.9 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount
of the Securities of any series then Outstanding, or to any suit instituted
by any Securityholders for the enforcement of the payment of the principal of
or interest, if any, on any Security against the Issuer on or after the due
date expressed in such Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default. In case an Event of Default with respect
to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or waiving of
all such Events of Default with respect to such series which may have
occurred:
(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders pursuant to Section 5.7 relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if there shall be reasonable
ground for believing that the repayment of such funds or adequate indemnity
against such liability is not reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to
Section 6.1:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
or Issuer Order (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors may be
evidenced to the Trustee by a Board Resolution;
(c) the Trustee may consult with counsel of its selection
and any advice of such counsel promptly confirmed in writing shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the provisions
of this Indenture (including, without limitation, pursuant to Section 5.7),
unless such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might
be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of Default, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the Holders of not less than a majority in
aggregate principal amount of the Securities of all series affected then
Outstanding; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses
of every such investigation shall be paid by the Issuer or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Issuer upon
demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder;
(h) The Trustee shall not be charged with knowledge of any
default or Event of Default with respect to a series of Securities unless
either (i) a Responsible Officer of the Trustee assigned to the Corporate
Trust Office of the Trustee (or any successor division or department of the
Trustee) shall have actual knowledge of such default or Event of Default or
(ii) written notice of such default or Event of Default shall have been given
to the Trustee by the Issuer or any other obligor on such series of
Securities or by any Holder of Securities of such series; and
(i) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of Proceeds Thereof. The recitals
contained herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture, of the Securities or of any prospectus used to sell the
Securities. The Trustee shall not be accountable for the use or application
by the Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and, subject to Sections 6.8 and 6.13, may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer with
the same rights it would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the
provisions of Section 10.4 hereof, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes
for which they were received, but need not be segregated from other funds
except to the extent required by mandatory provisions of law. Neither the
Trustee nor any agent of the Issuer or the Trustee shall be under any
liability for interest on any moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee
and Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing between the Issuer and the Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Issuer also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any and
all loss, liability, damage, claim or expense, including taxes (other than
taxes based on the income of the Trustee), incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in the premises. The obligations of the
Issuer under this Section 6.6 to compensate and indemnify the Trustee and
each predecessor Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee and
shall not be subordinate to the payment of Senior Indebtedness pursuant to
Article Thirteen. Such additional indebtedness shall be a senior claim to
that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
particular Securities. When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section 5.1 or in
connection with Section 5.9 hereof, the expenses (including the reasonable
fees and expenses of its counsel) and the compensation for the service in
connection therewith are intended to constitute expenses of administration
under any bankruptcy law. The provisions of this Section 6.6 shall survive
the resignation or removal of the Trustee and the termination of this
Indenture.
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc. Subject to Sections 6.1 and 6.2, whenever in the
administration of the trusts of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an Officers' Certificate delivered
to the Trustee, and such certificate, in the absence of negligence or bad
faith on the part of the Trustee, shall be full warrant to the Trustee for
any action taken, suffered or omitted by it under the provisions of this
Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting
Interests. This Indenture shall always have a Trustee who satisfies the
requirements of Section 310(a)(1) of the Trust Indenture Act of 1939. The
Trustee shall have a combined capital and surplus of at least $25,000,000 as
set forth in its most recent published annual report of condition. The
Trustee shall comply with Section 310(b) of the Trust Indenture Act of 1939
regarding disqualification of a trustee upon acquiring a conflicting
interest.
SECTION 6.9 Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series. The Trustee for each series of
Securities hereunder shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any state or
the District of Columbia having a combined capital and surplus of at least
$25,000,000, and which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal, state
or District of Columbia authority, or a corporation or other Person permitted
to act as trustee by the Commission. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. No obligor upon the Securities or any Affiliate
of such obligor shall serve as trustee upon the Securities. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 6.9, the Trustee shall resign immediately in the manner and
with the effect specified in Section 6.10.
A different Trustee may be appointed by the Issuer for any
series of Securities prior to the issuance of such Securities. If the
initial Trustee for any series of Securities is to be a trustee other than
__________________________, the Issuer and such Trustee shall, prior to the
issuance of such Securities, execute and deliver an indenture supplemental
hereto, which shall provide for the appointment of such Trustee as Trustee
for the Securities of such series and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Trustee.
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee. (a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign with respect to one or more or all series
of Securities by giving written notice of resignation to the Issuer. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by
written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Article Five, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions
of Section 6.8 with respect to any series of Securities
after written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six
months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and shall fail to resign
after written request therefor by the Issuer or by any such
Securityholder; or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a
bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the Board of
Directors one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions
of Article Five, any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months may on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee with respect to such series. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal
amount of the Securities of each series then Outstanding may at any time
remove the Trustee with respect to Securities of such series and appoint a
successor trustee with respect to the Securities of such series by delivering
to the Trustee so removed, to the successor trustee so appointed and to the
Issuer the evidence provided for in Section 7.1 of the action in that regard
taken by the Securityholders. If no successor trustee shall have been so
appointed with respect to any series and have accepted appointment within 30
days after the delivery of such evidence of removal, the Trustee may petition
any court of competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona fide Holder of a Security
or Securities of the applicable series for at least six months may, subject
to the provisions of Article Five, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, appoint a successor trustee.
(d) Any resignation or removal of the Trustee with respect
to any series and any appointment of a successor trustee with respect to such
series pursuant to any of the provisions of this Section 6.10 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 6.11.
SECTION 6.11 Acceptance of Appointment by Successor
Trustee. Any successor trustee appointed as provided in Section 6.10 shall
execute and deliver to the Issuer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee with respect to all or any
applicable series shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations with respect to such series of its predecessor
hereunder, with like effect as if originally named as trustee for such series
hereunder; but, nevertheless, on the written request of the Issuer or of the
successor trustee, upon payment of its charges then unpaid, the trustee
ceasing to act shall, subject to Section 10.4, pay over to the successor
trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all such rights,
powers, duties and obligations. Upon request of any such successor trustee,
the Issuer shall execute any and all instruments in writing for more fully
and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the
Securities of one or more (but not all) series, the Issuer, the predecessor
Trustee and each successor trustee with respect to the Securities of any
applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the predecessor
Trustee with respect to the Securities of any series as to which the
predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts under separate indentures.
No successor trustee with respect to any series of
Securities shall accept appointment as provided in this Section 6.11 unless
at the time of such acceptance such successor trustee shall be qualified
under the provisions of Section 6.8 and eligible under the provisions of
Section 6.9.
Upon acceptance of appointment by any successor trustee as
provided in this Section 6.11, the Issuer shall give notice thereof to the
Holders of Securities of each series affected, by mailing such notice to such
Holders at their addresses as they shall appear on the registry books. If
the Issuer fails to give such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee. Any corporation into which the Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee (including
the trust created by this Indenture), shall be the successor of the Trustee
hereunder, provided that such corporation shall be qualified under the
provisions of Section 6.8 and eligible under the provisions of Section 6.9,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary
notwithstanding.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Securities of any
series shall have been authenticated but not delivered, any such successor to
the Trustee may adopt the certificate of authentication of any predecessor
Trustee and deliver such Securities so authenticated; and, in case at that
time any of the Securities of any series shall not have been authenticated,
any successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificate shall have the full force which it is
anywhere in the Securities of such series or in this Indenture provided that
the certificate of the Trustee shall have; provided, that the right to adopt
the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13 Preferential Collection of Claims Against the
Issuer. The Trustee shall comply with Section 311(a) of the Trust Indenture
Act of 1939, excluding any creditor relationship listed in Section 311(b) of
the Trust Indenture Act of 1939. A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act of 1939 to the
extent indicated therein.
SECTION 6.14 Appointment of Authenticating Agent. As long
as any Securities of a series remain Outstanding, the Trustee may, by an
instrument in writing, appoint with the approval of the Issuer an
authenticating agent (the "Authenticating Agent") which shall be authorized
to act on behalf of the Trustee to authenticate Securities, including
Securities issued upon exchange, registration of transfer, partial redemption
or pursuant to Section 2.9. Securities of each such series authenticated by
such Authenticating Agent shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee. Whenever reference is made in this Indenture to the authentication
and delivery of Securities of any series by the Trustee or to the Trustee's
Certificate of Authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating
Agent for such series and a Certificate of Authentication executed on behalf
of the Trustee by such Authenticating Agent. Such Authenticating Agent shall
at all times be a corporation organized and doing business under the laws of
the United States of America or of any state or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $25,000,000 (determined as provided
in Section 6.9 with respect to the Trustee) and subject to supervision or
examination by federal or state authority.
Any corporation into which any Authenticating Agent may be
merged or converted, or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business (including the authenticating agency contemplated
by this Indenture) of any Authenticating Agent, shall continue to be the
Authenticating Agent with respect to all series of Securities for which it
served as Authenticating Agent without the execution or filing of any paper
or any further act on the part of the Trustee or such Authenticating Agent.
Any Authenticating Agent may at any time, and if it shall cease to be
eligible shall, resign by giving written notice of resignation to the Trustee
and to the Issuer. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.14 with
respect to one or more series of Securities, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Issuer and
the Issuer shall provide notice of such appointment to all Holders of
Securities of such series in the manner and to the extent provided in Section
11.4. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. The Issuer agrees to pay to the
Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series
shall have no responsibility or liability for any action taken by it as such
at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in
person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article Seven.
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities. Subject to Sections 6.1 and 6.2, the execution of any
instrument by a Securityholder or his agent or proxy may be proved in the
following manner:
(a) The fact and date of the execution by any Holder of
any instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments acknowledged to
him the execution thereof, or by an affidavit of a witness to such execution
sworn to before any such notary or other such officer. Where such execution
is by or on behalf of any legal entity other than an individual, such
certificate or affidavit shall also constitute sufficient proof of the
authority of the person executing the same.
(b) The ownership of Securities shall be proved by the
Security register or by a certificate of the Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer,
the Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and, subject to the provisions of this
Indenture, interest, if any, on such Security and for all other purposes; and
neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee
shall be affected by any notice to the contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have
concurred in any direction, consent or waiver under this Indenture,
Securities which are owned by the Issuer or by any other obligor on the
Securities with respect to which such determination is being made or by any
Affiliate of the Issuer or any other obligor on the Securities with respect
to which such determination is being made, shall be disregarded and deemed
not to be Outstanding for the purpose of any such determination, except that
for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver only Securities which a
Responsible Officer of the Trustee knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Issuer or any other obligor upon the Securities
or any Affiliate of the Issuer or any other obligor on the Securities. In
case of a dispute as to such right, the advice of counsel shall be full
protection in respect of any decision made by the Trustee in accordance with
such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described Persons; and, subject to Sections 6.1
and 6.2, the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the fact that
all Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.5 Right of Revocation of Action Taken. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.1, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the
case may be, specified in this Indenture in connection with such action, any
Holder of a Security the serial number of which is shown by the evidence to
be included among the serial numbers of the Securities the Holders of which
have consented to such action may, by filing written notice at the Corporate
Trust Office and upon proof of holding as provided in this Article Seven,
revoke such action so far as concerns such Security provided that such
revocation shall not become effective until three Business Days after such
filing. Except as aforesaid, any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange
or substitution therefor or on registration of transfer thereof, irrespective
of whether or not any notation in regard thereto is made upon any such
Security. Any action taken by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action shall be
conclusively binding upon the Issuer, the Trustee and the Holders of all the
Securities affected by such action.
SECTION 7.6 Record Date for Consents and Waivers. The
Issuer may, but shall not be obligated to, establish a record date for the
purpose of determining the Persons entitled to (i) waive any past default
with respect to the Securities of such series in accordance with Section 5.7
of the Indenture, (ii) consent to any supplemental indenture in accordance
with Section 8.2 of the Indenture or (iii) waive compliance with any term,
condition or provision of any covenant hereunder. If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and any
such Persons, shall be entitled to waive any such past default, consent to
any such supplemental indenture or waive compliance with any such term,
condition or provision, whether or not such Holder remains a Holder after
such record date; provided, however, that unless such waiver or consent is
obtained from the Holders, or duly designated proxies, of the requisite
principal amount of Outstanding Securities of such series prior to the date
which is the 120th day after such record date, any such waiver or consent
previously given shall automatically and without further action by any Holder
be cancelled and of no further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of the execution thereof) for
one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any property or
assets;
(b) to evidence the succession of another Person to the
Issuer, or successive successions, and the assumption by the successor Person
of the covenants, agreements and obligations of the Issuer pursuant to
Article Nine;
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as the Issuer and the
Trustee shall consider to be for the protection of the Holders of all or any
series of Securities (and if such covenants, restrictions, conditions or
provisions are to be for the protection of less than all series of
Securities, stating that the same are expressly being included solely for the
protection of such series) and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default permitting the enforcement of
all or any of the several remedies provided in this Indenture as herein set
forth; provided, however, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may provide
for a particular period of grace after default (which period may be shorter
or longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may limit
the right of the Holders of a majority in aggregate principal amount of the
Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Issuer may
deem necessary or desirable, provided, however, that no such action shall
materially adversely affect the interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 and 2.3;
(f) to provide for the issuance of Securities of any
series in coupon form (including Securities registrable as to principal only)
and to provide for exchangeability of such Securities for the Securities
issued hereunder in fully registered form and to make all appropriate changes
for such purpose;
(g) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the Trust Indenture Act of 1939, or under any similar
federal statute hereafter enacted, and to add to this Indenture such other
provisions as may be expressly permitted by the Trust Indenture Act of 1939,
excluding, however, the provisions referred to in Section 316(a)(2) of the
Trust Indenture Act of 1939 as in effect at the date as of which this
instrument was executed or any corresponding provision provided for in any
similar federal statute hereafter enacted; and
(h) to evidence and provide for the acceptance of
appointment hereunder of a Trustee other than _______________________ as
Trustee for a series of Securities and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.9 hereof;
(i) subject to Section 8.2 hereof, to add to or modify the
provisions hereof as may be necessary or desirable to provide for the
denomination of Securities in foreign currencies which shall not adversely
affect the interests of the Holders of the Securities in any material
respect;
(j) to modify the covenants or Events of Default of the
Issuer solely in respect of, or add new covenants or Events of Default of the
Issuer that apply solely to, Securities not Outstanding on the date of such
supplemental indenture; and
(k) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the Securities
of one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to
the requirements of Section 6.11.
The Trustee is hereby authorized to join with the Issuer in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any
property thereunder, but the Trustee shall not be obligated to enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the Holders of any of the
Securities then Outstanding, notwithstanding any of the provisions of Section
8.2.
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders. With the consent (evidenced as provided in Article Seven)
of the Holders of not less than a majority in aggregate principal amount of
the Securities then Outstanding of any series affected by such supplemental
indenture, the Issuer, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from
time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or
of modifying in any manner the rights of the Holders of the Securities of
such series; provided, that no such supplemental indenture shall (a) extend
the stated final maturity of the principal of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest, if any, thereon (or, in the case of an Original Issue Discount
Security, reduce the rate of accretion of original issue discount thereon),
or reduce or alter the method of computation of any amount payable on
redemption, repayment or purchase by the Issuer thereof (or the time at which
any such redemption, repayment or purchase may be made), or make the
principal thereof (including any amount in respect of original issue
discount), or interest, if any, thereon payable in any coin or currency other
than that provided in the Securities or in accordance with the terms of the
Securities, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof or the amount thereof provable in bankruptcy in each case
pursuant to Article Five, or impair or affect the right of any Securityholder
to institute suit for the payment thereof or, if the Securities provide
therefor, any right of repayment or purchase at the option of the
Securityholder, in each case without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security
so affected. No consent of any Holder of any Security shall be necessary
under this Section 8.2 to permit the Trustee and the Issuer to execute
supplemental indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any
covenant, Event of Default or other provision of this Indenture which has
expressly been included solely for the benefit of one or more particular
series of Securities, or which modifies the rights of Holders of Securities
of such series, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors (which resolution may provide general
terms or parameters for such action and may provide that the specific terms
of such action may be determined in accordance with or pursuant to an Issuer
Order) certified by the secretary or an assistant secretary of the Issuer
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of the Holders of the
Securities as aforesaid and other documents, if any, required by Section 7.1,
the Trustee shall join with the Issuer in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may at its discretion, but shall not be obligated to, enter into
such supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section 8.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee
of any supplemental indenture pursuant to the provisions of this Section 8.2,
the Issuer (or the Trustee at the request and expense of the Issuer) shall
give notice thereof to the Holders of then Outstanding Securities of each
series affected thereby, as provided in Section 11.4. Any failure of the
Issuer to give such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and shall be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Issuer and the Holders of Securities of each series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and shall be deemed to
be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 8.4 Documents to Be Given to Trustee. The
Trustee, subject to the provisions of Sections 6.1 and 6.2, shall be entitled
to receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article
Eight complies with the applicable provisions of this Indenture and that all
conditions precedent to the execution and delivery of such supplemental
indenture have been satisfied.
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures. Securities of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Eight may bear a notation in form approved by the
Trustee for such series as to any matter provided for by such supplemental
indenture or as to any action taken by Securityholders. If the Issuer or the
Trustee shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Issuer, to any modification of
this Indenture contained in any such supplemental indenture may be prepared
and executed by the Issuer, authenticated by the Trustee and delivered in
exchange for the Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain
Terms. Subject to the provisions of Section 9.2, nothing contained in this
Indenture or in any of the Securities shall prevent any consolidation or
merger of the Issuer with or into any other Person or Persons (whether or not
affiliated with the Issuer), or successive consolidations or mergers in which
the Issuer or its successor or successors shall be a party or parties, or
shall prevent any sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Issuer to any other Person
(whether or not affiliated with the Issuer) authorized to acquire and operate
the same; provided, however, and the Issuer hereby covenants and agrees, that
any such consolidation, merger, sale, lease, exchange or other disposition
shall be upon the conditions that (a) immediately after giving effect to such
consolidation, merger, sale, lease, exchange or other disposition of the
Person (whether the Issuer or such other Person) formed by or surviving any
such consolidation or merger, or to which such sale, lease, exchange or other
disposition shall have been made, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing; (b) the Person (if other than the
Issuer) formed by or surviving any such consolidation or merger, or to which
such sale, lease, exchange or other disposition shall have been made, shall
be a corporation or partnership organized under the laws of the United States
of America, any state thereof or the District of Columbia; and (c) the due
and punctual payment of the principal of and interest, if any, on all the
Securities, according to their tenor, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Issuer, shall be expressly assumed, by supplemental
indenture satisfactory in form to the Trustee executed and delivered to the
Trustee, by the Person (if other than the Issuer) formed by such
consolidation, or into which the Issuer shall have been merged, or by the
Person which shall have acquired or leased such property.
SECTION 9.2 Successor Corporation to be Substituted. In
case of any such consolidation or merger or any sale, conveyance or lease of
all or substantially all of the property of the Issuer and upon the
assumption by the successor Person, by supplemental indenture executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due
and punctual payment of the principal of, premium, if any, and interest, if
any, on all of the Securities and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Issuer,
such successor Person shall succeed to and be substituted for the Issuer,
with the same effect as if it had been named herein as the party of the first
part, and the Issuer (including any intervening successor to the Issuer which
shall have become the obligor hereunder) shall be relieved of any further
obligation under this Indenture and the Securities; provided, however, that
in the case of a sale, lease, exchange or other disposition of the property
and assets of the Issuer (including any such intervening successor), the
Issuer (including any such intervening successor) shall continue to be liable
on its obligations under this Indenture and the Securities to the extent, but
only to the extent, of liability to pay the principal of and interest, if
any, on the Securities at the time, places and rate prescribed in this
Indenture and the Securities. Such successor Person thereupon may cause to
be signed, and may issue either in its own name or in the name of the Issuer,
any or all of the Securities issuable hereunder which theretofore shall not
have been signed by the Issuer and delivered to the Trustee; and, upon the
order of such successor Person instead of the Issuer and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall
have been signed and delivered by the officers of the Issuer to the Trustee
for authentication, and any Securities which such successor Person thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though all of such
Securities had been issued at the date of the execution hereof.
In case of any such consolidation or merger or any sale,
lease, exchange or other disposition of all or substantially all of the
property and assets of the Issuer, such changes in phraseology and form (but
not in substance) may be made in the Securities, thereafter to be issued, as
may be appropriate.
SECTION 9.3 Opinion of Counsel to be Given Trustee. The
Trustee, subject to Sections 6.1 and 6.2, shall receive an Officers'
Certificate and Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, lease, exchange or other disposition and any
such assumption complies with the provisions of this Article Nine.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (a)
If at any time (i) the Issuer shall have paid or caused to be paid the
principal of, premium, if any, and interest, if any, on all the Securities
Outstanding (other than Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.9) as and when
the same shall have become due and payable, or (ii) the Issuer shall have
delivered to the Trustee for cancellation all Securities theretofore
authenticated (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9); and
if, in any such case, the Issuer shall also pay or cause to be paid all other
sums payable hereunder by the Issuer (including all amounts payable to the
Trustee pursuant to Section 6.6), then this Indenture shall cease to be of
further effect, and the Trustee, on demand of the Issuer accompanied by an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the satisfaction and discharge contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging such satisfaction and
discharging this Indenture. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred, and to
compensate the Trustee for any services thereafter reasonably and properly
rendered, by the Trustee in connection with this Indenture or the Securities.
(b) If at any time (i) the Issuer shall have paid or
caused to be paid the principal of, premium, if any, and interest, if any, on
all the Securities of any series Outstanding (other than Securities of such
series which have been destroyed, lost or stolen and which have been replaced
or paid as provided in Section 2.9) as and when the same shall have become
due and payable, or (ii) the Issuer shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated (other
than any Securities of such series which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.9), or (iii) in
the case of any series of Securities with respect to which the exact amount
described in clause (B) below can be determined at the time of making the
deposit referred to in such clause (B), (A) all the Securities of such series
not theretofore delivered to the Trustee for cancellation shall have become
due and payable, or by their terms are to become due and payable within one
year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and (B)
the Issuer shall have irrevocably deposited or caused to be deposited with
the Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such series,
cash in an amount (other than moneys repaid by the Trustee or any paying
agent to the Issuer in accordance with Section 10.4) or non-callable, non-
prepayable bonds, notes, bills or other similar obligations issued or
guaranteed by the United States government or any agency thereof the full and
timely payment of which are backed by the full faith and credit of the United
States ("U.S. Government Obligations"), maturing as to principal and
interest, if any, at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (1) the
principal of, premium, if any, and interest, if any, on all Securities of
such series on each date that such principal of, premium, if any, or
interest, if any, is due and payable, and (2) any mandatory sinking fund
payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such series;
then the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such series on the date of the deposit
referred to in clause (B) above and the provisions of this Indenture with
respect to the Securities of such series shall no longer be in effect
(except, in the case of clause (iii) of this Section 10.1(b), as to (I)
rights of registration of transfer and exchange of Securities of such series,
(II) rights of substitution of mutilated, defaced, destroyed, lost or stolen
Securities of such series, (III) rights of Holders of Securities of such
series to receive payments of principal thereof and premium, if any, and
interest, if any, thereon upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the Holders of Securities of
such series to receive mandatory sinking fund payments thereon, if any, when
due, (IV) the rights, obligations, duties and immunities of the Trustee
hereunder, (V) the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (VI) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same.
(c) The following provisions shall apply to the Securities
of each series unless specifically otherwise provided in a Board Resolution,
Officers' Certificate or indenture supplemental hereto provided pursuant to
Section 2.3. In addition to discharge of the Indenture pursuant to the next
preceding paragraph, in the case of any series of Securities with respect to
which the exact amount described in subparagraph (A) below can be determined
at the time of making the deposit referred to in such subparagraph (A), the
Issuer shall be deemed to have paid and discharged the entire indebtedness on
all the Securities of such a series on the 91st day after the date of the
deposit referred to in subparagraph (A) below, and the provisions of this
Indenture with respect to the Securities of such series shall no longer be in
effect (except as to (i) rights of registration of transfer and exchange of
Securities of such series, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities of such series, (iii) rights of Holders
of Securities of such series to receive payments of principal thereof,
premium, if any, and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the
Holders of Securities of such series to receive mandatory sinking fund
payments, if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, (v) the rights of the Holders of Securities of such series
as beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (vi) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same, if
(A) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such
series (1) cash in an amount, or (2) U.S. Government Obligations,
maturing as to principal and interest, if any, at such times and in
such amounts as will insure the availability of cash, or (3) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (I)
the principal of, premium, if any, and interest, if any, on all
Securities of such series on each date that such principal or
interest, if any, is due and payable, and (II) any mandatory sinking
fund payments on the dates on which such payments are due and payable
in accordance with the terms of the Indenture and the Securities of
such series;
(B) such deposit will not result in a breach or violation
of, or constitute a default under, any agreement or instrument to
which the Issuer is a party or by which it is bound; and
(C) the Issuer has delivered to the Trustee an Opinion of
Counsel based on the fact that (1) the Issuer has received from, or
there has been published by, the Internal Revenue Service a ruling or
(2), since the date hereof, there has been a change in the applicable
United States federal income tax law, in either case to the effect
that, and such opinion shall confirm that, the Holders of the
Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same
amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not
occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities. Subject to Section 10.4, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Section 10.1
shall be held in trust, and such moneys and all moneys from such U.S.
Government Obligations shall be applied by it to the payment, either directly
or through any paying agent (including the Issuer acting as its own paying
agent), to the Holders of the particular Securities of such series for the
payment or redemption of which such moneys and U.S. Government Obligations
have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest, if any, but such moneys and U.S.
Government Obligations need not be segregated from other funds except to the
extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under
the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years. Any moneys deposited with or paid to the
Trustee or any paying agent for the payment of the principal of, premium, if
any, or interest, if any, on any Security of any series and not applied but
remaining unclaimed for two years after the date upon which such principal,
premium, if any, or interest, if any, shall have become due and payable,
shall, upon the written request of the Issuer and unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed
property law, be repaid to the Issuer by the Trustee for such series or such
paying agent and the Holder of the Securities of such series shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property laws, thereafter look only to the Issuer for any
payment which such Holder may be entitled to collect, and all liability of
the Trustee or any paying agent with respect to such moneys shall thereupon
cease.
SECTION 10.5 Indemnity for U.S. Government Obligations.
The Issuer shall pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 10.1 or the principal or interest received in
respect of such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders,
Officers and Directors of Issuer Exempt from Individual Liability. No
recourse under or upon any obligation, covenant or agreement contained in
this Indenture, or in any Security, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such or against any past,
present or future stockholder, officer or director, as such, of the Issuer,
or any partner of the Issuer or of any successor, either directly or through
the Issuer or any successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or
equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities by the Holders thereof and
as part of the consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to give to any
Person, other than the parties hereto and their successors and the Holders of
the Senior Indebtedness and the Holders of the Securities, any legal or
equitable right, remedy or claim under this Indenture or under any covenant
or provision herein contained, all such covenants and provisions being for
the sole benefit of the parties hereto and their successors and of the
Holders of the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture. All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Issuer shall bind its successors
and assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Holders of Securities. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities to or on the Issuer, or as required pursuant to the
Trust Indenture Act of 1939, may be given or served by being deposited
postage prepaid, first-class mail (except as otherwise specifically provided
herein) addressed (until another address of the Issuer is filed by the Issuer
with the Trustee) to Hovnanian Enterprises, Inc., 10 Highway 35, P.O. Box
500, Red Bank, New Jersey 07701. Any notice, direction, request or demand by
the Issuer or any Holder of Securities to or upon the Trustee shall be deemed
to have been sufficiently given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee with the
Issuer) to __________________________________, [address], [attention:
Corporate Trust Administration (Hovnanian Enterprises, Inc. [specify series
of Securities])].
Where this Indenture provides for notice to Holders of
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder entitled thereto, at his last address as it appears in the
Security register. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities
in regular mail service, it shall be impracticable to mail notice to the
Issuer when such notice is required to be given pursuant to any provision of
this Indenture, then any manner of giving such notice as shall be reasonably
satisfactory to the Trustee shall be deemed to be sufficient notice.
SECTION 11.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein. Upon any application or demand
by the Issuer to the Trustee to take any action under any of the provisions
of this Indenture, or as required pursuant to the Trust Indenture Act of
1939, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent
have been complied with, except that in the case of any such application or
demand as to which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular application or
demand, no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture
(other than a certificate provided pursuant to Section 4.3(d)) and delivered
to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an opinion as to whether or not such covenant or
condition has been complied with, and (d) a statement as to whether or not,
in the opinion of such person, such condition or covenant has been complied
with.
Any certificate, statement or opinion of an officer of the
Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous. Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual matters, on
information with respect to which is in the possession of the Issuer, upon
the certificate, statement or opinion of or representations by an officer or
officers of the Issuer, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous.
Any certificate, statement or opinion of an officer of the
Issuer or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant
or firm of accountants in the employ of the Issuer, unless such officer or
counsel, as the case may be, knows that the certificate or opinion or
representations with respect to the accounting matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or
in the exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of
public accountants filed with and directed to the Trustee shall contain a
statement that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays. If the date of maturity of principal of or interest, if any, on
the Securities of any series or the date fixed for redemption, purchase or
repayment of any such Security shall not be a Business Day, then payment of
interest, if any, premium, if any, or principal need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the date fixed for
redemption, purchase or repayment, and, in the case of payment, no interest
shall accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, or is deemed applicable to this Indenture by virtue of the
provisions, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 11.8 GOVERNING LAW. THIS INDENTURE AND EACH
SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW
YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAWS.
SECTION 11.9 Counterparts. This Indenture may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of
this Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified, as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions.
Notice of redemption to the Holders of Securities of any series to be
redeemed as a whole or in part at the option of the Issuer shall be given by
mailing notice of such redemption by first class mail, postage prepaid, at
least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Securities of such series at their last
addresses as they shall appear in the Security register. Any notice which is
mailed in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the Holder receives the notice. Failure to
give notice by mail, or any defect in the notice to the Holder of any
Security of a series designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the redemption of any other
Security of such series.
The notice of redemption to each such Holder shall specify
(i) the principal amount of each Security of such series held by such Holder
to be redeemed, (ii) the date fixed for redemption, (iii) the redemption
price, (iv) the place or places of payment, (v) the CUSIP number relating to
such Securities, (vi) that payment will be made upon presentation and
surrender of such Securities, (vii) whether such redemption is pursuant to
the mandatory or optional sinking fund, or both, if such be the case, (viii)
whether interest, if any, (or, in the case of Original Issue Discount
Securities, original issue discount) accrued to the date fixed for redemption
will be paid as specified in such notice and (ix) whether on and after said
date interest, if any, (or, in the case of Original Issue Discount
Securities, original issue discount) thereon or on the portions thereof to be
redeemed will cease to accrue. In case any Security of a series is to be
redeemed in part only, the notice of redemption shall state the portion of
the principal amount thereof to be redeemed and shall state that on and after
the date fixed for redemption, upon surrender of such Security, a new
Security or Securities of such series in principal amount equal to the
unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be
redeemed at the option of the Issuer shall be given by the Issuer or, at the
Issuer's request, by the Trustee in the name and at the expense of the
Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section 12.2, the Issuer will deposit
with the Trustee or with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.5) an amount of money sufficient to redeem on the
redemption date all the Securities of such series so called for redemption at
the appropriate redemption price, together with accrued interest, if any, to
the date fixed for redemption. The Issuer will deliver to the Trustee at
least 45 days prior to the date fixed for redemption (unless a shorter notice
period shall be satisfactory to the Trustee) an Officers' Certificate stating
the aggregate principal amount of Securities to be redeemed. In case of a
redemption at the election of the Issuer prior to the expiration of any
restriction on such redemption, the Issuer shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officers' Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be
redeemed, the Trustee, within 10 Business Days after the Issuer gives written
notice to the Trustee that such redemption is to occur, shall select, in such
manner as it shall deem appropriate and fair, Securities of such series to be
redeemed. Notice of the redemption shall be given only after such selection
has been made. Securities may be redeemed in part in multiples equal to the
minimum authorized denomination for Securities of such series or any multiple
thereof. The Trustee shall promptly notify the Issuer in writing of the
Securities of such series selected for redemption and, in the case of any
Securities of such series selected for partial redemption, the principal
amount thereof to be redeemed. For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to the redemption of
Securities of any series shall relate, in the case of any Security redeemed
or to be redeemed only in part, to the portion of the principal amount of
such Security which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption.
If notice of redemption has been given as provided by this Article Twelve,
the Securities or portions of Securities specified in such notice shall
become due and payable on the date and at the place or places stated in such
notice at the applicable redemption price, together with interest, if any,
accrued to the date fixed for redemption, and on and after said date (unless
the Issuer shall default in the payment of such Securities at the redemption
price, together with interest, if any, accrued to said date) interest, if any
(or, in the case of Original Issue Discount Securities, original issue
discount) on the Securities or portions of Securities so called for
redemption shall cease to accrue, and such Securities shall cease from and
after the date fixed for redemption (unless an earlier date shall be
specified in a Board Resolution, Officers' Certificate or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant to
which the form and terms of the Securities of such series were established)
except as provided in Sections 6.5 and 10.4, to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest, if any, to the date fixed for redemption. On
presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest, if any, accrued thereon to the date fixed for redemption;
provided that payment of interest, if any, becoming due on or prior to the
date fixed for redemption shall be payable to the Holders of Securities
registered as such on the relevant record date subject to the terms and
provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the redemption price shall, until paid
or duly provided for, bear interest from the date fixed for redemption at the
rate of interest or Yield to Maturity (in the case of an Original Issue
Discount Security) borne by such Security.
Upon presentation of any Security redeemed in part only,
the Issuer shall execute and the Trustee shall authenticate and deliver to or
on the order of the Holder thereof, at the expense of the Issuer, a new
Security or Securities of such series, and of like tenor, of authorized
denominations, in principal amount equal to the unredeemed portion of the
Security so presented.
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. Securities shall be excluded from
eligibility for selection for redemption if they are identified by
registration and certificate number in an Officers' Certificate delivered to
the Trustee at least 45 days prior to the last date on which notice of
redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Issuer, or (b) a Person
specifically identified in such written statement as an Affiliate of the
Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The
minimum amount of any sinking fund payment provided for by the terms of the
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by
the terms of the Securities of any series is herein referred to as an
"optional sinking fund payment." The date on which a sinking fund payment is
to be made is herein referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any series of Securities in cash, the Issuer may
at its option (a) deliver to the Trustee Securities of such series
theretofore purchased or otherwise acquired (except upon redemption pursuant
to the mandatory sinking fund) by the Issuer or receive credit for Securities
of such series (not previously so credited) theretofore purchased or
otherwise acquired (except as aforesaid) by the Issuer and delivered to the
Trustee for cancellation pursuant to Section 2.10, (b) receive credit for
optional sinking fund payments (not previously so, credited) made pursuant to
this Section 12.5, or (c) receive credit for Securities of such series (not
previously so credited) redeemed by the Issuer through any optional
redemption provision contained in the terms of such series. Securities so
delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund
payment date for any series, the Issuer will deliver to the Trustee an
Officers' Certificate (a) specifying the portion of the mandatory sinking
fund payment to be satisfied by payment of cash and the portion to be
satisfied by credit of Securities of such series and the basis for such
credit, (b) stating that none of the Securities of such series to be so
credited has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured or otherwise ceased to exist)
and are continuing, and (d) stating whether or not the Issuer intends to
exercise its right to make an optional sinking fund payment with respect to
such series and, if so, specifying the amount of such optional sinking fund
payment which the Issuer intends to pay on or before the next succeeding
sinking fund payment date. Any Securities of such series to be credited and
required to be delivered to the Trustee in order for the Issuer to be
entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to
Section 2.10 to the Trustee with such Officers' Certificate (or reasonably
promptly thereafter if acceptable to the Trustee). Such Officers'
Certificate shall be irrevocable and upon its receipt by the Trustee the
Issuer shall become unconditionally obligated to make all the cash payments
or payments therein referred to, if any, on or before the next succeeding
sinking fund payment date. Failure of the Issuer, on or before any such 60th
day, to deliver such Officers' Certificate and Securities (subject to the
parenthetical clause in the second preceding sentence) specified in this
paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option
to deliver or credit Securities of such series in respect thereof, and (ii)
that the Issuer will make no optional sinking fund payment with respect to
such series as provided in this Section 12.5.
If the sinking fund payment or payments (mandatory or
optional or both) to be made in cash on the next succeeding sinking fund
payment date plus any unused balance of any preceding sinking fund payments
made in cash shall exceed $50,000, or a lesser sum if the Issuer shall so
request with respect to the Securities of any particular series, such cash
shall be applied on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund redemption price
together with accrued interest, if any, to the date fixed for redemption. If
such amount shall be $50,000 or less and the Issuer makes no such request,
then it shall be carried over until a sum in excess of $50,000 is available.
The Trustee shall select, in the manner provided in Section 12.2, for
redemption on such sinking fund payment date a sufficient principal amount of
Securities of such series to absorb said cash, as nearly as may be, and shall
(if requested in writing by the Issuer) inform the Issuer of the serial
numbers of the Securities of such series (or portions thereof) so selected.
The Issuer, or the Trustee, in the name and at the expense of the Issuer (if
the Issuer shall so request the Trustee in writing) shall cause notice of
redemption of the Securities of such series to be given in substantially the
manner provided in Section 12.2 (and with the effect provided in Section
12.3) for the redemption of Securities of such series in part at the option
of the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to
the next cash sinking fund payment for such series and, together with such
payment, shall be applied in accordance with the provisions of this Section
12.5. Any and all sinking fund moneys held on the stated maturity date of
the Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of,
and interest, if any, on, the Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer
shall pay to the Trustee in cash or shall otherwise provide for the payment
of all interest, if any, accrued to the date fixed for redemption on
Securities to be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any
Securities of a series with sinking fund moneys or give any notice of
redemption of Securities for such series by operation of the sinking fund
during the continuance of a default in payment of interest on such Securities
or of any Event of Default with respect to such series except that, where the
giving of notice of redemption of any Securities shall theretofore have been
made, the Trustee shall redeem or cause to be redeemed such Securities,
provided that it shall have received from the Issuer a sum sufficient for
such redemption. Except as aforesaid, and subject to Article Thirteen, any
moneys in the sinking fund for such series at the time when any such default
or Event of Default known to a Responsible Officer of the Trustee shall
occur, and any moneys thereafter paid into the sinking fund, shall, during
the continuance of such default or Event of Default, be deemed to have been
collected under Article Five and held for the payment of all such Securities.
In case such Event of Default shall have been waived as provided in Article
Five or the default cured on or before the 60th day preceding the sinking
fund payment date in any year, such moneys shall thereafter be applied on the
next succeeding sinking fund payment date in accordance with this Section to
the redemption of such Securities.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior
Indebtedness. (a) The Issuer covenants and agrees, and each Holder of
Securities of each series, by his acceptance thereof, likewise covenants and
agrees, that anything in this Indenture or the Securities of any series to
the contrary notwithstanding, the indebtedness evidenced by the Securities of
each series is subordinate and junior in right of payment, to the extent
provided herein, to all Senior Indebtedness, whether outstanding on the date
of execution of this Indenture or thereafter created, incurred or assumed,
and that the subordination is for the benefit of the holders of Senior
Indebtedness.
(b) Subject to Section 13.4, if (i) the Issuer shall
default in the payment of any principal of, premium, if any, or interest, if
any, on any Senior Indebtedness when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration of
acceleration or otherwise, or (ii) any other default shall occur with respect
to Senior Indebtedness and the maturity of such Senior Indebtedness has been
accelerated in accordance with its terms, then, upon written notice of such
default to the Issuer and the Trustee by the holders of Senior Indebtedness
or any trustee therefor, unless and until, in either case, the default has
been cured or waived, or has ceased to exist, or any such acceleration has
been rescinded or such Senior Indebtedness has been paid in full, no direct
or indirect payment (in cash, property, securities, by set-off or otherwise)
shall be made or agreed to be made on account of the principal of, premium,
if any, or interest, if any, on any of the Securities, or in respect of any
redemption, retirement, purchase or other acquisition of any of the
Securities other than those made in capital stock of the Issuer (or cash in
lieu of fractional shares thereof).
(c) If any default (other than a default described in
paragraph (b) of this Section 13.1) shall occur under the Senior
Indebtedness, pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods
occurs (a "Senior Nonmonetary Default"), then, upon the receipt by the Issuer
and the Trustee of written notice thereof (a "Payment Notice") from or on
behalf of holders of such Senior Indebtedness specifying an election to
prohibit such payment and other action by the Issuer in accordance with the
following provisions of this paragraph (c), the Issuer may not make any
payment or take any other action that would be prohibited by paragraph (b) of
this Section 13.1 during the period (the "Payment Blockage Period")
commencing on the date of receipt of such Payment Notice and ending on the
earlier of (i) the date, if any, on which the holders of such Senior
Indebtedness or their representative notify the Trustee that such Senior
Nonmonetary Default is cured or waived or ceases to exist or the Senior
Indebtedness to which such Senior Nonmonetary Default relates is discharged
or (ii) the 179th day after the date of receipt of such Payment Notice.
Notwithstanding the provisions described in the immediately preceding
sentence, the Issuer may resume payments on the Securities following such
Payment Blockage Period. Any number of Payment Notices may be given;
provided, however, that (i) not more than one Payment Notice shall be given
within a period of any 360 consecutive days, and (ii) no default that existed
upon the date of such Payment Notice or the commencement of such Payment
Blockage Period (whether or not such event of default is on the same issue of
Senior Indebtedness) shall be made the basis for the commencement of any
other Payment Blockage Period.
(d) If (i) (A) without the consent of the Issuer, a
receiver, conservator, liquidator or trustee of the Issuer or of any of its
property is appointed by the order or decree of any court or agency or
supervisory authority having jurisdiction, and such decree or order remains
in effect for more than 60 days or (B) the Issuer is adjudicated bankrupt or
insolvent or (C) any of its property is sequestered by court order and such
order remains in effect for more than 60 days or (D) a petition is filed
against the Issuer under any state or federal bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
receivership law of any jurisdiction whether now or hereafter in effect
(including without limitation the Bankruptcy Code), and is not dismissed
within 60 days after such filing; or (ii) the Issuer (A) commences a
voluntary case or other proceeding seeking liquidation, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
other relief with respect to itself or its debt or other liabilities under
any bankruptcy, insolvency or other similar law now or hereafter in effect
(including without limitation the Bankruptcy Code) or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or (B) consents to any such relief
or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or (C) fails
generally to, or cannot, pay its debts generally as they become due or (D)
takes any corporate action to authorize or effect any of the foregoing; or
(iii) any Subsidiary of the Issuer takes, suffers or permits to exist any of
the events or conditions referred to in the foregoing clause (i) or (ii),
then all Senior Indebtedness (including any interest thereon accruing after
the commencement of any such proceedings) shall first be paid in full before
any payment or distribution, whether in cash, securities or other property,
shall be made to any Holder of any Securities on account thereof. Any
payment or distribution, whether in cash, securities or other property (other
than securities of the Issuer or any other corporation provided for by a plan
of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in these subordination provisions with respect
to the indebtedness evidenced by the Securities to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or adjustment) which would otherwise
(but for these subordination provisions) be payable or deliverable in respect
of the Securities of any series shall be paid or delivered directly to the
holders of Senior Indebtedness in accordance with the priorities then
existing among such holders until all Senior Indebtedness (including any
interest thereon accruing after the commencement of any such proceedings)
shall have been paid in full. In the event of any such proceeding, after
payment in full of all sums owing with respect to Senior Indebtedness, the
Holders of the Securities, together with the holders of any obligations of
the Issuer ranking on a parity with the Securities, shall be entitled to be
paid from the remaining assets of the Issuer the amounts at the time due and
owing on account of unpaid principal of and interest, if any, on the
Securities and such other obligations before any payment or other
distribution, whether in cash, property or otherwise, shall be made on
account of any capital stock or any obligations of the Issuer ranking junior
to the Securities and such other obligations.
(e) If, notwithstanding the foregoing, any payment or
distribution of any character, whether in cash, securities or other property
(other than securities of the Issuer or any other corporation provided for by
a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent provided in the subordination provisions with respect
to the indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), shall be received by
the Trustee or any Holder in contravention of any of the terms hereof, such
payment or distribution of securities shall be received in trust for the
benefit of and shall be paid over or delivered and transferred to the holders
of the Senior Indebtedness then outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any
Holder to endorse or assign any such payment, distribution or security, each
holder of such Senior Indebtedness is hereby irrevocably authorized to
endorse or assign the same.
(f) No present or future holder of any Senior Indebtedness
shall be prejudiced in the right to enforce subordination of the indebtedness
evidenced by the Securities by any act or failure to act on the part of the
Issuer or any Holder of Securities. Nothing contained herein shall impair,
as between the Issuer and the Holders of Securities of each series, the
obligation of the Issuer to pay to such Holders the principal of and
interest, if any, on such Securities or prevent the Trustee or the Holder
from exercising all rights, powers and remedies otherwise permitted by
applicable law or hereunder upon a default or Event of Default hereunder, all
subject to the rights of the holders of the Senior Indebtedness to remove
cash, securities or other property otherwise payable or deliverable to the
Holders.
(g) Senior Indebtedness shall not be deemed to have been
paid in full unless the holders thereof shall have received cash, securities
or other property equal to the amount of such Senior Indebtedness then
outstanding. Upon the payment in full of all Senior Indebtedness, the
Holders of Securities of each series shall be subrogated to all rights of any
holders of Senior Indebtedness to receive any further payment or
distributions applicable to the Senior Indebtedness until the indebtedness
evidenced by the Securities of such series shall have been paid in full and
such payments or distributions received by such Holders, by reason of such
subrogation, of cash, securities or other property which otherwise would be
paid or distributed to the holders of Senior Indebtedness, shall, as between
the Issuer and its creditors other than the holders of Senior Indebtedness,
on the one hand, and such Holders, on the other hand, be deemed to be a
payment by the Issuer on account of Senior Indebtedness, and not on account
of the Securities of such series.
(h) The provisions of this Section 13.1 shall not impair
any rights, interests, remedies or powers of any secured creditor of the
Issuer in respect of any security interest the creation of which is not
prohibited by the provisions of this Indenture.
(i) The securing of any obligations of the Issuer,
otherwise ranking on a parity with the Securities, shall not be deemed to
prevent such obligations from constituting, respectively, obligations ranking
on a parity with the Securities.
SECTION 13.2 Reliance on Certificate of Liquidating Agent;
Further Evidence as to Ownership of Senior Indebtedness. Upon any payment or
distribution of assets of the Issuer, the Trustee and the Holders shall be
entitled to rely upon an order or decree issued by any court of competent
jurisdiction in which such dissolution or winding up or liquidation or
reorganization or arrangement proceedings are pending or upon a certificate
of the bankruptcy trustee, receiver, assignee for the benefit of creditors or
other Person making such payment or distribution, delivered to the Trustee or
to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Thirteen. In the absence of any such bankruptcy
trustee, receiver, assignee or other Person, the Trustee shall be entitled to
rely upon written notice by a Person representing himself to be a holder of
Senior Indebtedness (or a trustee or representative on behalf of such holder)
as evidence that such Person is a holder of Senior Indebtedness (or is such a
trustee or representative). If the Trustee determines, in good faith, that
further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distributions
pursuant to this Article Thirteen, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, as to the extent to which
such Person is entitled to participate in such payment or distribution, and
to other facts pertinent to the rights of such Person under this Article
Thirteen, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 13.3 Payment Permitted If No Default. Nothing
contained in this Article Thirteen or elsewhere in this Indenture, or in any
of the Securities, shall prevent (a) the Issuer at any time, except during
the pendency of any default with respect to Senior Indebtedness described in
Section 13.1(b) or Section 13.1(c) or of any of the events described in
Section 13.1(d), from making payments of the principal of or interest, if
any, on the Securities, or (b) the application by the Trustee or any paying
agent of any moneys deposited with it hereunder to payments of the principal
of or interest, if any, on the Securities, if, at the time of such deposit,
the Trustee or such paying agent, as the case may be, did not have the
written notice provided for in Section 13.5 of any event prohibiting the
making of such deposit, or if, at the time of such deposit (whether or not in
trust) by the Issuer with the Trustee or paying agent (other than the Issuer)
such payment would not have been prohibited by the provisions of this Article
Thirteen, and the Trustee or any paying agent shall not be affected by any
notice to the contrary received by it on or after such date.
SECTION 13.4 Disputes with Holders of Certain Senior
Indebtedness. Any failure by the Issuer to make any payment on or under any
Senior Indebtedness, other than any Senior Indebtedness as to which the
provisions of this Section 13.4 shall have been waived by the Issuer in the
instrument or instruments by which the Issuer incurred, assumed, guaranteed
or otherwise created such Senior Indebtedness, shall not be deemed a default
under Section 13.1 hereof if (i) the Issuer shall be disputing its obligation
to make such payment or perform such obligation, and (ii) either (A) no final
judgment relating to such dispute shall have been issued against the Issuer
which is in full force and effect and is not subject to further review,
including a judgment that has become final by reason of the expiration of the
time within which a party may seek further appeal or review, or (B) if a
judgment that is subject to further review or appeal has been issued, the
Issuer shall in good faith be prosecuting an appeal or other proceeding for
review, and a stay of execution shall have been obtained pending such appeal
or review.
SECTION 13.5 Trustee Not Charged with Knowledge of
Prohibition. Anything in this Article Thirteen or elsewhere in this
Indenture contained to the contrary notwithstanding, the Trustee shall not at
any time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment of moneys to or by the Trustee and shall
be entitled to assume conclusively that no such facts exist and that no event
specified in clauses (b) and (c) of Section 13.1 has happened unless and
until the Trustee shall have received an Officers' Certificate to the effect
or notice in writing to that effect signed by or on behalf of the holder or
holders, or the representatives, of Senior Indebtedness who shall have been
certified by the Issuer or otherwise established to the reasonable
satisfaction of the Trustee to be such holder or holders or representatives
or from any trustee under any indenture pursuant to which such Senior
Indebtedness shall be outstanding; provided, however, that, if the Trustee
shall not have received the Officers' Certificate or notice provided for in
this Section 13.5 at least three Business Days preceding the date upon which
by the terms hereof any moneys become payable for any purpose (including,
without limitation, the payment of either the principal of or interest, if
any, on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such moneys and apply the same to the purpose for which they were received
and shall not be affected by any notice to the contrary that may be received
by it within three Business Days preceding such date. The Issuer shall give
prompt written notice to the Trustee and to each paying agent of any facts
that would prohibit any payment of moneys to or by the Trustee or any paying
agent, and the Trustee shall not be charged with knowledge of the curing of
any default or the elimination of any other fact or condition preventing such
payment or distribution unless and until the Trustee shall have received an
Officers' Certificate to such effect.
SECTION 13.6 Trustee to Effectuate Subordination. Each
Holder of Securities by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination as between such Holder and holders of Senior
Indebtedness as provided in this Article Thirteen and appoints the Trustee
its attorney-in-fact for any and all such purposes.
SECTION 13.7 Rights of Trustee as Holder of Senior
Indebtedness. The Trustee shall be entitled to all the rights set forth in
this Article Thirteen with respect to any Senior Indebtedness which may at
the time be held by it, to the same extent as any other holder of Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article Thirteen shall apply
to claims of, or payments to, the Trustee under or pursuant to Section 6.6.
SECTION 13.8 Article Applicable to Paying Agents. In case
at any time any paying agent other than the Trustee shall have been appointed
by the Issuer and be then acting hereunder, the term "Trustee" as used in
this Article Thirteen shall in such case (unless the context shall otherwise
require) be construed as extending to and including such paying agent within
its meaning as fully for all intents and purposes as if the paying agent were
named in this Article Thirteen in addition to or in place of the Trustee;
provided, however, that Sections 13.5 and 13.7 shall not apply to the Issuer
if it acts as paying agent.
SECTION 13.9 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Issuer or by any act or failure
to act, in good faith, by any such holder, or by any noncompliance by the
Issuer with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof which any such holder may have or be otherwise
charged with. The holders of Senior Indebtedness, may at any time or from
time to time and in their absolute direction, change the manner, place or
terms of payment, change or extend the time of payment of, or renew or alter,
any such Senior Indebtedness, or amend or supplement any instrument pursuant
to which any such Senior Indebtedness is issued or by which it may be
secured, or release any security therefor, or exercise or refrain from
exercising any other of their rights under such Senior Indebtedness,
including, without limitation, the waiver of default thereunder, all without
notice to or assent from the Holders of the Securities or the Trustee and
without affecting the obligations of the Issuer, the Trustee or the Holders
of Securities under this Article Thirteen.
SECTION 13.10 Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of the Senior Indebtedness, and shall not be liable to any such
holders if it shall mistakenly pay over or distribute money or assets to
Securityholders or the Issuer. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of
its covenants or obligations as are specifically set forth in this Article
Thirteen and no implied covenants or obligations with respect to holders of
Senior Indebtedness shall be read into this Indenture against the Trustee.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, as of the date first written above.
HOVNANIAN ENTERPRISES, INC.
By:______________________________
Title:___________________________
____________________, as Trustee
By:_______________________________
Title:____________________________
____________________
[FN]
This Cross Reference Sheet is not part of the Indenture.
Exhibit 4.6
______________________________________________________________________________
K. HOVNANIAN ENTERPRISES, INC.
AND
__________________________________
as Trustee
Form of Senior Indenture
Dated as of _______________
______________________________________________________________________________
CROSS REFERENCE SHEET*
___________
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as
of ______________________ between K. HOVNANIAN ENTERPRISES, INC. and
_____________________________, Trustee:
Section of the Act Section of
Indenture
310(a)(1), (2) and (5) . . . . . . . . . . . . . . . . . 69
310(a)(3) and (4) . . . . . . . . . . . . . . . . . . . Inapplicable
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.8 and6.10(a),
(b) and (d)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(a) and
(b)(i) and (ii)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(a)(i),
(ii), (iii), (iv), (v), (vi) and (vii)
313(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
313(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . 4.4(b) 313(c)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(c)
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . 4.4(d)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.3
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . . . . . . . . . . . . . . . 11.5
314(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . . . . . . . . . . . . . . . 6.1
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.8
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . 5.9
316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 5.7
316(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . Not required
316(a) (last sentence) . . . . . . . . . . . . . . . . . 7.4
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.4
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . 5.2
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . 3.5(a)
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . 11.7
_____________________
*This Cross Reference Sheet is not part of the Indenture.
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 2
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . 2
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 2
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 2
Global Security . . . . . . . . . . . . . . . . . . . . . . . . 2
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Holder of Securities . . . . . . . . . . . . . . . . . . . . . . 3
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . 3
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 3
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 4
original issue date . . . . . . . . . . . . . . . . . . . . . . 4
original issue discount . . . . . . . . . . . . . . . . . . . . 4
Original Issue Discount Security . . . . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . 4
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 5
principal . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
principal amount . . . . . . . . . . . . . . . . . . . . . . . . 5
record date . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 5
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . 5
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . 5
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . 5
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . 5
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . 5
U.S. Government Obligations . . . . . . . . . . . . . . . . . . 6
vice president . . . . . . . . . . . . . . . . . . . . . . . . . 6
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . 6
SECTION 2.2 Form of Trustee's Certificate of Authentication . . 6
SECTION 2.3 Amount Unlimited, Issuable in Series . . . . . . . 7
SECTION 2.4 Authentication and Delivery of Securities . . . . . 9
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . . 11
SECTION 2.6 Certificate of Authentication . . . . . . . . . . . 11
SECTION 2.7 Denomination and Date of Securities; Payments
of Interest . . . . . . . . . . . . . . . . . . 11
SECTION 2.8 Registration, Transfer and Exchange . . . . . . . . 12
SECTION 2.10 Cancellation of Securities; Disposition
Thereof . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . 14
SECTION 2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . 15
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . 15
SECTION 3.2 Offices for Notices and Payments, etc . . . . . . . 15
SECTION 3.3 No Interest Extension . . . . . . . . . . . . . . . 15
SECTION 3.4 Appointments to Fill Vacancies in Trustee's
Office . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.5 Provision as to Paying Agent . . . . . . . . . . . 15
SECTION 3.6 Limitation on Liens . . . . . . . . . . . . . . . . 16
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders . . . . 18
SECTION 4.2 Preservation and Disclosure of Securityholders
Lists . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . 19
SECTION 4.4 Reports by the Trustee . . . . . . . . . . . . . . 20
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . 20
SECTION 5.2 Payment of Securities on Default; Suit Therefor . . 22
SECTION 5.3 Application of Moneys Collected by Trustee . . . . 23
SECTION 5.4 Proceedings by Securityholders . . . . . . . . . . 23
SECTION 5.5 Proceedings by Trustee . . . . . . . . . . . . . . 24
SECTION 5.6 Remedies Cumulative and Continuing . . . . . . . . 24
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by
Majority of Securityholders . . . . . . . . . . 24
SECTION 5.8 Notice of Defaults . . . . . . . . . . . . . . . . 25
SECTION 5.9 Undertaking to Pay Costs . . . . . . . . . . . . . 25
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default . . . . . . . 25
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . . 26
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of
Proceeds Thereof . . . . . . . . . . . . . . . 27
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc . . . . . . . . . . . . . . . 27
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . 27
SECTION 6.6 Compensation and Indemnification of Trustee and
Its Prior Claim . . . . . . . . . . . . . . . . 27
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc . . . . . . . . . . . . . . . 28
SECTION 6.8 Qualification of Trustee; Conflicting Interests . . 28
SECTION 6.9 Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series. . . . 28
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee . . . . . . . . . . . . . . . 28
SECTION 6.11 Acceptance of Appointment by Successor Trustee . . 29
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . 30
SECTION 6.13 Preferential Collection of Claims Against the
Issuer . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . 31
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders . . . . 31
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities . . . . . . . . . . . . . 32
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . . 32
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . . 32
SECTION 7.5 Right of Revocation of Action Taken . . . . . . . . 32
SECTION 7.6 Record Date for Consents and Waivers . . . . . . . 33
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders . . . . . . . . . . . . . . . . 33
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders . . . . . . . . . . . . . . . . 34
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . 35
SECTION 8.4 Documents to Be Given to Trustee . . . . . . . . . 35
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures . . . . . . . . . . . . 36
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER
DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms . . 36
SECTION 9.2 Successor Corporation to be Substituted . . . . . . 36
SECTION 9.3 Opinion of Counsel to be Given Trustee . . . . . . 37
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture;
Covenant Defeasance . . . . . . . . . . . . . . 37
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities . . . . . . . . . . . . . 39
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . . 39
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years . . . . . . . . . 39
SECTION 10.5 Indemnity for U.S. Government Obligations . . . . 39
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders,
Officers and Directors of Issuer Exempt
from Individual Liability . . . . . . . . . . . 39
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities . . . . . 40
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture . . . . . . . . . . . . . . . . . . . 40
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Holders of Securities . . . . . . . . . . . . . 40
SECTION 11.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein . . 40
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays . . . . . . . . . . . . . . . . . . . 41
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939 . . . . . . . . . . 41
SECTION 11.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . 41
SECTION 11.9 Counterparts . . . . . . . . . . 41
SECTION 11.10 Effect of Headings . . . . . . . . . . . . . . . 41
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . 41
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . 42
SECTION 12.3 Payment of Securities Called for Redemption . . . 42
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption . . . 43
SECTION 12.5 Mandatory and Optional Sinking Funds . . . . . . . 43
ARTICLE THIRTEEN
GUARANTEE
Section 13.1 Guarantee . . . . . . . . . . . . . . . . . . . . 45
Section 13.2 Obligations of the Guarantor Unconditional . . . . 46
Section 13.3 Article 13 Not To Prevent Events of Default . . . 46
Section 13.4 Execution and Delivery of Guarantee . . . . . . . 46
FORM OF SENIOR INDENTURE
THIS SENIOR INDENTURE, dated as of ___________________ between K.
Hovnanian Enterprises, Inc., a New Jersey corporation (the "Issuer"), and
________________________, a ________________________, as trustee (the
"Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issuance from time to
time of its unsecured debentures, notes or other evidences of indebtedness to
be issued in one or more series (the "Securities") up to such principal
amount or amounts as may from time to time be authorized in accordance with
the terms of this Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication,
delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been undertaken and
completed;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the Holders (as hereinafter defined) thereof, the Issuer and the Trustee
mutually covenant and agree for the equal and proportionate benefit of the
respective Holders from time to time of the Securities as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 For all purposes of this Indenture and of any indenture
supplemental hereto the following terms shall have the respective meanings
specified in this Section 1.1 (except as otherwise expressly provided herein
or in any indenture supplemental hereto or unless the context otherwise
clearly requires). All other terms used in this Indenture that are defined
in the Trust Indenture Act of 1939, including terms defined therein by
reference to the Securities Act of 1933, as amended (the "Securities Act"),
shall have the meanings assigned to such terms in said Trust Indenture Act of
1939 and in said Securities Act as in force at the date of this Indenture
(except as herein otherwise expressly provided herein or in any indenture
supplemental hereto or unless the context otherwise clearly requires).
All accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted on the
date of this Indenture.
The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision. The expressions "date of this
Indenture", "date hereof", "date as of which this Indenture is dated" and
"date of execution and delivery of this Indenture" and other expressions of
similar import refer to the effective date of the original execution and
delivery of this Indenture, viz. as of ___________________.
The terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
States Code Sections 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of the
Issuer or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means one or more resolutions, certified by the
secretary or an assistant secretary of the Issuer to have been duly adopted
or consented to by the Board of Directors and to be in full force and effect,
and delivered to the Trustee.
"Business Day" means, with respect to any Security, unless otherwise
specified in a Board Resolution and an Officers' Certificate with respect to
a particular series of Securities, a day that (a) in the Place of Payment (or
in any of the Places of Payment, if more than one) in which amounts are
payable, as specified in the form of such Security, and (b) in the city in
which the Corporate Trust Office is located, is not a day on which banking
institutions are authorized or required by law or regulation to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
as amended, or, if at any time after the execution and delivery of this
Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act of 1939, then the body
performing such duties on such date.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets included on the most recent consolidated balance sheet of the Issuer
and its Restricted Subsidiaries, less applicable reserves and other properly
deductible items and after deducting therefrom (a) all current liabilities
and (b) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all in accordance with
generally accepted accounting principles consistently applied.
"Corporate Trust Office" means the office of the Trustee of a series
of Securities at which the trust created by this Indenture shall, at any
particular time, be principally administered, which office is, at the date as
of which this Indenture is dated, located at [address].
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or
include each Person who is then a Depositary hereunder, and, if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with respect to the
Global Securities of such series.
"Dollars" and the sign "$" means the coin and currency of the United
States of America as at the time of payment is legal tender for the payment
of public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Global Security" means a Security evidencing all or a part of a
series of Securities issued to the Depositary for such series in accordance
with Section 2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean, in the case of any Security, the Person in whose name such
Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof.
"Indebtedness" with respect to any Person means, without duplication:
(a) (i) the principal of and premium, if any, and
interest, if any, on indebtedness for money borrowed of such Person,
indebtedness of such Person evidenced by bonds, notes, debentures or
similar obligations, and any guaranty by such Person of any
indebtedness for money borrowed or indebtedness evidenced by bonds,
notes, debentures or similar obligations of any other Person, whether
any such indebtedness or guaranty is outstanding on the date of this
Indenture or is thereafter created, assumed or incurred, (ii)
obligations of such Person for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit
transaction; (iii) the principal of and premium, if any, and
interest, if any, on indebtedness incurred, assumed or guaranteed by
such Person in connection with the acquisition by it or any of its
subsidiaries of any other businesses, properties or other assets;
(iv) lease obligations which such Person capitalized in accordance
with Statement of Financial Accounting Standards No. 13 promulgated
by the Financial Accounting Standards Board or such other generally
accepted accounting principles as may be from time to time in effect;
(v) any indebtedness of such Person representing the balance deferred
and unpaid of the purchase price of any property or interest therein
(except any such balance that constitutes an accrued expense or trade
payable) and any guaranty, endorsement or other contingent obligation
of such Person in respect of any indebtedness of another that is
outstanding on the date of this Indenture or is thereafter created,
assumed or incurred by such Person; and (vi) obligations of such
Person under interest rate, commodity or currency swaps, caps,
collars, options and similar arrangements; and
(b) any amendments, modifications, refundings,
renewals or extensions of any indebtedness or obligation described as
Indebtedness in clause (a) above.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, including, for all purposes of this instrument and any
such supplement, the provisions of the Trust Indenture Act of 1939 that are
deemed to be a part of and govern this instrument and any such supplement,
respectively, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
"interest" means, when used with respect to non-interest bearing
Securities (including, without limitation, any Original Issue Discount
Security that by its terms bears interest only after maturity or upon default
in any other payment due on such Security), interest payable after maturity
(whether at stated maturity, upon acceleration or redemption or otherwise) or
after the date, if any, on which the Issuer becomes obligated to acquire a
Security, whether upon conversion, by purchase or otherwise.
"Issuer" means K. Hovnanian Enterprises, Inc., a New Jersey
corporation, and, subject to Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer which is signed in its name by the chairman of the Board of Directors,
the president or any vice president of the Issuer, and delivered to the
Trustee.
"Officers' Certificate", when used with respect to the Issuer, means
a certificate signed by the chairman of the Board of Directors, the
president, or any vice president and by the treasurer, any assistant
treasurer, the controller, any assistant controller, the secretary or any
assistant secretary of the Issuer. Each such certificate shall include the
statements provided for in Section 11.5 if and to the extent required by the
provisions of such Section 11.5. One of the officers signing an Officers'
Certificate given pursuant to Section 4.3 shall be the principal executive,
financial or accounting officer of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by the chief
counsel of the Issuer or by such other legal counsel who may be an employee
of or counsel to the Issuer and who shall be reasonably satisfactory to the
Trustee. Each such opinion shall include the statements provided for in
Section 11.5, if and to the extent required by the provisions of such Section
11.5.
"original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly)
on registration of transfer, exchange or substitution.
"original issue discount" of any debt security, including any
Original Issue Discount Security, means the difference between the principal
amount of such debt security and the initial issue price of such debt
security (as set forth in the case of an Original Issue Discount Security on
the face of such Security).
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the maturity thereof pursuant to
Article Five.
"Outstanding" when used with reference to Securities, shall, subject
to the provisions of Section 7.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(b) Securities (other than Securities of any series
as to which the provisions of Article Ten hereof shall not be
applicable), or portions thereof, for the payment or redemption of
which moneys or U.S. Government Obligations (as provided for in
Section 10.1) in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the
Issuer) or shall have been set aside, segregated and held in trust by
the Issuer for the Holders of such Securities (if the Issuer shall
act as its own paying agent), provided that, if such Securities, or
portions thereof, are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as herein provided,
or provision satisfactory to the Trustee shall have been made for
giving such notice; and
(c) Securities which shall have been paid or in
substitution for which other Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.9 (except with
respect to any such Security as to which proof satisfactory to the
Trustee is presented that such Security is held by a Person in whose
hands such Security is a legal, valid and binding obligation of the
Issuer).
In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding for such purposes shall be the portion of
the principal amount thereof that would be due and payable as of the date of
such determination (as certified by the Issuer to the Trustee) upon a
declaration of acceleration of the maturity thereof pursuant to Article Five.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Issuer or its agents upon the
issuance of such Securities.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
estate, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and interest, if
any, on the Securities of such series are payable as determined in accordance
with Section 2.3.
"principal" of a debt security, including any Security, means the
amount (including, without limitation, if and to the extent applicable, any
premium and, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect
to such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, if any, upon any redemption
at the option of the Issuer, upon any purchase or exchange at the option of
the Issuer or the holder of such debt security and upon any acceleration of
the maturity of such debt security).
"principal amount" of a debt security, including any Security, means
the principal amount as set forth on the face of such debt security.
"record date" shall have the meaning set forth in Section 2.7.
"Responsible Officer", when used with respect to the Trustee of a
series of Securities, means any officer of the Trustee with direct
responsibility for the administration of the trust created by this Indenture.
"Restricted Subsidiary" means (a) any Subsidiary of the Issuer other
than an Unrestricted Subsidiary, and (b) any Subsidiary of the Issuer which
was an Unrestricted Subsidiary but which, subsequent to the date hereof, is
designated by the Issuer (by Board Resolution) to be a Restricted Subsidiary;
provided, however, that the Issuer may not designate any such Subsidiary to
be a Restricted Subsidiary if the Issuer would thereby breach any covenant or
agreement herein contained (on the assumptions that any outstanding
Indebtedness of such Subsidiary was incurred at the time of such
designation).
"Securities Act" shall have the meaning set forth in Section 1.1.
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture or, as the case may be, Securities that have been
authenticated and delivered pursuant to this Indenture.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" of the Issuer within the meaning of Rule 1.02(w) of Regulation S-
K promulgated by the Commission as in effect on the date of this Indenture.
"Subsidiary" of any specified Person means any corporation of which
such Person, or such Person and one or more Subsidiaries of such Person, or
any one or more Subsidiaries of such Person, directly or indirectly own
voting securities entitling any one or more of such Persons and its
Subsidiaries to elect a majority of the directors, either at all times or, so
long as there is no default or contingency which permits the holders of any
other class or classes of securities to vote for the election of one or more
directors.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which
this Indenture is originally executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each
Person who is then a trustee hereunder and, if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of such series.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Issuer
acquired or organized after the date hereof, provided, however, that such
Subsidiary shall not be a successor, directly or indirectly, to any
Restricted Subsidiary, and (b) any Subsidiary of the Issuer substantially all
the assets of which consist of stock or other securities of a Subsidiary or
Subsidiaries of the character described in clause (a) of this paragraph,
unless and until such Subsidiary shall have been designated to be a
Restricted Subsidiary pursuant to clause (b) of the definition of "Restricted
Subsidiary".
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(B).
"vice president," when used with respect to the Issuer or the
Trustee, means any vice president, regardless of whether designated by a
number or a word or words added before or after the title "vice president."
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series,
and calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall be
substantially in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as set forth in
a Board Resolution or, to the extent established pursuant to rather than set
forth in a Board Resolution, an Officers' Certificate detailing such
establishment) or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have
imprinted or otherwise reproduced thereon such legend or legends or
endorsements, not inconsistent with the provisions of this Indenture, as may
be required to comply with any law or with any rules or regulations pursuant
thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities as evidenced by their
execution of such Securities.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be
substantially as follows:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
______________________, as Trustee
By__________________________________
Authorized Signatory
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Securities of such series shall
bear, in addition to the Trustee's certificate of authentication, an
alternate Certificate of Authentication which shall be substantially as
follows:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
__________________________, as Trustee
By___________________________________
as Authenticating Agent
By___________________________________
Authorized Signatory
SECTION 2.3 Amount Unlimited, Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series and the Securities
of each such series shall rank equally and pari passu with the Securities of
each other series and with all other unsecured and unsubordinated debt of the
Issuer. There shall be established in or pursuant to one or more Board
Resolutions (and, to the extent established pursuant to rather than set forth
in a Board Resolution, in an Officers' Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the initial issuance of Securities of any series:
(1) the designation of the Securities of the
series, which shall distinguish the Securities of such series from
the Securities of all other series;
(2) any limit upon the aggregate principal amount
of the Securities of the series that may be authenticated and
delivered under this Indenture (except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for,
or in lieu of, other Securities of the series pursuant to Section
2.8, 2.9, 2.11, 8.5 or 12.3);
(3) the date or dates on which the principal of the
Securities of the series is payable;
(4) the rate or rates at which the Securities of
the series shall bear interest, if any, the date or dates from which
any such interest shall accrue, on which any such interest shall be
payable and on which a record shall be taken for the determination of
Holders to whom any such interest is payable or the method by which
such rate or rates or date or dates shall be determined or both;
(5) the place or places where and the manner in
which the principal of, premium, if any, and interest, if any, on
Securities of the series shall be payable (if other than as provided
in Section 3.2) and the office or agency for the Securities of the
series maintained by the Issuer pursuant to Section 3.2;
(6) the right, if any, of the Issuer to redeem,
purchase or repay Securities of the series, in whole or in part, at
its option and the period or periods within which, the price or
prices (or the method by which such price or prices shall be
determined or both) at which, the form or method of payment therefor
if other than in cash and any terms and conditions upon which and the
manner in which (if different from the provisions of Article Twelve)
Securities of the series may be so redeemed, purchased or repaid, in
whole or in part, pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to
redeem, purchase or repay Securities of the series in whole or in
part pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which the price or prices (or the method by which such
price or prices shall be determined or both) at which, the form or
method of payment therefor if other than in cash and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities of
the series shall be issuable;
(9) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon acceleration of the maturity thereof;
(10) whether Securities of the series will be
issuable as Global Securities;
(11) if the Securities of such series are to be
issuable in definitive form (whether upon original issue or upon
exchange of a temporary Security of such series) only upon receipt of
certain certificates or other documents or satisfaction of other
conditions, the form and terms of such certificates, documents or
conditions;
(12) any trustees, depositaries, authenticating or
paying agents, transfer agents or registrars or any other agents with
respect to the Securities of such series;
(13) any deleted, modified or additional events of
default or remedies or any deleted, modified or additional covenants
with respect to the Securities of such series;
(14) whether the provisions of Section 10.1(C) will
be applicable to Securities of such series;
(15) any provision relating to the issuance of
Securities of such series at an original issue discount (including,
without limitation, the issue price thereof, the rate or rates at
which such original issue discount shall accrete, if any, and the
date or dates from or to which or period or periods during which such
original issue discount shall accrete at such rate or rates);
(16) if other than Dollars, the foreign currency in
which payment of the principal of, premium, if any, and interest, if
any, on the Securities of such series shall be payable;
(17) if other than
_________________________________ is to act as Trustee for the
Securities of such series, the name and Corporate Trust Office of
such Trustee;
(18) if the amounts of payments of principal of,
premium, if any, and interest, if any, on the Securities of such
series are to be determined with reference to an index, the manner in
which such amounts shall be determined;
(19) the terms for conversion or exchange, if any,
with respect to the Securities of such series; and
(20) any other terms of the series (which terms
shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical,
except as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above
or as set forth in any such indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by
or pursuant to such Board Resolution, such Officers' Certificate or in any
such indenture supplemental hereto.
Any such Board Resolution or Officers' Certificate referred to above
with respect to Securities of any series filed with the Trustee on or before
the initial issuance of the Securities of such series shall be incorporated
herein by reference with respect to Securities of such series and shall
thereafter be deemed to be a part of the Indenture for all purposes relating
to Securities of such series as fully as if such Board Resolution or
Officers' Certificate were set forth herein in full.
SECTION 2.4 Authentication and Delivery of Securities. The Issuer
may deliver Securities of any series executed by the Issuer to the Trustee
for authentication together with the applicable documents referred to below
in this Section 2.4, and the Trustee shall thereupon authenticate and deliver
such Securities to, or upon the order of, the Issuer (contained in the Issuer
Order referred to below in this Section 2.4) or pursuant to such procedures
acceptable to the Trustee and to such recipients as may be specified from
time to time by an Issuer Order. The maturity date, original issue date,
interest rate, if any, and any other terms of the Securities of such series
shall be determined by or pursuant to such Issuer Order and procedures. If
provided for in such procedures and agreed to by the Trustee, such Issuer
Order may authorize authentication and delivery pursuant to oral instructions
from the Issuer or its duly authorized agent, which instructions shall be
promptly confirmed in writing. In authenticating the Securities of such
series and accepting the additional responsibilities under this Indenture in
relation to such Securities, the Trustee shall be entitled to receive (in the
case of subparagraphs (2), (3) and (4) below only at or before the time of
the first request of the Issuer to the Trustee to authenticate Securities of
such series) and (subject to Section 6.1) shall be fully protected in relying
upon, unless and until such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication
and setting forth delivery instructions provided that, with respect
to Securities of a series subject to a Periodic Offering, (a) such
Issuer Order may be delivered by the Issuer to the Trustee prior to
the delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities
of such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or pursuant
to procedures acceptable to the Trustee as may be specified from time
to time by an Issuer Order, (c) the maturity date or dates, original
issue date or dates, interest rate or rates, if any, and any other
terms of Securities of such series shall be determined by an Issuer
Order or pursuant to such procedures, (d) if provided for in such
procedures, such Issuer Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Issuer
or its duly authorized agent or agents, which oral instructions shall
be promptly confirmed in writing and (e) after the original issuance
of the first Security of such series to be issued, any separate
request by the Issuer that the Trustee authenticate Securities of
such series for original issuance will be deemed to be a
certification by the Issuer that it is in compliance with all
conditions precedent provided for in this Indenture relating to the
authentication and delivery of such Securities;
(2) the Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3
by or pursuant to which the forms and terms of the Securities of such
series were established;
(3) an Officers' Certificate setting forth the form
or forms and terms of the Securities stating that the form or forms
and terms of the Securities have been established pursuant to
Sections 2.1 and 2.3 and comply with this Indenture and covering such
other matters as the Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion
of Counsel, or a letter from legal counsel addressed to the Trustee
permitting it to rely on an Opinion of Counsel, substantially to the
effect that:
(a) the form or forms of the
Securities of such series have been duly authorized
and established in conformity with the provisions of
this Indenture;
(b) in the case of an
underwritten offering, the terms of the Securities
of such series have been duly authorized and
established in conformity with the provisions of
this Indenture, and, in the case of an offering that
is not underwritten, certain terms of the Securities
of such series have been established pursuant to a
Board Resolution, an Officers' Certificate or a
supplemental indenture in accordance with this
Indenture, and when such other terms as are to be
established pursuant to procedures set forth in an
Issuer Order shall have been established, all such
terms will have been duly authorized by the Issuer
and will have been established in conformity with
the provisions of this Indenture;
(c) when the Securities of
such series have been executed by the Issuer and
authenticated by the Trustee in accordance with the
provisions of this Indenture and delivered to and
duly paid for by the purchasers thereof, they will
have been duly issued under this Indenture and will
be valid and legally binding obligations of the
Issuer, enforceable in accordance with their
respective terms, and will be entitled to the
benefits of this Indenture; and
(d) the execution and
delivery by the Issuer of, and the performance by
the Issuer of its obligations under, the Securities
of such series will not contravene any provision of
applicable law or the articles of incorporation or
bylaws of the Issuer or any agreement or other
instrument binding upon the Issuer or any of its
Subsidiaries that is material to the Issuer and its
Subsidiaries, considered as one enterprise, or, to
such counsel's knowledge after the inquiry indicated
therein, any judgment, order or decree of any
governmental agency or any court having jurisdiction
over the Issuer or any Subsidiary of the Issuer, and
no consent, approval or authorization of any
governmental body or agency is required for the
performance by the Issuer of its obligations under
the Securities, except such as are specified and
have been obtained and such as may be required by
the securities or blue sky laws of the various
states in connection with the offer and sale of the
Securities.
In addition, if the authentication and delivery relates to a new
series of Securities created by an indenture supplemental hereto, such
Opinion of Counsel shall also state that all laws and requirements with
respect to the form and execution by the Issuer of the supplemental indenture
with respect to the series of Securities have been complied with, the Issuer
has corporate power to execute and deliver any such supplemental indenture
and has taken all necessary corporate action for those purposes and any such
supplemental indenture has been executed and delivered and constitutes the
legal, valid and binding obligation of the Issuer enforceable in accordance
with its terms.
In rendering such opinions, such counsel may qualify any opinions as
to enforceability by stating that such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and other
similar laws affecting the rights and remedies of creditors and is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the State of
New Jersey and the federal law of the United States, upon opinions of other
counsel (copies of which shall be delivered to the Trustee), who shall be
counsel reasonably satisfactory to the Trustee, in which case the opinion
shall state that such counsel believes that both such counsel and the Trustee
are entitled so to rely. Such counsel may also state that, insofar as such
opinion involves factual matters, such counsel has relied, to the extent such
counsel deems proper, upon certificates of officers of the Issuer and its
Subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of any series under this Section 2.4 if the Trustee,
being advised by counsel, determines that such action may not lawfully be
taken by the Issuer or if the Trustee in good faith by its board of directors
or board of trustees, executive committee or a trust committee of directors
or trustees or Responsible Officers shall determine that such action would
expose the Trustee to personal liability to existing Holders or would
adversely affect the Trustee's own rights, duties or immunities under the
Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section 2.4 and the Issuer Order with respect to such
series, authenticate and deliver one or more Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series to be issued in the
form of Global Securities and not yet cancelled, (ii) shall be registered in
the name of the Depositary for such Global Security or Securities or the
nominee of such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instructions, and (iv) shall bear
a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for Securities in definitive registered form,
this Security may not be transferred except as a whole by the Depositary to
the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time
of its designation and at all times while it serves as Depositary, be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and any other applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall be signed
on behalf of the Issuer by the chairman of the Board of Directors, the
president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one
of its assistant secretaries. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the
Issuer may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Securities. Typographical
and other minor errors or defects in any such reproduction of a seal or any
such signature shall not affect the validity or enforceability of any
Security that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall
be authenticated and delivered by the Trustee or disposed of by the Issuer,
such Security nevertheless may be authenticated and delivered or disposed of
as though the person who signed such Security had not ceased to be such
officer of the Issuer; and any Security may be signed on behalf of the Issuer
by such persons as, at the actual date of the execution of such Security,
shall be the proper officers of the Issuer, although at the date of the
execution and delivery of this Indenture any such person was not such an
officer.
SECTION 2.6 Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one
of its authorized signatories, or its Authenticating Agent, shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
The execution of such certificate by the Trustee or its Authenticating Agent
upon any Security executed by the Issuer shall be conclusive evidence that
the Security so authenticated has been duly authenticated and delivered
hereunder and that the Holder is entitled to the benefits of this Indenture.
Each reference in this Indenture to authentication by the Trustee includes
authentication by an agent appointed pursuant to Section 6.14.
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable in registered form
in denominations established as contemplated by Section 2.3 or, with respect
to the Securities of any series, if not so established, in denominations of
$1,000 and any integral multiple thereof. The Securities of each series
shall be numbered, lettered or otherwise distinguished in such manner or in
accordance with such plan as the officers of the Issuer executing the same
may determine with the approval of the Trustee, as evidenced by the execution
and authentication thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and
such interest, if any, shall be payable on the dates, established as
contemplated by Section 2.3.
The Person in whose name any Security of any series is registered at
the close of business on any record date applicable to a particular series
with respect to any interest payment date for such series shall be entitled
to receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the
extent the Issuer shall default in the payment of the interest due on such
interest payment date for such series, in which case such defaulted interest
shall be paid to the Persons in whose names Outstanding Securities for such
series are registered (a) at the close of business on a subsequent record
date (which shall be not less than five Business Days prior to the date of
payment of such defaulted interest) established by notice given by mail by or
on behalf of the Issuer to the Holders of Securities not less than 15 days
preceding such subsequent record date or (b) as determined by such other
procedure as is mutually acceptable to the Issuer and the Trustee. The term
"record date" as used with respect to any interest payment date (except a
date for payment of defaulted interest) for the Securities of any series
shall mean the date specified as such in the terms of the Securities of such
series established as contemplated by Section 2.3, or, if no such date is so
established, if such interest payment date is the first day of a calendar
month, the fifteenth day of the next preceding calendar month or, if such
interest payment date is the fifteenth day of a calendar month, the first day
of such calendar month, whether or not such record date is a Business Day.
SECTION 2.8 Registration, Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 for each series of Securities a register or registers in which,
subject to such reasonable regulations as it may prescribe, it will provide
for the registration of Securities of each series and the registration of
transfer of Securities of such series. Each such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times
such register or registers shall be open for inspection and available for
copying by the Trustee.
Upon due presentation for registration of transfer of any Security of
any series at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities of the same series, maturity date, interest rate, if
any, and original issue date in authorized denominations for a like aggregate
principal amount.
All Securities presented for registration of transfer shall (if so
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to
the Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
At the option of the Holder thereof, Securities of any series (other
than a Global Security, except as set forth below) may be exchanged for a
Security or Securities of such series having authorized denominations and an
equal aggregate principal amount, upon surrender of such Securities to be
exchanged at the agency of the Issuer that shall be maintained for such
purpose in accordance with Section 3.2.
The Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
registration of transfer of Securities. No service charge shall be made for
any such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a transfer
of (a) any Securities of any series for a period of 15 days next preceding
the first mailing or publication of notice of redemption of Securities of
such series to be redeemed, (b) any Securities selected, called or being
called for redemption, in whole or in part, except, in the case of any
Security to be redeemed in part, the portion thereof not so to be redeemed or
(c) any Security if the Holder thereof has exercised his right, if any, to
require the Issuer to repurchase such Security in whole or in part, except
the portion of such Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a part of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor Depositary for such
series or a nominee of such successor Depositary.
If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Issuer that it is
unwilling or unable to continue as Depositary for such Securities or if at
any time the Depositary for such Securities shall no longer be eligible under
Section 2.4, the Issuer shall appoint a successor Depositary with respect to
such Securities. If a successor Depositary for such Securities is not
appointed by the Issuer within 90 days after the Issuer receives such notice
or becomes aware of such ineligibility, the Issuer's election pursuant to
Section 2.3 that such Securities be represented by one or more Global
Securities shall no longer be effective and the Issuer shall execute, and the
Trustee, upon receipt of an Issuer Order for the authentication and delivery
of definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount
of the Global Security or Securities representing such Securities in exchange
for such Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Securities.
In such event, the Issuer shall execute, and the Trustee, upon receipt of an
Issuer Order for the authentication and delivery of definitive Securities of
such series, shall authenticate and deliver, Securities of such series in
definitive registered form, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such Securities, in exchange for such Global Security
or Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part
for Securities of the same series in definitive registered form on such terms
as are acceptable to the Issuer and such Depositary. Thereupon, the Issuer
shall execute, and the Trustee shall authenticate and deliver, without
service charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
cancelled by the Trustee or an agent of the Trustee. Securities in
definitive registered form issued in exchange for a Global Security pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of
the Issuer. The Trustee or such agent shall deliver at its office such
Securities to or as directed by the Persons in whose names such Securities
are so registered.
All Securities issued upon any registration of transfer or exchange
of Securities shall be valid and legally binding obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer
or exchange.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated or defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of the Issuer, the
Trustee shall authenticate and deliver a new Security of the same series,
maturity date, interest rate, if any, and original issue date, bearing a
number or other distinguishing symbol not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Security, or in lieu
of and in substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substitute Security shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as may be required by the Trustee or the Issuer or any
such agent to indemnify and defend and to save each of the Trustee and the
Issuer and any such agent harmless and, in every case of destruction, loss or
theft, evidence to their satisfaction of the destruction, loss or theft of
such Security and of the ownership thereof and in the case of mutilation or
defacement, shall surrender the Security to the Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee or its agent) connected therewith. In case
any Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the
case of a mutilated or defaced Security), if the applicant for such payment
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as any of them may require to hold
each of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and the Trustee and any agent of
the Issuer or the Trustee evidence to the Trustee's satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights
set forth in) this Indenture equally and proportionately with any and all
other Securities of such series duly authenticated and delivered hereunder.
All Securities shall be held and owned upon the express condition that, to
the extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, destroyed, lost
or stolen Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Disposition Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or
analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee or any agent of the Trustee, shall be delivered to the Trustee or
its agent for cancellation or, if surrendered to the Trustee, shall be
cancelled by it; and no Securities shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall dispose of all cancelled Securities in accordance with its standard
procedures and shall deliver a certificate of such disposition to the
Company. If the Issuer or its agent shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee or its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable in any authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by
the execution and authentication thereof. Temporary Securities may contain
such references to any provisions of this Indenture as may be appropriate.
Every temporary Security shall be executed by the Issuer and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Securities. Without unreasonable
delay the Issuer shall execute and shall furnish definitive Securities of
such series and thereupon temporary Securities of such series may be
surrendered in exchange therefor without charge at each office or agency to
be maintained by the Issuer for that purpose pursuant to Section 3.2 and the
Trustee shall authenticate and deliver in exchange for such temporary
Securities of such series an equal aggregate principal amount of definitive
Securities of the same series having authorized denominations. Until so
exchanged, the temporary Securities of any series shall be entitled to the
same benefits under this Indenture as definitive Securities of such series,
unless otherwise established pursuant to Section 2.3.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of, premium, if any, and interest, if any, on each of the
Securities at the place, at the respective times and in the manner provided
in the Securities.
SECTION 3.2 Offices for Notices and Payments, etc. So long as any
of the Securities are Outstanding, the Issuer will maintain in each Place of
Payment, an office or agency where the Securities may be presented for
payment, an office or agency where the Securities may be presented for
registration of transfer and for exchange as provided in this Indenture, and
an office or agency where notices and demands to or upon the Issuer in
respect of the Securities or of this Indenture may be served. In case the
Issuer shall at any time fail to maintain any such office or agency, or shall
fail to give notice to the Trustee of any change in the location thereof,
presentation may be made and notice and demand may be served in respect of
the Securities or of this Indenture at the Corporate Trust Office. The
Issuer hereby initially designates the Corporate Trust Office for each such
purpose and appoints the Trustee as registrar and paying agent and as the
agent upon whom notices and demands may be served with respect to the
Securities.
SECTION 3.3 No Interest Extension. In order to prevent any
accumulation of claims for interest after maturity thereof, the Issuer will
not directly or indirectly extend or consent to the extension of the time for
the payment of any claim for interest on any of the Securities and will not
directly or indirectly be a party to or approve any such arrangement by the
purchase or funding of said claims or in any other manner; provided, however,
that this Section 3.3 shall not apply in any case where an extension shall be
made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 3.5 Provision as to Paying Agent. (a) If the Issuer shall
appoint a paying agent other than the Trustee, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such
paying agent shall agree with the Trustee, subject to the provisions of this
Section 3.5,
(1) that it will hold all sums held by it as such
paying agent for the payment of the principal of or interest, if any,
on the Securities (whether such sums have been paid to it by the
Issuer or by any other obligor on the Securities) in trust for the
benefit of the Holders of the Securities and the Trustee; and
(2) that it will give the Trustee notice of any
failure by the Issuer (or by any other obligor on the Securities) to
make any payment of the principal of, premium, if any, or interest,
if any, on the Securities when the same shall be due and payable; and
(3) that it will, at any time during the
continuance of any such failure, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by
such paying agent.
(b) If the Issuer shall act as its own paying agent, it will, on or
before each due date of the principal of or interest, if any, on the
Securities, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities a sum sufficient to pay such principal, premium, if
any, or interest, if any, so becoming due and will notify the Trustee of any
failure to take such action and of any failure by the Issuer (or by any other
obligor under the Securities) to make any payment of the principal of,
premium, if any, or interest, if any, on the Securities when the same shall
become due and payable.
(c) Anything in this Section 3.5 to the contrary notwithstanding,
the Issuer may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid
to the Trustee all sums held in trust by it, or any paying agent hereunder,
as required by this Section 3.5, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 3.5 to the contrary notwithstanding,
any agreement of the Trustee or any paying agent to hold sums in trust as
provided in this Section 3.5 is subject to Sections 10.3 and 10.4.
(e) Whenever the Issuer shall have one or more paying agents, it
will, on or before each due date of the principal of or interest, if any, on
any Securities, deposit with a paying agent a sum sufficient to pay the
principal, premium, if any, or interest, if any, so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal,
premium, if any, or interest, if any, and (unless such paying agent is the
Trustee) the Issuer will promptly notify the Trustee of its action or failure
so to act.
SECTION 3.6 Limitation on Liens. So long as any of the Securities
are Outstanding, the Issuer will not, and will not permit any Restricted
Subsidiary to, pledge, mortgage, hypothecate or grant a security interest in,
or permit any mortgage, pledge, security interest or other lien upon, any
property or assets owned by the Issuer or any Restricted Subsidiary to secure
any Indebtedness, without making effective provision whereby the Securities
then Outstanding shall (so long as such other Indebtedness shall be so
secured) be equally and ratably secured with any and all such other
Indebtedness and any other indebtedness similarly entitled to be equally and
ratably secured; provided, however, that this restriction shall not apply to
nor prevent the creation or existence of:
(a) any mortgage, pledge, security interest, lien
or encumbrance upon any property or assets created at the time of the
acquisition of such property or assets by the Issuer or any
Restricted Subsidiary or within one year after such time to secure
all or a portion of the purchase price for such property or assets;
(b) any mortgage, pledge, security interest, lien
or encumbrance upon any property or assets existing thereon at the
time of the acquisition thereof by the Issuer or any Restricted
Subsidiary (whether or not the obligations secured thereby are
assumed by the Issuer or any Subsidiary of the Issuer);
(c) any mortgage, pledge, security interest, lien
or encumbrance upon any property or assets, whenever acquired, of any
corporation or other entity that becomes a Restricted Subsidiary
after the date hereof, provided that (i) the instrument creating such
mortgage, pledge, security interest, lien or encumbrance shall be in
effect prior to the time such corporation or other entity becomes a
Restricted Subsidiary and (ii) such mortgage, pledge, security
interest, lien or encumbrance shall only apply to properties or
assets owned by such corporation or other entity at the time it
becomes a Restricted Subsidiary or thereafter acquired by it from
sources other than the Issuer or another Restricted Subsidiary;
(d) any mortgage, pledge, security interest, lien
or encumbrance in favor of the Issuer or any wholly-owned Subsidiary
of the Issuer;
(e) any mortgage, pledge, security interest, lien
or encumbrance created or assumed by the Issuer or a Restricted
Subsidiary in connection with the issuance of debt securities to
interest on which is excludable from gross income of the holder of
such security pursuant to the Internal Revenue Code of 1986, as
amended, for the purpose of financing, in whole or in part, the
acquisition or construction of property or assets to be used by the
Issuer or a Subsidiary;
(f) any extension, renewal or refunding of any
mortgage, pledge, security interest, lien or encumbrance permitted by
the foregoing subparagraphs (a) through (e) above on substantially
the same property or assets theretofore subject thereto;
(g) any mortgage, pledge, security interest, lien
or encumbrance securing any Indebtedness in an amount which, together
with all other Indebtedness secured by a mortgage, pledge, security
interest, lien or encumbrance that is not otherwise permitted by the
provisions of this Section 3.6, does not at the time of the
incurrence of the Indebtedness so secured exceed 20% of Consolidated
Net Tangible Assets;
(h) deposits or pledges to secure the payment of
workmen's compensation, unemployment insurance or other social
security benefits or obligations, or to secure the performance of
trade contracts, leases, public or statutory obligations, surety or
appeal bonds or other obligations of a like general nature incurred
in the ordinary course of business;
(i) mechanics', materialmen's, warehousemen's,
carriers' or other like liens arising in the ordinary course of
business securing obligations which are not overdue for a period
longer than 30 days or which are being contested in good faith by
appropriate proceedings;
(j) liens for taxes, assessments or other
governmental charges not yet payable or being contested in good faith
and as to which adequate reserves shall have been established in
accordance with generally accepted accounting principles;
(k) non-recourse mortgages on Income Producing
Properties securing Indebtedness;
(l) liens on assets of a Mortgage Subsidiary to
secure only a Warehouse Line of Credit provided to such Subsidiary;
(m) easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of
business; or
(n) liens in connection with capital leases or sale
leaseback transactions not securing any other indebtedness.
In case the Issuer or any Restricted Subsidiary shall propose to
pledge, mortgage, hypothecate or grant a security interest in any property or
assets owned by the Issuer or any Restricted Subsidiary to secure any
Indebtedness, other than as permitted by subdivisions (a) to (n), inclusive,
of this Section 3.6, the Issuer will prior thereto give written notice
thereof to the Trustee, and the Issuer will, or will cause such Restricted
Subsidiary to, prior to or simultaneously with such pledge, mortgage,
hypothecation or grant of security interest, by supplemental indenture
executed to the Trustee (or to the extent legally necessary to another
trustee or additional or separate trustee), in form satisfactory to the
Trustee, effectively secure (for so long as such other Indebtedness shall be
so secured) all the Securities equally and ratably with such Indebtedness and
with any other indebtedness similarly entitled to be equally and ratably
secured. Such supplemental indenture shall contain the provisions concerning
the possession, control, release and substitution of mortgaged and pledged
property and securities and other appropriate matters which are required by
the Trust Indenture Act of 1939 (as in effect at the date of execution of
such supplemental indenture) to be included in a secured indenture qualified
under the Trust Indenture Act of 1939, and may also contain such additional
and amendatory provisions permitted by the Trust Indenture Act of 1939 as the
Issuer and the Trustee shall deem advisable or appropriate or as the Trustee
shall deem necessary in connection with such pledge, mortgage, hypothecation
or grant of security interest.
For purpose of this Section 3.6, "security interest" shall include
the interest of the lessor under a lease with a term of three years or more
that should be, in accordance with generally accepted accounting principles,
recorded as a capital lease, and any such lease of property or assets not
acquired from the Issuer or any Restricted Subsidiary in contemplation of
such lease shall be treated as though the lessee had purchased such property
or assets from the lessor.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the
Securities covenant and agree that they will furnish or cause to be furnished
to the Trustee a list in such form as the Trustee may reasonably require of
the names and addresses of the Holders of the Securities of each series:
(a) semiannually and not more than 15 days after
each January 1 and July 1, and
(b) at such other times as the Trustee may request
in writing, within 15 days after receipt by the Issuer of any such
request,
provided that if and so long as the Trustee shall be the registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Securities (i) contained in the most recent list furnished to
it as provided in Section 4.1, and (ii) received by it in the capacity of
registrar or paying agent for such series, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 4.1 upon receipt of a
new list so furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to
the Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application,
and such application states that the applicants desire to communicate with
other Holders of Securities of a particular series (in which case the
applicants must all hold Securities of such series) or with Holders of all
Securities with respect to their rights under this Indenture or under such
Securities and such application is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, or
(ii) inform such applicants as to the approximate number
of Holders of Securities of such series or of all Securities, as the
case may be, whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the
provisions of subsection (a) of this Section 4.2, and as to the
approximate cost of mailing to such Securityholders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy
or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders
of Securities of such series or of all Securities, as the case may be, or
would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for
a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met, and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Securityholders
with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by receiving and holding
the same, agrees with the Issuer and the Trustee that neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Securities in accordance with the
provisions of subsection (b) of this Section 4.2, regardless of the source
from which such information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant to a request made
under such subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Issuer may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if the Issuer is not required to file information, documents or
reports pursuant to either of such Sections, then to file with the Trustee
and the Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section
13 of the Exchange Act, in respect of a debt security listed and registered
on a national securities exchange as may be prescribed from time to time in
such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Issuer with the conditions and covenants provided for in this Indenture
as may be required from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 4.4(c), such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to subsections (a) and
(b) of this Section 4.3 as may be required to be transmitted to such Holders
by rules and regulations prescribed from time to time by the Commission; and
(d) to furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his knowledge of the Issuer's
compliance with all conditions and covenants under this Indenture. For
purposes of this subsection (d), such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
SECTION 4.4 Reports by the Trustee. (a) The Trustee shall transmit
to Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act of 1939 at
the times and in the manner provided pursuant thereto. To the extent that
any such report is required by the Trust Indenture Act of 1939 with respect
to any 12 month period, such report shall cover the 12 month period ending
July 15 and shall be transmitted by the next succeeding September 15.
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by
the Trustee with each stock exchange upon which the Securities of any
applicable series are listed and also with the Commission. The Issuer agrees
to promptly notify the Trustee with respect to any series when and as the
Securities of such series become admitted to trading on any national
securities exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default", wherever used
herein with respect to Securities of any series, means any one or more of the
following events (whatever the reason for such Event of Default), unless it
is either inapplicable to a particular series or it is specifically deleted
or modified in or pursuant to the Board Resolution or supplemental indenture
establishing such series of Securities or in the form of Security, for such
series:
(a) default in the payment of the principal of or
premium, if any, of the Securities of such series as and when the
same shall become due and payable either at maturity, upon
redemption, by declaration or otherwise; or
(b) default in the payment of any installment of
interest on any of the Securities of such series as and when the same
shall become due and payable, and continuance of such default for a
period of 30 days; or
(c) default in the payment or satisfaction of any
sinking fund or other purchase obligation with respect to Securities
of such series, as and when such obligation shall become due and
payable; or
(d) failure on the part of the Issuer duly to
observe or perform any other of the covenants or agreements on the
part of the Issuer in the Securities of such series or in this
Indenture continued for a period of 90 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given by certified or registered mail to the Issuer
by the Trustee, or to the Issuer and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Securities of such
series then Outstanding; or
(e) without the consent of the Issuer a court
having jurisdiction shall enter an order for relief with respect to
the Issuer or any of its Significant Subsidiaries under any
applicable bankruptcy, insolvency or other similar law of the United
States of America, any state thereof or the District of Columbia, or
without the consent of the Issuer a court having jurisdiction shall
enter a judgment, order or decree adjudging the Issuer or any of its
Significant Subsidiaries bankrupt or insolvent, or enter an order for
relief for reorganization, arrangement, adjustment or composition of
or in respect of the Issuer or any of its Significant Subsidiaries
under any applicable bankruptcy, insolvency or other similar law of
the United States of America, any state thereof or the District of
Columbia, and the continuance of any such judgment, order or decree
is unstayed and in effect for a period of 60 consecutive days; or
(f) the Issuer or any of its Significant
Subsidiaries shall institute proceedings for entry of an order for
relief with respect to the Issuer or any of its Significant
Subsidiaries under any applicable bankruptcy, insolvency or other
similar law of the United States of America, any state thereof or the
District of Columbia, or for an adjudication of insolvency, or shall
consent to the institution of bankruptcy or insolvency proceedings
against it, or shall file a petition seeking, or seek or consent to
reorganization, arrangement, composition or relief under any
applicable bankruptcy, insolvency or other similar law of the United
States of America, any state thereof or the District of Columbia, or
shall consent to the filing of such petition or to the appointment of
a receiver, custodian, liquidator, assignee, trustee, sequestrator or
similar official of the Issuer or of substantially all of its
property, or the Issuer shall make a general assignment for the
benefit of creditors as recognized under any applicable bankruptcy,
insolvency or other similar law of the United States of America, any
state thereof or the District of Columbia; or
(g) any other Event of Default provided with
respect to the Securities of such series.
If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given
by Securityholders), may declare the principal (or, if the Securities of such
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all the Securities
of such series and the interest, if any, accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, notwithstanding anything to the
contrary contained in this Indenture or in the Securities of such series.
This provision, however, is subject to the condition that, if at any time
after the unpaid principal amount (or such specified amount) of the
Securities of such series shall have been so declared due and payable and
before any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Issuer shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest, if any, upon all of the Securities of such series
and the principal of any and all Securities of such series which shall have
become due otherwise than by acceleration (with interest on overdue
installments of interest, if any, to the extent that payment of such interest
is enforceable under applicable law and on such principal at the rate borne
by the Securities of such series to the date of such payment or deposit) and
the reasonable compensation, disbursements, expenses and advances of the
Trustee and all other amounts due the Trustee under Section 6.6, and any and
all defaults under this Indenture, other than the nonpayment of such portion
of the principal amount of and accrued interest, if any, on Securities of
such series which shall have become due by acceleration, shall have been
cured or shall have been waived in accordance with Section 5.7 or provision
deemed by the Trustee to be adequate shall have been made therefor, then and
in every such case the Holders of a majority in aggregate principal amount of
the Securities of such series then Outstanding, by written notice to the
Issuer and to the Trustee, may rescind and annul such declaration and its
consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon.
Notwithstanding the previous sentence, no waiver shall be effective against
any Holder for any Event of Default or event which with notice or lapse of
time or both would be an Event of Default with respect to any covenant or
provision which cannot be modified or amended without the consent of the
Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event.
If any Event of Default specified in Section 5.1(e) or 5.1(f) occurs
with respect to the Issuer, all unpaid principal amount (or, if the
Securities of any series then Outstanding are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of each such series) and accrued interest on all Securities of each
series then Outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act by the Trustee or any
Securityholder.
If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Issuer, the Trustee and the Securityholders shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall continue as
though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to Section 5.1
(a), (b) or (c), the Trustee shall not be charged with knowledge of any Event
of Default unless written notice thereof shall have been given to a
Responsible Officer by the Issuer, a paying agent or any Securityholder.
SECTION 5.2 Payment of Securities on Default; Suit Therefor. The
Issuer covenants that (a) if default shall be made in the payment of any
installment of interest upon any of the Securities of any series then
Outstanding as and when the same shall become due and payable, and such
default shall have continued for a period of 30 days, or (b) if default shall
be made in the payment of the principal of any of the Securities of such
series as and when the same shall have become due and payable, whether at
maturity of the Securities of such series or upon redemption or by
declaration or otherwise, then, upon demand of the Trustee, the Issuer will
pay to the Trustee, for the benefit of the Holders of the Securities, the
whole amount that then shall have become due and payable on all such
Securities of such series for principal or interest, if any, or both, as the
case may be, with interest upon the overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) upon the
overdue installments of interest, if any, at the rate borne by the Securities
of such series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel,
and any expenses or liabilities incurred by the Trustee hereunder other than
through its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at
law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or any other
obligor on the Securities of such series and collect in the manner provided
by law out of the property of the Issuer or any other obligor on the
Securities of such series, wherever situated, the moneys adjudged or decreed
to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Issuer or any other obligor on the Securities of any
series then Outstanding under any bankruptcy, insolvency or other similar law
now or hereafter in effect, or if a receiver or trustee or similar official
shall have been appointed for the property of the Issuer or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Issuer or other obligor upon the Securities of such series, or to the
creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of the Securities of such series shall
then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand pursuant
to the provisions of this Section 5.2, shall be entitled and empowered by
intervention in such proceedings or otherwise to file and prove a claim or
claims for the whole amount of principal and interest, if any, owing and
unpaid in respect of the Securities of such series, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Securityholders allowed in such judicial proceedings
relative to the Issuer or any other obligor on the Securities of such series,
its or their creditors, or its or their property, and to collect and receive
any moneys or other property payable or deliverable on any such claims, and
to distribute the same after the deduction of its charges and expenses, and
any receiver, assignee or trustee or similar official in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, if the Trustee shall consent to the making
of such payments directly to the Securityholders, to pay to the Trustee any
amount due it for compensation and expenses or otherwise pursuant to Section
6.6, including counsel fees and expenses incurred by it up to the date of
such distribution. To the extent that such payment of reasonable
compensation, expenses and counsel fees and expenses out of the estate in any
such proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit
of the Holders of the Securities of the series in respect of which such
judgment has been recovered.
SECTION 5.3 Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to Section 5.2 with respect to Securities
of any series then Outstanding shall be applied in the order following, at
the date or dates fixed by the Trustee for the distribution of such moneys,
upon presentation of the several Securities of such series, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:
FIRST: To the payment of costs and expenses of
collection and reasonable compensation to the Trustee, its agents,
attorneys and counsel, and of all other expenses and liabilities
incurred, and all advances made, by the Trustee pursuant to Section
6.6 except as a result of its negligence or bad faith;
SECOND: If the principal of the Outstanding
Securities of such series shall not have become due and be unpaid, to
the payment of interest, if any, on the Securities of such series, in
the order of the maturity of the installments of such interest, if
any, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest,
if any, at the rate borne by the Securities of such series, such
payment to be made ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding
Securities of such series shall have become due, by declaration or
otherwise, to the payment of the whole amount then owing and unpaid
upon the Securities of such series for principal and interest, if
any, with interest on the overdue principal and (to the extent that
such interest has been collected by the Trustee) upon overdue
installments of interest, if any, at the rate borne by the Securities
of such series; and in case such moneys shall be insufficient to pay
in full the whole amounts so due and unpaid upon the Securities of
such series, then to the payment of such principal and interest, if
any, without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any
other installment of interest, or of any Security over any other
Security, ratably to the aggregate of such principal and accrued and
unpaid interest; and
FOURTH: To the payment of any surplus then
remaining to the Issuer, its successors or assigns, or to whomsoever
may be lawfully entitled to receive the same.
No claim for interest which in any manner at or after maturity shall
have been transferred or pledged separate or apart from the Securities to
which it relates, or which in any manner shall have been kept alive after
maturity by an extension (otherwise than pursuant to an extension made
pursuant to a plan proposed by the Issuer to the Holders of all Securities of
any series then Outstanding), purchase, funding or otherwise by or on behalf
or with the consent or approval of the Issuer shall be entitled, in case of a
default hereunder, to any benefit of this Indenture, except after prior
payment in full of the principal of all Securities of any series then
Outstanding and of all claims for interest not so transferred, pledged, kept
alive, extended, purchased or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of any
Securities of any series then Outstanding shall have any right by virtue of
or by availing of any provision of this Indenture to institute any suit,
action or proceeding in equity or at law upon or under or with respect to
this Indenture or for the appointment of a receiver or trustee or similar
official, or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless the Holders of not
less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request to the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
any such action, suit or proceeding, it being understood and intended, and
being expressly covenanted by the Holder of every Security of such series
with every other Holder and the Trustee, that no one or more Holders of
Securities of such series shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture or of the
Securities to affect, disturb or prejudice the rights of any other Holder of
such Securities of such series, or to obtain or seek to obtain priority over
or preference as to any other such Holder, or to enforce any right under this
Indenture or the Securities, except in the manner herein provided and for the
equal, ratable and common benefit of all Holders of Securities of such
series.
Notwithstanding any other provisions in this Indenture, however, the
right of any Holder of any Security to receive payment of the principal of,
premium, if any, and interest, if any, on such Security, on or after the
respective due dates expressed in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates shall not
be impaired or affected without the consent of such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event of Default
hereunder, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any of such rights, either by suit in equity or by action at law or by
proceedings in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.6 Remedies Cumulative and Continuing. All powers and
remedies given by this Article Five to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any thereof or of any other powers and remedies available to the Trustee
or the Securityholders, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Securityholder
to exercise any right or power accruing upon any default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.4, every power and remedy given by
this Article Five or by law to the Trustee or to the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by Majority
of Securityholders. The Holders of a majority in aggregate principal amount
of the Securities of any series then Outstanding shall have the right to
direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to Securities of such series; provided, however,
that (subject to the provisions of Section 6.1) the Trustee shall have the
right to decline to follow any such direction if the Trustee shall determine
upon advice of counsel that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of directors,
its executive committee, or a trust committee of directors or Responsible
Officers or both shall determine that the action or proceeding so directed
would involve the Trustee in personal liability. The Holders of a majority
in aggregate principal amount of the Securities of any series then
Outstanding may on behalf of the Holders of all of the Securities of such
series waive any past default or Event of Default hereunder and its
consequences except a default in the payment of interest, if any, on, or the
principal of, the Securities of such series. Upon any such waiver the
Issuer, the Trustee and the Holders of the Securities of such series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this
Section 5.7, said default or Event of Default shall for all purposes of the
Securities and this Indenture be deemed to have been cured and to be not
continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within 90 days
after the occurrence of a default, with respect to Securities of any series
then Outstanding, mail to all Holders of Securities of such series, as the
names and the addresses of such Holders appear upon the Securities register,
notice of all defaults known to the Trustee with respect to such series,
unless such defaults shall have been cured before the giving of such notice
(the term "defaults" for the purpose of this Section 5.8 being hereby defined
to be the events specified in clauses (a), (b), (c), (d), (e), (f) and (g) of
Section 5.1, not including periods of grace, if any, provided for therein and
irrespective of the giving of the written notice specified in said clause (d)
but in the case of any default of the character specified in said clause (d)
no such notice to Securityholders shall be given until at least 60 days after
the giving of written notice thereof to the Issuer pursuant to said clause
(d)); provided, however, that, except in the case of default in the payment
of the principal of or interest, if any, on any of the Securities, or in the
payment or satisfaction of any sinking fund or other purchase obligation, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of
directors or Responsible Officers or both of the Trustee in good faith
determines that the withholding of such notice is in the best interests of
the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to
pay the cost of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against
any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.9 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount
of the Securities of any series then Outstanding, or to any suit instituted
by any Securityholders for the enforcement of the payment of the principal of
or interest, if any, on any Security against the Issuer on or after the due
date expressed in such Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. In case an Event of Default with respect to the
Securities of a series has occurred (which has not been cured or waived) the
Trustee shall exercise with respect to such series of Securities such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default
with respect to the Securities of any series and after the curing or
waiving of all such Events of Default with respect to such series
which may have occurred:
(i) the duties and obligations of
the Trustee with respect to the Securities of any
series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such
duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or
obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on
the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but in the case
of any such statements, certificates or opinions
which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders pursuant to Section 5.7
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if there shall be reasonable ground for believing
that the repayment of such funds or adequate indemnity against such liability
is not reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officers' Certificate or Issuer
Order (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a Board Resolution;
(c) the Trustee may consult with counsel of its selection and any
advice of such counsel promptly confirmed in writing shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture (including, without limitation, pursuant to Section 5.7), unless
such Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Securities of all series affected then Outstanding; provided that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such investigation
shall be paid by the Issuer or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder;
(h) the Trustee shall not be charged with knowledge of any default
or Event of Default with respect to a series of Securities unless either (i)
a Responsible Officer of the Trustee assigned to the Corporate Trust Office
of the Trustee (or any successor division or department of the Trustee) shall
have actual knowledge of such default or Event of Default or (ii) written
notice of such default or Event of Default shall have been given to the
Trustee by the Issuer or any other obligor on such series of Securities or by
any Holder of Securities of such series; and
(i) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture, of the
Securities or of any prospectus used to sell the Securities. The Trustee
shall not be accountable for the use or application by the Issuer of any of
the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
etc. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and, subject to Sections 6.8 and 6.13, may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer with
the same rights it would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the
extent required by mandatory provisions of law. Neither the Trustee nor any
agent of the Issuer or the Trustee shall be under any liability for interest
on any moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as shall be
agreed to in writing between the Issuer and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad
faith. The Issuer also covenants to indemnify the Trustee and each
predecessor Trustee for, and to hold it harmless against, any and all loss,
liability, damage, claim or expense, including taxes (other than taxes based
on the income of the Trustee), incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in the premises. The obligations of the
Issuer under this Section 6.6 to compensate and indemnify the Trustee and
each predecessor Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee.
Such additional indebtedness shall be a senior claim to that of the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the Holders of particular
Securities. When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1 or in connection
with Article Five hereof, the expenses (including the reasonable fees and
expenses of its counsel) and the compensation for the service in connection
therewith are intended to constitute expenses of administration under any
bankruptcy law. The provisions of this Section 6.6 shall survive the
resignation or removal of the Trustee and the termination of this Indenture.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad
faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered
or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. This
Indenture shall always have a Trustee who satisfies the requirements of
Section 310(a)(1) of the Trust Indenture Act of 1939. The Trustee shall have
a combined capital and surplus of at least $25,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply
with Section 310(b) of the Trust Indenture Act of 1939 regarding
disqualification of a trustee upon acquiring a conflicting interest.
SECTION 6.9 Persons Eligible for Appointment as Trustee; Different
Trustees for Different Series. The Trustee for each series of Securities
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or of any state or the
District of Columbia having a combined capital and surplus of at least
$25,000,000, and which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal, state
or District of Columbia authority, or a corporation or other Person permitted
to act as trustee by the Commission. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. No obligor upon the Securities or any Affiliate
of such obligor shall serve as trustee upon the Securities. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 6.9, the Trustee shall resign immediately in the manner and
with the effect specified in Section 6.10.
A different Trustee may be appointed by the Issuer for each series of
Securities prior to the issuance of such Securities. If the initial Trustee
for any series of Securities is to be a trustee other than
____________________________________, the Issuer and such Trustee shall,
prior to the issuance of such Securities, execute and deliver an indenture
supplemental hereto, which shall provide for the appointment of such Trustee
as Trustee for the Securities of such series and shall add to or change any
of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Trustee.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to one or more or all series of
Securities by giving written notice of resignation to the Issuer. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by
written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Section 5.9, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions
of Section 6.8 with respect to any series of Securities after written
request therefor by the Issuer or by any Securityholder who has been
a bona fide Holder of a Security or Securities of such series for at
least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and shall fail to resign after
written request therefor by the Issuer or by any such Securityholder;
or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a bankrupt
or insolvent, or a receiver or liquidator of the Trustee or of its
property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the Board of
Directors one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions
of Article Five, any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months may on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee with respect to such series. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series then Outstanding may at any time remove the Trustee
with respect to Securities of such series and appoint a successor trustee
with respect to the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.1 of the action in that regard taken by the
Securityholders. If no successor trustee shall have been so appointed with
respect to any series and have accepted appointment within 30 days after the
delivery of such evidence of removal, the Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Section 5.9, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in
Section 6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and
obligations with respect to such series of its predecessor hereunder, with
like effect as if originally named as trustee for such series hereunder; but,
nevertheless, on the written request of the Issuer or of the successor
trustee, upon payment of its charges then unpaid, the trustee ceasing to act
shall, subject to Section 10.4, pay over to the successor trustee all moneys
at the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Issuer shall
execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor Trustee and
each successor trustee with respect to the Securities of any applicable
series shall execute and deliver an indenture supplemental hereto which shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the predecessor Trustee
with respect to the Securities of any series as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor
Trustee, and shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such trustees
co-trustees of the same trust and that each such trustee shall be trustee of
a trust or trusts under separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of
such acceptance such successor trustee shall be qualified under the
provisions of Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided
in this Section 6.11, the Issuer shall give notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the Issuer
fails to give such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee (including the trust created by this
Indenture), shall be the successor of the Trustee hereunder, provided that
such corporation shall be qualified under the provisions of Section 6.8 and
eligible under the provisions of Section 6.9, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities of any series
shall have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor
Trustee and deliver such Securities so authenticated; and, in case at that
time any of the Securities of any series shall not have been authenticated,
any successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificate shall have the full force which it is
anywhere in the Securities of such series or in this Indenture provided that
the certificate of the Trustee shall have; provided, that the right to adopt
the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Issuer.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act of
1939, excluding any creditor relationship listed in Section 311(b) of the
Trust Indenture Act of 1939. A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act of 1939 to the
extent indicated therein.
SECTION 6.14 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument
in writing, appoint with the approval of the Issuer an authenticating agent
(the "Authenticating Agent") which shall be authorized to act on behalf of
the Trustee to authenticate Securities, including Securities issued upon
exchange, registration of transfer, partial redemption or pursuant to Section
2.9. Securities of each such series authenticated by such Authenticating
Agent shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee. Whenever
reference is made in this Indenture to the authentication and delivery of
Securities of any series by the Trustee or to the Trustee's Certificate of
Authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent for such series
and a Certificate of Authentication executed on behalf of the Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States
of America or of any state or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least $25,000,000 (determined as provided in Section 6.9 with
respect to the Trustee) and subject to supervision or examination by federal
or state authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
business (including the authenticating agency contemplated by this Indenture)
of any Authenticating Agent, shall continue to be the Authenticating Agent
with respect to all series of Securities for which it served as
Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the Trustee and to
the Issuer. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.14 with
respect to one or more series of Securities, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Issuer and
the Issuer shall provide notice of such appointment to all Holders of
Securities of such series in the manner and to the extent provided in Section
11.4. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. The Issuer agrees to pay to the
Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series
shall have no responsibility or liability for any action taken by it as such
at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in
person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article Seven.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following
manner:
(a) The fact and date of the execution by any
Holder of any instrument may be proved by the certificate of any
notary public or other officer of any jurisdiction authorized to take
acknowledgments of deeds or administer oaths that the person
executing such instruments acknowledged to him the execution thereof,
or by an affidavit of a witness to such execution sworn to before any
such notary or other such officer. Where such execution is by or on
behalf of any legal entity other than an individual, such certificate
or affidavit shall also constitute sufficient proof of the authority
of the person executing the same.
(b) The ownership of Securities shall be proved by
the Security register or by a certificate of the Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and, subject to the provisions of this
Indenture, interest, if any, on such Security and for all other purposes; and
neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee
shall be affected by any notice to the contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount
of Outstanding Securities of any or all series have concurred in any
direction, consent or waiver under this Indenture, Securities which are owned
by the Issuer or any other obligor on the Securities with respect to which
such determination is being made or by any Affiliate of the Issuer or any
other obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction,
consent or waiver only Securities which a Responsible Officer of the Trustee
knows are so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Issuer or any
other obligor upon the Securities or any Affiliate of the Issuer or any other
obligor on the Securities. In case of a dispute as to such right, the advice
of counsel shall be full protection in respect of any decision made by the
Trustee in accordance with such advice. Upon request of the Trustee, the
Issuer shall furnish to the Trustee promptly an Officers' Certificate listing
and identifying all Securities, if any, known by the Issuer to be owned or
held by or for the account of any of the above-described Persons; and,
subject to Sections 6.1 and 6.2, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Securities not listed therein are Outstanding for
the purpose of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have
consented to such action may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Article Seven, revoke
such action so far as concerns such Security provided that such revocation
shall not become effective until three Business Days after such filing.
Except as aforesaid, any such action taken by the Holder of any Security
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified
in this Indenture in connection with such action shall be conclusively
binding upon the Issuer, the Trustee and the Holders of all the Securities
affected by such action.
SECTION 7.6 Record Date for Consents and Waivers. The Issuer may,
but shall not be obligated to, establish a record date for the purpose of
determining the Persons entitled to (i) waive any past default with respect
to the Securities of such series in accordance with Section 5.7 of the
Indenture, (ii) consent to any supplemental indenture in accordance with
Section 8.2 of the Indenture or (iii) waive compliance with any term,
condition or provision of any covenant hereunder. If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and any
such Persons, shall be entitled to waive any such past default, consent to
any such supplemental indenture or waive compliance with any such term,
condition or provision, whether or not such Holder remains a Holder after
such record date; provided, however, that unless such waiver or consent is
obtained from the Holders, or duly designated proxies, of the requisite
principal amount of Outstanding Securities of such series prior to the date
which is the 120th day after such record date, any such waiver or consent
previously given shall automatically and, without further action by any
Holder be cancelled and of no further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of the execution thereof) for
one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge
to the Trustee as security for the Securities of one or more series
any property or assets;
(b) to evidence the succession of another to the
Issuer, or successive successions, and the assumption by the
successor Person of the covenants, agreements and obligations of the
Issuer pursuant to Article Nine;
(c) to add to the covenants of the Issuer such
further covenants, restrictions, conditions or provisions as the
Issuer and the Trustee shall consider to be for the protection of the
Holders of all or any series of Securities (and if such covenants,
restrictions, conditions or provisions are to be for the protection
of less than all series of Securities, stating that the same are
expressly being included solely for the protection of such series),
and to make the occurrence, or the occurrence and continuance, of a
default in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or
any of the several remedies provided in this Indenture as herein set
forth; provided, however, that in respect of any such additional
covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default
(which period may be shorter or longer than that allowed in the case
of other defaults) or may provide for an immediate enforcement upon
such an Event of Default or may limit the remedies available to the
Trustee upon such an Event of Default or may limit the right of the
Holders of a majority in aggregate principal amount of the Securities
of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or
supplement any provision contained herein or in any supplemental
indenture which may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture, or to
make any other provisions as the Issuer may deem necessary or
desirable, provided, however, that no such action shall materially
adversely affect the interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of
any series as permitted by Sections 2.1 and 2.3;
(f) to provide for the issuance of Securities of
any series in coupon form (including Securities registrable as to
principal only) and to provide for exchangeability of such Securities
for the Securities issued hereunder in fully registered form and to
make all appropriate changes for such purpose;
(g) to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the Trust Indenture Act of
1939, or under any similar federal statute hereafter enacted, and to
add to this Indenture such other provisions as may be expressly
permitted by the Trust Indenture Act of 1939, excluding, however, the
provisions referred to in Section 316(a)(2) of the Trust Indenture
Act of 1939 as in effect at the date as of which this instrument was
executed or any corresponding provision provided for in any similar
federal statute hereafter enacted;
(h) to evidence and provide for the acceptance of
appointment hereunder of a Trustee other than
____________________________ as Trustee for a series of Securities
and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 6.9 hereof;
(i) subject to Section 8.2 hereof, to add to or
modify the provisions hereof as may be necessary or desirable to
provide for the denomination of Securities in foreign currencies
which shall not adversely affect the interests of the Holders of the
Securities in any material respect;
(j) to modify the covenants or Events of Default of
the Issuer solely in respect of, or add new covenants or Events of
Default of the Issuer that apply solely to, Securities not
Outstanding on the date of such supplemental indenture; and
(k) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than
one trustee, pursuant to the requirements of Section 6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities then Outstanding, notwithstanding any of the provisions of Section
8.2.
SECTION 8.2 Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Article Seven) of the Holders of
not less than a majority in aggregate principal amount of the Securities then
Outstanding of any series affected by such supplemental indenture, the
Issuer, when authorized by a Board Resolution (which resolution may provide
general terms or parameters for such action and may provide that the specific
terms of such action may be determined in accordance with or pursuant to an
Issuer Order), and the Trustee may, from time to time and at any time, enter
into an indenture or indentures supplemental hereto (which shall conform to
the provisions of the Trust Indenture Act of 1939 as in force at the date of
execution thereof) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the
Holders of the Securities of such series; provided, that no such supplemental
indenture shall (a) extend the stated final maturity of the principal of any
Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest, if any, thereon (or, in the case of
an Original Issue Discount Security, reduce the rate of accretion of original
issue discount thereon), or reduce or alter the method of computation of any
amount payable on redemption, repayment or purchase by the Issuer thereof (or
the time at which any such redemption, repayment or purchase may be made), or
make the principal thereof (including any amount in respect of original issue
discount), or interest, if any, thereon payable in any coin or currency other
than that provided in the Securities or in accordance with the terms of the
Securities, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof pursuant to Section 5.1 or the amount thereof provable in
bankruptcy pursuant to Section 5.2, or impair or affect the right of any
Securityholder to institute suit for the payment thereof or, if the
Securities provide therefor, any right of repayment or purchase at the option
of the Securityholder, in each case without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security
so affected. No consent of any Holder of any Security shall be necessary
under this Section 8.2 to permit the Trustee and the Issuer to execute
supplemental indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any covenant,
Event of Default or other provision of this Indenture which has expressly
been included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of Holders of Securities of such
series, with respect to such covenant or provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Securities of any
other series.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of the Holders of the
Securities as aforesaid and other documents, if any, required by Section 7.1,
the Trustee shall join with the Issuer in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may at its discretion, but shall not be obligated to, enter into
such supplemental indenture.
It shall not be necessary for the consent of the Securityholders
under this Section 8.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Issuer (or the Trustee at the request and expense of the Issuer) shall give
notice thereof to the Holders of then Outstanding Securities of each series
affected thereby, as provided in Section 11.4. Any failure of the Issuer to
give such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer and the
Holders of Securities of each series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and shall be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, shall be entitled to receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant to this Article Eight complies
with the applicable provisions of this Indenture and that all conditions
precedent to the execution and delivery of such supplemental indenture have
been satisfied.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article Eight may bear a notation in form approved by the Trustee for such
series as to any matter provided for by such supplemental indenture or as to
any action taken by Securityholders. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Issuer, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by
the Issuer, and such Securities may be authenticated by the Trustee and
delivered in exchange for the Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER
DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms. Subject
to the provisions of Section 9.2, nothing contained in this Indenture or in
any of the Securities shall prevent any consolidation or merger of the Issuer
with or into any other Person or Persons (whether or not affiliated with the
Issuer), or successive consolidations or mergers in which the Issuer or its
successor or successors shall be a party or parties, or shall prevent any
sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Issuer to any other Person (whether or not
affiliated with the Issuer) authorized to acquire and operate the same;
provided, however, and the Issuer hereby covenants and agrees, that any such
consolidation, merger, sale, lease, exchange or other disposition shall be
upon the conditions that (a) immediately after giving effect to such
consolidation, merger, sale, lease, exchange or other disposition of the
Person (whether the Issuer or such other Person) formed by or surviving any
such consolidation or merger, or to which such sale, lease, exchange or other
disposition shall have been made, no Event of Default, and no event which
after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing; (b) the Person (if other than the
Issuer) formed by or surviving any such consolidation or merger, or to which
such sale, lease, exchange or other disposition shall have been made, shall
be a corporation or partnership organized under the laws of the United States
of America, any state thereof or the District of Columbia; and (c) the due
and punctual payment of the principal of and interest, if any, on all the
Securities, according to their tenor, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Issuer, shall be expressly assumed, by supplemental
indenture satisfactory in form to the Trustee executed and delivered to the
Trustee, by the Person (if other than the Issuer) formed by such
consolidation, or into which the Issuer shall have been merged, or by the
Person which shall have acquired or leased such property.
SECTION 9.2 Successor Corporation to be Substituted. In case of any
such consolidation or merger or any sale, conveyance or lease of all or
substantially all of the property of the Issuer and upon the assumption by
the successor Person, by supplemental indenture executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of, premium, if any, and interest, if any, on all of
the Securities and the due and punctual performance of all of the covenants
and conditions of this Indenture to be performed by the Issuer, such
successor Person shall succeed to and be substituted for the Issuer, with the
same effect as if it had been named herein as the party of the first part,
and the Issuer (including any intervening successor to the Issuer which shall
have become the obligor hereunder) shall be relieved of any further
obligation under this Indenture and the Securities; provided, however, that
in the case of a sale, lease, exchange or other disposition of the property
and assets of the Issuer (including any such intervening successor), the
Issuer (including any such intervening successor) shall continue to be liable
on its obligations under this Indenture and the Securities to the extent, but
only to the extent, of liability to pay the principal of, premium, if any,
and interest, if any, on the Securities at the time, places and rate
prescribed in this Indenture and the Securities. Such successor Person
thereupon may cause to be signed, and may issue either in its own name or in
the name of the Issuer, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such successor Person instead of the Issuer
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of the
Issuer to the Trustee for authentication, and any Securities which such
successor Person thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation or merger or any sale, lease,
exchange or other disposition of all or substantially all of the property and
assets of the Issuer, such changes in phraseology and form (but not in
substance) may be made in the Securities, thereafter to be issued, as may be
appropriate.
SECTION 9.3 Opinion of Counsel to be Given Trustee. The Trustee,
subject to Sections 6.1 and 6.2, shall receive an Officers' Certificate and
Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, lease, exchange or other disposition and any such assumption
complies with the provisions of this Article Nine.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture; Covenant
Defeasance.
(A) If at any time (a) the Issuer shall have paid or caused to be
paid the principal of, premium, if any, and interest, if any, on all the
Securities Outstanding (other than Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.9) as
and when the same shall have become due and payable, or (b) the Issuer shall
have delivered to the Trustee for cancellation all Securities theretofore
authenticated (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9); and
if, in any such case, the Issuer shall also pay or cause to be paid all other
sums payable hereunder by the Issuer (including all amounts, payable to the
Trustee pursuant to Section 6.6), then this Indenture shall cease to be of
further effect, and the Trustee, on demand of the Issuer accompanied by an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the satisfaction and discharge contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging such satisfaction and
discharging this Indenture. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred, and to
compensate the Trustee for any services thereafter reasonably and properly
rendered, by the Trustee in connection with this Indenture or the Securities.
(B) If at any time (a) the Issuer shall have paid or caused to be
paid the principal of, premium, if any, and interest, if any, on all the
Securities of any series Outstanding (other than Securities of such series
which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.9) as and when the same shall have become due
and payable, or (b) the Issuer shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated (other
than any Securities of such series which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.9), or (c) in
the case of any series of Securities with respect to which the exact amount
described in clause (ii) below can be determined at the time of making the
deposit referred to in such clause (ii), (i) all the Securities of such
series not theretofore delivered to the Trustee for cancellation shall have
become due and payable, or by their terms are to become due and payable
within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee as funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
Securities of such series, cash in an amount (other than moneys repaid by the
Trustee or any paying agent to the Issuer in accordance with Section 10.4) or
non-callable, non-prepayable bonds, notes, bills or other similar obligations
issued or guaranteed by the United States government or any agency thereof
the full and timely payment of which are backed by the full faith and credit
of the United States ("U.S. Government Obligations"), maturing as to
principal and interest, if any, at such times and in such amounts as will
insure the availability of cash, or a combination thereof, sufficient in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
(1) the principal of, premium, if any, and interest, if any, on all
Securities of such series on each date that such principal of, premium, if
any, or interest, if any, is due and payable, and (2) any mandatory sinking
fund payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such series;
then the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such series on the date of the deposit
referred to in clause (ii) above and the provisions of this Indenture with
respect to the Securities of such series shall no longer be in effect
(except, in the case of clause (c) of this Section 10.1(B), as to (i) rights
of registration of transfer and exchange of Securities of such series, (ii)
rights of substitution of mutilated, defaced, destroyed, lost or stolen
Securities of such series, (iii) rights of Holders of Securities of such
series to receive payments of principal thereof and premium, if any, and
interest, if any, thereon upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the Holders of Securities of
such series to receive mandatory sinking fund payments thereon, if any, when
due, (iv) the rights, obligations, duties and immunities of the Trustee
hereunder, (v) the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (vi) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same.
(C) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution,
Officers' Certificate or indenture supplemental hereto provided pursuant to
Section 2.3. In addition to discharge of the Indenture pursuant to the next
preceding paragraph, in the case of any series of Securities with respect to
which the exact amount described in subparagraph (a) below can be determined
at the time of making the deposit referred to in such subparagraph (a), the
Issuer shall be deemed to have paid and discharged the entire indebtedness on
all the Securities of such a series on the 91st day after the date of the
deposit referred to in subparagraph (a) below, and the provisions of this
Indenture with respect to the Securities of such series shall no longer be in
effect (except as to (i) rights of registration of transfer and exchange of
Securities of such series, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities of such series, (iii) rights of Holders
of Securities of such series to receive payments of principal thereof,
premium, if any, and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the
Holders of Securities of such series to receive mandatory sinking fund
payments, if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, (v) the rights of the Holders of Securities of such series
as beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (vi) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same, if
(a) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such
series (i) cash in an amount, or (ii) U.S. Government Obligations,
maturing as to principal and interest, if any, at such times and in
such amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A)
the principal of, premium, if any, and interest, if any, on all
Securities of such series on each date that such principal or
interest, if any, is due and payable, and (B) any mandatory sinking
fund payments on the dates on which such payments are due and payable
in accordance with the terms of the Indenture and the Securities of
such series;
(b) such deposit will not result in a breach or
violation of, or constitute a default under, any agreement or
instrument to which the Issuer is a party or by which it is bound;
and
(c) the Issuer has delivered to the Trustee an
Opinion of Counsel based on the fact that (x) the Issuer has received
from, or there has been published by, the Internal Revenue Service a
ruling or (y), since the date hereof, there has been a change in the
applicable United States federal income tax law, in either case to
the effect that, and such opinion shall confirm that, the Holders of
the Securities of such series will not recognize income, gain or loss
for Federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to Federal income tax on
the same amount and in the same manner and at the same times, as
would have been the case if such deposit, defeasance and discharge
had not occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys and U.S. Government
Obligations deposited with the Trustee pursuant to Section 10.1 shall be held
in trust, and such moneys and all moneys from such U.S. Government
Obligations shall be applied by it to the payment, either directly or through
any paying agent (including the Issuer acting as its own paying agent), to
the Holders of the particular Securities of such series for the payment or
redemption of which such moneys and U.S. Government Obligations have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest, if any, but such moneys and U.S. Government
Obligations need not be segregated from other funds except to the extent
required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under
the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of, premium, if any, or
interest, if any, on any Security of any series and not applied but remaining
unclaimed for two years after the date upon which such principal, premium, if
any, or interest, if any, shall have become due and payable, shall, upon the
written request of the Issuer and unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Issuer by the Trustee for such series or such paying agent, and
the Holder of the Securities of such series shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed
property laws, thereafter look only to the Issuer for any payment which such
Holder may be entitled to collect, and all liability of the Trustee or any
paying agent with respect to such moneys shall thereupon cease.
SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect of
such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse under or
upon any obligation, covenant or agreement contained in this Indenture, or in
any Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer, or any partner of
the Issuer or of any successor, either directly or through the Issuer or any
successor, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Holders of Securities. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any Person, other
than the parties hereto and their successors and the Holders of the
Securities, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities. Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Issuer, or as required pursuant to the Trust
Indenture Act of 1939, may be given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein)
addressed (until another address of the Issuer is filed by the Issuer with
the Trustee) to K. Hovnanian Enterprises, Inc., 10 Highway 35, P.O. Box 500,
Red Bank, New Jersey 07701. Any notice, direction, request or demand by the
Issuer or any Holder of Securities to or upon the Trustee shall be deemed to
have been sufficiently given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee with the
Issuer) to _____________________________ [address], [attention: Corporate
Trust Administration (K. Hovnanian Enterprises, Inc. [specify series of
Securities])].
Where this Indenture provides for notice to Holders of Securities,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder entitled thereto, at his last address as it appears in the Security
register. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when
such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be reasonably
satisfactory to the Trustee shall be deemed to be sufficient notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, or as required pursuant to the Trust Indenture Act of 1939, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied
with, except that in the case of any such application or demand as to which
the furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture (other
than a certificate provided pursuant to Section 4.3(d)) and delivered to the
Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
opinion as to whether or not such covenant or condition has been complied
with, and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous. Any certificate, statement or opinion of counsel may be
based, insofar as it relates to factual matters, information with respect to
which is in the possession of the Issuer, upon the certificate, statement or
opinion of or representations by an officer or officers of the Issuer, unless
such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate, statement
or opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of principal of or interest, if any, on the Securities
of any series or the date fixed for redemption, purchase or repayment of any
such Security shall not be a Business Day, then payment of interest, if any,
premium, if any, or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made
on the date of maturity or the date fixed for redemption, purchase or
repayment, and, in the case of payment, no interest shall accrue for the
period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, or is deemed applicable to this Indenture by virtue of the
provisions of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 11.8 GOVERNING LAW. THIS INDENTURE AND EACH SECURITY SHALL
BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR
ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified, as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a
whole or in part at the option of the Issuer shall be given by mailing notice
of such redemption by first class mail, postage prepaid, at least 30 days and
not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear in
the Security register. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or
not the Holder receives the notice. Failure to give notice by mail, or any
defect in the notice to the Holder of any Security of a series designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify (i) the
principal amount of each Security of such series held by such Holder to be
redeemed, (ii) the date fixed for redemption, (iii) the redemption price,
(iv) the place or places of payment, (v) the CUSIP number relating to such
Securities, (vi) that payment will be made upon presentation and surrender of
such Securities, (vii) whether such redemption is pursuant to the mandatory
or optional sinking fund, or both, if such be the case, (viii) whether
interest, if any, (or, in the case of Original Issue Discount Securities,
original issue discount) accrued to the date fixed for redemption will be
paid as specified in such notice and (ix) whether on and after said date
interest, if any, (or, in the case of Original Issue Discount Securities,
original issue discount) thereon or on the portions thereof to be redeemed
will cease to accrue. In case any Security of a series is to be redeemed in
part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the date
fixed for redemption, upon surrender of such Security, a new Security or
Securities of such series in principal amount equal to the unredeemed portion
thereof will be issued.
The notice of redemption of Securities of any series to be redeemed
at the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section 12.2, the Issuer will deposit
with the Trustee or with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.5) an amount of money sufficient to redeem on the
redemption date all the Securities of such series so called for redemption at
the appropriate redemption price, together with accrued interest, if any, to
the date fixed for redemption. The Issuer will deliver to the Trustee at
least 45 days prior to the date fixed for redemption (unless a shorter notice
period shall be satisfactory to the Trustee) an Officers' Certificate stating
the aggregate principal amount of Securities to be redeemed. In case of a
redemption at the election of the Issuer prior to the expiration of any
restriction on such redemption, the Issuer shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officers' Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee, within 10 Business Days after the Issuer gives written notice to the
Trustee that such redemption is to occur, shall select, in such manner as it
shall deem appropriate and fair, Securities of such series to be redeemed.
Notice of the redemption shall be given only after such selection has been
made. Securities may be redeemed in part in multiples equal to the minimum
authorized denomination for Securities of such series or any multiple
thereof. The Trustee shall promptly notify the Issuer in writing of the
Securities of such series selected for redemption and, in the case of any
Securities of such series selected for partial redemption, the principal
amount thereof to be redeemed. For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to the redemption of
Securities of any series shall relate, in the case of any Security redeemed
or to be redeemed only in part, to the portion of the principal amount of
such Security which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as provided by this Article Twelve, the
Securities or portions of Securities specified in such notice shall become
due and payable on the date and at the place or places stated in such notice
at the applicable redemption price, together with interest, if any accrued to
the date fixed for redemption, and on and after said date (unless the Issuer
shall default in the payment of such Securities at the redemption price,
together with interest, if any, accrued to said date) interest, if any (or,
in the case of Original Issue Discount Securities, original issue discount),
on the Securities or portions of Securities so called for redemption shall
cease to accrue, and such Securities shall cease from and after the date
fixed for redemption (unless an earlier date shall be specified in a Board
Resolution, Officers' Certificate or executed supplemental indenture referred
to in Sections 2.1 and 2.3 by or pursuant to which the form and terms of the
Securities of such series were established) except as provided in Sections
6.5 and 10.4, to be entitled to any benefit or security under this Indenture,
and the Holders thereof shall have no right in respect of such Securities
except the right to receive the redemption price thereof and unpaid interest,
if any, to the date fixed for redemption. On presentation and surrender of
such Securities at a place of payment specified in said notice, said
Securities or the specified portions thereof shall be paid and redeemed by
the Issuer at the applicable redemption price, together with interest, if
any, accrued thereon to the date fixed for redemption; provided that payment
of interest, if any, becoming due on or prior to the date fixed for
redemption shall be payable to the Holders of Securities registered as such
on the relevant record date subject to the terms and provisions of Sections
2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the redemption price shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the
rate of interest or Yield to Maturity (in the case of an Original Issue
Discount Security) borne by such Security.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the
order of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, and of like tenor, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so
presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and
certificate number in an Officers' Certificate delivered to the Trustee at
least 45 days prior to the last date on which notice of redemption may be
given as being owned of record and beneficially by, and not pledged or
hypothecated by either (a) the Issuer, or (b) a Person specifically
identified in such written statement as an Affiliate of the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of the
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by
the terms of the Securities of any series is herein referred to as an
"optional sinking fund payment." The date on which a sinking fund payment is
to be made is herein referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at
its option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of
such series (not previously so credited) theretofore purchased or otherwise
acquired (except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional
sinking fund payments (not previously so credited) made pursuant to this
Section 12.5, or (c) receive credit for Securities of such series (not
previously so credited) redeemed by the Issuer through any optional
redemption provision contained in the terms of such series. Securities so
delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officers'
Certificate (a) specifying the portion of the mandatory sinking fund payment
to be satisfied by payment of cash and the portion to be satisfied by credit
of Securities of such series and the basis for such credit, (b) stating that
none of the Securities of such series to be so credited has theretofore been
so credited, (c) stating that no defaults in the payment of interest or
Events of Default with respect to such series have occurred (which have not
been waived or cured or otherwise ceased to exist) and are continuing, and
(d) stating whether or not the Issuer intends to exercise its right to make
an optional sinking fund payment with respect to such series and, if so,
specifying the amount of such optional sinking fund payment which the Issuer
intends to pay on or before the next succeeding sinking fund payment date.
Any Securities of such series to be credited and required to be delivered to
the Trustee in order for the Issuer to be entitled to credit therefor as
aforesaid which have not theretofore been delivered to the Trustee shall be
delivered for cancellation pursuant to Section 2.10 to the Trustee with such
Officers' Certificate (or reasonably promptly thereafter if acceptable to the
Trustee). Such Officers' Certificate shall be irrevocable and upon its
receipt by the Trustee the Issuer shall become unconditionally obligated to
make all the cash payments or payments therein referred to, if any, on or
before the next succeeding sinking fund payment date. Failure of the Issuer,
on or before any such 60th day, to deliver such Officers' Certificate and
Securities (subject to the parenthetical clause in the second preceding
sentence) specified in this paragraph, if any, shall not constitute a default
but shall constitute, on and as of such date, the irrevocable election of the
Issuer (i) that the mandatory sinking fund payment for such series due on the
next succeeding sinking fund payment date shall be paid entirely in cash
without the option to deliver or credit Securities of such series in respect
thereof, and (ii) that the Issuer will make no optional sinking fund payment
with respect to such series as provided in this Section 12.5.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $50,000, or a lesser sum if the Issuer shall so request with
respect to the Securities of any particular series, such cash shall be
applied on the next succeeding sinking fund payment date to the redemption of
Securities of such series at the sinking fund redemption price together with
accrued interest, if any, to the date fixed for redemption. If such amount
shall be $50,000 or less and the Issuer makes no such request, then it shall
be carried over until a sum in excess of $50,000 is available. The Trustee
shall select, in the manner provided in Section 12.2, for redemption on such
sinking fund payment date a sufficient principal amount of Securities of such
series to absorb said cash, as nearly as may be, and shall (if requested in
writing by the Issuer) inform the Issuer of the serial numbers of the
Securities of such series (or portions thereof) so selected. The Issuer, or
the Trustee, in the name and at the expense of the Issuer (if the Issuer
shall so request the Trustee in writing) shall cause notice of redemption of
the Securities of such series to be given in substantially the manner
provided in Section 12.2 (and with the effect provided in Section 12.3) for
the redemption of Securities of such series in part at the option of the
Issuer. The amount of any sinking fund payments not so applied or allocated
to the redemption of Securities of such series shall be added to the next
cash sinking fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this Section 12.5. Any
and all sinking fund moneys held on the stated maturity date of the
Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of,
and interest, if any, on, the Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all
interest, if any, accrued to the date fixed for redemption on Securities to
be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities
of a series with sinking fund moneys or give any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default with respect to such series except that, where the giving of
notice of redemption of any Securities shall theretofore have been made, the
Trustee shall redeem or cause to be redeemed such Securities, provided that
it shall have received from the Issuer a sum sufficient for such redemption.
Except as aforesaid, any moneys in the sinking fund for such series at the
time when any such default or Event of Default known to a Responsible Officer
of the Trustee shall occur, and any moneys thereafter paid into the sinking
fund, shall, during the continuance of such default or Event of Default, be
deemed to have been collected under Article Five and held for the payment of
all such Securities. In case such Event of Default shall have been waived as
provided in Section 5.7 or the default cured on or before the 60th day
preceding the sinking fund payment date in any year, such moneys shall
thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Securities.
ARTICLE THIRTEEN
GUARANTEE
Section 13.1 Guarantee.
Hovnanian Enterprises, Inc. (hereinafter referred to as the
"Guarantor," which term includes any successor thereto) 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 Security or the
obligations of the Company hereunder or thereunder, (i) the due and punctual
payment of the principal of and any premium or interest on the Securities,
whether at maturity or on an interest payment date, by acceleration, pursuant
to an offer to purchase Securities 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
thereunder shall be promptly paid in full, all in accordance with the terms
hereof and thereof including all amounts payable to the Trustee under Section
6.6 hereof, and (ii) in case of any extension of time of payment or renewal
of any Securities or any of such other obligations, the same shall be
promptly paid in full when due or to be performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
If the Company fails to make any payment when due of any amount so
guaranteed for whatever reason, the Guarantor 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
such Guarantor. The Guarantor hereby waives diligence, presentment, demand
of payment, demand of performance, filing of claims with a court in the event
of insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, the benefit of discussion, protest, notice and all
demand whatsoever and covenants that this Guarantee shall not be discharged
except by complete performance of the obligations contained in the
Securities, in this Indenture and in this Article 13. If any Holder 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 Holder, this Article 13, 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 Holders 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 5
hereof 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 acceleration
of such obligations as provided in Article 5 hereof such obligations (whether
or not due and payable) shall forthwith become due and payable by the
Guarantor for the purpose of this Article 13. In addition, without limiting
the foregoing, upon the effectiveness of an acceleration under Article 5, the
Trustee may make a demand for payment on the Securities under 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 13.1 shall not be valid or
become obligatory for any purpose with respect to a Security until the
certificate of authentication on such Security shall have been signed by the
Trustee or any duly appointed agent.
Section 13.2 Obligations of the Guarantor Unconditional.
Nothing contained in this Article 13 or elsewhere in this Indenture
or in any Security is intended to or shall impair, as between the Guarantor
and the Holders, the obligations of the Guarantor, which are absolute and
unconditional, to pay to the Holders the principal of and interest on the
Securities as and when the same shall become due and payable in accordance
with the provisions of this Guarantee or is intended to or shall affect the
relative rights of the Holders and creditors of the Guarantor, nor shall
anything herein or therein prevent the Trustee or any Holder from exercising
all remedies otherwise permitted by applicable law upon Default under this
Indenture in respect of cash, property or securities of the Guarantor
received upon the exercise of any such remedy;
Upon any distribution of assets of the Guarantor referred to in this
Article 13, the Trustee, subject to the provisions of Sections 6.1 and 6.2,
and the Holders of the Securities shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders of the Securities, for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of other indebtedness of the Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 13.
Section 13.3 Article 13 Not To Prevent Events of Default.
The failure to make a payment on account of principal or interest on
the Securities of any series by reason of any provision in this Article 13
shall not be construed as preventing the occurrence of an Event of Default
under Section 5.1.
Section 13.4 Execution and Delivery of Guarantee.
To evidence the Guarantee set forth in this Article 13, the Guarantor
hereby agrees that the Guarantee Notation, substantially in the form of
Exhibit A hereto, shall be endorsed on each Security authenticated and
delivered by the Trustee 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 the Guarantee
Notation on each Security.
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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of __________________________________.
K. HOVNANIAN ENTERPRISES, INC.
By:_____________________________
Title:
____________________, as Trustee
By:_____________________________
Title:__________________________
EXHIBIT A
[FORM OF NOTATION OF SECURITY
RELATING TO GUARANTEE]
GUARANTEE
Hovnanian Enterprises, Inc. (hereinafter referred to as the
"Guarantor", which term includes any successor person under the Indenture
(the "Indenture") referred to in the Security upon which this notation is
endorsed), has unconditionally guaranteed (i) the due and punctual payment of
the principal of, premium, if any, and interest on the Securities, whether at
maturity, by acceleration or otherwise, the due and punctual payment of
interest on the overdue principal of, premium, if any, and interest, if any,
on the Securities, to the extent lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article 13 of the Indenture and (ii)
in case of any extension of time of payment or renewal of any Securities or
any of such other obligations, that the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantor to the Holders and to the Trustee
pursuant to the Guarantee and the Indenture are expressly set forth in
Article 13 of the Indenture and reference is hereby made to such Indenture
for the terms of the Guarantee.
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Guarantor shall have any personal liability under
the Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication of the Securities upon which this Guarantee
is endorsed shall have been executed by the Trustee under the Indenture by
the manual signature of one of its authorized officers.
Guarantor
[SEAL] OVNANIAN ENTERPRISES, INC.
By_________________________
By_________________________
Exhibit 4.7
____________________________________________________________________________
K. HOVNANIAN ENTERPRISES, INC.
AND
_____________________________
as Trustee
Form of Senior Subordinated Indenture
Dated as of _____________________
____________________________________________________________________________
CROSS REFERENCE SHEET
_______________
Provisions of Trust Indenture Act of 1939 and Indenture to be dated
as of ____________________ between K. HOVNANIAN ENTERPRISES, INC. and
____________________________, Trustee:
Section of the Act Section of Indenture
- ------------------ --------------------
310(a)(1), (2) and (5) . . . . . 6.9
310(a)(3) and (4) . . . . . . . . Inapplicable
310(b) . . . . . . . . . . . . 6.8 and 6.10(a), (b) and (d)
310(c) . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . 6.13
311(b) . . . . . . . . . . . . 6.13
311(c) . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . . . 4.2(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . . . 4.4(a)(i), (ii), (iii), (iv), (v), (vi)
and (vii)
313(a)(5) . . . . . . . . . . . . Inapplicable
313(b)(1) . . . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . . . 4.4(b)
313(c) . . . . . . . . . . . . 4.4(c)
313(d) . . . . . . . . . . . . 4.4(d)
314(a) . . . . . . . . . . . . 4.3
314(b) . . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . . . 11.5
314(c)(3) . . . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . 11.5
314(f) . . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . . . 6.1
315(b) . . . . . . . . . . . . 5.8
315(e) . . . . . . . . . . . . 5.9
316(a)(1) . . . . . . . . . . . . 5.7
316(a)(2) . . . . . . . . . . . . Not required
316(a) (last sentence) . . . . . 7.4
316(b) . . . . . . . . . . . . 5.4
317(a) . . . . . . . . . . . . 5.2
317(b) . . . . . . . . . . . . 3.5(a)
318(a) . . . . . . . . . . . . 11.7
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 9
Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . 9
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 9
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 9
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . 9
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 10
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 10
Global Security . . . . . . . . . . . . . . . . . . . . . . . . 10
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Holder of Securities . . . . . . . . . . . . . . . . . . . . . . 10
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 11
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 11
original issue date . . . . . . . . . . . . . . . . . . . . . . 12
original issue discount . . . . . . . . . . . . . . . . . . . . 12
Original Issue Discount Security . . . . . . . . . . . . . . . . 12
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . 13
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 13
principal . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
principal amount . . . . . . . . . . . . . . . . . . . . . . . . 13
record date . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 13
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . 13
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . 13
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 14
Senior Subordinated Indebtedness . . . . . . . . . . . . . . . . 14
Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . 14
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . 14
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . 14
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . 14
U.S. Government Obligations . . . . . . . . . . . . . . . . . . 15
vice president . . . . . . . . . . . . . . . . . . . . . . . . . 15
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . 15
SECTION 2.2 Form of Trustee's Certificate of Authentication . . 15
SECTION 2.3 Amount Unlimited Issuable in Series . . . . . . . . 16
SECTION 2.4 Authentication and Delivery of Securities . . . . . 18
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . . 21
SECTION 2.6 Certificate of Authentication . . . . . . . . . . . 22
SECTION 2.7 Denomination and Date of Securities; Payments
of Interest . . . . . . . . . . . . . . . . . . . 22
SECTION 2.8 Registration, Transfer and Exchange . . . . . . . . 23
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.10 Cancellation of Securities; Disposition
Thereof . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . 26
SECTION 2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . 26
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . 27
SECTION 3.2 Offices for Notices and Payments, etc . . . . . . . 27
SECTION 3.3 No Interest Extension . . . . . . . . . . . . . . . 27
SECTION 3.4 Appointments to Fill Vacancies in Trustee's
Office . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.5 Provision as to Paying Agent . . . . . . . . . . . 27
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders . . . . . . 28
SECTION 4.2 Preservation and Disclosure of Securityholders
Lists . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . 30
SECTION 4.4 Reports by the Trustee . . . . . . . . . . . . . . 31
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . 31
SECTION 5.2 Payment of Securities on Default; Suit Therefor . . 33
SECTION 5.3 Application of Moneys Collected by Trustee . . . . 35
SECTION 5.4 Proceedings by Securityholders . . . . . . . . . . 36
SECTION 5.5 Proceedings by Trustee . . . . . . . . . . . . . . 36
SECTION 5.6 Remedies Cumulative and Continuing . . . . . . . . 36
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by
Majority of Securityholders . . . . . . . . . . . 37
SECTION 5.8 Notice of Defaults . . . . . . . . . . . . . . . . 37
SECTION 5.9 Undertaking to Pay Costs . . . . . . . . . . . . . 38
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default . . . . . . . . . 38
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . . 39
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of
Proceeds Thereof . . . . . . . . . . . . . . . . . 40
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc . . . . . . . . . . . . . . . . . 40
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . 41
SECTION 6.6 Compensation and Indemnification of Trustee and
Its Prior Claim . . . . . . . . . . . . . . . . . 41
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc . . . . . . . . . . . . . . . . . 41
SECTION 6.8 Qualification of Trustee; Conflicting Interests . . 42
SECTION 6.9 Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series . . . . . . 42
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee . . . . . . . . . . . . . . . . 42
SECTION 6.11 Acceptance of Appointment by Successor Trustee . . 44
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . . 45
SECTION 6.13 Preferential Collection of Claims Against the
Issuer . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . 45
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders . . . . 46
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities . . . . . . . . . . . . . . . 47
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . . 47
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.5 Right of Revocation of Action Taken . . . . . . . . 48
SECTION 7.6 Record Date for Consents and Waivers . . . . . . . 48
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. . . . . . . . . . . . . . . . . . . 48
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders. . . . . . . . . . . . . . . . . . . 50
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . 51
SECTION 8.4 Documents to Be Given to Trustee . . . . . . . . . 52
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures. . . . . . . . . . . . . . . 52
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms . . 52
SECTION 9.2 Successor Corporation to be Substituted . . . . . . 53
SECTION 9.3 Opinion of Counsel to be Given Trustee . . . . . . 53
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture . . . . . 53
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities. . . . . . . . . . . . . . . 56
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . . 56
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years. . . . . . . . . . . 56
SECTION 10.5 Indemnity for U . . . . . . . . . . . . . . . . . 57
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders,
Officers and Directors of Issuer Exempt from
Individual Liability. . . . . . . . . . . . . . . 57
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities . . . . . . . 57
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture. . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Holders of Securities. . . . . . . . . . . . . . . 57
SECTION 11.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein. . . . 58
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939. . . . . . . . . . . . 59
SECTION 11.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . 59
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . . 59
SECTION 11.10 Effect of Headings . . . . . . . . . . . . . . . 59
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . 59
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . 59
SECTION 12.3 Payment of Securities Called for Redemption . . . 61
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. . . . . . 61
SECTION 12.5 Mandatory and Optional Sinking Funds . . . . . . . 62
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior Indebtedness . . 64
SECTION 13.2 Reliance on Certificate of Liquidating Agent;
Further Evidence as to Ownership of Senior
Indebtedness. . . . . . . . . . . . . . . . . . . . 67
SECTION 13.3 Payment Permitted If No Default . . . . . . . . . 67
SECTION 13.4 Disputes with Holders of Certain Senior
Indebtedness. . . . . . . . . . . . . . . . . . . . 68
SECTION 13.5 Trustee Not Charged with Knowledge of
Prohibition . . . . . . . . . . . . . . . . . . . . 68
SECTION 13.6 Trustee to Effectuate Subordination . . . . . . . 68
SECTION 13.7 Rights of Trustee as Holder of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . 68
SECTION 13.8 Article Applicable to Paying Agents . . . . . . . 69
SECTION 13.9 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior
Indebtedness. . . . . . . . . . . . . . . . . . . . 69
SECTION 13.10 Trustee Not Fiduciary for Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . 69
ARTICLE FOURTEEN
SUBORDINATED GUARANTEE
SECTION 14.1 Guarantee . . . . . . . . . . . . . . . . . . . . 69
SECTION 14.2 Guarantee Subordinated to Senior Debt of the
Guarantor . . . . . . . . . . . . . . . . . . . . 71
SECTION 14.3 Guarantor Not to Make Payments With Respect to
Securities in Certain Circumstances. . . . . . . . . 72
SECTION 14.4 Guarantee Subordinated to Prior Payment of All
Senior Debt of the Guarantor on Dissolution,
Winding Up, Liquidation or Reorganization of the
Guarantor. . . . . . . . . . . . . . . . . . . . . . 74
SECTION 14.5 Holders to be Subrogated to Rights of Holders
of Senior Debt of the Guarantor. . . . . . . . . . . 76
SECTION 14.6 Obligations of the Guarantor Unconditional . . . . . 76
SECTION 14.7 Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice. . . . . . . . . . . 77
SECTION 14.8 Application by Trustee of Monies Deposited
with It. . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 14.9 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantor or Holders of Senior
Debt of the Guarantor . . . . . . . . . . . . . . . 78
SECTION 14.10 Holders Authorize Trustee to Effectuate
Subordination of Securities. . . . . . . . . . . . . 78
SECTION 14.11 Right of Trustee to Hold Senior Debt of the
Guarantor. . . . . . . . . . . . . . . . . . . . . . 79
SECTION 14.12 Trustee Not Fiduciary for Holders of Senior
Debt of the Guarantor. . . . . . . . . . . . . . . . 79
SECTION 14.13 Article 14 Not To Prevent Events of Default . . . . 79
SECTION 14.14 Execution and Delivery of Guarantee . . . . . . . . 79
SECTION 14.15 Subordination of Indebtedness Owed by the
Company to the Guarantor . . . . . . . . . . . . . 80
SECTION 14.16 Officers' Certificate . . . . . . . . . . . . . . . 80
FORM OF SENIOR SUBORDINATED INDENTURE
FORM OF SENIOR SUBORDINATED INDENTURE, dated as of
____________________ between K. Hovnanian Enterprises, Inc., a New
Jersey corporation (the "Issuer"), and ______________________,
a ___________________________, as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issuance from
time to time of its unsecured senior subordinated debentures, notes or other
evidences of indebtedness to be issued in one or more series (the
"Securities") up to such principal amount or amounts as may from time to time
be authorized in accordance with the terms of this Indenture; and
WHEREAS, the Issuer has duly authorized the execution and
delivery of this Indenture to provide, among other things, for the
authentication, delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a
valid indenture and agreement according to its terms have been undertaken and
completed;
NOW, THEREFORE, in:
consideration of the premises and the purchases of the
Securities by the Holders (as hereinafter defined) thereof, the Issuer and
the Trustee mutually covenant and agree for the equal and proportionate
benefit of the respective Holders from time to time of the Securities as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 For all purposes of this Indenture and of any
indenture supplemental hereto the following terms shall have the respective
meanings specified in this Section 1.1 (except as otherwise expressly
provided herein or in any indenture supplemental hereto or unless the context
otherwise clearly requires). All other terms used in this Indenture that are
defined in the Trust Indenture Act of 1939, including terms defined therein
by reference to the Securities Act of 1933, as amended (the "Securities
Act"), shall have the meanings assigned to such terms in said Trust Indenture
Act of 1939 and in said Securities Act as in force at the date of this
Indenture (except as otherwise expressly provided herein or in any indenture
supplemental hereto or unless the context otherwise clearly requires).
All accounting terms used herein and not expressly defined
shall have the meanings assigned to such terms in accordance with generally
accepted accounting principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted on the
date of this Indenture.
The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision. The expressions "date of
this Indenture", "date hereof", "date as of which this Indenture is dated"
and "date of execution and delivery of this Indenture" and other expressions
of similar import refer to the effective date of the original execution and
delivery of this Indenture, viz. as of _____________________.
The terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" shall have the meaning set forth in
Section 6.14.
"Bankruptcy Code" means the United States Bankruptcy Code,
11 United States Code Sections 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of
the Issuer or any committee of such Board duly authorized to act on its
behalf.
"Board Resolution" means one or more resolutions, certified
by the secretary or an assistant secretary of the Issuer to have been duly
adopted or consented to by the Board of Directors and to be in full force and
effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, unless
otherwise specified in a Board Resolution and an Officers Certificate with
respect to a particular series of Securities, a day that (a) in the Place of
Payment (or in any of the Places of Payment, if more than one) in which
amounts are payable, as specified in the form of such Security, and (b) in
the city in which the Corporate Trust Office is located, is not a day on
which banking institutions are authorized or required by law or regulation to
close.
"Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Securities Exchange Act
of 1934, as amended, or, if at any time after the execution and delivery of
this Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act of 1939, then the body
performing such duties on such date.
"Consolidated Net Tangible Assets" means the aggregate
amount of assets included on the most recent consolidated balance sheet of
the Issuer and its Restricted Subsidiaries, less applicable reserves and
other properly deductible items and after deducting therefrom (a) all current
liabilities and (b) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all in
accordance with generally accepted accounting principles consistently
applied.
"Corporate Trust Office" means the office of the Trustee of
a series of Securities at which the trust created by this Indenture shall, at
any particular time, be principally administered, which office is, at the
date as of which this Indenture is dated, located at [address].
"Depositary" means, with respect to the Securities of any
series issuable or issued in the form of one or more Global Securities, the
Person designated as Depositary by the Issuer pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or
include each Person who is then a Depositary hereunder, and, if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with respect to the
Global Securities of such series.
"Dollars" and the sign "$" means the coin and currency of
the United States of America as at the time of payment is legal tender for
the payment of public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Event of Default" means any event or condition specified
as such in Section 5.1.
"Global Security" means a Security evidencing all or a part
of a series of Securities issued to the Depositary for such series in
accordance with Section 2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other
similar terms mean, in the case of any Security, the Person in whose name
such Security is registered in the security register kept by the Issuer for
that purpose in accordance with the terms hereof.
"Indebtedness" with respect to any Person, means, without
duplication:
(a) (i) the principal of and premium, if any,
and interest, if any, on indebtedness for money borrowed
of such Person, indebtedness of such Person evidenced by
bonds, notes, debentures or similar obligations, and any
guaranty by such Person of any indebtedness for money
borrowed or indebtedness evidenced by bonds, notes,
debentures or similar obligations of any other Person,
whether any such indebtedness or guaranty is outstanding
on the date of this Indenture or is thereafter created,
assumed or incurred, (ii) obligations of such Person for
the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction; (iii)
the principal of and premium, if any, and interest, if
any, on indebtedness incurred, assumed or guaranteed by
such Person in connection with the acquisition by it or
any of its subsidiaries of any other businesses,
properties or other assets; (iv) lease obligations which
such Person capitalizes in accordance with Statement of
Financial Accounting Standards No. 13 promulgated by the
Financial Accounting Standards Board or such other
generally accepted accounting principles as may be from
time to time in effect; (v) any indebtedness of such
Person representing the balance deferred and unpaid of
the purchase price of any property or interest therein
(except any such balance that constitutes an accrued
expense or trade payable) and any guaranty, endorsement
or other contingent obligation of such Person in respect
of any indebtedness of another that is outstanding on the
date of this Indenture or is thereafter created, assumed
or incurred by such Person; and (vi) obligations of such
Person under interest rate, commodity or currency swaps,
caps, collars, options and similar arrangements; and
(b) any amendments, modifications, refundings,
renewals or extensions of any indebtedness or obligation
described as Indebtedness in clause (a) above.
"Indenture" means this instrument as originally executed
and delivered or, if amended or supplemented as herein provided, as so
amended or supplemented or both, including, for all purposes of this
instrument and any such supplement, the provisions of the Trust Indenture Act
of 1939 that are deemed to be a part of and govern this instrument and any
such supplement, respectively, and shall include the forms and terms of
particular series of Securities established as contemplated hereunder.
"interest" means, when used with respect to non-interest
bearing Securities (including, without limitation, any Original Issue
Discount Security that by its terms bears interest only after maturity or
upon default in any other payment due on such Security), interest payable
after maturity (whether at stated maturity, upon acceleration or redemption
or otherwise) or after the date, if any, on which the Issuer becomes
obligated to acquire a Security, whether upon conversion, by purchase or
otherwise.
"Issuer" means K. Hovnanian Enterprises, Inc., a New Jersey
corporation, and, subject to Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request or order
of the Issuer which is signed in its name by the chairman of the Board of
Directors, the president or any vice president of the Issuer, and delivered
to the Trustee.
"Officers' Certificate", when used with respect to the
Issuer, means a certificate signed by the chairman of the Board of Directors,
the president, or any vice president and by the treasurer, any assistant
treasurer, the controller, any assistant controller, the secretary or any
assistant secretary of the Issuer. Each such certificate shall include the
statements provided for in Section 11.5 if and to the extent required by the
provisions of such Section 11.5. One of the officers signing an Officers'
Certificate given pursuant to Section 4.3 shall be the principal executive,
financial or accounting officer of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by
the chief counsel of the Issuer or by such other legal counsel who may be an
employee of or counsel to the Issuer and who shall be reasonably satisfactory
to the Trustee. Each such opinion shall include the statements provided for
in Section 11.5, if and to the extent required by the provisions of such
Section 11.5.
"original issue date" of any Security (or portion thereof)
means the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
"original issue discount" of any debt security, including
any Original Issue Discount Security, means the difference between the
principal amount of such debt security and the initial issue price of such
debt security (as set forth in the case of an Original Issue Discount
Security on the face of such Security).
"Original Issue Discount Security" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant
to Article Five.
"Outstanding" when used with reference to Securities,
shall, subject to the provisions of Section 7.4, mean, as of any particular
time, all Securities authenticated and delivered by the Trustee under this
Indenture, except:
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities (other than Securities of any series as to
which the provisions of Article Ten hereof shall not be applicable),
or portions thereof, for the payment or redemption of which moneys or
U.S. Government Obligations (as provided for in Section 10.1) in the
necessary amount shall have been deposited in trust with the Trustee
or with any paying agent (other than the Issuer) or shall have been
set aside, segregated and held in trust by the Issuer for the Holders
of such Securities (if the Issuer shall act as its own paying agent),
provided that, if such Securities, or portions thereof, are to be
redeemed prior to the maturity thereof, notice of such redemption
shall have been given as herein provided, or provision satisfactory
to the Trustee shall have been made for giving such notice; and
(c) Securities which shall have been paid or in
substitution for which other Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.9 (except with
respect to any such Security as to which proof satisfactory to the
Trustee is presented that such Security is held by a Person in whose
hands such Security is a legal, valid and binding obligation of the
Issuer).
In determining whether the Holders of the requisite
aggregate principal amount of Outstanding Securities of any or all series
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding for such purposes shall be the portion
of the principal amount thereof that would be due and payable as of the date
of such determination (as certified by the Issuer to the Trustee) upon a
declaration of acceleration of the maturity thereof pursuant to Article Five.
"Periodic Offering" means an offering of Securities of a
series from time to time, the specific terms of which Securities, including,
without limitation, the rate or rates of interest, if any, thereon, the
stated maturity or maturities thereof and the redemption provisions, if any,
with respect thereto, are to be determined by the Issuer or its agents upon
the issuance of such Securities.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint stock
company, trust, estate, unincorporated organization or government or any
agency or political subdivision thereof.
"Place of Payment", when used with respect to the
Securities of any series, means the place or places where the principal of
and interest, if any, on the Securities of such series are payable as
determined in accordance with Section 2.3.
"principal" of a debt security, including any Security,
means the amount (including, without limitation, if and to the extent
applicable, any premium and, in the case of an Original Issue Discount
Security, any accrued original issue discount, but excluding interest) that
is payable with respect to such debt security as of any date and for any
purpose (including, without limitation, in connection with any sinking fund,
if any, upon any redemption at the option of the Issuer, upon any purchase or
exchange at the option of the Issuer or the holder of such debt security and
upon any acceleration of the maturity of such debt security).
"principal amount" of a debt security, including any
Security, means the principal amount as set forth on the face of such debt
security.
"record date" shall have the meaning set forth in Section
2.7.
"Responsible Officer", when used with respect to the
Trustee of a series of Securities, means any officer of the Trustee with
direct responsibility for the administration of the trust created by this
Indenture.
"Restricted Subsidiary" means (a) any Subsidiary of the
Issuer other than an Unrestricted Subsidiary, and (b) any Subsidiary of the
Issuer which was an Unrestricted Subsidiary but which, subsequent to the date
hereof, is designated by the Issuer (by Board Resolution) to be a Restricted
Subsidiary; provided, however, that the Issuer may not designate any such
Subsidiary to be a Restricted Subsidiary if the Issuer would thereby breach
any covenant or agreement herein contained (on the assumptions that any
outstanding Indebtedness of such Subsidiary was incurred at the time of such
designation).
"Securities Act" shall have the meaning set forth in
Section 1.1.
"Security" or "Securities" has the meaning stated in the
first recital of this Indenture or, as the case may be, Securities that have
been authenticated and delivered pursuant to this Indenture.
"Senior Indebtedness" means Indebtedness of the Issuer
outstanding at any time (other than the Indebtedness evidenced by the
Securities of any series) except (a) any Indebtedness as to which, by the
terms of the instrument creating or evidencing such Indebtedness, it is
provided that such Indebtedness is not senior or prior in right of payment to
the Securities or is pari passu or subordinate by its terms in right of
payment to the Securities, (b) renewals, extensions and modifications of any
such Indebtedness, (c) any Indebtedness of the Issuer to a wholly-owned
Subsidiary of the Issuer, (d) interest accruing after the filing of a
petition initiating any proceeding referred to in Sections 5.1(e) and 5.1(f)
unless such interest is an allowed claim enforceable against the Issuer in a
proceeding under federal or state bankruptcy laws and (e) trade payables.
"Senior Subordinated Indebtedness" means the Securities and
any other Indebtedness of the Issuer that ranks pari passu with the
Securities. Any Indebtedness of the Issuer that is subordinate or junior by
its terms in right of payment to any other Indebtedness of the Issuer shall
be subordinate to Senior Subordinated Indebtedness unless the instrument
creating or evidencing the same or pursuant to which the same is outstanding
specifically provides that such Indebtedness (i) is to rank pari passu with
other Senior Subordinated Indebtedness and (ii) is not subordinated by its
terms to any Indebtedness of the Issuer which is not Senior Indebtedness.
"Subordinated Indebtedness" means the Securities, any other
Senior Subordinated Indebtedness and any other Indebtedness that is
subordinate or junior in right of payment to Senior Indebtedness.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" of the Issuer within the meaning of Rule 1.02(w) of
Regulation S-K promulgated by the Commission as in effect on the date of this
Indenture.
"Subsidiary" of any specified Person means any corporation
of which such Person, or such Person and one or more Subsidiaries of such
Person, or any one or more Subsidiaries of such Person, directly or
indirectly own voting securities entitling any one or more of such Persons
and its Subsidiaries to elect a majority of the directors, either at all
times or, so long as there is no default or contingency which permits the
holders of any other class or classes of securities to vote for the election
of one or more directors.
"Trust Indenture Act of 1939" (except as otherwise provided
in Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which
this Indenture is originally executed.
"Trustee" means the Person identified as "Trustee" in the
first paragraph hereof and, subject to the provisions of Article Six, shall
also include any successor trustee. "Trustee" shall also mean or include
each Person who is then a trustee hereunder and, if at any time there is more
than one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of such series.
"Unrestricted Subsidiary" means (a) any Subsidiary of the
Issuer acquired or organized after the date hereof, provided, however, that
such Subsidiary of the Issuer shall not be a successor, directly or
indirectly, to any Restricted Subsidiary, and (b) any Subsidiary of the
Issuer substantially all the assets of which consist of stock or other
securities of a Subsidiary or Subsidiaries of the Issuer of the character
described in clause (a) of this paragraph, unless and until such Subsidiary
shall have been designated to be a Restricted Subsidiary pursuant to clause
(b) of the definition of "Restricted Subsidiary".
"U.S. Government Obligations" shall have the meaning set
forth in Section 10.1(B).
"vice president," when used with respect to the Issuer or
the Trustee, means any vice president, regardless of whether designated by a
number or a word or words added before or after the title "vice president."
"Yield to Maturity" means the yield to maturity on a series
of Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series,
and calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each
series shall be substantially in such form (not inconsistent with this
Indenture) as shall be established by or pursuant to one or more Board
Resolutions (as set forth in a Board Resolution or, to the extent established
pursuant to rather than set forth in a Board Resolution, an Officers'
Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have imprinted or otherwise reproduced thereon such
legend or legends or endorsements, not inconsistent with the provisions of
this Indenture, as may be required to comply with any law or with any rules
or regulations pursuant thereto, or with any rules of any securities exchange
or to conform to general usage, all as may be determined by the officers
executing such Securities, as evidenced by their execution of such
Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities as evidenced by
their execution of such Securities.
SECTION 2.2 Form of Trustee's Certificate of
Authentication. The Trustee's certificate of authentication on all
Securities shall be substantially as follows:
This is one of the Securities of the series designated
herein referred to in the within mentioned Indenture.
________________________, as Trustee
By_______________________________
Authorized Signatory
If at any time there shall be an Authenticating Agent
appointed with respect to any series of Securities, then the Securities of
such series shall bear, in addition to the Trustee's certificate of
authentication, an alternate Certificate of Authentication which shall be
substantially as follows:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
________________________, as Trustee
By_______________________________
as Authenticating Agent
By_______________________________
Authorized Signatory
SECTION 2.3 Amount Unlimited Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series and the
Securities of each such series shall rank equally and pari passu with the
Securities of each other series, but all Securities issued hereunder shall be
subordinate and junior in right of payment, to the extent and in the manner
set forth in Article Thirteen, to all Senior Indebtedness of the Issuer.
There shall be established in or pursuant to one or more Board Resolutions
(and, to the extent established pursuant to rather than set forth in a Board
Resolution, in an Officers' Certificate detailing such establishment) or
established in one or more indentures supplemental hereto, prior to the
initial issuance of Securities of any series:
(1) the designation of the Securities of the series, which
shall distinguish the Securities of such series from the Securities
of all other series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 2.8, 2.9,
2.11, 8.5 or 12.3);
(3) the date or dates on which the principal of the
Securities of the series is payable;
(4) the rate or rates at which the Securities of the
series shall bear interest, if any, the date or dates from which any
such interest shall accrue, on which any such interest shall be
payable and on which a record shall be taken for the determination of
Holders to whom any such interest is payable or the method by which
such rate or rates or date or dates shall be determined or both;
(5) the place or places where and the manner in which the
principal of, premium, if any, and interest, if any, on Securities of
the series shall be payable (if other than as provided in Section
3.2) and the office or agency for the Securities of the series
maintained by the Issuer pursuant to Section 3.2;
(6) the right, if any, of the Issuer to redeem, purchase
or repay Securities of the series, in whole or in part, at its option
and the period or periods within which, the price or prices (or the
method by which such price or prices shall be determined or both) at
which, the form or method of payment therefor if other than in cash
and any terms and conditions upon which and the manner in which (if
different from the provisions of Article Twelve) Securities of the
series may be so redeemed, purchased or repaid, in whole or in part
pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem,
purchase or repay Securities of the series in whole or in part
pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which the price or prices (or the method by which such
price or prices shall be determined or both) at which, the form or
method of payment therefor if other than in cash and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(9) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon acceleration of the maturity thereof;
(10) whether Securities of the series will be issuable as
Global Securities;
(11) if the Securities of such series are to be issuable
in definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(12) any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars or any other agents with
respect to the Securities of such series;
(13) any deleted, modified or additional events of default
or remedies or any deleted, modified or additional covenants with
respect to the Securities of such series;
(14) whether the provisions of Section 10.1(C) will be
applicable to Securities of such series;
(15) any provision relating to the issuance of Securities
of such series at an original issue discount (including, without
limitation, the issue price thereof, the rate or rates at which such
original issue discount shall accrete, if any, and the date or dates
from or to which or period or periods during which such original
issue discount shall accrete at such rate or rates);
(16) if other than Dollars, the foreign currency in which
payment of the principal of, premium, if any, and interest, if any,
on the Securities of such series shall be payable;
(17) if other than _____________________________ is to act
as Trustee for the Securities of such series, the name and Corporate
Trust Office of such Trustee;
(18) if the amounts of payments of principal of, premium,
if any, and interest, if any, on the Securities of such series are to
be determined with reference to an index, the manner in which such
amounts shall be determined;
(19) the terms for conversion or exchange, if any, with
respect to the Securities of such series; and
(20) any other terms of the series.
All Securities of any one series shall be substantially
identical, except as to denomination and except as may otherwise be provided
by or pursuant to the Board Resolution or Officers' Certificate referred to
above or as set forth in any such indenture supplemental hereto. All
Securities of any one series need not be issued at the same time and may be
issued from time to time, consistent with the terms of this Indenture, if so
provided by or pursuant to such Board Resolution, such Officers' Certificate
or in any such indenture supplemental hereto.
Any such Board Resolution or Officers' Certificate referred
to above with respect to Securities of any series filed with the Trustee on
or before the initial issuance of the Securities of such series shall be
incorporated herein by reference with respect to Securities of such series
and shall thereafter be deemed to be a part of the Indenture for all purposes
relating to Securities of such series as fully as if such Board Resolution or
Officers' Certificate were set forth herein in full.
SECTION 2.4 Authentication and Delivery of Securities.
The Issuer may deliver Securities of any series executed by the Issuer to the
Trustee for authentication together with the applicable documents referred to
below in this Section 2.4, and the Trustee shall thereupon authenticate and
deliver such Securities to, or upon the order of the Issuer (contained in the
Issuer Order referred to below in this Section 2.4) or pursuant to such
procedures acceptable to the Trustee and to such recipients as may be
specified from time to time by an Issuer Order. The maturity date, original
issue date, interest rate, if any, and any other terms of the Securities of
such series shall be determined by or pursuant to such Issuer Order and
procedures. If provided for in such procedures and agreed to by the Trustee,
such Issuer Order may authorize authentication and delivery pursuant to oral
instructions from the Issuer or its duly authorized agent, which instructions
shall be promptly confirmed in writing. In authenticating the Securities of
such series and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive (in the case of subparagraphs (2), (3) and (4) below only at or
before the time of the first request of the Issuer to the Trustee to
authenticate Securities of such series) and (subject to Section 6.1) shall be
fully protected in relying upon, unless and until such documents have been
superseded or revoked:
(1) an Issuer Order requesting such authentication and
setting forth delivery instructions provided that, with respect to
Securities of a series subject to a Periodic Offering, (a) such
Issuer Order may be delivered by the Issuer to the Trustee prior to
the delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities
of such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or pursuant
to procedures acceptable to the Trustee as may be specified from time
to time by an Issuer Order, (c) the maturity date or dates, original
issue date or dates, interest rate or rates, if any, and any other
terms of Securities of such series shall be determined by an Issuer
Order or pursuant to such procedures, (d) if provided for in such
procedures, such Issuer Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Issuer
or its duly authorized agent or agents, which oral instructions shall
be promptly confirmed in writing and (e) after the original issuance
of the first Security of such series to be issued, any separate
request by the Issuer that the Trustee authenticate Securities of
such series for original issuance will be deemed to be a
certification by the Issuer that it is in compliance with all
conditions precedent provided for in this Indenture relating to the
authentication and delivery of such Securities;
(2) the Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3
by or pursuant to which the forms and terms of the Securities of such
series were established;
(3) an Officers' Certificate setting forth the form or
forms and terms of the Securities stating that the form or forms and
terms of the Securities have been established pursuant to Sections
2.1 and 2.3 and comply with this Indenture and covering such other
matters as the Trustee may reasonably request; and
(4) at the option of the Issuers, either an Opinion of
Counsel, or a letter from legal counsel addressed to the Trustee
permitting it to rely on an Opinion of Counsel, substantially to the
effect that:
(a) the form or forms of the Securities of such series
have been duly authorized and established in conformity
with the provisions of this Indenture;
(b) in the case of an underwritten offering, the terms
of the Securities of such series have been duly authorized
and established in conformity with the provisions of this
Indenture, and, in the case of an offering that is not
underwritten, certain terms of the Securities of such
series have been established pursuant to a Board
Resolution, an Officers' Certificate or a supplemental
indenture in accordance with this Indenture, and when such
other terms as are to be established pursuant to procedures
set forth in an Issuer Order shall have been established,
all such terms will have been duly authorized by the Issuer
and will have been established in conformity with the
provisions of this Indenture;
(c) when the Securities of such series have been
executed by the Issuer and the Securities of such series
have been authenticated by the Trustee in accordance with
the provisions of this Indenture and delivered to and duly
paid for by the purchasers thereof, they will have been
duly issued under this Indenture and will be valid and
legally binding obligations of the Issuer, enforceable in
accordance with their respective terms, and will be
entitled to the benefits of this Indenture; and
(d) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, the
Securities of such series will not contravene any provision
of applicable law or the articles of incorporation or
bylaws of the Issuer or any agreement or other instrument
binding upon the Issuer or any of its Subsidiaries that is
material to the Issuer and its Subsidiaries, considered as
one enterprise, or, to such counsel's knowledge after the
inquiry indicated therein (which shall be reasonable), any
judgment, order or decree of any governmental agency or any
court having jurisdiction over the Issuer or any Subsidiary
of the Issuer, and no consent, approval or authorization of
any governmental body or agency is required for the
performance by the Issuer of its obligations under the
Securities, except such as are specified and have been
obtained and such as may be required by the securities or
blue sky laws of the various states in connection with the
offer and sale of the Securities.
In addition, if the authentication and delivery relates to
a new series of Securities created by an indenture supplemental hereto, such
Opinion of Counsel shall also state that all laws and requirements with
respect to the form and execution by the Issuer of the supplemental indenture
with respect to the series of Securities have been complied with, the Issuer
has corporate power to execute and deliver any such supplemental indenture
and has taken all necessary corporate action for those purposes and any such
supplemental indenture has been executed and delivered and constitutes the
legal, valid and binding obligation of the Issuer enforceable in accordance
with its terms.
In rendering such opinions, such counsel may qualify any
opinions as to enforceability by stating that such enforceability may be
limited by bankruptcy, insolvency, reorganization, liquidation, moratorium
and other similar laws affecting the rights and remedies of creditors and is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Such
counsel may rely, as to all matters governed by the laws of jurisdictions
other than the State of New Jersey and the federal law of the United States,
upon opinions of other counsel (copies of which shall be delivered to the
Trustee), who shall be counsel reasonably satisfactory to the Trustee, in
which case the opinion shall state that such counsel believes that both such
counsel and the Trustee are entitled so to rely. Such counsel may also state
that, insofar as such opinion involves factual matters, such counsel has
relied, to the extent such counsel deems proper, upon certificates of
officers of the Issuer and its Subsidiaries and certificates of public
officials.
The Trustee shall have the right to decline to authenticate
and deliver any Securities of any series under this Section 2.4 if the
Trustee, being advised by counsel, determines that such action may not
lawfully be taken by the Issuer, or if the Trustee in good faith by its board
of directors or board of trustees, executive committee or a trust committee
of directors or trustees or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing Holders or
would adversely affect the Trustee's own rights, duties or immunities under
the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that
the Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section 2.4 and the Issuer Order with respect to such
series, authenticate and deliver one or more Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series to be issued in the
form of Global Securities and not yet cancelled, (ii) shall be registered in
the name of the Depositary for such Global Security or Securities or the
nominee of such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instructions, and (iv) shall bear
a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for Securities in definitive registered form,
this Security may not be transferred except as a whole by the Depositary to
the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3 must, at
the time of its designation and at all times while it serves as Depositary,
be a clearing agency registered under the Securities Exchange Act of 1934, as
amended, and any other applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall
be signed on behalf of the Issuer by the chairman of the Board of Directors,
the president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one
of its assistant secretaries. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the
Issuer may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Securities. Typographical
and other minor errors or defects in any such reproduction of a seal or any
such signature shall not affect the validity or enforceability of any
Security that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any
of the Securities shall cease to be such officer before the Security so
signed shall be authenticated and delivered by the Trustee or disposed of by
the Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Security had not ceased to
be such officer of the Issuer; and any Security may be signed on behalf of
the Issuer by such persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Issuer, although at the date of
the execution and delivery of this Indenture any such person was not such an
officer.
SECTION 2.6 Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication
substantially in the form hereinbefore recited, executed by the Trustee by
the manual signature of one of its authorized signatories, or its
Authenticating Agent, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. The execution of such certificate by
the Trustee or its Authenticating Agent upon any Security executed by the
Issuer shall be conclusive evidence that the Security so authenticated has
been duly authenticated and delivered hereunder and that the Holder is
entitled to the benefits of this Indenture. Each reference in this Indenture
to authentication by the Trustee includes authentication by an agent
appointed pursuant to Section 6.14.
SECTION 2.7 Denomination and Date of Securities; Payments
of Interest. The Securities of each series shall be issuable in registered
form in denominations established as contemplated by Section 2.3 or, with
respect to the Securities of any series, if not so established, in
denominations of $1,000 and any integral multiple thereof. The Securities of
each series shall be numbered, lettered or otherwise distinguished in such
manner or in accordance with such plan as the officers of the Issuer
executing the same may determine with the approval of the Trustee, as
evidenced by the execution and authentication thereof.
Each Security shall be dated the date of its
authentication. The Securities of each series shall bear interest, if any,
from the date, and such interest, if any, shall be payable on the dates,
established as contemplated by Section 2.3.
The Person in whose name any Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Security
subsequent to the record date and prior to such interest payment date, except
if and to the extent the Issuer shall default in the payment of the interest
due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the Persons in whose names Outstanding
Securities for such series are registered (a) at the close of business on a
subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice
given by mail by or on behalf of the Issuer to the Holders of Securities not
less than 15 days preceding such subsequent record date or (b) as determined
by such other procedure as is mutually acceptable to the Issuer and the
Trustee. The term "record date" as used with respect to any interest payment
date (except a date for payment of defaulted interest) for the Securities of
any series shall mean the date specified as such in the terms of the
Securities of such series established as contemplated by Section 2.3, or, if
no such date is so established, if such interest payment date is the first
day of a calendar month, the fifteenth day of the next preceding calendar
month or, if such interest payment date is the fifteenth day of a calendar
month, the first day of such calendar month, whether or not such record date
is a Business Day.
SECTION 2.8 Registration, Transfer and Exchange. The
Issuer will keep at each office or agency to be maintained for the purpose as
provided in Section 3.2 for each series of Securities a register or registers
in which, subject to such reasonable regulations as it may prescribe, it will
provide for the registration of Securities of each series and the
registration of transfer of Securities of such series. Each such register
shall be in written form in the English language or in any other form capable
of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for inspection and
available for copying by the Trustee.
Upon due presentation for registration of transfer of any
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Security or Securities of the same series, maturity date, interest rate,
if any, and original issue date in authorized denominations for a like
aggregate principal amount.
All Securities presented for registration of transfer shall
(if so required by the Issuer or the Trustee) be duly endorsed by, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the Holder or
his attorney duly authorized in writing.
At the option of the Holder thereof, Securities of any
series (other than a Global Security, except as set forth below) may be
exchanged for a Security or Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Securities to be exchanged at the agency of the Issuer that shall be
maintained for such purpose in accordance with Section 3.2.
The Issuer may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any registration of transfer of Securities. No service charge shall be made
for any such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a
transfer of (a) any Securities of any series for a period of 15 days next
preceding the first mailing or publication of notice of redemption of
Securities of such series to be redeemed, (b) any Securities selected, called
or being called for redemption, in whole or in part, except, in the case of
any Security to be redeemed in part, the portion thereof not so to be
redeemed or (c) any Security if the Holder thereof has exercised his right,
if any, to require the Issuer to repurchase such Security in whole or in
part, except the portion of such Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8,
unless and until it is exchanged in whole or in part for Securities in
definitive registered form, a Global Security representing all or a part of
the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor Depositary for such
series or a nominee of such successor Depositary.
If at any time the Depositary for any Securities of a
series represented by one or more Global Securities notifies the Issuer that
it is unwilling or unable to continue as Depositary for such Securities or if
at any time the Depositary for such Securities shall no longer be eligible
under Section 2.4, the Issuer shall appoint a successor Depositary with
respect to such Securities. If a successor Depositary for such Securities is
not appointed by the Issuer within 90 days after the Issuer receives such
notice or becomes aware of such ineligibility, the Issuer's election pursuant
to Section 2.3 that such Securities be represented by one or more Global
Securities shall no longer be effective and the Issuer shall execute, and the
Trustee, upon receipt of an Issuer Order for the authentication and delivery
of definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount
of the Global Security or Securities representing such Securities in exchange
for such Global Security or Securities.
The Issuer may at any time and in its sole discretion
determine that the Securities of any series issued in the form of one or more
Global Securities shall no longer be represented by a Global Security or
Securities. In such event the Issuer shall execute, and the Trustee, upon
receipt of an Issuer Order for the authentication and delivery of definitive
Securities of such series, shall authenticate and deliver, Securities of such
series in definitive registered form, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such Securities, in exchange for such
Global Security or Securities.
If specified by the Issuer pursuant to Section 2.3 with
respect to Securities represented by a Global Security, the Depositary for
such Global Security may surrender such Global Security in exchange in whole
or in part for Securities of the same series in definitive registered form on
such terms as are acceptable to the Issuer and such Depositary. Thereupon,
the Issuer shall execute, and the Trustee shall authenticate and deliver,
without service charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of a Global Security for Securities in
definitive registered form in authorized denominations, such Global Security
shall be cancelled by the Trustee or an agent of the Trustee. Securities in
definitive registered form issued in exchange for a Global Security pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of
the Issuer. The Trustee or such agent shall deliver at its office such
Securities to or as directed by the Persons in whose names such Securities
are so registered.
All Securities issued upon any registration of transfer or
exchange of Securities shall be valid and legally binding obligations of the
Issuer, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Securities surrendered upon such registration of
transfer or exchange.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver a new Security of the same
series, maturity date, interest rate, if any, and original issue date,
bearing a number or other distinguishing symbol not contemporaneously
outstanding, in exchange and substitution for the mutilated or defaced
Security, or in lieu of and in substitution for the Security so destroyed,
lost or stolen. In every case the applicant for a substitute Security shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the
Trustee such security or indemnity as may be required by the Trustee or the
Issuer or any such agent to indemnify and defend and to save each of the
Trustee and the Issuer and any such agent harmless and, in every case of
destruction, loss or theft, evidence to their satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof and
in the case of mutilation or defacement, shall surrender the Security to the
Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or its agent)
connected therewith. In case any Security which has matured or is about to
mature or has been called for redemption in full shall become mutilated or
defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a
substitute Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated or defaced Security), if
the applicant for such payment shall furnish to the Issuer and to the Trustee
and any agent of the Issuer or the Trustee such security or indemnity as any
of them may require to hold each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Issuer
and the Trustee and any agent of the Issuer or the Trustee evidence to the
Trustee's satisfaction of the destruction, loss or theft of such Security and
of the ownership thereof.
Every substitute Security of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such Security
is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights
set forth in) this Indenture equally and proportionately with any and all
other Securities of such series duly authenticated and delivered hereunder.
All Securities shall be held and owned upon the express condition that, to
the extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, destroyed, lost
or stolen Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Disposition
Thereof. All Securities surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a
sinking or analogous fund, if surrendered to the Issuer or any agent of the
Issuer or the Trustee or any agent of the Trustee, shall be delivered to the
Trustee or its agent for cancellation or, if surrendered to the Trustee,
shall be cancelled by it; and no Securities shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture.
The Trustee shall dispose of all cancelled Securities in accordance with its
standard procedures and shall deliver a certificate of such disposition to
the Company. If the Issuer or its agent shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee or its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the
preparation of definitive Securities for any series, the Issuer may execute
and the Trustee shall authenticate and deliver temporary Securities for such
series (printed, lithographed, typewritten or otherwise reproduced, in each
case in form satisfactory to the Trustee). Temporary Securities of any
series shall be issuable in any authorized denomination, and substantially in
the form of the definitive Securities of such series but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all
as may be determined by the Issuer with the concurrence of the Trustee as
evidenced by the execution and authentication thereof. Temporary Securities
may contain such references to any provisions of this Indenture as may be
appropriate. Every temporary Security shall be executed by the Issuer and be
authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive
Securities of such series and thereupon temporary Securities of such series
may be surrendered in exchange therefor without charge at each office or
agency to be maintained by the Issuer for that purpose pursuant to Section
3.2 and the Trustee shall authenticate and deliver in exchange for such
temporary Securities of such series an equal aggregate principal amount of
definitive Securities of the same series having authorized denominations.
Until so exchanged, the temporary Securities of any series shall be entitled
to the same benefits under this Indenture as definitive Securities of such
series, unless otherwise established pursuant to Section 2.3.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the
Securities may use "CUSIP" numbers (if then generally in use), and, if so,
the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of, premium, if any, and interest, if any, on each of the
Securities at the place, at the respective times and in the manner provided
in the Securities.
SECTION 3.2 Offices for Notices and Payments, etc. So
long as any of the Securities are Outstanding, the Issuer will maintain in
each Place of Payment, an office or agency where the Securities may be
presented for payment, an office or agency where the Securities may be
presented for registration of transfer and for exchange as provided in this
Indenture, and an office or agency where notices and demands to or upon the
Issuer in respect of the Securities or of this Indenture may be served. In
case the Issuer shall at any time fail to maintain any such office or agency,
or shall fail to give notice to the Trustee of any change in the location
thereof, presentation may be made and notice and demand may be served in
respect of the Securities or of this Indenture at the Corporate Trust Office.
The Issuer hereby initially designates the Corporate Trust Office for each
such purpose and appoints the Trustee as registrar and paying agent and as
the agent upon whom notices and demands may be served with respect to the
Securities.
SECTION 3.3 No Interest Extension. In order to prevent
any accumulation of claims for interest after maturity thereof, the Issuer
will not directly or indirectly extend or consent to the extension of the
time for the payment of any claim for interest on any of the Securities and
will not directly or indirectly be a party to or approve any such arrangement
by the purchase or funding of said claims or in any other manner; provided,
however, that this Section 3.3 shall not apply in any case where an extension
shall be made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's
Office. The Issuer, whenever necessary to avoid or fill a vacancy in the
office of the Trustee, will appoint, in the manner provided in Section 6.10,
a Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 3.5 Provision as to Paying Agent. (a) If the
Issuer shall appoint a paying agent other than the Trustee, it will cause
such paying agent to execute and deliver to the Trustee an instrument in
which such paying agent shall agree with the Trustee, subject to the
provisions of this Section 3.5,
(1) that it will hold all sums held by it as such paying
agent for the payment of the principal of or interest, if any, on the
Securities (whether such sums have been paid to it by the Issuer or
by any other obligor on the Securities) in trust for the benefit of
the Holders of the Securities and the Trustee; and
(2) that it will give the Trustee notice of any failure by
the Issuer (or by any other obligor on the Securities) to make any
payment of the principal of, premium, if any, or interest, if any, on
the Securities when the same shall be due and payable; and
(3) that it will, at any time during the continuance of
any such failure, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such paying agent.
(b) If the Issuer shall act as its own paying agent, it
will, on or before each due date of the principal of or interest, if any, on
the Securities, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities a sum sufficient to pay such principal, premium, if
any, or interest, if any, so becoming due and will notify the Trustee of any
failure to take such action and of any failure by the Issuer (or by any other
obligor under the Securities) to make any payment of the principal of,
premium, if any, or interest, if any, on the Securities when the same shall
become due and payable.
(c) Anything in this Section 3.5 to the contrary
notwithstanding, the Issuer may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by it, or any paying
agent hereunder, as required by this Section 3.5, such sums to be held by the
Trustee upon the trusts herein contained.
(d) Anything in this Section 3.5 to the contrary
notwithstanding, any agreement of the Trustee or any paying agent to hold
sums in trust as provided in this Section 3.5 is subject to Sections 10.3 and
10.4.
(e) Whenever the Issuer shall have one or more paying
agents, it will, on or before each due date of the principal of or interest,
if any, on any Securities, deposit with a paying agent a sum sufficient to
pay the principal, premium, if any, or interest, if any, so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium, if any, or interest, if any, and (unless such paying
agent is the Trustee) the Issuer will promptly notify the Trustee of its
action or failure so to act.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders. The Issuer and any other obligor on
the Securities covenant and agree that they will furnish or cause to be
furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders of the Securities of each
series:
(a) semiannually and not more than 15 days after each
January 1 and July 1, and
(b) at such other times as the Trustee may request in
writing, within 15 days after receipt by the Issuer of any such
request,
provided that if and so long as the Trustee shall be the registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders
Lists. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders of each series of Securities (i) contained in the most recent list
furnished to it as provided in Section 4.1, and (ii) received by it in the
capacity of registrar or paying agent for such series, if so acting. The
Trustee may destroy any list furnished to it as provided in Section 4.1 upon
receipt of a new list so furnished.
(b) In case three or more Holders of Securities
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of a particular series (in which
case the applicants must all hold Securities of such series) or with Holders
of all Securities with respect to their rights under this Indenture or under
such Securities and such application is accompanied by a copy of the form of
proxy or other communication which such applicants propose to transmit, then
the Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford to such applicants access to the
information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this
Section 4.2, or
(ii) inform such applicants as to the approximate
number of Holders of Securities of such series or of all
Securities, as the case may be, whose names and addresses
appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection
(a) of this Section 4.2, and as to the approximate cost of
mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants
access to such information, the Trustee shall, upon the written request of
such applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy
or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders
of Securities of such series or of all Securities, as the case may be, or
would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for
a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met, and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Securityholders
with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by receiving and
holding the same, agrees with the Issuer and the Trustee that neither the
Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be
held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders of Securities in accordance with the
provisions of subsection (b) of this Section 4.2, regardless of the source
from which such information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant to a request made
under such subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to time
by rules and regulations prescribe), if any, which the Issuer may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Issuer is not required to file information,
documents or reports pursuant to either of such Sections, then to file with
the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a debt security listed and
registered on a national securities exchange as may be prescribed from time
to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants provided for in
this Indenture as may be required from time to time by such rules and
regulations;
(c) to transmit by mail to the Holders of Securities
within 30 days after the filing thereof with the Trustee, in the manner and
to the extent provided in Section 4.4(c), such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to
subsections (a) and (b) of this Section 4.3 as may be required to be
transmitted to such Holders by rules and regulations prescribed from time to
time by the Commission; and
(d) furnish to the Trustee, not less than annually, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his knowledge of the Issuer's
compliance with all conditions and covenants under this Indenture. For
purposes of this subsection (d), such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
SECTION 4.4 Reports by the Trustee. (a) The Trustee shall
transmit to Holders such reports concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act of 1939
at the times and in the manner provided pursuant thereto. To the extent that
any such report is required by the Trust Indenture Act of 1939 with respect
to any 12 month period, such report shall cover the 12 month period ending
July 15 and shall be transmitted by the next succeeding September 15.(a)
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by
the Trustee with each stock exchange upon which the Securities of any
applicable series are listed and also with the Commission. The Issuer agrees
to promptly notify the Trustee with respect to any series when and as the
Securities of such series become admitted to trading on any national
securities exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default",
wherever used herein with respect to Securities of any series, means any one
or more of the following events (whatever the reason for such Event of
Default and whether it shall be occasioned by the provisions of Article
Thirteen or otherwise), unless it is either inapplicable to a particular
series or it is specifically deleted or modified in or pursuant to the Board
Resolution or supplemental indenture establishing such series of Securities
or in the form of Security, for such series:
(a) default in the payment of the principal of or premium,
if any, of the Securities of such series as and when the same shall become
due and payable either at maturity, upon redemption, by declaration or
otherwise; or
(b) default in the payment of any installment of interest
on any of the Securities of such series as and when the same shall become due
and payable, and continuance of such default for a period of 30 days; or
(c) default in the payment or satisfaction of any sinking
fund or other purchase obligation with respect to Securities of such series,
as and when such obligation shall become due and payable; or
(d) failure on the part of the Issuer duly to observe or
perform any other of the covenants or agreements on the part of the Issuer in
the Securities of such series or in this Indenture continued for a period of
90 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given by certified or registered mail to
the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Securities of such series
then Outstanding; or
(e) without the consent of the Issuer a court having
jurisdiction shall enter an order for relief with respect to the Issuer or
any of its Significant Subsidiaries under any applicable bankruptcy,
insolvency or other similar law of the United States of America, any state
thereof or the District of Columbia, or without the consent of the Issuer a
court having jurisdiction shall enter a judgment, order or decree adjudging
the Issuer or any of its Significant Subsidiaries bankrupt or insolvent, or
enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Issuer or any of its Significant
Subsidiaries under any applicable bankruptcy, insolvency or other similar law
of the United States of America, any state thereof or the District of
Columbia, and the continuance of any such judgment, order or decree is
unstayed and in effect for a period of 60 consecutive days; or
(f) the Issuer or any of its Significant Subsidiaries
shall institute proceedings for entry of an order for relief with respect to
the Issuer or any of its Significant Subsidiaries under any applicable
bankruptcy, insolvency or other similar law of the United States of America,
any state thereof or the District of Columbia or for an adjudication of
insolvency, or shall consent to the institution of bankruptcy or insolvency
proceedings against it, or shall file a petition seeking, or seek or consent
to reorganization, arrangement, composition or relief under any applicable
bankruptcy, insolvency or other similar law of the United States of America,
any state thereof or the District of Columbia, or shall consent to the filing
of such petition or to the appointment of a receiver, custodian, liquidator,
assignee, trustee, sequestrator or similar official of the Issuer or of
substantially all of its property, or the Issuer or any of its Significant
Subsidiaries shall make a general assignment for the benefit of creditors as
recognized under any applicable bankruptcy, insolvency or other similar law
of the United States of America, any state thereof or the District of
Columbia; or
(g) any other Event of Default provided with respect to
the Securities of such series.
If an Event of Default with respect to Securities of any
series then Outstanding occurs and is continuing, then and in each and every
such case, unless the principal of all of the Securities of such series shall
have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Securities of such series
then Outstanding, by notice in writing to the Issuer (and to the Trustee if
given by Securityholders), may declare the principal (or, if the Securities
of such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all the
Securities of such series and the interest, if any, accrued thereon to be due
and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, notwithstanding anything to the
contrary contained in this Indenture or in the Securities of such series.
This provision, however, is subject to the condition that, if at any time
after the unpaid principal amount (or such specified amount) of the
Securities of such series shall have been so declared due and payable and
before any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Issuer shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest, if any, upon all of the Securities of such series
and the principal of any and all Securities of such series which shall have
become due otherwise than by acceleration (with interest on overdue
installments of interest, if any, to the extent that payment of such interest
is enforceable under applicable law and on such principal at the rate borne
by the Securities of such series to the date of such payment or deposit) and
the reasonable compensation, disbursements, expenses and advances of the
Trustee and all other amounts due the Trustee under Section 6.6, and any and
all defaults under this Indenture, other than the nonpayment of such portion
of the principal amount of and accrued interest, if any, on Securities of
such series which shall have become due by acceleration, shall have been
cured or shall have been waived in accordance with Section 5.7 or provision
deemed by the Trustee to be adequate shall have been made therefor, then and
in every such case the Holders of a majority in aggregate principal amount of
the Securities of such series then Outstanding, by written notice to the
Issuer and to the Trustee, may rescind and annul such declaration and its
consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon.
Notwithstanding the previous sentence, no waiver shall be effective against
any Holder for any Event of Default or event which with notice or lapse of
time or both would be an Event of Default with respect to any covenant or
provision which cannot be modified or amended without the consent of the
Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event.
If any Event of Default with respect to the Issuer specified in
Section 5.1(e) or 5.1(f) occurs, all unpaid principal amount (or, if the
Securities of any series then Outstanding are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of each such series) and accrued interest on all Securities of each
series then Outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act by the Trustee or any
Securityholder.
If the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such
case the Issuer, the Trustee and the Securityholders shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Issuer, the Trustee and the Securityholders shall
continue as though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to
Section 5.1 (a), (b) or (c), the Trustee shall not be charged with knowledge
of any Event of Default unless written notice thereof shall have been given
to a Responsible Officer by the Issuer, a paying agent or any Securityholder.
SECTION 5.2 Payment of Securities on Default; Suit
Therefor. The Issuer covenants that (a) if default shall be made in the
payment of any installment of interest upon any of the Securities of any
series then Outstanding as and when the same shall become due and payable,
and such default shall have continued for a period of 30 days, or (b) if
default shall be made in the payment of the principal of any of the
Securities of such series as and when the same shall have become due and
payable, whether at maturity of the Securities of such series or upon
redemption or by declaration or otherwise, then, upon demand of the Trustee,
the Issuer will pay to the Trustee, for the benefit of the Holders of the
Securities, the whole amount that then shall have become due and payable on
all such Securities of such series for principal or interest, if any, or
both, as the case may be, with interest upon the overdue principal and (to
the extent that payment of such interest is enforceable under applicable law)
upon the overdue installments of interest, if any, at the rate borne by the
Securities of such series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
a reasonable compensation to the Trustee, its agents, attorneys and counsel,
and any expenses or liabilities incurred by the Trustee hereunder other than
through its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at
law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or any other
obligor on the Securities of such series and collect in the manner provided
by law out of the property of the Issuer or any other obligor on the
Securities of such series, wherever situated, the moneys adjudged or decreed
to be payable.
If there shall be pending proceedings for the bankruptcy or
for the reorganization of the Issuer or any other obligor on the Securities
of any series then Outstanding under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or if a receiver or trustee or
similar official shall have been appointed for the property of the Issuer or
such other obligor, or in the case of any other similar judicial proceedings
relative to the Issuer or other obligor upon the Securities of such series,
or to the creditors or property of the Issuer or such other obligor, the
Trustee, irrespective of whether the principal of the Securities of such
series shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any
demand pursuant to the provisions of this Section 5.2, shall be entitled and
empowered by intervention in such proceedings or otherwise to file and prove
a claim or claims for the whole amount of principal and interest, if any,
owing and unpaid in respect of the Securities of such series, and, in case of
any judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Securityholders allowed in such judicial proceedings
relative to the Issuer or any other obligor on the Securities of such series,
its or their creditors, or its or their property, and to collect and receive
any moneys or other property payable or deliverable on any such claims, and
to distribute the same after the deduction of its charges and expenses, and
any receiver, assignee or trustee or similar official in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, if the Trustee shall consent to the making
of such payments directly to the Securityholders, to pay to the Trustee any
amount due it for compensation and expenses or otherwise pursuant to Section
6.6, including counsel fees and expenses incurred by it up to the date of
such distribution. To the extent that such payment of reasonable
compensation, expenses and counsel fees and expenses out of the estate in any
such proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities, or the production thereof at
any trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Securities of the series in respect of
which such judgment has been recovered.
SECTION 5.3 Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee pursuant to Section 5.2 with respect to
Securities of any series then Outstanding shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Securities of such series, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:
FIRST: To the payment of costs and expenses of collection
and reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and liabilities incurred, and all
advances made, by the Trustee pursuant to Section 6.6 except as a
result of its negligence or bad faith;
SECOND: If the principal of the Outstanding Securities of
such series shall not have become due and be unpaid, to the payment
of interest, if any, on the Securities of such series, in the order
of the maturity of the installments of such interest, if any, with
interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest, if any, at the
rate borne by the Securities of such series, such payment to be made
ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding Securities of
such series shall have become due, by declaration or otherwise, to
the payment of the whole amount then owing and unpaid upon the
Securities of such series for principal and interest, if any, with
interest on the overdue principal and (to the extent that such
interest has been collected by the Trustee) upon overdue installments
of interest, if any, at the rate borne by the Securities of such
series; and in case such moneys shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Securities of such
series, then to the payment of such principal and interest, if any,
without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any
other installment of interest, or of any Security over any other
Security, ratably to the aggregate of such principal and accrued and
unpaid interest; and
FOURTH: To the payment of any surplus then remaining to
the Issuer, its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same.
No claim for interest which in any manner at or after
maturity shall have been transferred or pledged separate or apart from the
Securities to which it relates, or which in any manner shall have been kept
alive after maturity by an extension (otherwise than pursuant to an extension
made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding), purchase, funding or otherwise by
or on behalf or with the consent or approval of the Issuer shall be entitled,
in case of a default hereunder, to any benefit of this Indenture, except
after prior payment in full of the principal of all Securities of any series
then Outstanding and of all claims for interest not so transferred, pledged,
kept alive, extended, purchased or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of
any Securities of any series then Outstanding shall have any right by virtue
of or by availing of any provision of this Indenture to institute any suit,
action or proceeding in equity or at law upon or under or with respect to
this Indenture or for the appointment of a receiver or trustee or similar
official, or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless the Holders of not
less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request to the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
any such action, suit or proceeding, it being understood and intended, and
being expressly covenanted by the Holder of every Security of such series
with every other Holder and the Trustee, that no one or more Holders of
Securities of such series shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture or of the
Securities to affect, disturb or prejudice the rights of any other Holder of
such Securities of such series, or to obtain or seek to obtain priority over
or preference as to any other such Holder, or to enforce any right under this
Indenture or the Securities, except in the manner herein provided and for the
equal, ratable and common benefit of all Holders of Securities of such
series.
Notwithstanding any other provisions in this Indenture, but
subject to Article Thirteen, the right of any Holder of any Security to
receive payment of the principal of, premium, if any, and interest, if any,
on such Security, on or after the respective due dates expressed in such
Security, or to institute suit for the enforcement of any such payment on or
after such respective dates shall not be impaired or affected without the
consent of such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event
of Default hereunder, the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or
by proceedings in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in
aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
SECTION 5.6 Remedies Cumulative and Continuing. All
powers and remedies given by this Article Five to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the Securityholders, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the
Trustee or of any Securityholder to exercise any right or power accruing upon
any default occurring and continuing as aforesaid shall impair any such right
or power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 5.4, every
power and remedy given by this Article Five or by law to the Trustee or to
the Securityholders may be exercised from time to time, and as often as shall
be deemed expedient, by the Trustee or by the Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults
by Majority of Securityholders. The Holders of a majority in aggregate
principal amount of the Securities of any series then Outstanding shall have
the right to direct the time, method, and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to Securities of such series; provided,
however, that (subject to the provisions of Section 6.1) the Trustee shall
have the right to decline to follow any such direction if the Trustee shall
determine upon advice of counsel that the action or proceeding so directed
may not lawfully be taken or if the Trustee in good faith by its board of
directors, its executive committee, or a trust committee of directors or
Responsible Officers or both shall determine that the action or proceeding so
directed would involve the Trustee in personal liability. The Holders of a
majority in aggregate principal amount of the Securities of any series then
Outstanding may on behalf of the Holders of all of the Securities of such
series waive any past default or Event of Default hereunder and its
consequences except a default in the payment of interest, if any, on, or the
principal of, the Securities of such series. Upon any such waiver the
Issuer, the Trustee and the Holders of the Securities of such series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this
Section 5.7, said default or Event of Default shall for all purposes of the
Securities and this Indenture be deemed to have been cured and to be not
continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within
30 days after the occurrence of a default, with respect to Securities of any
series then Outstanding, mail to all Holders of Securities of such series, as
the names and the addresses of such Holders appear upon the Securities
register, notice of all defaults known to the Trustee with respect to such
series, unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for the purpose of this Section 5.8 being hereby
defined to be the events specified in clauses (a), (b), (c), (d), (e), (f)
and (g) of Section 5.1, not including periods of grace, if any, provided for
therein and irrespective of the giving of the written notice specified in
said clause (d) but in the case of any default of the character specified in
said clause (d) no such notice to Securityholders shall be given until at
least 60 days after the giving of written notice thereof to the Issuer
pursuant to said clause (d)); provided, however, that, except in the case of
default in the payment of the principal of or interest, if any, on any of the
Securities, or in the payment or satisfaction of any sinking fund or other
purchase obligation, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or
a trust committee of directors or Responsible Officers or both, of the
Trustee in good faith determines that the withholding of such notice is in
the best interests of the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to
pay the cost of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against
any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.9 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount
of the Securities of any series then Outstanding, or to any suit instituted
by any Securityholders for the enforcement of the payment of the principal of
or interest, if any, on any Security against the Issuer on or after the due
date expressed in such Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default. In case an Event of Default with respect
to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or waiving of
all such Events of Default with respect to such series which may have
occurred:
(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders pursuant to Section 5.7 relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if there shall be reasonable
ground for believing that the repayment of such funds or adequate indemnity
against such liability is not reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to
Section 6.1:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
or Issuer Order (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors may be
evidenced to the Trustee by a Board Resolution;
(c) the Trustee may consult with counsel of its selection
and any advice of such counsel promptly confirmed in writing shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the provisions
of this Indenture (including, without limitation, pursuant to Section 5.7),
unless such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might
be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of Default, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the Holders of not less than a majority in
aggregate principal amount of the Securities of all series affected then
Outstanding; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses
of every such investigation shall be paid by the Issuer or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Issuer upon
demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder;
(h) The Trustee shall not be charged with knowledge of any
default or Event of Default with respect to a series of Securities unless
either (i) a Responsible Officer of the Trustee assigned to the Corporate
Trust Office of the Trustee (or any successor division or department of the
Trustee) shall have actual knowledge of such default or Event of Default or
(ii) written notice of such default or Event of Default shall have been given
to the Trustee by the Issuer or any other obligor on such series of
Securities or by any Holder of Securities of such series; and
(i) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of Proceeds Thereof. The recitals
contained herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture, of the Securities or of any prospectus used to sell the
Securities. The Trustee shall not be accountable for the use or application
by the Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and, subject to Sections 6.8 and 6.13, may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer with
the same rights it would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the
provisions of Section 10.4 hereof, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes
for which they were received, but need not be segregated from other funds
except to the extent required by mandatory provisions of law. Neither the
Trustee nor any agent of the Issuer or the Trustee shall be under any
liability for interest on any moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee
and Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing between the Issuer and the Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Issuer also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any and
all loss, liability, damage, claim or expense, including taxes (other than
taxes based on the income of the Trustee), incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in the premises. The obligations of the
Issuer under this Section 6.6 to compensate and indemnify the Trustee and
each predecessor Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee and
shall not be subordinate to the payment of Senior Indebtedness pursuant to
Article Thirteen. Such additional indebtedness shall be a senior claim to
that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
particular Securities. When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section 5.1 or in
connection with Article Five hereof, the expenses (including the reasonable
fees and expenses of its counsel) and the compensation for the service in
connection therewith are intended to constitute expenses of administration
under any bankruptcy law. The provisions of this Section 6.6 shall survive
the resignation or removal of the Trustee and the termination of this
Indenture.
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc. Subject to Sections 6.1 and 6.2, whenever in the
administration of the trusts of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an Officers' Certificate delivered
to the Trustee, and such certificate, in the absence of negligence or bad
faith on the part of the Trustee, shall be full warrant to the Trustee for
any action taken, suffered or omitted by it under the provisions of this
Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting
Interests. This Indenture shall always have a Trustee who satisfies the
requirements of Section 310(a)(1) of the Trust Indenture Act of 1939. The
Trustee shall have a combined capital and surplus of at least $25,000,000 as
set forth in its most recent published annual report of condition. The
Trustee shall comply with Section 310(b) of the Trust Indenture Act of 1939
regarding disqualification of a trustee upon acquiring a conflicting
interest.
SECTION 6.9 Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series. The Trustee for each series of
Securities hereunder shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any state or
the District of Columbia having a combined capital and surplus of at least
$25,000,000, and which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal, state
or District of Columbia authority, or a corporation or other Person permitted
to act as trustee by the Commission. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. No obligor upon the Securities or any Affiliate
of such obligor shall serve as trustee upon the Securities. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 6.9, the Trustee shall resign immediately in the manner and
with the effect specified in Section 6.10.
A different Trustee may be appointed by the Issuer for any
series of Securities prior to the issuance of such Securities. If the
initial Trustee for any series of Securities is to be a trustee other than
______________________, the Issuer and such Trustee shall, prior to the
issuance of such Securities, execute and deliver an indenture supplemental
hereto, which shall provide for the appointment of such Trustee as Trustee
for the Securities of such series and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Trustee.
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee. (a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign with respect to one or more or all series
of Securities by giving written notice of resignation to the Issuer. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by
written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Section 5.9, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 6.8 with respect to any series of
Securities after written request therefor by the Issuer or
by any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six
months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.9 and shall
fail to resign after written request therefor by the Issuer
or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting
with respect to any series of Securities, or shall be
adjudged a bankrupt or insolvent, or a receiver or
liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the Board of
Directors one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions
of Article Five, any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months may on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee with respect to such series. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal
amount of the Securities of each series then Outstanding may at any time
remove the Trustee with respect to Securities of such series and appoint a
successor trustee with respect to the Securities of such series by delivering
to the Trustee so removed, to the successor trustee so appointed and to the
Issuer the evidence provided for in Section 7.1 of the action in that regard
taken by the Securityholders. If no successor trustee shall have been so
appointed with respect to any series and have accepted appointment within 30
days after the delivery of such evidence of removal, the Trustee may petition
any court of competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona fide Holder of a Security
or Securities of the applicable series for at least six months may, subject
to the provisions of Article Five, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, appoint a successor trustee.
(d) Any resignation or removal of the Trustee with respect
to any series and any appointment of a successor trustee with respect to such
series pursuant to any of the provisions of this Section 6.10 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 6.11.
SECTION 6.11 Acceptance of Appointment by Successor
Trustee. Any successor trustee appointed as provided in Section 6.10 shall
execute and deliver to the Issuer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee with respect to all or any
applicable series shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations with respect to such series of its predecessor
hereunder, with like effect as if originally named as trustee for such series
hereunder; but, nevertheless, on the written request of the Issuer or of the
successor trustee, upon payment of its charges then unpaid, the trustee
ceasing to act shall, subject to Section 10.4, pay over to the successor
trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all such rights,
powers, duties and obligations. Upon request of any such successor trustee,
the Issuer shall execute any and all instruments in writing for more fully
and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the
Securities of one or more (but not all) series, the Issuer, the predecessor
Trustee and each successor trustee with respect to the Securities of any
applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the predecessor
Trustee with respect to the Securities of any series as to which the
predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts under separate indentures.
No successor trustee with respect to any series of
Securities shall accept appointment as provided in this Section 6.11 unless
at the time of such acceptance such successor trustee shall be qualified
under the provisions of Section 6.8 and eligible under the provisions of
Section 6.9.
Upon acceptance of appointment by any successor trustee as
provided in this Section 6.11, the Issuer shall give notice thereof to the
Holders of Securities of each series affected, by mailing such notice to such
Holders at their addresses as they shall appear on the registry books. If
the Issuer fails to give such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee. Any corporation into which the Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee (including
the trust created by this Indenture), shall be the successor of the Trustee
hereunder, provided that such corporation shall be qualified under the
provisions of Section 6.8 and eligible under the provisions of Section 6.9,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary
notwithstanding.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Securities of any
series shall have been authenticated but not delivered, any such successor to
the Trustee may adopt the certificate of authentication of any predecessor
Trustee and deliver such Securities so authenticated; and, in case at that
time any of the Securities of any series shall not have been authenticated,
any successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificate shall have the full force which it is
anywhere in the Securities of such series or in this Indenture provided that
the certificate of the Trustee shall have; provided, that the right to adopt
the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13 Preferential Collection of Claims Against the
Issuer. The Trustee shall comply with Section 311(a) of the Trust Indenture
Act of 1939, excluding any creditor relationship listed in Section 311(b) of
the Trust Indenture Act of 1939. A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act of 1939 to the
extent indicated therein.
SECTION 6.14 Appointment of Authenticating Agent. As long
as any Securities of a series remain Outstanding, the Trustee may, by an
instrument in writing, appoint with the approval of the Issuer an
authenticating agent (the "Authenticating Agent") which shall be authorized
to act on behalf of the Trustee to authenticate Securities, including
Securities issued upon exchange, registration of transfer, partial redemption
or pursuant to Section 2.9. Securities of each such series authenticated by
such Authenticating Agent shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee. Whenever reference is made in this Indenture to the authentication
and delivery of Securities of any series by the Trustee or to the Trustee's
Certificate of Authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating
Agent for such series and a Certificate of Authentication executed on behalf
of the Trustee by such Authenticating Agent. Such Authenticating Agent shall
at all times be a corporation organized and doing business under the laws of
the United States of America or of any state or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $25,000,000 (determined as provided
in Section 6.9 with respect to the Trustee) and subject to supervision or
examination by federal or state authority.
Any corporation into which any Authenticating Agent may be
merged or converted, or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business (including the authenticating agency contemplated
by this Indenture) of any Authenticating Agent, shall continue to be the
Authenticating Agent with respect to all series of Securities for which it
served as Authenticating Agent without the execution or filing of any paper
or any further act on the part of the Trustee or such Authenticating Agent.
Any Authenticating Agent may at any time, and if it shall cease to be
eligible shall, resign by giving written notice of resignation to the Trustee
and to the Issuer. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.14 with
respect to one or more series of Securities, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Issuer and
the Issuer shall provide notice of such appointment to all Holders of
Securities of such series in the manner and to the extent provided in Section
11.4. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. The Issuer agrees to pay to the
Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series
shall have no responsibility or liability for any action taken by it as such
at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in
person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article Seven.
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities. Subject to Sections 6.1 and 6.2, the execution of any
instrument by a Securityholder or his agent or proxy may be proved in the
following manner:
(a) The fact and date of the execution by any Holder of
any instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments acknowledged to
him the execution thereof, or by an affidavit of a witness to such execution
sworn to before any such notary or other such officer. Where such execution
is by or on behalf of any legal entity other than an individual, such
certificate or affidavit shall also constitute sufficient proof of the
authority of the person executing the same.
(b) The ownership of Securities shall be proved by the
Security register or by a certificate of the Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer,
the Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and, subject to the provisions of this
Indenture, interest, if any, on such Security and for all other purposes; and
neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee
shall be affected by any notice to the contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have
concurred in any direction, consent or waiver under this Indenture,
Securities which are owned by the Issuer or by any other obligor on the
Securities with respect to which such determination is being made or by any
Affiliate of the Issuer or any other obligor on the Securities with respect
to which such determination is being made shall be disregarded and deemed not
to be Outstanding for the purpose of any such determination, except that for
the purpose of determining whether the Trustee shall be protected in relying
on any such direction, consent or waiver only Securities which a Responsible
Officer of the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the
pledgee is not the Issuer or any other obligor upon the Securities or any
Affiliate of the Issuer or any other obligor on the Securities. In case of a
dispute as to such right, the advice of counsel shall be full protection in
respect of any decision made by the Trustee in accordance with such advice.
Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly
an Officers' Certificate listing and identifying all Securities, if any,
known by the Issuer to be owned or held by or for the account of any of the
above-described Persons; and, subject to Sections 6.1 and 6.2, the Trustee
shall be entitled to accept such Officers' Certificate as conclusive evidence
of the facts therein set forth and of the fact that all Securities not listed
therein are Outstanding for the purpose of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.1, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the
case may be, specified in this Indenture in connection with such action, any
Holder of a Security the serial number of which is shown by the evidence to
be included among the serial numbers of the Securities the Holders of which
have consented to such action may, by filing written notice at the Corporate
Trust Office and upon proof of holding as provided in this Article Seven,
revoke such action so far as concerns such Security provided that such
revocation shall not become effective until three Business Days after such
filing. Except as aforesaid, any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange
or substitution therefor or on registration of transfer thereof, irrespective
of whether or not any notation in regard thereto is made upon any such
Security. Any action taken by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action shall be
conclusively binding upon the Issuer, the Trustee and the Holders of all the
Securities affected by such action.
SECTION 7.6 Record Date for Consents and Waivers. The
Issuer may, but shall not be obligated to, establish a record date for the
purpose of determining the Persons entitled to (i) waive any past default
with respect to the Securities of such series in accordance with Section 5.7
of the Indenture, (ii) consent to any supplemental indenture in accordance
with Section 8.2 of the Indenture or (iii) waive compliance with any term,
condition or provision of any covenant hereunder. If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and any
such Persons, shall be entitled to waive any such past default, consent to
any such supplemental indenture or waive compliance with any such term,
condition or provision, whether or not such Holder remains a Holder after
such record date; provided, however, that unless such waiver or consent is
obtained from the Holders, or duly designated proxies, of the requisite
principal amount of Outstanding Securities of such series prior to the date
which is the 120th day after such record date, any such waiver or consent
previously given shall automatically and without further action by any Holder
be cancelled and of no further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of the execution thereof) for
one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any property or
assets;
(b) to evidence the succession of another Person to the
Issuer, or successive successions, and the assumption by the successor Person
of the covenants, agreements and obligations of the Issuer pursuant to
Article Nine;
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as the Issuer and the
Trustee shall consider to be for the protection of the Holders of all or any
series of Securities (and if such covenants, restrictions, conditions or
provisions are to be for the protection of less than all series of
Securities, stating that the same are expressly being included solely for the
protection of such series) and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default permitting the enforcement of
all or any of the several remedies provided in this Indenture as herein set
forth; provided, however, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may provide
for a particular period of grace after default (which period may be shorter
or longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may limit
the right of the Holders of a majority in aggregate principal amount of the
Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Issuer may
deem necessary or desirable, provided, however, that no such action shall
materially adversely affect the interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 and 2.3;
(f) to provide for the issuance of Securities of any
series in coupon form (including Securities registrable as to principal only)
and to provide for exchangeability of such Securities for the Securities
issued hereunder in fully registered form and to make all appropriate changes
for such purpose;
(g) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the Trust Indenture Act of 1939, or under any similar
federal statute hereafter enacted, and to add to this Indenture such other
provisions as may be expressly permitted by the Trust Indenture Act of 1939,
excluding, however, the provisions referred to in Section 316(a)(2) of the
Trust Indenture Act of 1939 as in effect at the date as of which this
instrument was executed or any corresponding provision provided for in any
similar federal statute hereafter enacted; or
(h) to evidence and provide for the acceptance of
appointment hereunder of a Trustee other than _____________________ as
Trustee for a series of Securities and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.9 hereof;
(i) subject to Section 8.2 hereof, to add to or modify the
provisions hereof as may be necessary or desirable to provide for the
denomination of Securities in foreign currencies which shall not adversely
affect the interests of the Holders of the Securities in any material
respect;
(j) to modify the covenants or Events of Default of the
Issuer solely in respect of, or add new covenants or Events of Default of the
Issuer that apply solely to, Securities not Outstanding on the date of such
supplemental indenture; and
(k) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the Securities
of one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to
the requirements of Section 6.11.
The Trustee is hereby authorized to join with the Issuer in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any
property thereunder, but the Trustee shall not be obligated to enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the Holders of any of the
Securities then Outstanding, notwithstanding any of the provisions of Section
8.2.
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders. With the consent (evidenced as provided in Article Seven)
of the Holders of not less than a majority in aggregate principal amount of
the Securities then Outstanding of any series affected by such supplemental
indenture, the Issuer, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from
time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or
of modifying in any manner the rights of the Holders of the Securities of
such series; provided, that no such supplemental indenture shall (a) extend
the stated final maturity of the principal of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest, if any, thereon (or, in the case of an Original Issue Discount
Security, reduce the rate of accretion of original issue discount thereon),
or reduce or alter the method of computation of any amount payable on
redemption, repayment or purchase by the Issuer thereof (or the time at which
any such redemption, repayment or purchase may be made), or make the
principal thereof (including any amount in respect of original issue
discount), or interest, if any, thereon payable in any coin or currency other
than that provided in the Securities or in accordance with the terms of the
Securities, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof or the amount thereof provable in bankruptcy in each case
pursuant to Article Five, or impair or affect the right of any Securityholder
to institute suit for the payment thereof or, if the Securities provide
therefor, any right of repayment or purchase at the option of the
Securityholder, in each case without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security
so affected. No consent of any Holder of any Security shall be necessary
under this Section 8.2 to permit the Trustee and the Issuer to execute
supplemental indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any
covenant, Event of Default or other provision of this Indenture which has
expressly been included solely for the benefit of one or more particular
series of Securities, or which modifies the rights of Holders of Securities
of such series, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors (which resolution may provide general
terms or parameters for such action and may provide that the specific terms
of such action may be determined in accordance with or pursuant to an Issuer
Order) certified by the secretary or an assistant secretary of the Issuer
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of the Holders of the
Securities as aforesaid and other documents, if any, required by Section 7.1,
the Trustee shall join with the Issuer in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may at its discretion, but shall not be obligated to, enter into
such supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section 8.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee
of any supplemental indenture pursuant to the provisions of this Section 8.2,
the Issuer (or the Trustee at the request and expense of the Issuer) shall
give notice thereof to the Holders of then Outstanding Securities of each
series affected thereby, as provided in Section 11.4. Any failure of the
Issuer to give such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and shall be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Issuer and the Holders of Securities of each series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and shall be deemed to
be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 8.4 Documents to Be Given to Trustee. The
Trustee, subject to the provisions of Sections 6.1 and 6.2, shall be entitled
to receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article
Eight complies with the applicable provisions of this Indenture and that all
conditions precedent to the execution and delivery of such supplemental
indenture have been satisfied.
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures. Securities of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Eight may bear a notation in form approved by the
Trustee for such series as to any matter provided for by such supplemental
indenture or as to any action taken by Securityholders. If the Issuer or the
Trustee shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Issuer, to any modification of
this Indenture contained in any such supplemental indenture may be prepared
and executed by the Issuer, authenticated by the Trustee and delivered in
exchange for the Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain
Terms. Subject to the provisions of Section 9.2, nothing contained in this
Indenture or in any of the Securities shall prevent any consolidation or
merger of the Issuer with or into any other Person or Persons (whether or not
affiliated with the Issuer), or successive consolidations or mergers in which
the Issuer or its successor or successors shall be a party or parties, or
shall prevent any sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Issuer to any other Person
(whether or not affiliated with the Issuer) authorized to acquire and operate
the same; provided, however, and the Issuer hereby covenants and agrees, that
any such consolidation, merger, sale, lease, exchange or other disposition
shall be upon the conditions that (a) immediately after giving effect to such
consolidation, merger, sale, lease, exchange or other disposition of the
Person (whether the Issuer or such other Person) formed by or surviving any
such consolidation or merger, or to which such sale, lease, exchange or other
disposition shall have been made, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing; (b) the Person (if other than the
Issuer) formed by or surviving any such consolidation or merger, or to which
such sale, lease, exchange or other disposition shall have been made, shall
be a corporation or partnership organized under the laws of the United States
of America, any state thereof or the District of Columbia; and (c) the due
and punctual payment of the principal of and interest, if any, on all the
Securities, according to their tenor, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Issuer, shall be expressly assumed, by supplemental
indenture satisfactory in form to the Trustee executed and delivered to the
Trustee, by the Person (if other than the Issuer) formed by such
consolidation, or into which the Issuer shall have been merged, or by the
Person which shall have acquired or leased such property.
SECTION 9.2 Successor Corporation to be Substituted. In
case of any such consolidation or merger or any sale, conveyance or lease of
all or substantially all of the property of the Issuer and upon the
assumption by the successor Person, by supplemental indenture executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due
and punctual payment of the principal of, premium, if any, and interest, if
any, on all of the Securities and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Issuer,
such successor Person shall succeed to and be substituted for the Issuer,
with the same effect as if it had been named herein as the party of the first
part, and the Issuer (including any intervening successor to the Issuer which
shall have become the obligor hereunder) shall be relieved of any further
obligation under this Indenture and the Securities; provided, however, that
in the case of a sale, lease, exchange or other disposition of the property
and assets of the Issuer (including any such intervening successor), the
Issuer (including any such intervening successor) shall continue to be liable
on its obligations under this Indenture and the Securities to the extent, but
only to the extent, of liability to pay the principal of and interest, if
any, on the Securities at the time, places and rate prescribed in this
Indenture and the Securities. Such successor Person thereupon may cause to
be signed, and may issue either in its own name or in the name of the Issuer,
any or all of the Securities issuable hereunder which theretofore shall not
have been signed by the Issuer and delivered to the Trustee; and, upon the
order of such successor Person instead of the Issuer and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall
have been signed and delivered by the officers of the Issuer to the Trustee
for authentication, and any Securities which such successor Person thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though all of such
Securities had been issued at the date of the execution hereof.
In case of any such consolidation or merger or any sale,
lease, exchange or other disposition of all or substantially all of the
property and assets of the Issuer, such changes in phraseology and form (but
not in substance) may be made in the Securities, thereafter to be issued, as
may be appropriate.
SECTION 9.3 Opinion of Counsel to be Given Trustee. The
Trustee, subject to Sections 6.1 and 6.2, shall receive an Officers'
Certificate and Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, lease, exchange or other disposition and any
such assumption complies with the provisions of this Article Nine.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (a)
If at any time (i) the Issuer shall have paid or caused to be paid the
principal of, premium, if any, and interest, if any, on all the Securities
Outstanding (other than Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.9) as and when
the same shall have become due and payable, or (ii) the Issuer shall have
delivered to the Trustee for cancellation all Securities theretofore
authenticated (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9); and
if, in any such case, the Issuer shall also pay or cause to be paid all other
sums payable hereunder by the Issuer (including all amounts payable to the
Trustee pursuant to Section 6.6), then this Indenture shall cease to be of
further effect, and the Trustee, on demand of the Issuer accompanied by an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the satisfaction and discharge contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging such satisfaction and
discharging this Indenture. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred, and to
compensate the Trustee for any services thereafter reasonably and properly
rendered, by the Trustee in connection with this Indenture or the Securities.
(b) If at any time (i) the Issuer shall have paid or
caused to be paid the principal of, premium, if any, and interest, if any, on
all the Securities of any series Outstanding (other than Securities of such
series which have been destroyed, lost or stolen and which have been replaced
or paid as provided in Section 2.9) as and when the same shall have become
due and payable, or (ii) the Issuer shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated (other
than any Securities of such series which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.9), or (iii) in
the case of any series of Securities with respect to which the exact amount
described in clause (B) below can be determined at the time of making the
deposit referred to in such clause (B), (A) all the Securities of such series
not theretofore delivered to the Trustee for cancellation shall have become
due and payable, or by their terms are to become due and payable within one
year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and (B)
the Issuer shall have irrevocably deposited or caused to be deposited with
the Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such series,
cash in an amount (other than moneys repaid by the Trustee or any paying
agent to the Issuer in accordance with Section 10.4) or non-callable, non-
prepayable bonds, notes, bills or other similar obligations issued or
guaranteed by the United States government or any agency thereof the full and
timely payment of which are backed by the full faith and credit of the United
States ("U.S. Government Obligations"), maturing as to principal and
interest, if any, at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (1) the
principal of, premium, if any, and interest, if any, on all Securities of
such series on each date that such principal of, premium, if any, or
interest, if any, is due and payable, and (2) any mandatory sinking fund
payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such series;
then the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such series on the date of the deposit
referred to in clause (B) above and the provisions of this Indenture with
respect to the Securities of such series shall no longer be in effect
(except, in the case of clause (iii) of this Section 10.1(b), as to (I)
rights of registration of transfer and exchange of Securities of such series,
(II) rights of substitution of mutilated, defaced, destroyed, lost or stolen
Securities of such series, (III) rights of Holders of Securities of such
series to receive payments of principal thereof and premium, if any, and
interest, if any, thereon upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the Holders of Securities of
such series to receive mandatory sinking fund payments thereon, if any, when
due, (IV) the rights, obligations, duties and immunities of the Trustee
hereunder, (V) the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (VI) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same.
(c) The following provisions shall apply to the Securities
of each series unless specifically otherwise provided in a Board Resolution,
Officers' Certificate or indenture supplemental hereto provided pursuant to
Section 2.3. In addition to discharge of the Indenture pursuant to the next
preceding paragraph, in the case of any series of Securities with respect to
which the exact amount described in subparagraph (A) below can be determined
at the time of making the deposit referred to in such subparagraph (A), the
Issuer shall be deemed to have paid and discharged the entire indebtedness on
all the Securities of such a series on the 91st day after the date of the
deposit referred to in subparagraph (A) below, and the provisions of this
Indenture with respect to the Securities of such series shall no longer be in
effect (except as to (i) rights of registration of transfer and exchange of
Securities of such series, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities of such series, (iii) rights of Holders
of Securities of such series to receive payments of principal thereof,
premium, if any, and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the
Holders of Securities of such series to receive mandatory sinking fund
payments, if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, (v) the rights of the Holders of Securities of such series
as beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (vi) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same, if
(A) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such
series (1) cash in an amount, or (2) U.S. Government Obligations,
maturing as to principal and interest, if any, at such times and in
such amounts as will insure the availability of cash, or (3) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (I)
the principal of, premium, if any, and interest, if any, on all
Securities of such series on each date that such principal or
interest, if any, is due and payable, and (II) any mandatory sinking
fund payments on the dates on which such payments are due and payable
in accordance with the terms of the Indenture and the Securities of
such series;
(B) such deposit will not result in a breach or violation
of, or constitute a default under, any agreement or instrument to
which the Issuer is a party or by which it is bound; and
(C) the Issuer has delivered to the Trustee an Opinion of
Counsel based on the fact that (1) the Issuer has received from, or
there has been published by, the Internal Revenue Service a ruling or
(2), since the date hereof, there has been a change in the applicable
United States federal income tax law, in either case to the effect
that, and such opinion shall confirm that, the Holders of the
Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same
amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not
occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities. Subject to Section 10.4, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Section 10.1
shall be held in trust, and such moneys and all moneys from such U.S.
Government Obligations shall be applied by it to the payment, either directly
or through any paying agent (including the Issuer acting as its own paying
agent), to the Holders of the particular Securities of such series for the
payment or redemption of which such moneys and U.S. Government Obligations
have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest, if any, but such moneys and U.S.
Government Obligations need not be segregated from other funds except to the
extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under
the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years. Any moneys deposited with or paid to the
Trustee or any paying agent for the payment of the principal of, premium, if
any, or interest, if any, on any Security of any series and not applied but
remaining unclaimed for two years after the date upon which such principal,
premium, if any, or interest, if any, shall have become due and payable,
shall, upon the written request of the Issuer and unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed
property law, be repaid to the Issuer by the Trustee for such series or such
paying agent and the Holder of the Securities of such series shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property laws, thereafter look only to the Issuer for any
payment which such Holder may be entitled to collect, and all liability of
the Trustee or any paying agent with respect to such moneys shall thereupon
cease.
SECTION 10.5 Indemnity for U.S. Government Obligations.
The Issuer shall pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 10.1 or the principal or interest received in
respect of such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders,
Officers and Directors of Issuer Exempt from Individual Liability. No
recourse under or upon any obligation, covenant or agreement contained in
this Indenture, or in any Security, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such or against any past,
present or future stockholder, officer or director, as such, of the Issuer,
or any partner of the Issuer or of any successor, either directly or through
the Issuer or any successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or
equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities by the Holders thereof and
as part of the consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to give to any
Person, other than the parties hereto and their successors and the Holders of
the Senior Indebtedness and the Holders of the Securities, any legal or
equitable right, remedy or claim under this Indenture or under any covenant
or provision herein contained, all such covenants and provisions being for
the sole benefit of the parties hereto and their successors and of the
Holders of the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture. All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Issuer shall bind its successors
and assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Holders of Securities. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities to or on the Issuer, or as required pursuant to the
Trust Indenture Act of 1939, may be given or served by being deposited
postage prepaid, first-class mail (except as otherwise specifically provided
herein) addressed (until another address of the Issuer is filed by the Issuer
with the Trustee) to K. Hovnanian Enterprises, Inc., 10 Highway 35, P.O. Box
500, Red Bank, New Jersey 07701. Any notice, direction, request or demand by
the Issuer or any Holder of Securities to or upon the Trustee shall be deemed
to have been sufficiently given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee with the
Issuer) to _____________________________,[address], [attention: Corporate
Trust Administration (K. Hovnanian Enterprises, Inc. [specify series of
Securities])].
Where this Indenture provides for notice to Holders of
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder entitled thereto, at his last address as it appears in the
Security register. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities
in regular mail service, it shall be impracticable to mail notice to the
Issuer when such notice is required to be given pursuant to any provision of
this Indenture, then any manner of giving such notice as shall be reasonably
satisfactory to the Trustee shall be deemed to be sufficient notice.
SECTION 11.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein. Upon any application or demand
by the Issuer to the Trustee to take any action under any of the provisions
of this Indenture, or as required pursuant to the Trust Indenture Act of
1939, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent
have been complied with, except that in the case of any such application or
demand as to which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular application or
demand, no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture
(other than a certificate provided pursuant to Section 4.3(d)) and delivered
to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an opinion as to whether or not such covenant or
condition has been complied with, and (d) a statement as to whether or not,
in the opinion of such person, such condition or covenant has been complied
with.
Any certificate, statement or opinion of an officer of the
Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous. Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual matters, on
information with respect to which is in the possession of the Issuer, upon
the certificate, statement or opinion of or representations by an officer or
officers of the Issuer, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous.
Any certificate, statement or opinion of an officer of the
Issuer or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant
or firm of accountants in the employ of the Issuer, unless such officer or
counsel, as the case may be, knows that the certificate or opinion or
representations with respect to the accounting matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or
in the exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of
public accountants filed with and directed to the Trustee shall contain a
statement that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays. If the date of maturity of principal of or interest, if any, on
the Securities of any series or the date fixed for redemption, purchase or
repayment of any such Security shall not be a Business Day, then payment of
interest, if any, premium, if any, or principal need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the date fixed for
redemption, purchase or repayment, and, in the case of payment, no interest
shall accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, or is deemed applicable to this Indenture by virtue of the
provisions, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 11.8 GOVERNING LAW. THIS INDENTURE AND EACH
SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW
YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAWS.
SECTION 11.9 Counterparts. This Indenture may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of
this Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified, as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions.
Notice of redemption to the Holders of Securities of any series to be
redeemed as a whole or in part at the option of the Issuer shall be given by
mailing notice of such redemption by first class mail, postage prepaid, at
least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Securities of such series at their last
addresses as they shall appear in the Security register. Any notice which is
mailed in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the Holder receives the notice. Failure to
give notice by mail, or any defect in the notice to the Holder of any
Security of a series designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the redemption of any other
Security of such series.
The notice of redemption to each such Holder shall specify
(i) the principal amount of each Security of such series held by such Holder
to be redeemed, (ii) the date fixed for redemption, (iii) the redemption
price, (iv) the place or places of payment, (v) the CUSIP number relating to
such Securities, (vi) that payment will be made upon presentation and
surrender of such Securities, (vii) whether such redemption is pursuant to
the mandatory or optional sinking fund, or both, if such be the case, (viii)
whether interest, if any, (or, in the case of Original Issue Discount
Securities, original issue discount) accrued to the date fixed for redemption
will be paid as specified in such notice and (ix) whether on and after said
date interest, if any, (or, in the case of Original Issue Discount
Securities, original issue discount) thereon or on the portions thereof to be
redeemed will cease to accrue. In case any Security of a series is to be
redeemed in part only, the notice of redemption shall state the portion of
the principal amount thereof to be redeemed and shall state that on and after
the date fixed for redemption, upon surrender of such Security, a new
Security or Securities of such series in principal amount equal to the
unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be
redeemed at the option of the Issuer shall be given by the Issuer or, at the
Issuer's request, by the Trustee in the name and at the expense of the
Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section 12.2, the Issuer will deposit
with the Trustee or with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.5) an amount of money sufficient to redeem on the
redemption date all the Securities of such series so called for redemption at
the appropriate redemption price, together with accrued interest, if any, to
the date fixed for redemption. The Issuer will deliver to the Trustee at
least 45 days prior to the date fixed for redemption (unless a shorter notice
period shall be satisfactory to the Trustee) an Officers' Certificate stating
the aggregate principal amount of Securities to be redeemed. In case of a
redemption at the election of the Issuer prior to the expiration of any
restriction on such redemption, the Issuer shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officers' Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be
redeemed, the Trustee within 10 Business Days after the Issuer gives written
notice to the Trustee that such redemption is to occur, shall select, in such
manner as it shall deem appropriate and fair, Securities of such series to be
redeemed. Notice of the redemption shall be given only after such selection
has been made. Securities may be redeemed in part in multiples equal to the
minimum authorized denomination for Securities of such series or any multiple
thereof. The Trustee shall promptly notify the Issuer in writing of the
Securities of such series selected for redemption and, in the case of any
Securities of such series selected for partial redemption, the principal
amount thereof to be redeemed. For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to the redemption of
Securities of any series shall relate, in the case of any Security redeemed
or to be redeemed only in part, to the portion of the principal amount of
such Security which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption.
If notice of redemption has been given as provided by this Article Twelve,
the Securities or portions of Securities specified in such notice shall
become due and payable on the date and at the place or places stated in such
notice at the applicable redemption price, together with interest, if any,
accrued to the date fixed for redemption, and on and after said date (unless
the Issuer shall default in the payment of such Securities at the redemption
price, together with interest, if any, accrued to said date) interest, if any
(or, in the case of Original Issue Discount Securities, original issue
discount) on the Securities or portions of Securities so called for
redemption shall cease to accrue, and such Securities shall cease from and
after the date fixed for redemption (unless an earlier date shall be
specified in a Board Resolution, Officers' Certificate or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant to
which the form and terms of the Securities of such series were established)
except as provided in Sections 6.5 and 10.4, to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest, if any, to the date fixed for redemption. On
presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest, if any, accrued thereon to the date fixed for redemption;
provided that payment of interest, if any, becoming due on or prior to the
date fixed for redemption shall be payable to the Holders of Securities
registered as such on the relevant record date subject to the terms and
provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the redemption price shall, until paid
or duly provided for, bear interest from the date fixed for redemption at the
rate of interest or Yield to Maturity (in the case of an Original Issue
Discount Security) borne by such Security.
Upon presentation of any Security redeemed in part only,
the Issuer shall execute and the Trustee shall authenticate and deliver to or
on the order of the Holder thereof, at the expense of the Issuer, a new
Security or Securities of such series, and of like tenor, of authorized
denominations, in principal amount equal to the unredeemed portion of the
Security so presented.
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. Securities shall be excluded from
eligibility for selection for redemption if they are identified by
registration and certificate number in an Officers' Certificate delivered to
the Trustee at least 45 days prior to the last date on which notice of
redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Issuer, or (b) a Person
specifically identified in such written statement as an Affiliate of the
Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The
minimum amount of any sinking fund payment provided for by the terms of the
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by
the terms of the Securities of any series is herein referred to as an
"optional sinking fund payment." The date on which a sinking fund payment is
to be made is herein referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any series of Securities in cash, the Issuer may
at its option (a) deliver to the Trustee Securities of such series
theretofore purchased or otherwise acquired (except upon redemption pursuant
to the mandatory sinking fund) by the Issuer or receive credit for Securities
of such series (not previously so credited) theretofore purchased or
otherwise acquired (except as aforesaid) by the Issuer and delivered to the
Trustee for cancellation pursuant to Section 2.10, (b) receive credit for
optional sinking fund payments (not previously so, credited) made pursuant to
this Section 12.5, or (c) receive credit for Securities of such series (not
previously so credited) redeemed by the Issuer through any optional
redemption provision contained in the terms of such series. Securities so
delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund
payment date for any series, the Issuer will deliver to the Trustee an
Officers' Certificate (a) specifying the portion of the mandatory sinking
fund payment to be satisfied by payment of cash and the portion to be
satisfied by credit of Securities of such series and the basis for such
credit, (b) stating that none of the Securities of such series to be so
credited has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured or otherwise ceased to exist)
and are continuing, and (d) stating whether or not the Issuer intends to
exercise its right to make an optional sinking fund payment with respect to
such series and, if so, specifying the amount of such optional sinking fund
payment which the Issuer intends to pay on or before the next succeeding
sinking fund payment date. Any Securities of such series to be credited and
required to be delivered to the Trustee in order for the Issuer to be
entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to
Section 2.10 to the Trustee with such Officers' Certificate (or reasonably
promptly thereafter if acceptable to the Trustee). Such Officers'
Certificate shall be irrevocable and upon its receipt by the Trustee the
Issuer shall become unconditionally obligated to make all the cash payments
or payments therein referred to, if any, on or before the next succeeding
sinking fund payment date. Failure of the Issuer, on or before any such 60th
day, to deliver such Officers' Certificate and Securities (subject to the
parenthetical clause in the second preceding sentence) specified in this
paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option
to deliver or credit Securities of such series in respect thereof, and (ii)
that the Issuer will make no optional sinking fund payment with respect to
such series as provided in this Section 12.5.
If the sinking fund payment or payments (mandatory or
optional or both) to be made in cash on the next succeeding sinking fund
payment date plus any unused balance of any preceding sinking fund payments
made in cash shall exceed $50,000, or a lesser sum if the Issuer shall so
request with respect to the Securities of any particular series, such cash
shall be applied on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund redemption price
together with accrued interest, if any, to the date fixed for redemption. If
such amount shall be $50,000 or less and the Issuer makes no such request,
then it shall be carried over until a sum in excess of $50,000 is available.
The Trustee shall select, in the manner provided in Section 12.2, for
redemption on such sinking fund payment date a sufficient principal amount of
Securities of such series to absorb said cash, as nearly as may be, and shall
(if requested in writing by the Issuer) inform the Issuer of the serial
numbers of the Securities of such series (or portions thereof) so selected.
The Issuer, or the Trustee, in the name and at the expense of the Issuer (if
the Issuer shall so request the Trustee in writing) shall cause notice of
redemption of the Securities of such series to be given in substantially the
manner provided in Section 12.2 (and with the effect provided in Section
12.3) for the redemption of Securities of such series in part at the option
of the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to
the next cash sinking fund payment for such series and, together with such
payment, shall be applied in accordance with the provisions of this Section
12.5. Any and all sinking fund moneys held on the stated maturity date of
the Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of,
and interest, if any, on, the Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer
shall pay to the Trustee in cash or shall otherwise provide for the payment
of all interest, if any, accrued to the date fixed for redemption on
Securities to be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any
Securities of a series with sinking fund moneys or give any notice of
redemption of Securities for such series by operation of the sinking fund
during the continuance of a default in payment of interest on such Securities
or of any Event of Default with respect to such series except that, where the
giving of notice of redemption of any Securities shall theretofore have been
made, the Trustee shall redeem or cause to be redeemed such Securities,
provided that it shall have received from the Issuer a sum sufficient for
such redemption. Except as aforesaid, and subject to Article Thirteen, any
moneys in the sinking fund for such series at the time when any such default
or Event of Default known to a Responsible Officer of the Trustee shall
occur, and any moneys thereafter paid into the sinking fund, shall, during
the continuance of such default or Event of Default, be deemed to have been
collected under Article Five and held for the payment of all such Securities.
In case such Event of Default shall have been waived as provided in Article
Five or the default cured on or before the 60th day preceding the sinking
fund payment date in any year, such moneys shall thereafter be applied on the
next succeeding sinking fund payment date in accordance with this Section to
the redemption of such Securities.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior
Indebtedness. (a) The Issuer covenants and agrees, and each Holder of
Securities of each series, by his acceptance thereof, likewise covenants and
agrees, that anything in this Indenture or the Securities of any series to
the contrary notwithstanding, the indebtedness evidenced by the Securities of
each series is subordinate and junior in right of payment, to the extent
provided herein, to all Senior Indebtedness, whether outstanding on the date
of execution of this Indenture or thereafter created, incurred or assumed,
and that the subordination is for the benefit of the holders of Senior
Indebtedness but the Securities shall in all respects rank pari passu with
all other Senior Subordinated Indebtedness of the Issuer. The Securities
shall rank senior to all existing and future Indebtedness of the Issuer that
is neither Senior Indebtedness nor Senior Subordinated Indebtedness and only
Indebtedness of the Issuer that is Senior Indebtedness shall rank senior to
the Securities in accordance with the provisions set forth herein.
(b) Subject to Section 13.4, if (i) the Issuer shall
default in the payment of any principal of, premium, if any, or interest, if
any, on any Senior Indebtedness when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration of
acceleration or otherwise, or (ii) any other default shall occur with respect
to Senior Indebtedness and the maturity of such Senior Indebtedness has been
accelerated in accordance with its terms, then, upon written notice of such
default to the Issuer and the Trustee by the holders of Senior Indebtedness
or any trustee therefor, unless and until, in either case, the default has
been cured or waived, or has ceased to exist, or any such acceleration has
been rescinded or such Senior Indebtedness has been paid in full, no direct
or indirect payment (in cash, property, securities, by set-off or otherwise)
shall be made or agreed to be made on account of the principal of, premium,
if any, or interest, if any, on any of the Securities, or in respect of any
redemption, retirement, purchase or other acquisition of any of the
Securities other than those made in capital stock of the Issuer (or cash in
lieu of fractional shares thereof).
(c) If any default (other than a default described in
paragraph (b) of this Section 13.1) shall occur under the Senior
Indebtedness, pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods
occurs (a "Senior Nonmonetary Default"), then, upon the receipt by the Issuer
and the Trustee of written notice thereof (a "Payment Notice") from or on
behalf of holders of such Senior Indebtedness specifying an election to
prohibit such payment and other action by the Issuer in accordance with the
following provisions of this paragraph (c), the Issuer may not make any
payment or take any other action that would be prohibited by paragraph (b) of
this Section 13.1 during the period (the "Payment Blockage Period")
commencing on the date of receipt of such Payment Notice and ending on the
earlier of (i) the date, if any, on which the holders of such Senior
Indebtedness or their representative notify the Trustee that such Senior
Nonmonetary Default is cured or waived or ceases to exist or the Senior
Indebtedness to which such Senior Nonmonetary Default relates is discharged
or (ii) the 179th day after the date of receipt of such Payment Notice.
Notwithstanding the provisions described in the immediately preceding
sentence, the Issuer may resume payments on the Securities following such
Payment Blockage Period. Any number of Payment Notices may be given;
provided, however, that (i) not more than one Payment Notice shall be given
within a period of any 360 consecutive days, and (ii) no default that existed
upon the date of such Payment Notice or the commencement of such Payment
Blockage Period (whether or not such event of default is on the same issue of
Senior Indebtedness) shall be made the basis for the commencement of any
other Payment Blockage Period.
(d) If (i) (A) without the consent of the Issuer, a
receiver, conservator, liquidator or trustee of the Issuer or of any of its
property is appointed by the order or decree of any court or agency or
supervisory authority having jurisdiction, and such decree or order remains
in effect for more than 60 days or (B) the Issuer is adjudicated bankrupt or
insolvent or (C) any of its property is sequestered by court order and such
order remains in effect for more than 60 days or (D) a petition is filed
against the Issuer under any state or federal bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
receivership law of any jurisdiction whether now or hereafter in effect
(including without limitation the Bankruptcy Code), and is not dismissed
within 60 days after such filing; or (ii) the Issuer (A) commences a
voluntary case or other proceeding seeking liquidation, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
other relief with respect to itself or its debt or other liabilities under
any bankruptcy, insolvency or other similar law now or hereafter in effect
(including without limitation the Bankruptcy Code) or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or (B) consents to any such relief
or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or (C) fails
generally to, or cannot, pay its debts generally as they become due or (D)
takes any corporate action to authorize or effect any of the foregoing; or
(iii) any Subsidiary of the Issuer takes, suffers or permits to exist any of
the events or conditions referred to in the foregoing clause (i) or (ii),
then all Senior Indebtedness (including any interest thereon accruing after
the commencement of any such proceedings) shall first be paid in full before
any payment or distribution, whether in cash, securities or other property,
shall be made to any Holder of any Securities on account thereof. Any
payment or distribution, whether in cash, securities or other property (other
than securities of the Issuer or any other corporation provided for by a plan
of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in these subordination provisions with respect
to the indebtedness evidenced by the Securities to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or adjustment) which would otherwise
(but for these subordination provisions) be payable or deliverable in respect
of the Securities of any series shall be paid or delivered directly to the
holders of Senior Indebtedness in accordance with the priorities then
existing among such holders until all Senior Indebtedness (including any
interest thereon accruing after the commencement of any such proceedings)
shall have been paid in full. In the event of any such proceeding, after
payment in full of all sums owing with respect to Senior Indebtedness, the
Holders of the Securities, together with the holders of any obligations of
the Issuer ranking on a parity with the Securities, shall be entitled to be
paid from the remaining assets of the Issuer the amounts at the time due and
owing on account of unpaid principal of and interest, if any, on the
Securities and such other obligations before any payment or other
distribution, whether in cash, property or otherwise, shall be made on
account of any capital stock or any obligations of the Issuer ranking junior
to the Securities and such other obligations.
(e) If, notwithstanding the foregoing, any payment or
distribution of any character, whether in cash, securities or other property
(other than securities of the Issuer or any other corporation provided for by
a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent provided in the subordination provisions with respect
to the indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), shall be received by
the Trustee or any Holder in contravention of any of the terms hereof, such
payment or distribution of securities shall be received in trust for the
benefit of and shall be paid over or delivered and transferred to the holders
of the Senior Indebtedness then outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any
Holder to endorse or assign any such payment, distribution or security, each
holder of Senior Indebtedness is hereby irrevocably authorized to endorse or
assign the same.
(f) No present or future holder of any Senior Indebtedness
shall be prejudiced in the right to enforce subordination of the indebtedness
evidenced by the Securities by any act or failure to act on the part of the
Issuer or any Holder of Securities. Nothing contained herein shall impair,
as between the Issuer and the Holders of Securities of each series, the
obligation of the Issuer to pay to such Holders the principal of and
interest, if any, on such Securities or prevent the Trustee or the Holder
from exercising all rights, powers and remedies otherwise permitted by
applicable law or hereunder upon a default or Event of Default hereunder, all
subject to the rights of the holders of the Senior Indebtedness to remove
cash, securities or other property otherwise payable or deliverable to the
Holders.
(g) Senior Indebtedness shall not be deemed to have been
paid in full unless the holders thereof shall have received cash, securities
or other property equal to the amount of such Senior Indebtedness then
outstanding. Upon the payment in full of all Senior Indebtedness, the
Holders of Securities of each series shall be subrogated to all rights of any
holders of Senior Indebtedness to receive any further payment or
distributions applicable to the Senior Indebtedness until the indebtedness
evidenced by the Securities of such series shall have been paid in full and
such payments or distributions received by such Holders, by reason of such
subrogation, of cash, securities or other property which otherwise would be
paid or distributed to the holders of Senior Indebtedness, shall, as between
the Issuer and its creditors other than the holders of Senior Indebtedness,
on the one hand, and such Holders, on the other hand, be deemed to be a
payment by the Issuer on account of Senior Indebtedness, and not on account
of the Securities of such series.
(h) The provisions of this Section 13.1 shall not impair
any rights, interests, remedies or powers of any secured creditor of the
Issuer in respect of any security interest the creation of which is not
prohibited by the provisions of this Indenture.
(i) The securing of any obligations of the Issuer,
otherwise ranking on a parity with the Securities or ranking junior to the
Securities, shall not be deemed to prevent such obligations from
constituting, respectively, obligations ranking on a parity with the
Securities or ranking junior to the Securities.
SECTION 13.2 Reliance on Certificate of Liquidating Agent;
Further Evidence as to Ownership of Senior Indebtedness. Upon any payment or
distribution of assets of the Issuer, the Trustee and the Holders shall be
entitled to rely upon an order or decree issued by any court of competent
jurisdiction in which such dissolution or winding up or liquidation or
reorganization or arrangement proceedings are pending or upon a certificate
of the bankruptcy trustee, receiver, assignee for the benefit of creditors or
other Person making such payment or distribution, delivered to the Trustee or
to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Thirteen. In the absence of any such bankruptcy
trustee, receiver, assignee or other Person, the Trustee shall be entitled to
rely upon written notice by a Person representing himself to be a holder of
Senior Indebtedness (or a trustee or representative on behalf of such holder)
as evidence that such Person is a holder of Senior Indebtedness (or is such a
trustee or representative). If the Trustee determines, in good faith, that
further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distributions
pursuant to this Article Thirteen, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, as to the extent to which
such Person is entitled to participate in such payment or distribution, and
to other facts pertinent to the rights of such Person under this Article
Thirteen, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 13.3 Payment Permitted If No Default. Nothing
contained in this Article Thirteen or elsewhere in this Indenture, or in any
of the Securities, shall prevent (a) the Issuer at any time, except during
the pendency of any default with respect to Senior Indebtedness described in
Section 13.1(b) or Section 13.1(c) or of any of the events described in
Section 13.1(d), from making payments of the principal of or interest, if
any, on the Securities, or (b) the application by the Trustee or any paying
agent of any moneys deposited with it hereunder to payments of the principal
of or interest, if any, on the Securities, if, at the time of such deposit,
the Trustee or such paying agent, as the case may be, did not have the
written notice provided for in Section 13.5 of any event prohibiting the
making of such deposit, or if, at the time of such deposit (whether or not in
trust) by the Issuer with the Trustee or paying agent (other than the Issuer)
such payment would not have been prohibited by the provisions of this Article
Thirteen, and the Trustee or any paying agent shall not be affected by any
notice to the contrary received by it on or after such date.
SECTION 13.4 Disputes with Holders of Certain Senior
Indebtedness. Any failure by the Issuer to make any payment on or under any
Senior Indebtedness, other than any Senior Indebtedness as to which the
provisions of this Section 13.4 shall have been waived by the Issuer in the
instrument or instruments by which the Issuer incurred, assumed, guaranteed
or otherwise created such Senior Indebtedness, shall not be deemed a default
under Section 13.1 hereof if (i) the Issuer shall be disputing its obligation
to make such payment or perform such obligation, and (ii) either (A) no final
judgment relating to such dispute shall have been issued against the Issuer
which is in full force and effect and is not subject to further review,
including a judgment that has become final by reason of the expiration of the
time within which a party may seek further appeal or review, or (B) if a
judgment that is subject to further review or appeal has been issued, the
Issuer shall in good faith be prosecuting an appeal or other proceeding for
review, and a stay of execution shall have been obtained pending such appeal
or review.
SECTION 13.5 Trustee Not Charged with Knowledge of
Prohibition. Anything in this Article Thirteen or elsewhere in this
Indenture contained to the contrary notwithstanding, the Trustee shall not at
any time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment of moneys to or by the Trustee and shall
be entitled to assume conclusively that no such facts exist and that no event
specified in clauses (b) and (c) of Section 13.1 has happened unless and
until the Trustee shall have received an Officers' Certificate to the effect
or notice in writing to that effect signed by or on behalf of the holder or
holders, or the representatives, of Senior Indebtedness who shall have been
certified by the Issuer or otherwise established to the reasonable
satisfaction of the Trustee to be such holder or holders or representatives
or from any trustee under any indenture pursuant to which such Senior
Indebtedness shall be outstanding; provided, however, that, if the Trustee
shall not have received the Officers' Certificate or notice provided for in
this Section 13.5 at least three Business Days preceding the date upon which
by the terms hereof any moneys become payable for any purpose (including,
without limitation, the payment of either the principal of or interest, if
any, on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such moneys and apply the same to the purpose for which they were received
and shall not be affected by any notice to the contrary that may be received
by it within three Business Days preceding such date. The Issuer shall give
prompt written notice to the Trustee and to each paying agent of any facts
that would prohibit any payment of moneys to or by the Trustee or any paying
agent, and the Trustee shall not be charged with knowledge of the curing of
any default or the elimination of any other fact or condition preventing such
payment or distribution unless and until the Trustee shall have received an
Officers' Certificate to such effect.
SECTION 13.6 Trustee to Effectuate Subordination. Each
Holder of Securities by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination as between such Holder and holders of Senior
Indebtedness as provided in this Article Thirteen and appoints the Trustee
its attorney-in-fact for any and all such purposes.
SECTION 13.7 Rights of Trustee as Holder of Senior
Indebtedness. The Trustee shall be entitled to all the rights set forth in
this Article Thirteen with respect to any Senior Indebtedness which may at
the time be held by it, to the same extent as any other holder of Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article Thirteen shall apply
to claims of, or payments to, the Trustee under or pursuant to Section 6.6.
SECTION 13.8 Article Applicable to Paying Agents. In case
at any time any paying agent other than the Trustee shall have been appointed
by the Issuer and be then acting hereunder, the term "Trustee" as used in
this Article Thirteen shall in such case (unless the context shall otherwise
require) be construed as extending to and including such paying agent within
its meaning as fully for all intents and purposes as if the paying agent were
named in this Article Thirteen in addition to or in place of the Trustee;
provided, however, that Sections 13.5 and 13.7 shall not apply to the Issuer
if it acts as paying agent.
SECTION 13.9 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Issuer or by any act or failure
to act, in good faith, by any such holder, or by any noncompliance by the
Issuer with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof which any such holder may have or be otherwise
charged with. The holders of Senior Indebtedness, may at any time or from
time to time and in their absolute direction, change the manner, place or
terms of payment, change or extend the time of payment of, or renew or alter,
any such Senior Indebtedness, or amend or supplement any instrument pursuant
to which any such Senior Indebtedness is issued or by which it may be
secured, or release any security therefor, or exercise or refrain from
exercising any other of their rights under such Senior Indebtedness,
including, without limitation, the waiver of default thereunder, all without
notice to or assent from the Holders of the Securities or the Trustee and
without affecting the obligations of the Issuer, the Trustee or the Holders
of Securities under this Article Thirteen.
SECTION 13.10 Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of the Senior Indebtedness, and shall not be liable to any such
holders if it shall mistakenly pay over or distribute money or assets to
Securityholders or the Issuer. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of
its covenants or obligations as are specifically set forth in this Article
Thirteen and no implied covenants or obligations with respect to holders of
Senior Indebtedness shall be read into this Indenture against the Trustee.
ARTICLE FOURTEEN
SUBORDINATED GUARANTEE
SECTION 14.1 Guarantee.
Hovnanian Enterprises, Inc. (hereinafter referred to as the
"Guarantor," which term includes any successor thereto) hereby
unconditionally guarantees (such guarantee to be referred to herein as the
"Guarantee"), on a subordinated basis, 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 Security or the obligations of the Company hereunder or
thereunder, (i) the due and punctual payment of the principal of and any
premium or interest on the Securities, whether at maturity or on an interest
payment date, by acceleration, pursuant to an offer to purchase Securities 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 thereunder shall be promptly paid in
full, all in accordance with the terms hereof and thereof including all
amounts payable to the Trustee under Section 6.6 hereof, and (ii) in case of
any extension of time of payment or renewal of any Securities or any of such
other obligations, the same shall be promptly paid in full when due or to be
performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise.
If the Company fails to make any payment when due of any
amount so guaranteed for whatever reason, the Guarantor 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 of any series, this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities or
the Trustee with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge
or defense of such Guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, demand of performance, filing of claims with
a court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, the benefit of discussion,
protest, notice and all demand whatsoever and covenants that the Guarantee
shall not be discharged except by complete performance of the obligations
contained in the Securities, in this Indenture and in this Article 14. If
any Holder 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 Holder,
this Article 14, 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 Holders 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 5 hereof 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 acceleration of such obligations as provided in
Article 5 hereof such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purpose of this
Article 14. In addition, without limiting the foregoing, upon the
effectiveness of an acceleration under Article 5, the Trustee may make a
demand for payment on the Securities under 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 14.1 shall not be
valid or become obligatory for any purpose with respect to a Security until
the certificate of authentication on such Security shall have been signed by
the Trustee or any duly appointed agent.
SECTION 14.2 Guarantee Subordinated to Senior Debt of the
Guarantor.
The Guarantor agrees, and each Holder of the Securities by
his acceptance thereof likewise agrees, that the payments pursuant to the
Guarantee by the Guarantor shall be subordinated in accordance with the
following provisions of this Article 14 to the prior payment in full of all
Senior Debt of the Guarantor.
"Senior Debt of the Guarantor" means the Principal of and
interest on:
(1) all indebtedness for money borrowed by the
Guarantor or which is evidenced by a bond,
debenture, note or other similar instrument or
agreement whether or not for money borrowed;
(2) lease obligations of the Guarantor;
(3) all indebtedness, secured or unsecured, in
connection with the acquisition or improvement of
any property or asset or the acquisition of any
business by the Guarantor;
(4) all indebtedness secured by any mortgage, lien,
pledge, charge or encumbrance upon property owned
by the Guarantor and all indebtedness secured in
the manner specified in this clause (4) even if
the Guarantor has not assumed or become liable for
the payment thereof;
(5) all customer deposits held by the Guarantor in
escrow accounts pending closing of the related
sales;
(6) all indebtedness of the Guarantor created or
arising under any conditional sale or other title
retention agreement with respect to property
acquired by the Guarantor or otherwise
representing the deferred and unpaid balance of
the purchase price of any such property, including
all indebtedness created or arising in the manner
specified in this clause (6) even though the
rights and remedies of the seller or lender under
such agreement in the event of default are limited
to repossession or sale of such property;
(7) guarantees by the Guarantor, direct or indirect,
of any indebtedness of another Person of the types
referred to in clauses (1), (2), (3), (4), (5) or
(6); and
(8) contingent obligations of the Guarantor in respect
of, or to purchase or otherwise acquire or be
responsible or liable for through the purchase of
products or services, irrespective of whether such
products are delivered or such services are
rendered, any such indebtedness referred to in
clauses (1), (2), (3), (4), (5) or (6),
which indebtedness, lease obligation, deposit, guarantee or contingent
obligation the Guarantor has directly or indirectly created, incurred,
assumed, guaranteed or otherwise become liable or responsible for, whether
currently outstanding or hereafter created. All references to indebtedness
include any renewals, extensions, refundings, amendments and modifications of
any such indebtedness issued in exchange for such indebtedness; provided,
however, that Senior Debt of the Guarantor shall not include, without
limitation (i) a Guarantee, (ii) the guarantee by the Guarantor of the
Subordinated Notes, (iii) accounts payable or any other indebtedness to trade
creditors created or assumed by the Guarantor in the ordinary course of
business in connection with the obtaining of materials or services, (iv) any
liability for federal, state or local taxes owed or owing by the Guarantor
and (v) any indebtedness as to which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such indebtedness is on a parity with or otherwise not superior
in right of payment to a Guarantee.
This Article 14 shall constitute a continuing offer to all
persons who, in reliance upon such provisions, become holders of, or continue
to hold, Senior Debt of the Guarantor, and such provisions are made for the
benefit of the holders of Senior Debt of the Guarantor, and such holders are
made obligees hereunder and any one or more of them may enforce such
provisions.
SECTION 14.3 Guarantor Not to Make Payments With Respect
to Securities in Certain Circumstances.
(a) Upon the maturity of the principal of any Senior
Debt of the Guarantor (other than payment of sinking fund
installments) by lapse of time, acceleration or otherwise, all
principal thereof and interest thereon shall first be paid in full,
or such payment duly provided for in cash or in a manner satisfactory
to the holders of such Senior Debt of the Guarantor, before any
payment, pursuant to the Guarantee, is made on account of the
principal or interest on the Securities or to acquire any of the
Securities or on account of the mandatory redemption provisions in
the Securities (except mandatory redemption payments made in respect
of Securities acquired by the Guarantor before the maturity of such
Senior Debt of the Guarantor).
(b) Unless Section 14.4 shall be applicable, upon (1)
the occurrence of a Payment Default with respect to Senior Debt of
the Guarantor and receipt by the Guarantor and the Trustee of written
notice of such occurrence or (2) upon the acceleration of such
indebtedness, then no payment or distribution of any assets of the
Guarantor of any kind or character shall be made by the Guarantor or
the Trustee on account of principal of (or premium, if any) or
interest on the Securities or on account of the purchase or
redemption or other acquisition of Securities, unless and until such
Payment Default shall have been cured or waived in writing or shall
have ceased to exist or such Senior Debt of the Guarantor shall have
been discharged, after which the Guarantor shall resume making any
and all required payments in respect of the Securities, including any
missed payments.
(c) Unless Section 14.4 shall be applicable, upon (1)
the occurrence of a Non-Payment Default and (2) receipt by the
Trustee of written notice of such occurrence, then no payment or
distribution of any assets of the Guarantor of any kind or character
shall be made by the Guarantor or the Trustee on account of any
principal of (or premium, if any) or interest on the Securities or on
account of the purchase or redemption or other acquisition of
Securities, for a period ("Payment Blockage Period") commencing on
the earlier of the date of receipt by the Trustee of such written
notice from the holder of Senior Debt of the Guarantor or of the
Company, or any representative of a holder of Senior Debt of the
Guarantor or of the Company unless and until (subject to any blockage
of payment that may then be in effect under subsection (a) of this
Section) the earlier of (x) more than 120 days shall have elapsed
since receipt of such written notice by the Guarantor or the Trustee,
whichever was earlier, (y) such Non-Payment Default shall have been
cured or waived in writing or shall have ceased to exist or such
Senior Debt of the Guarantor or of the Company shall have been
discharged or (z) such Payment Blockage Period shall have been
terminated by written notice to the Guarantor or to the Company, as
the case may be, or to the Trustee from the holders of the Senior
Debt of the Guarantor or of the Company or any representative of the
holders of the Senior Debt of the Guarantor or of the Company
initiating such Payment Blockage Period, after which, in the case of
clause (x), (y) or (z), the Guarantor shall promptly resume making
any and all required payments in respect of the Securities, including
any missed payments. In no event shall a Payment Blockage Period
extend beyond 120 days from the date of the receipt by the Trustee of
the notice referred to in clause (2) hereof (the "Initial Period").
Any number of additional Payment Blockage Periods may be commenced
during the Initial Period; provided, however, that no such additional
period shall extend beyond the Initial Period. After the expiration
of the Initial Period, no Payment Blockage Period may be commenced on
the basis of a Non-Payment Default on the Senior Debt which was the
basis of a Payment Blockage Period commenced during the Initial
Period until at least 270 consecutive days have elapsed from the last
day of the Initial Period. No Non-Payment Default which existed or
was continuing on the date of the commencement of any Payment
Blockage Period and of which the applicable Senior Debt holder(s) are
aware shall be, or be made, the basis for the commencement of a
second Payment Blockage Period whether or not within a period of 270
consecutive days unless such event of default shall have been cured
or waived for a period of not less than 90 consecutive days.
(d) In the event that notwithstanding the provisions
of this Section 14.3 the Guarantor shall make, pursuant to this
Guarantee, any payment or distribution of any character to the
Trustee on account of the principal of or interest on the Securities,
or on account of the mandatory redemption provisions, after the
happening of an event of default with respect to any Senior Debt of
the Guarantor based on a default in the payment of the principal or
interest on Senior Debt of the Guarantor, or after receipt by the
Trustee of written notice as provided in this Section 14.3 of an
event of default with respect to any Senior Debt of the Guarantor, or
after the acceleration of the Securities of any series pursuant to
Section 5.1, then, but only if the Trustee is in receipt of the
notice specified in Section 14.7, unless and until such default or
event of default shall have been cured or waived or shall have ceased
to exist, or such acceleration shall have been rescinded, such
payment (subject to the provisions of Sections 14.7 and 14.8) shall
be held by the Trustee in trust for the benefit of, and, if the
Senior Debt of the Guarantor shall have been declared immediately due
and payable, shall be paid forthwith over and delivered to, the
holders of Senior Debt of the Guarantor (pro rata as to each of such
holders on the basis of the respective amounts of Senior Debt of the
Guarantor held by them) or their representative or the trustee under
the indenture or other agreement (if any) pursuant to which Senior
Debt of the Guarantor may have been issued, as their respective
interests may appear, such payments to be made in accordance with an
Officers' Certificate as provided in Section 11.5 (on which the
Trustee may conclusively rely) identifying all holders of Senior Debt
of the Guarantor and the principal amount of Senior Debt of the
Guarantor then outstanding held by each and stating the reasons why
such Officers' Certificate is being delivered to the Trustee, for
application to the payment of all Senior Debt of the Guarantor
remaining unpaid to the extent necessary to pay all Senior Debt 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 Debt of the Guarantor. In the event of the failure
of any Holder of a Security to endorse or assign any such payment or
distribution, each holder of Senior Debt of the Guarantor is hereby
irrevocably authorized to endorse or assign the same. The Guarantor
shall give prompt notice to the Trustee of any default under any
Senior Debt of the Guarantor or under any agreement pursuant to which
Senior Debt of the Guarantor may have been issued, as required by
Section 3.5.
SECTION 14.4 Guarantee Subordinated to Prior Payment of
All Senior Debt of the Guarantor on Dissolution, Winding Up, Liquidation or
Reorganization of the Guarantor.
In the event of (i) any insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment, composition or other
similar proceeding relating to the Guarantor, its creditors or its property,
(ii) any case or proceeding for the liquidation, dissolution or other
winding-up of the Guarantor, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings, (iii) any assignment by the
Guarantor for the benefit of creditors, or (iv) any other marshalling of the
assets of the Guarantor:
(a) the holders of all Senior Debt of the Guarantor
shall first be entitled to receive payment in full
(or to have such payment duly provided for) of the
principal and interest due thereon (including any
interest thereon accruing after commencement of
any such proceeding) before the Holders of the
Securities are entitled to receive, pursuant to
this Guarantee any payment or any distribution,
whether in cash, securities or other property, on
account of the principal or interest on the
Securities;
(b) any payment or distribution of assets of the
Company of any kind or character, whether in cash,
property or securities (other than securities of
the Guarantor as reorganized or readjusted or
securities of the Guarantor or any other company,
trust or corporation provided for by a plan of
reorganization or readjustment, junior or the
payment of which is otherwise subordinate, at
least to the extent provided in this Article, to
the payment of all Senior Debt of the Guarantor at
the time outstanding and to the payment of all
securities issued in exchange therefor to the
holders of the Senior Debt of the Guarantor at the
time outstanding), to which the Holders of the
Securities or the Trustee on behalf of the Holders
of the Securities would be entitled, pursuant to
this Guarantee except for the provisions of this
Article 14, 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 Senior Debt of the Guarantor or
their representative(s), or to the trustee under
any indenture under which Senior Debt 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
Debt of the Guarantor held or represented by
each), to the extent necessary to make payment in
full of all Senior Debt of the Guarantor remaining
unpaid after giving effect to any concurrent
payment or distribution or provision therefor to
the holders of such Senior Debt of the Guarantor;
and
(c) in the event that notwithstanding the foregoing
provisions of this Section 14.4, any payment or
distribution of assets of the Guarantor of any
kind or character, whether in cash, property or
securities shall be received, pursuant to the
Guarantee, by the Trustee or the Holders of the
Securities on account of principal or interest on
the Securities before all Senior Debt of the
Guarantor is paid in full, or effective provisions
made for its payment, such payment or
distribution(subject to the provisions of Sections
14.7 and 14.8) shall be received and held in trust
for and shall be paid over or delivered to the
liquidating trustee, agent or other person making
such payment or distribution or to the holders of
the Senior Debt of the Guarantor remaining unpaid
or unprovided for or their representative, or to
the trustee under any indenture under which Senior
Debt of the Guarantor may have been issued (pro
rata as provided in subsection (b) above), for
application to the payment of such Senior Debt of
the Guarantor until all such Senior Debt 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 Debt of the Guarantor.
If the Guarantor effects a transaction permitted by Article
Nine, such transaction shall not be deemed to be a dissolution, winding up,
liquidation or reorganization of the Guarantor for purposes of this Section.
The Guarantor shall give prompt written notice to the
Trustee of any dissolution, winding up, liquidation or reorganization of the
Guarantor, assignment for the benefit of creditors by the Guarantor or any
other marshalling of assets of the Guarantor.
SECTION 14.5 Holders to be Subrogated to Rights of Holders
of Senior Debt of the Guarantor.
Subject to the payment in full of all Senior Debt of the
Guarantor, the Holders of the Securities shall be subrogated to the rights of
the holders of Senior Debt of the Guarantor to receive payments or
distributions of assets of the Guarantor applicable to the Senior Debt of the
Guarantor until all amounts owing under the Guarantee shall be paid in full
and for the purpose of such subrogation no payments or distributions to the
holders of Senior Debt of the Guarantor by virtue of this Article 14 which
otherwise would have been made to the Holders of the Securities, shall, as
between the Guarantor, its creditors other than holders of its Senior Debt of
the Guarantor and the Holders, be deemed to be a payment by the Guarantor to
or on account of the Senior Debt of the Guarantor, it being understood that
the provisions of this Article 14 are solely for the purpose of defining the
relative rights of the holders of Senior Debt of the Guarantor on the one
hand and the Holders on the other hand.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article shall
have been applied, pursuant to the provisions of this Article, to the payment
of Senior Debt of the Guarantor, then and in such case, the Holders shall be
entitled to receive from the holders of such Senior Debt of the Guarantor at
the time outstanding any payments or distributions received by such holders
of such Senior Debt of the Guarantor in excess of the amount sufficient to
pay all amounts payable under or in respect of such Senior Debt of the
Guarantor in full.
SECTION 14.6 Obligations of the Guarantor Unconditional.
Nothing contained in this Article 14 or elsewhere in this
Indenture or in any Security is intended to or shall impair, as between the
Guarantor and the Holders, the obligations of the Guarantor, which are
absolute and unconditional, to pay to the Holders the principal of and
interest on the Securities as and when the same shall become due and payable
in accordance with the provisions of this Guarantee or is intended to or
shall affect the relative rights of the Holders and creditors of the
Guarantor other than the holders of the Senior Debt of the Guarantor, nor
shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon Default
under this Indenture, subject to the rights, if any, under this Article 14 of
the holders of Senior Debt of the Guarantor in respect of cash, property or
securities of the Guarantor received upon the exercise of any such remedy.
Upon any distribution of assets of the Guarantor referred
to in this Article 14, the Trustee, subject to the provisions of Sections 6.1
and 6.2, and the Holders of the Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of the liquidating trustee or agent or other person
making any distribution to the Trustee or to the Holders of the Securities,
for the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the
Guarantor, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article 14.
SECTION 14.7 Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice.
The Trustee shall not at any time be charged with knowledge
of the existence of any facts which would prohibit the making of any payment
to or by the Trustee, and the Trustee shall not be required to withhold
payment to the Holders of Securities as provided in Section 14.3(d), unless
and until the Trustee shall have received written notice thereof at its
Corporate Trust Office from the Guarantor or from one or more holders of
Senior Debt of the Guarantor or from any representative thereof or trustee
therefor identifying the specific sections of this Indenture involved and
describing in detail the facts that would obligate the Trustee to withhold
payments to Holders of Securities, as well as any other facts required by the
next succeeding paragraph of this Section 14.7; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Sections
6.1 and 6.2, shall be entitled to assume conclusively that no such facts
exist.
The Trustee shall be entitled to rely on the delivery to it
of a written notice by a person representing himself to be a holder of Senior
Debt of the Guarantor (or a trustee on behalf of such holder) to establish
that such notice has been given by a holder of Senior Debt of the Guarantor
or a trustee on behalf of any such holder. In the event that the Trustee
determines in good faith that further evidence is required with respect to
the right of any person as a holder of Senior Debt of the Guarantor to
participate in any payment or distribution pursuant to this Article 14, the
Trustee may request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of the Guarantor
held by such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts pertinent to
the rights of such person under this Article 14, and if such evidence is not
furnished the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment.
SECTION 14.8 Application by Trustee of Monies Deposited
with It.
Except as provided in Section 10 any deposit of monies by
the Guarantor with the Trustee or any Paying Agent (whether or not in trust)
for the payment of the principal or interest on any Securities shall be
subject to the provisions of Sections 14.2, 14.3, 14.4 and 14.5 except that,
if prior to the opening of business on the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including,
without limitation, the payment, pursuant to this Guarantee, of either the
principal or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 14.7,
then the Trustee shall have full power and authority to receive such monies
and to apply the same to the purpose for which they were received and shall
not be affected by any notice to the contrary which may be received by it on
or after such date, without, however, limiting any rights that holders of
Senior Debt of the Guarantor may have to recover any such payments from the
Holders in accordance with the provisions of this Article.
SECTION 14.9 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantor or Holders of Senior Debt of the Guarantor.
No right of any present or future holders of any Senior
Debt 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 Debt of the
Guarantor may extend, renew, modify or amend the terms of the Senior Debt 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 this Indenture or the
Holders.
SECTION 14.10 Holders Authorize Trustee to Effectuate
Subordination of Securities.
Each Holder of the Securities by his acceptance thereof
authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article 14 and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Guarantor (whether in bankruptcy,
insolvency or receivership proceedings, voluntary liquidation or upon
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Guarantor, the timely filing of
a claim for the unpaid balance, pursuant to this Guarantee, of its or his
Securities in the form required in said proceedings and cause said claim to
be approved. If the Trustee does not file a proper claim or proof of debt in
the form required in such proceeding on or prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of
Senior Debt of the Guarantor have the right to file and are hereby authorized
to file an appropriate claim for and on behalf of the Holders of said
Securities.
SECTION 14.11 Right of Trustee to Hold Senior Debt of the
Guarantor.
The Trustee in its individual capacity, shall be entitled
to all of the rights set forth in this Article 14 in respect of any Senior
Debt of the Guarantor at any time held by it to the same extent as any other
holder of such Senior Debt of the Guarantor, and nothing in this Indenture
shall be construed to deprive the Trustee of any of its rights as such
holder.
SECTION 14.12 Trustee Not Fiduciary for Holders of Senior
Debt of the Guarantor.
With respect to the holders of Senior Debt of the
Guarantor, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article 14,
and no implied covenants or obligations with respect to the holders of Senior
Debt of the Guarantor shall be read into this Indenture against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Debt of the Guarantor and the Trustee shall not be liable to any
holder of Senior Debt of the Guarantor if it shall pay over or deliver to
Holders of Securities, the Guarantor or any other person monies or assets to
which any holder of Senior Debt of the Guarantor shall be entitled by virtue
of this Article 14 or otherwise.
SECTION 14.13 Article 14 Not To Prevent Events of Default.
The failure to make a payment on account of principal or
interest on the Securities of any series by reason of any provision in this
Article 14 shall not be construed as preventing the occurrence of an Event of
Default under Section 5.1.
SECTION 14.14 Execution and Delivery of Guarantee.
To evidence the Guarantee set forth in this Article 14, the
Guarantor hereby agrees that the Guarantee Notation, substantially in the
form of Exhibit A hereto, shall be endorsed on each Security authenticated
and delivered by the Trustee 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 the Guarantee
Notation on each Security.
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 14.15 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 Debt of the Company.
SECTION 14.16 Officers' Certificate.
If there occurs an event referred to in the first sentence
of Section 14.4(c) or the first sentence of Section 14.4, the Guarantor shall
promptly give to the Trustee an Officers' Certificate (on which the Trustee
may conclusively rely) identifying all holders of Senior Debt of the
Guarantor and the principal amount of Senior Debt of the Guarantor then
outstanding held by each such holder and stating the reasons why such
Officers' Certificate is being delivered to the Trustee.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, as of the date first written above.
K. HOVNANIAN ENTERPRISES, INC.
By:____________________________________________
Title:
___________________________________, as Trustee
By:____________________________________________
Title:
EXHIBIT A
[FORM OF NOTATION OF SECURITY
RELATING TO GUARANTEE]
GUARANTEE
Hovnanian Enterprises, Inc. (hereinafter referred to as the
"Guarantor", which term includes any successor person under the Indenture
(the "Indenture") referred to in the Security upon which this notation is
endorsed), has unconditionally guaranteed on a subordinated basis (i) the due
and punctual payment of the principal of, premium, if any, and interest on
the Securities, whether at maturity, by acceleration or otherwise, the due
and punctual payment of interest on the overdue principal of, premium, if
any, and interest, if any, on the Securities, to the extent lawful, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms set forth in Article
14 of the Indenture and (ii) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
The obligations of the Guarantor to the Holders and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth
and are expressly subordinated and subject in right of payment to the prior
payment in full of all Senior Debt of the Guarantor, to the extent and in the
manner provided in Article 14 of the Indenture and reference is hereby made
to such Indenture for the terms of the Guarantee and the subordination
thereof therein made.
No stockholder, officer, director or incorporator, as such,
past, present or future, of the Guarantor shall have any personal liability
under the Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
The Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication of the Securities upon which
this Guarantee is endorsed shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
Guarantor
[SEAL]HOVNANIAN ENTERPRISES, INC.
By___________________________________
By___________________________________
____________________
[FN]
This Cross Reference Sheet is not part of the Indenture.
Exhibit 4.8
K. HOVNANIAN ENTERPRISES, INC.
AND
_____________________
as Trustee
Form of Subordinated Indenture
Dated as of _____________________
CROSS REFERENCE SHEET
_______________
Provisions of Trust Indenture Act of 1939 and Indenture to be dated
as of _________________ between K. Hovnanian Enterprises, Inc. and
__________________________________, Trustee:
Section of the Act Section of Indenture
310(a)(1), (2) and (5) . . . . . . . . . 6.9
310(a)(3) and (4) . . . . . . . . . . . . Inapplicable
310(b) . . . . . . . . . . . . . . . . . 6.8 and 6.10(a), (b) and (d)
310(c) . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . 6.13
311(b) . . . . . . . . . . . . . . . . . 6.13
311(c) . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . 4.1 and 4.2(a)
312(b) . . . . . . . . . . . . . . . . . 4.2(a) and (b)(i) and (ii)
312(c) . . . . . . . . . . . . . . . . . 4.2(c)
313(a) . . . . . . . . . . . . . . . . . 4.4(a)(i), (ii), (iii), (iv),
(v), (vi) and (vii)
313(a)(5) . . . . . . . . . . . . . . . . Inapplicable
313(b)(1) . . . . . . . . . . . . . . . . Inapplicable
313(b)(2) . . . . . . . . . . . . . . . . 4.4(b)
313(c) . . . . . . . . . . . . . . . . . 4.4(c)
313(d) . . . . . . . . . . . . . . . . . 4.4(d)
314(a) . . . . . . . . . . . . . . . . . 4.3
314(b) . . . . . . . . . . . . . . . . . Inapplicable
314(c)(1) and (2) . . . . . . . . . . . . 11.5
314(c)(3) . . . . . . . . . . . . . . . . Inapplicable
314(d) . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . 11.5
314(f) . . . . . . . . . . . . . . . . . Inapplicable
315(a), (c) and (d) . . . . . . . . . . . 6.1
315(b) . . . . . . . . . . . . . . . . . 5.8
315(e) . . . . . . . . . . . . . . . . . 5.9
316(a)(1) . . . . . . . . . . . . . . . . 5.7
316(a)(2) . . . . . . . . . . . . . . . . Not required
316(a) (last sentence) . . . . . . . . . 7.4
316(b) . . . . . . . . . . . . . . . . . 5.4
317(a) . . . . . . . . . . . . . . . . . 5.2
317(b) . . . . . . . . . . . . . . . . . 3.5(a)
318(a) . . . . . . . . . . . . . . . . . 11.7
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 9
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 9
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 9
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . 9
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 10
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 10
Global Security . . . . . . . . . . . . . . . . . . . . . . . . 10
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Holder of Securities . . . . . . . . . . . . . . . . . . . . . . 10
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 11
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 12
original issue date . . . . . . . . . . . . . . . . . . . . . . 12
original issue discount . . . . . . . . . . . . . . . . . . . . 12
Original Issue Discount Security . . . . . . . . . . . . . . . . 12
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Periodic Offering . . . . . . . . . . . . . . . . . . . . . . . 13
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 13
principal . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
principal amount . . . . . . . . . . . . . . . . . . . . . . . . 13
record date . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 13
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . 13
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . 13
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 14
Significant Subsidiary . . . . . . . . . . . . . . . . . . . . . 14
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . 14
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . 14
U.S. Government Obligations . . . . . . . . . . . . . . . . . . 14
vice president . . . . . . . . . . . . . . . . . . . . . . . . . 15
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE TWO
SECURITIES . . . . . . . . . . . . . . 15
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . 15
SECTION 2.2 Form of Trustee's Certificate of Authentication . . 15
SECTION 2.3 Amount Unlimited Issuable in Series . . . . . . . . 16
SECTION 2.4 Authentication and Delivery of Securities . . . . . 18
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . . 21
SECTION 2.6 Certificate of Authentication . . . . . . . . . . . 22
SECTION 2.7 Denomination and Date of Securities; Payments
of Interest . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.8 Registration, Transfer and Exchange . . . . . . . . 23
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.10 Cancellation of Securities; Disposition
Thereof . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . 26
SECTION 2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . 26
ARTICLE THREE
COVENANTS OF THE ISSUER . . . . . . . . . . . 27
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . 27
SECTION 3.2 Offices for Notices and Payments, etc . . . . . . . 27
SECTION 3.3 No Interest Extension . . . . . . . . . . . . . . . 27
SECTION 3.4 Appointments to Fill Vacancies in Trustee's
Office . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.5 Provision as to Paying Agent . . . . . . . . . . . 27
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE . . . . . . . . . . . 28
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders . . . . . . . . 28
SECTION 4.2 Preservation and Disclosure of Securityholders
Lists . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.3 Reports by the Issuer . . . . . . . . . . . . . . . 30
SECTION 4.4 Reports by the Trustee . . . . . . . . . . . . . . 30
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT . . . . . . . . . . . . 31
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . 31
SECTION 5.2 Payment of Securities on Default; Suit Therefor . . 33
SECTION 5.3 Application of Moneys Collected by Trustee . . . . 35
SECTION 5.4 Proceedings by Securityholders . . . . . . . . . . 36
SECTION 5.5 Proceedings by Trustee . . . . . . . . . . . . . . 36
SECTION 5.6 Remedies Cumulative and Continuing . . . . . . . . 36
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by
Majority of Securityholders . . . . . . . . . . . . . 37
SECTION 5.8 Notice of Defaults . . . . . . . . . . . . . . . . 37
SECTION 5.9 Undertaking to Pay Costs . . . . . . . . . . . . . 37
ARTICLE SIX
CONCERNING THE TRUSTEE . . . . . . . . . . . 38
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default . . . . . . . . . . . 38
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . . 39
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of
Proceeds Thereof . . . . . . . . . . . . . . . . . . . 40
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc . . . . . . . . . . . . . . . . . . . 40
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . 40
SECTION 6.6 Compensation and Indemnification of Trustee and
Its Prior Claim . . . . . . . . . . . . . . . . . . . 41
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc . . . . . . . . . . . . . . . . . . . 41
SECTION 6.8 Qualification of Trustee; Conflicting Interests . . 41
SECTION 6.9 Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series . . . . . . . 42
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee . . . . . . . . . . . . . . . . . . 42
SECTION 6.11 Acceptance of Appointment by Successor Trustee . . 44
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . . . . 44
SECTION 6.13 Preferential Collection of Claims Against the
Issuer . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . 45
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS . . . . . . . . . 46
SECTION 7.1 Evidence of Action Taken by Securityholders . . . . 46
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities . . . . . . . . . . . . . . . . 46
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . . 47
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.5 Right of Revocation of Action Taken . . . . . . . . 47
SECTION 7.6 Record Date for Consents and Waivers . . . . . . . 48
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES . . . . . . . . . . . 48
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders . . . . . . . . . . . . . . . . . . . 48
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders . . . . . . . . . . . . . . . . . . . 50
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . 51
SECTION 8.4 Documents to Be Given to Trustee . . . . . . . . . 51
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures . . . . . . . . . . . . . . . 52
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION 52
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms . . 52
SECTION 9.2 Successor Corporation to be Substituted . . . . . . 52
SECTION 9.3 Opinion of Counsel to be Given Trustee . . . . . . 53
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS . . . . . . . 53
SECTION 10.1 Satisfaction and Discharge of Indenture . . . . . 53
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities . . . . . . . . . . . . . . . . 56
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . . 56
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years . . . . . . . . . . . . 56
SECTION 10.5 Indemnity for U.S. Government Obligations . . . . 56
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS . . . . . . . . . . 57
SECTION 11.1 Partners, Incorporators, Stockholders,
Officers and Directors of Issuer Exempt from
Individual Liability . . . . . . . . . . . . . . . . . 57
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities . . . . . . . . . 57
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Holders of Securities . . . . . . . . . . . . . . . . 57
SECTION 11.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein . . . . . 58
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939 . . . . . . . . . . . . . 59
SECTION 11.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . 59
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . . 59
SECTION 11.10 Effect of Headings . . . . . . . . . . . . . . . 59
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS . . . . . . 59
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . 59
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . 59
SECTION 12.3 Payment of Securities Called for Redemption . . . 61
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption . . . . . . . 61
SECTION 12.5 Mandatory and Optional Sinking Funds . . . . . . . 62
ARTICLE THIRTEEN
SUBORDINATION . . . . . . . . . . . . . 64
SECTION 13.1 Securities Subordinated to Senior Indebtedness . . 64
SECTION 13.2 Reliance on Certificate of Liquidating Agent;
Further Evidence as to Ownership of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 67
SECTION 13.3 Payment Permitted If No Default . . . . . . . . . 67
SECTION 13.4 Disputes with Holders of Certain Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 67
SECTION 13.5 Trustee Not Charged with Knowledge of
Prohibition . . . . . . . . . . . . . . . . . . . . . 68
SECTION 13.6 Trustee to Effectuate Subordination . . . . . . . 68
SECTION 13.7 Rights of Trustee as Holder of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 68
SECTION 13.8 Article Applicable to Paying Agents . . . . . . . 68
SECTION 13.9 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 69
SECTION 13.10 Trustee Not Fiduciary for Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE FOURTEEN
SUBORDINATED GUARANTEE . . . . . . . . . . . 69
SECTION 14.1 Guarantee . . . . . . . . . . . . . . . . . . . . 69
SECTION 14.2 Guarantee Subordinated to Senior Debt of the
Guarantor . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 14.3 Guarantor Not to Make Payments With Respect to
Securities in Certain Circumstances . . . . . . . . . 72
SECTION 14.4 Guarantee Subordinated to Prior Payment of All
Senior Debt of the Guarantor on Dissolution,
Winding Up, Liquidation or Reorganization of the
Guarantor . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 14.5 Holders to be Subrogated to Rights of Holders
of Senior Debt of the Guarantor . . . . . . . . . . . 76
SECTION 14.6 Obligations of the Guarantor Unconditional . . . . 76
SECTION 14.7 Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice . . . . . . . . . . . 77
SECTION 14.8 Application by Trustee of Monies Deposited
with It . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 14.9 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantor or Holders of Senior
Debt of the Guarantor . . . . . . . . . . . . . . . . 78
SECTION 14.10 Holders Authorize Trustee to Effectuate
Subordination of Securities . . . . . . . . . . . . . 78
SECTION 14.11 Right of Trustee to Hold Senior Debt of the
Guarantor . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 14.12 Trustee Not Fiduciary for Holders of Senior
Debt of the Guarantor . . . . . . . . . . . . . . . . 79
SECTION 14.13 Article 14 Not To Prevent Events of Default . . . 79
SECTION 14.14 Execution and Delivery of Guarantee . . . . . . . 79
SECTION 14.15 Subordination of Indebtedness Owed by the
Company to the Guarantor . . . . . . . . . . . . . . . 79
SECTION 14.16 Officers' Certificate . . . . . . . . . . . . . . 80
FORM OF SUBORDINATED INDENTURE
FORM OF SUBORDINATED INDENTURE, dated as of
___________________ between K. Hovnanian Enterprises, Inc., a New Jersey
corporation (the "Issuer"), and _______________________, a
_____________________________ , as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issuance from
time to time of its unsecured subordinated debentures, notes or other
evidences of indebtedness to be issued in one or more series (the
"Securities") up to such principal amount or amounts as may from time to time
be authorized in accordance with the terms of this Indenture; and
WHEREAS, the Issuer has duly authorized the execution and
delivery of this Indenture to provide, among other things, for the
authentication, delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a
valid indenture and agreement according to its terms have been undertaken and
completed;
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Securities by the Holders (as hereinafter defined) thereof, the Issuer and
the Trustee mutually covenant and agree for the equal and proportionate
benefit of the respective Holders from time to time of the Securities as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 For all purposes of this Indenture and of any
indenture supplemental hereto the following terms shall have the respective
meanings specified in this Section 1.1 (except as otherwise expressly
provided herein or in any indenture supplemental hereto or unless the context
otherwise clearly requires). All other terms used in this Indenture that are
defined in the Trust Indenture Act of 1939, including terms defined therein
by reference to the Securities Act of 1933, as amended (the "Securities
Act"), shall have the meanings assigned to such terms in said Trust Indenture
Act of 1939 and in said Securities Act as in force at the date of this
Indenture (except as otherwise expressly provided herein or in any indenture
supplemental hereto or unless the context otherwise clearly requires).
All accounting terms used herein and not expressly defined
shall have the meanings assigned to such terms in accordance with generally
accepted accounting principles, and the term "generally accepted accounting
principles" means such accounting principles as are generally accepted on the
date of this Indenture.
The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision. The expressions "date of
this Indenture", "date hereof", "date as of which this Indenture is dated"
and "date of execution and delivery of this Indenture" and other expressions
of similar import refer to the effective date of the original execution and
delivery of this Indenture, viz. as of _____________________.
The terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" shall have the meaning set forth in
Section 6.14.
"Bankruptcy Code" means the United States Bankruptcy Code,
11 United Stated Code Sections 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of
the Issuer or any committee of such Board duly authorized to act on its
behalf.
"Board Resolution" means one or more resolutions, certified
by the secretary or an assistant secretary of the Issuer to have been duly
adopted or consented to by the Board of Directors and to be in full force and
effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, unless
otherwise specified in a Board Resolution and an Officers' Certificate with
respect to a particular series of Securities, a day that (a) in the Place of
Payment (or in any of the Places of Payment, if more than one) in which
amounts are payable, as specified in the form of such Security, and (b) in
the city in which the Corporate Trust Office is located, is not a day on
which banking institutions are authorized or required by law or regulation to
close.
"Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Securities Exchange Act
of 1934, as amended, or, if at any time after the execution and delivery of
this Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act of 1939, then the body
performing such duties on such date.
"Consolidated Net Tangible Assets" means the aggregate
amount of assets included on the most recent consolidated balance sheet of
the Issuer and its Restricted Subsidiaries, less applicable reserves and
other properly deductible items and after deducting therefrom (a) all current
liabilities and (b) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all in
accordance with generally accepted accounting principles consistently
applied.
"Corporate Trust Office" means the office of the Trustee of
a series of Securities at which the trust created by this Indenture shall, at
any particular time, be principally administered, which office is, at the
date as of which this Indenture is dated, located at [address].
"Depositary" means, with respect to the Securities of any
series issuable or issued in the form of one or more Global Securities, the
Person designated as Depositary by the Issuer pursuant to Section 2.3 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or
include each Person who is then a Depositary hereunder, and, if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with respect to the
Global Securities of such series.
"Dollars" and the sign "$" means the coin and currency of
the United States of America as at the time of payment is legal tender for
the payment of public and private debts.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Event of Default" means any event or condition specified
as such in Section 5.1.
"Global Security" means a Security evidencing all or a part
of a series of Securities issued to the Depositary for such series in
accordance with Section 2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other
similar terms mean, in the case of any Security, the Person in whose name
such Security is registered in the security register kept by the Issuer for
that purpose in accordance with the terms hereof.
"Indebtedness" with respect to any Person, means, without
duplication:
(a) (i) the principal of and premium, if any, and
interest, if any, on indebtedness for money borrowed of
such Person, indebtedness of such Person evidenced by
bonds, notes, debentures or similar obligations, and any
guaranty by such Person of any indebtedness for money
borrowed or indebtedness evidenced by bonds, notes,
debentures or similar obligations of any other Person,
whether any such indebtedness or guaranty is outstanding on
the date of this Indenture or is thereafter created,
assumed or incurred, (ii) obligations of such Person for
the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction; (iii)
the principal of and premium, if any, and interest, if any,
on indebtedness incurred, assumed or guaranteed by such
Person in connection with the acquisition by it or any of
its subsidiaries of any other businesses, properties or
other assets; (iv) lease obligations which such Person
capitalized in accordance with Statement of Financial
Accounting Standards No. 13 promulgated by the Financial
Accounting Standards Board or such other generally accepted
accounting principles as may be from time to time in
effect; (v) any indebtedness of such Person representing
the balance deferred and unpaid of the purchase price of
any property or interest therein (except any such balance
that constitutes an accrued expense or trade payable) and
any guaranty, endorsement or other contingent obligation of
such Person in respect of any indebtedness of another that
is outstanding on the date of this Indenture or is
thereafter created, assumed or incurred by such Person; and
(vi) obligations of such Person under interest rate,
commodity or currency swaps, caps, collars, options and
similar arrangements; and
(b) any amendments, modifications, refundings, renewals or
extensions of any indebtedness or obligation described as
Indebtedness in clause (a) above.
"Indenture" means this instrument as originally executed
and delivered or, if amended or supplemented as herein provided, as so
amended or supplemented or both, including, for all purposes of this
instrument and any such supplement, the provisions of the Trust Indenture Act
of 1939 that are deemed to be a part of and govern this instrument and any
such supplement, respectively, and shall include the forms and terms of
particular series of Securities established as contemplated hereunder.
"interest" means, when used with respect to non-interest
bearing Securities (including, without limitation, any Original Issue
Discount Security that by its terms bears interest only after maturity or
upon default in any other payment due on such Security), interest payable
after maturity (whether at stated maturity, upon acceleration or redemption
or otherwise) or after the date, if any, on which the Issuer becomes
obligated to acquire a Security, whether upon conversion, by purchase or
otherwise.
"Issuer" means K. Hovnanian Enterprises, Inc., a New Jersey
corporation, and, subject to Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request or order
of the Issuer which is signed in its name by the chairman of the Board of
Directors, the president or any vice president of the Issuer, and delivered
to the Trustee.
"Officers' Certificate", when used with respect to the
Issuer, means a certificate signed by the chairman of the Board of Directors,
the president, or any vice president and by the treasurer, any assistant
treasurer, the controller, any assistant controller, the secretary or any
assistant secretary of the Issuer. Each such certificate shall include the
statements provided for in Section 11.5 if and to the extent required by the
provisions of such Section 11.5. One of the officers signing an Officers'
Certificate given pursuant to Section 4.3 shall be the principal executive,
financial or accounting officer of the Issuer.
"Opinion of Counsel" means an opinion in writing signed by
the chief counsel of the Issuer or by such other legal counsel who may be an
employee of or counsel to the Issuer and who shall be reasonably satisfactory
to the Trustee. Each such opinion shall include the statements provided for
in Section 11.5, if and to the extent required by the provisions of such
Section 11.5.
"original issue date" of any Security (or portion thereof)
means the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
"original issue discount" of any debt security, including
any Original Issue Discount Security, means the difference between the
principal amount of such debt security and the initial issue price of such
debt security (as set forth in the case of an Original Issue Discount
Security on the face of such Security).
"Original Issue Discount Security" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant
to Article Five.
"Outstanding" when used with reference to Securities,
shall, subject to the provisions of Section 7.4, mean, as of any particular
time, all Securities authenticated and delivered by the Trustee under this
Indenture, except:
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities (other than Securities of any series as to
which the provisions of Article Ten hereof shall not be applicable),
or portions thereof, for the payment or redemption of which moneys or
U.S. Government Obligations (as provided for in Section 10.1) in the
necessary amount shall have been deposited in trust with the Trustee
or with any paying agent (other than the Issuer) or shall have been
set aside, segregated and held in trust by the Issuer for the Holders
of such Securities (if the Issuer shall act as its own paying agent),
provided that, if such Securities, or portions thereof, are to be
redeemed prior to the maturity thereof, notice of such redemption
shall have been given as herein provided, or provision satisfactory
to the Trustee shall have been made for giving such notice; and
(c) Securities which shall have been paid or in
substitution for which other Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.9 (except with
respect to any such Security as to which proof satisfactory to the
Trustee is presented that such Security is held by a Person in whose
hands such Security is a legal, valid and binding obligation of the
Issuer).
In determining whether the Holders of the requisite
aggregate principal amount of Outstanding Securities of any or all series
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding for such purposes shall be the portion
of the principal amount thereof that would be due and payable as of the date
of such determination (as certified by the Issuer to the Trustee) upon a
declaration of acceleration of the maturity thereof pursuant to Article Five.
"Periodic Offering" means an offering of Securities of a
series from time to time, the specific terms of which Securities, including,
without limitation, the rate or rates of interest, if any, thereon, the
stated maturity or maturities thereof and the redemption provisions, if any,
with respect thereto, are to be determined by the Issuer or its agents upon
the issuance of such Securities.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint stock
company, trust, estate, unincorporated organization or government or any
agency or political subdivision thereof.
"Place of Payment", when used with respect to the
Securities of any series, means the place or places where the principal of
and interest, if any, on the Securities of such series are payable as
determined in accordance with Section 2.3.
"principal" of a debt security, including any Security,
means the amount (including, without limitation, if and to the extent
applicable, any premium and, in the case of an Original Issue Discount
Security, any accrued original issue discount, but excluding interest) that
is payable with respect to such debt security as of any date and for any
purpose (including, without limitation, in connection with any sinking fund,
if any, upon any redemption at the option of the Issuer, upon any purchase or
exchange at the option of the Issuer or the holder of such debt security and
upon any acceleration of the maturity of such debt security).
"principal amount" of a debt security, including any
Security, means the principal amount as set forth on the face of such debt
security.
"record date" shall have the meaning set forth in Section
2.7.
"Responsible Officer", when used with respect to the
Trustee of a series of Securities, means any officer of the Trustee with
direct responsibility for the administration of the trust created by this
Indenture.
"Restricted Subsidiary" means (a) any Subsidiary of the
Issuer other than an Unrestricted Subsidiary, and (b) any Subsidiary of the
Issuer which was an Unrestricted Subsidiary but which, subsequent to the date
hereof, is designated by the Issuer (by Board Resolution) to be a Restricted
Subsidiary; provided, however, that the Issuer may not designate any such
Subsidiary to be a Restricted Subsidiary if the Issuer would thereby breach
any covenant or agreement herein contained (on the assumptions that any
outstanding Indebtedness of such Subsidiary was incurred at the time of such
designation).
"Securities Act" shall have the meaning set forth in
Section 1.1.
"Security" or "Securities" has the meaning stated in the
first recital of this Indenture or, as the case may be, Securities that have
been authenticated and delivered pursuant to this Indenture.
"Senior Indebtedness" means Indebtedness of the Issuer
outstanding at any time (other than the Indebtedness evidenced by the
Securities of any series) except (a) any Indebtedness as to which, by the
terms of the instrument creating or evidencing such Indebtedness, it is
provided that such Indebtedness is not senior or prior in right of payment to
the Securities or is pari passu or subordinate by its terms in right of
payment to the Securities, (b) renewals, extensions and modifications of any
such Indebtedness, (c) any Indebtedness of the Issuer to a wholly-owned
Subsidiary of the Issuer, (d) interest accruing after the filing of a
petition initiating any proceeding referred to in Sections 5.1(e) and 5.1(f)
unless such interest is an allowed claim enforceable against the Issuer in a
proceeding under federal or state bankruptcy laws and (e) trade payables.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" of the Issuer within the meaning of Rule 1.02(w) of
Regulation S-X promulgated by the Commission as in effect on the date of this
Indenture.
"Subsidiary" of any specified Person means any corporation
of which such Person, or such Person and one or more Subsidiaries of such
Person, or any one or more Subsidiaries of such Person, directly or
indirectly own voting securities entitling any one or more of such Persons
and its Subsidiaries to elect a majority of the directors, either at all
times or, so long as there is no default or contingency which permits the
holders of any other class or classes of securities to vote for the election
of one or more directors.
"Trust Indenture Act of 1939" (except as otherwise provided
in Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which
this Indenture is originally executed.
"Trustee" means the Person identified as "Trustee" in the
first paragraph hereof and, subject to the provisions of Article Six, shall
also include any successor trustee. "Trustee" shall also mean or include
each Person who is then a trustee hereunder and, if at any time there is more
than one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of such series.
"Unrestricted Subsidiary" means (a) any Subsidiary of the
Issuer acquired or organized after the date hereof, provided, however, that
such Subsidiary of the Issuer shall not be a successor, directly or
indirectly, to any Restricted Subsidiary, and (b) any Subsidiary of the
Issuer substantially all the assets of which consist of stock or other
securities of a Subsidiary or Subsidiaries of the Issuer of the character
described in clause (a) of this paragraph, unless and until such Subsidiary
shall have been designated to be a Restricted Subsidiary pursuant to clause
(b) of the definition of "Restricted Subsidiary".
"U.S. Government Obligations" shall have the meaning set
forth in Section 10.1(B).
"vice president," when used with respect to the Issuer or
the Trustee, means any vice president, regardless of whether designated by a
number or a word or words added before or after the title "vice president."
"Yield to Maturity" means the yield to maturity on a series
of Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series,
and calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each
series shall be substantially in such form (not inconsistent with this
Indenture) as shall be established by or pursuant to one or more Board
Resolutions (as set forth in a Board Resolution or, to the extent established
pursuant to rather than set forth in a Board Resolution, an Officers'
Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have imprinted or otherwise reproduced thereon such
legend or legends or endorsements, not inconsistent with the provisions of
this Indenture, as may be required to comply with any law or with any rules
or regulations pursuant thereto, or with any rules of any securities exchange
or to conform to general usage, all as may be determined by the officers
executing such Securities, as evidenced by their execution of such
Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities as evidenced by
their execution of such Securities.
SECTION 2.2 Form of Trustee's Certificate of
Authentication. The Trustee's certificate of authentication on all
Securities shall be substantially as follows:
This is one of the Securities of the series designated
herein referred to in the within mentioned Indenture.
________________________, as Trustee
By_______________________________
Authorized Signatory
If at any time there shall be an Authenticating Agent
appointed with respect to any series of Securities, then the Securities of
such series shall bear, in addition to the Trustee's certificate of
authentication, an alternate Certificate of Authentication which shall be
substantially as follows:
This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.
________________________, as Trustee
By________________________________
as Authenticating Agent
By________________________________
Authorized Signatory
SECTION 2.3 Amount Unlimited Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series and the
Securities of each such series shall rank equally and pari passu with the
Securities of each other series, but all Securities issued hereunder shall be
subordinate and junior in right of payment, to the extent and in the manner
set forth in Article Thirteen, to all Senior Indebtedness of the Issuer.
There shall be established in or pursuant to one or more Board Resolutions
(and, to the extent established pursuant to rather than set forth in a Board
Resolution, in an Officers' Certificate detailing such establishment) or
established in one or more indentures supplemental hereto, prior to the
initial issuance of Securities of any series:
(1) the designation of the Securities of the series, which
shall distinguish the Securities of such series from the Securities
of all other series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 2.8, 2.9,
2.11, 8.5 or 12.3);
(3) the date or dates on which the principal of the
Securities of the series is payable;
(4) the rate or rates at which the Securities of the
series shall bear interest, if any, the date or dates from which any
such interest shall accrue, on which any such interest shall be
payable and on which a record shall be taken for the determination of
Holders to whom any such interest is payable or the method by which
such rate or rates or date or dates shall be determined or both;
(5) the place or places where and the manner in which the
principal of, premium, if any, and interest, if any, on Securities of
the series shall be payable (if other than as provided in Section
3.2) and the office or agency for the Securities of the series
maintained by the Issuer pursuant to Section 3.2;
(6) the right, if any, of the Issuer to redeem, purchase
or repay Securities of the series, in whole or in part, at its option
and the period or periods within which, the price or prices (or the
method by which such price or prices shall be determined or both) at
which, the form or method of payment therefor if other than in cash
and any terms and conditions upon which and the manner in which (if
different from the provisions of Article Twelve) Securities of the
series may be so redeemed, purchased or repaid, in whole or in part
pursuant to any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem,
purchase or repay Securities of the series in whole or in part
pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which the price or prices (or the method by which such
price or prices shall be determined or both) at which, the form or
method of payment therefor if other than in cash and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(9) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon acceleration of the maturity thereof;
(10) whether Securities of the series will be issuable as
Global Securities;
(11) if the Securities of such series are to be issuable
in definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(12) any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars or any other agents with
respect to the Securities of such series;
(13) any deleted, modified or additional events of default
or remedies or any deleted, modified or additional covenants with
respect to the Securities of such series;
(14) whether the provisions of Section 10.1(C) will be
applicable to Securities of such series;
(15) any provision relating to the issuance of Securities
of such series at an original issue discount (including, without
limitation, the issue price thereof, the rate or rates at which such
original issue discount shall accrete, if any, and the date or dates
from or to which or period or periods during which such original
issue discount shall accrete at such rate or rates);
(16) if other than Dollars, the foreign currency in which
payment of the principal of, premium, if any, and interest, if any,
on the Securities of such series shall be payable;
(17) if other than ____________________________ is to act
as Trustee for the Securities of such series, the name and Corporate
Trust Office of such Trustee;
(18) if the amounts of payments of principal of, premium,
if any, and interest, if any, on the Securities of such series are to
be determined with reference to an index, the manner in which such
amounts shall be determined;
(19) the terms for conversion or exchange, if any, with
respect to the Securities of such series; and
(20) any other terms of the series.
All Securities of any one series shall be substantially
identical, except as to denomination and except as may otherwise be provided
by or pursuant to the Board Resolution or Officers' Certificate referred to
above or as set forth in any such indenture supplemental hereto. All
Securities of any one series need not be issued at the same time and may be
issued from time to time, consistent with the terms of this Indenture, if so
provided by or pursuant to such Board Resolution, such Officers' Certificate
or in any such indenture supplemental hereto.
Any such Board Resolution or Officers' Certificate referred
to above with respect to Securities of any series filed with the Trustee on
or before the initial issuance of the Securities of such series shall be
incorporated herein by reference with respect to Securities of such series
and shall thereafter be deemed to be a part of the Indenture for all purposes
relating to Securities of such series as fully as if such Board Resolution or
Officers' Certificate were set forth herein in full.
SECTION 2.4 Authentication and Delivery of Securities.
The Issuer may deliver Securities of any series executed by the Issuer to the
Trustee for authentication together with the applicable documents referred to
below in this Section 2.4, and the Trustee shall thereupon authenticate and
deliver such Securities to, or upon the order of the Issuer (contained in the
Issuer Order referred to below in this Section 2.4) or pursuant to such
procedures acceptable to the Trustee and to such recipients as may be
specified from time to time by an Issuer Order. The maturity date, original
issue date, interest rate, if any, and any other terms of the Securities of
such series shall be determined by or pursuant to such Issuer Order and
procedures. If provided for in such procedures and agreed to by the Trustee,
such Issuer Order may authorize authentication and delivery pursuant to oral
instructions from the Issuer or its duly authorized agent, which instructions
shall be promptly confirmed in writing. In authenticating the Securities of
such series and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive (in the case of subparagraphs (2), (3) and (4) below only at or
before the time of the first request of the Issuer to the Trustee to
authenticate Securities of such series) and (subject to Section 6.1) shall be
fully protected in relying upon, unless and until such documents have been
superseded or revoked:
(1) an Issuer Order requesting such authentication and
setting forth delivery instructions provided that, with respect to
Securities of a series subject to a Periodic Offering, (a) such
Issuer Order may be delivered by the Issuer to the Trustee prior to
the delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities
of such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or pursuant
to procedures acceptable to the Trustee as may be specified from time
to time by an Issuer Order, (c) the maturity date or dates, original
issue date or dates, interest rate or rates, if any, and any other
terms of Securities of such series shall be determined by an Issuer
Order or pursuant to such procedures, (d) if provided for in such
procedures, such Issuer Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Issuer
or its duly authorized agent or agents, which oral instructions shall
be promptly confirmed in writing and (e) after the original issuance
of the first Security of such series to be issued, any separate
request by the Issuer that the Trustee authenticate Securities of
such series for original issuance will be deemed to be a
certification by the Issuer that it is in compliance with all
conditions precedent provided for in this Indenture relating to the
authentication and delivery of such Securities;
(2) the Board Resolution, Officers' Certificate or
executed supplemental indenture referred to in Sections 2.1 and 2.3
by or pursuant to which the forms and terms of the Securities of such
series were established;
(3) an Officers' Certificate setting forth the form or
forms and terms of the Securities stating that the form or forms and
terms of the Securities have been established pursuant to Sections
2.1 and 2.3 and comply with this Indenture and covering such other
matters as the Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion of
Counsel, or a letter from legal counsel addressed to the Trustee
permitting it to rely on an Opinion of Counsel, substantially to the
effect that:
(a) the form or forms of the Securities of such series
have been duly authorized and established in conformity
with the provisions of this Indenture;
(b) in the case of an underwritten offering, the terms
of the Securities of such series have been duly authorized
and established in conformity with the provisions of this
Indenture, and, in the case of an offering that is not
underwritten, certain terms of the Securities of such
series have been established pursuant to a Board
Resolution, an Officers' Certificate or a supplemental
indenture in accordance with this Indenture, and when such
other terms as are to be established pursuant to procedures
set forth in an Issuer Order shall have been established,
all such terms will have been duly authorized by the Issuer
and will have been established in conformity with the
provisions of this Indenture;
(c) when the Securities of such series have been
executed by the Issuer and the Securities of such series
have been authenticated by the Trustee in accordance with
the provisions of this Indenture and delivered to and duly
paid for by the purchasers thereof, they will have been
duly issued under this Indenture and will be valid and
legally binding obligations of the Issuer, enforceable in
accordance with their respective terms, and will be
entitled to the benefits of this Indenture; and
(d) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, the
Securities of such series will not contravene any provision
of applicable law or the articles of incorporation or
bylaws of the Issuer or any agreement or other instrument
binding upon the Issuer or any of its Subsidiaries that is
material to the Issuer and its Subsidiaries, considered as
one enterprise, or, to such counsel's knowledge after the
inquiry indicated therein (which shall be reasonable), any
judgment, order or decree of any governmental agency or any
court having jurisdiction over the Issuer or any Subsidiary
of the Issuer, and no consent, approval or authorization of
any governmental body or agency is required for the
performance by the Issuer of its obligations under the
Securities, except such as are specified and have been
obtained and such as may be required by the securities or
blue sky laws of the various states in connection with the
offer and sale of the Securities.
In addition, if the authentication and delivery relates to
a new series of Securities created by an indenture supplemental hereto, such
Opinion of Counsel shall also state that all laws and requirements with
respect to the form and execution by the Issuer of the supplemental indenture
with respect to the series of Securities have been complied with, the Issuer
has corporate power to execute and deliver any such supplemental indenture
and has taken all necessary corporate action for those purposes and any such
supplemental indenture has been executed and delivered and constitutes the
legal, valid and binding obligation of the Issuer enforceable in accordance
with its terms.
In rendering such opinions, such counsel may qualify any
opinions as to enforceability by stating that such enforceability may be
limited by bankruptcy, insolvency, reorganization, liquidation, moratorium
and other similar laws affecting the rights and remedies of creditors and is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Such
counsel may rely, as to all matters governed by the laws of jurisdictions
other than the State of New Jersey and the federal law of the United States,
upon opinions of other counsel (copies of which shall be delivered to the
Trustee), who shall be counsel reasonably satisfactory to the Trustee, in
which case the opinion shall state that such counsel believes that both such
counsel and the Trustee are entitled so to rely. Such counsel may also state
that, insofar as such opinion involves factual matters, such counsel has
relied, to the extent such counsel deems proper, upon certificates of
officers of the Issuer and its Subsidiaries and certificates of public
officials.
The Trustee shall have the right to decline to authenticate
and deliver any Securities of any series under this Section 2.4 if the
Trustee, being advised by counsel, determines that such action may not
lawfully be taken by the Issuer, or if the Trustee in good faith by its board
of directors or board of trustees, executive committee or a trust committee
of directors or trustees or Responsible Officers shall determine that such
action would expose the Trustee to personal liability to existing Holders or
would adversely affect the Trustee's own rights, duties or immunities under
the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that
the Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section 2.4 and the Issuer Order with respect to such
series, authenticate and deliver one or more Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate
principal amount of all of the Securities of such series to be issued in the
form of Global Securities and not yet cancelled, (ii) shall be registered in
the name of the Depositary for such Global Security or Securities or the
nominee of such Depositary, (iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instructions, and (iv) shall bear
a legend substantially to the following effect: "Unless and until it is
exchanged in whole or in part for Securities in definitive registered form,
this Security may not be transferred except as a whole by the Depositary to
the nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3 must, at
the time of its designation and at all times while it serves as Depositary,
be a clearing agency registered under the Securities Exchange Act of 1934, as
amended, and any other applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall
be signed on behalf of the Issuer by the chairman of the Board of Directors,
the president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one
of its assistant secretaries. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the
Issuer may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Securities. Typographical
and other minor errors or defects in any such reproduction of a seal or any
such signature shall not affect the validity or enforceability of any
Security that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any
of the Securities shall cease to be such officer before the Security so
signed shall be authenticated and delivered by the Trustee or disposed of by
the Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Security had not ceased to
be such officer of the Issuer; and any Security may be signed on behalf of
the Issuer by such persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Issuer, although at the date of
the execution and delivery of this Indenture any such person was not such an
officer.
SECTION 2.6 Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication
substantially in the form hereinbefore recited, executed by the Trustee by
the manual signature of one of its authorized signatories, or its
Authenticating Agent, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. The execution of such certificate by
the Trustee or its Authenticating Agent upon any Security executed by the
Issuer shall be conclusive evidence that the Security so authenticated has
been duly authenticated and delivered hereunder and that the Holder is
entitled to the benefits of this Indenture. Each reference in this Indenture
to authentication by the Trustee includes authentication by an agent
appointed pursuant to Section 6.14.
SECTION 2.7 Denomination and Date of Securities; Payments
of Interest. The Securities of each series shall be issuable in registered
form in denominations established as contemplated by Section 2.3 or, with
respect to the Securities of any series, if not so established, in
denominations of $1,000 and any integral multiple thereof. The Securities of
each series shall be numbered, lettered or otherwise distinguished in such
manner or in accordance with such plan as the officers of the Issuer
executing the same may determine with the approval of the Trustee, as
evidenced by the execution and authentication thereof.
Each Security shall be dated the date of its
authentication. The Securities of each series shall bear interest, if any,
from the date, and such interest, if any, shall be payable on the dates,
established as contemplated by Section 2.3.
The Person in whose name any Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Security
subsequent to the record date and prior to such interest payment date, except
if and to the extent the Issuer shall default in the payment of the interest
due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the Persons in whose names Outstanding
Securities for such series are registered (a) at the close of business on a
subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice
given by mail by or on behalf of the Issuer to the Holders of Securities not
less than 15 days preceding such subsequent record date or (b) as determined
by such other procedure as is mutually acceptable to the Issuer and the
Trustee. The term "record date" as used with respect to any interest payment
date (except a date for payment of defaulted interest) for the Securities of
any series shall mean the date specified as such in the terms of the
Securities of such series established as contemplated by Section 2.3, or, if
no such date is so established, if such interest payment date is the first
day of a calendar month, the fifteenth day of the next preceding calendar
month or, if such interest payment date is the fifteenth day of a calendar
month, the first day of such calendar month, whether or not such record date
is a Business Day.
SECTION 2.8 Registration, Transfer and Exchange. The
Issuer will keep at each office or agency to be maintained for the purpose as
provided in Section 3.2 for each series of Securities a register or registers
in which, subject to such reasonable regulations as it may prescribe, it will
provide for the registration of Securities of each series and the
registration of transfer of Securities of such series. Each such register
shall be in written form in the English language or in any other form capable
of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for inspection and
available for copying by the Trustee.
Upon due presentation for registration of transfer of any
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Security or Securities of the same series, maturity date, interest rate,
if any, and original issue date in authorized denominations for a like
aggregate principal amount.
All Securities presented for registration of transfer shall
(if so required by the Issuer or the Trustee) be duly endorsed by, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the Holder or
his attorney duly authorized in writing.
At the option of the Holder thereof, Securities of any
series (other than a Global Security, except as set forth below) may be
exchanged for a Security or Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Securities to be exchanged at the agency of the Issuer that shall be
maintained for such purpose in accordance with Section 3.2.
The Issuer may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any registration of transfer of Securities. No service charge shall be made
for any such transaction or for any exchange of Securities of any series as
contemplated by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a
transfer of (a) any Securities of any series for a period of 15 days next
preceding the first mailing or publication of notice of redemption of
Securities of such series to be redeemed, (b) any Securities selected, called
or being called for redemption, in whole or in part, except, in the case of
any Security to be redeemed in part, the portion thereof not so to be
redeemed or (c) any Security if the Holder thereof has exercised his right,
if any, to require the Issuer to repurchase such Security in whole or in
part, except the portion of such Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8,
unless and until it is exchanged in whole or in part for Securities in
definitive registered form, a Global Security representing all or a part of
the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor Depositary for such
series or a nominee of such successor Depositary.
If at any time the Depositary for any Securities of a
series represented by one or more Global Securities notifies the Issuer that
it is unwilling or unable to continue as Depositary for such Securities or if
at any time the Depositary for such Securities shall no longer be eligible
under Section 2.4, the Issuer shall appoint a successor Depositary with
respect to such Securities. If a successor Depositary for such Securities is
not appointed by the Issuer within 90 days after the Issuer receives such
notice or becomes aware of such ineligibility, the Issuer's election pursuant
to Section 2.3 that such Securities be represented by one or more Global
Securities shall no longer be effective and the Issuer shall execute, and the
Trustee, upon receipt of an Issuer Order for the authentication and delivery
of definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount
of the Global Security or Securities representing such Securities in exchange
for such Global Security or Securities.
The Issuer may at any time and in its sole discretion
determine that the Securities of any series issued in the form of one or more
Global Securities shall no longer be represented by a Global Security or
Securities. In such event, the Issuer shall execute, and the Trustee, upon
receipt of an Issuer Order for the authentication and delivery of definitive
Securities of such series, shall authenticate and deliver, Securities of such
series in definitive registered form, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such Securities, in exchange for such
Global Security or Securities.
If specified by the Issuer pursuant to Section 2.3 with
respect to Securities represented by a Global Security, the Depositary for
such Global Security may surrender such Global Security in exchange in whole
or in part for Securities of the same series in definitive registered form on
such terms as are acceptable to the Issuer and such Depositary. Thereupon,
the Issuer shall execute, and the Trustee shall authenticate and deliver,
without service charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of a Global Security for Securities in
definitive registered form in authorized denominations, such Global Security
shall be cancelled by the Trustee or an agent of the Trustee. Securities in
definitive registered form issued in exchange for a Global Security pursuant
to this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Trustee or the Issuer or an agent of
the Issuer. The Trustee or such agent shall deliver at its office such
Securities to or as directed by the Persons in whose names such Securities
are so registered.
All Securities issued upon any registration of transfer or
exchange of Securities shall be valid and legally binding obligations of the
Issuer, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Securities surrendered upon such registration of
transfer or exchange.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of the Issuer, the
Trustee shall authenticate and deliver a new Security of the same series,
maturity date, interest rate, if any, and original issue date, bearing a
number or other distinguishing symbol not contemporaneously outstanding, in
exchange and substitution for the mutilated or defaced Security, or in lieu
of and in substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substitute Security shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as may be required by the Trustee or the Issuer or any
such agent to indemnify and defend and to save each of the Trustee and the
Issuer and any such agent harmless and, in every case of destruction, loss or
theft, evidence to their satisfaction of the destruction, loss or theft of
such Security and of the ownership thereof and in the case of mutilation or
defacement, shall surrender the Security to the Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or its agent)
connected therewith. In case any Security which has matured or is about to
mature or has been called for redemption in full shall become mutilated or
defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a
substitute Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated or defaced Security), if
the applicant for such payment shall furnish to the Issuer and to the Trustee
and any agent of the Issuer or the Trustee such security or indemnity as any
of them may require to hold each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Issuer
and the Trustee and any agent of the Issuer or the Trustee evidence to the
Trustee's satisfaction of the destruction, loss or theft of such Security and
of the ownership thereof.
Every substitute Security of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such Security
is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights
set forth in) this Indenture equally and proportionately with any and all
other Securities of such series duly authenticated and delivered hereunder.
All Securities shall be held and owned upon the express condition that, to
the extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, destroyed, lost
or stolen Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Disposition
Thereof. All Securities surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a
sinking or analogous fund, if surrendered to the Issuer or any agent of the
Issuer or the Trustee or any agent of the Trustee, shall be delivered to the
Trustee or its agent for cancellation or, if surrendered to the Trustee,
shall be cancelled by it; and no Securities shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture.
The Trustee shall dispose of all cancelled Securities in accordance with its
standard procedures and shall deliver a certificate of such disposition to
the Company. If the Issuer or its agent shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee or its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the
preparation of definitive Securities for any series, the Issuer may execute
and the Trustee shall authenticate and deliver temporary Securities for such
series (printed, lithographed, typewritten or otherwise reproduced, in each
case in form satisfactory to the Trustee). Temporary Securities of any
series shall be issuable in any authorized denomination, and substantially in
the form of the definitive Securities of such series but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all
as may be determined by the Issuer with the concurrence of the Trustee as
evidenced by the execution and authentication thereof. Temporary Securities
may contain such references to any provisions of this Indenture as may be
appropriate. Every temporary Security shall be executed by the Issuer and be
authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive
Securities of such series and thereupon temporary Securities of such series
may be surrendered in exchange therefor without charge at each office or
agency to be maintained by the Issuer for that purpose pursuant to Section
3.2 and the Trustee shall authenticate and deliver in exchange for such
temporary Securities of such series an equal aggregate principal amount of
definitive Securities of the same series having authorized denominations.
Until so exchanged, the temporary Securities of any series shall be entitled
to the same benefits under this Indenture as definitive Securities of such
series, unless otherwise established pursuant to Section 2.3.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the
Securities may use "CUSIP" numbers (if then generally in use), and, if so,
the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of, premium, if any, and interest, if any, on each of the
Securities at the place, at the respective times and in the manner provided
in the Securities.
SECTION 3.2 Offices for Notices and Payments, etc. So
long as any of the Securities are Outstanding, the Issuer will maintain in
each Place of Payment, an office or agency where the Securities may be
presented for payment, an office or agency where the Securities may be
presented for registration of transfer and for exchange as provided in this
Indenture, and an office or agency where notices and demands to or upon the
Issuer in respect of the Securities or of this Indenture may be served. In
case the Issuer shall at any time fail to maintain any such office or agency,
or shall fail to give notice to the Trustee of any change in the location
thereof, presentation may be made and notice and demand may be served in
respect of the Securities or of this Indenture at the Corporate Trust Office.
The Issuer hereby initially designates the Corporate Trust Office for each
such purpose and appoints the Trustee as registrar and paying agent and as
the agent upon whom notices and demands may be served with respect to the
Securities.
SECTION 3.3 No Interest Extension. In order to prevent
any accumulation of claims for interest after maturity thereof, the Issuer
will not directly or indirectly extend or consent to the extension of the
time for the payment of any claim for interest on any of the Securities and
will not directly or indirectly be a party to or approve any such arrangement
by the purchase or funding of said claims or in any other manner; provided,
however, that this Section 3.3 shall not apply in any case where an extension
shall be made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's
Office. The Issuer, whenever necessary to avoid or fill a vacancy in the
office of the Trustee, will appoint, in the manner provided in Section 6.10,
a Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 3.5 Provision as to Paying Agent. (a) If the
Issuer shall appoint a paying agent other than the Trustee, it will cause
such paying agent to execute and deliver to the Trustee an instrument in
which such paying agent shall agree with the Trustee, subject to the
provisions of this Section 3.5,
(1) that it will hold all sums held by it as such paying
agent for the payment of the principal of or interest, if any, on the
Securities (whether such sums have been paid to it by the Issuer or
by any other obligor on the Securities) in trust for the benefit of
the Holders of the Securities and the Trustee; and
(2) that it will give the Trustee notice of any failure by
the Issuer (or by any other obligor on the Securities) to make any
payment of the principal of, premium, if any, or interest, if any, on
the Securities when the same shall be due and payable; and
(3) that it will, at any time during the continuance of
any such failure, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such paying agent.
(b) If the Issuer shall act as its own paying agent, it
will, on or before each due date of the principal of or interest, if any, on
the Securities, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities a sum sufficient to pay such principal, premium, if
any, or interest, if any, so becoming due and will notify the Trustee of any
failure to take such action and of any failure by the Issuer (or by any other
obligor under the Securities) to make any payment of the principal of,
premium, if any, or interest, if any, on the Securities when the same shall
become due and payable.
(c) Anything in this Section 3.5 to the contrary
notwithstanding, the Issuer may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust by it, or any paying
agent hereunder, as required by this Section 3.5, such sums to be held by the
Trustee upon the trusts herein contained.
(d) Anything in this Section 3.5 to the contrary
notwithstanding, any agreement of the Trustee or any paying agent to hold
sums in trust as provided in this Section 3.5 is subject to Sections 10.3 and
10.4.
(e) Whenever the Issuer shall have one or more paying
agents, it will, on or before each due date of the principal of or interest,
if any, on any Securities, deposit with a paying agent a sum sufficient to
pay the principal, premium, if any, or interest, if any, so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium, if any, or interest, if any, and (unless such paying
agent is the Trustee) the Issuer will promptly notify the Trustee of its
action or failure so to act.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders. The Issuer and any other obligor on
the Securities covenant and agree that they will furnish or cause to be
furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders of the Securities of each
series:
(a) semiannually and not more than 15 days after each
January 1 and July 1, and
(b) at such other times as the Trustee may request in
writing, within 15 days after receipt by the Issuer of any such
request,
provided that if and so long as the Trustee shall be the registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders
Lists. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders of each series of Securities (i) contained in the most recent list
furnished to it as provided in Section 4.1, and (ii) received by it in the
capacity of registrar or paying agent for such series, if so acting. The
Trustee may destroy any list furnished to it as provided in Section 4.1 upon
receipt of a new list so furnished.
(b) In case three or more Holders of Securities
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of a particular series (in which
case the applicants must all hold Securities of such series) or with Holders
of all Securities with respect to their rights under this Indenture or under
such Securities and such application is accompanied by a copy of the form of
proxy or other communication which such applicants propose to transmit, then
the Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford to such applicants access to the
information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this
Section 4.2, or
(ii) inform such applicants as to the approximate
number of Holders of Securities of such series or of all
Securities, as the case may be, whose names and addresses
appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection
(a) of this Section 4.2, and as to the approximate cost of
mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants
access to such information, the Trustee shall, upon the written request of
such applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy
or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders
of Securities of such series or of all Securities, as the case may be, or
would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for
a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met, and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Securityholders
with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(c) Each and every Holder of Securities, by receiving and
holding the same, agrees with the Issuer and the Trustee that neither the
Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be
held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders of Securities in accordance with the
provisions of subsection (b) of this Section 4.2, regardless of the source
from which such information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant to a request made
under such subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to time
by rules and regulations prescribe), if any, which the Issuer may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Issuer is not required to file information,
documents or reports pursuant to either of such Sections, then to file with
the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a debt security listed and
registered on a national securities exchange as may be prescribed from time
to time in such rules and regulations;
(b) to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants provided for in
this Indenture as may be required from time to time by such rules and
regulations;
(c) to transmit by mail to the Holders of Securities
within 30 days after the filing thereof with the Trustee, in the manner and
to the extent provided in Section 4.4(c), such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to
subsections (a) and (b) of this Section 4.3 as may be required to be
transmitted to such Holders by rules and regulations prescribed from time to
time by the Commission; and
(d) to furnish to the Trustee, not less than annually, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his knowledge of the Issuer's
compliance with all conditions and covenants under this Indenture. For
purposes of this subsection (d), such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
SECTION 4.4 Reports by the Trustee. (a) The Trustee shall
transmit to Holders such reports concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act of 1939
at the times and in the manner provided pursuant thereto. To the extent that
any such report is required by the Trust Indenture Act of 1939 with respect
to any 12 month period, such report shall cover the 12 month period ending
July 15 and shall be transmitted by the next succeeding September 15.
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by
the Trustee with each stock exchange upon which the Securities of any
applicable series are listed and also with the Commission. The Issuer agrees
to promptly notify the Trustee with respect to any series when and as the
Securities of such series become admitted to trading on any national
securities exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default",
wherever used herein with respect to Securities of any series, means any one
or more of the following events (whatever the reason for such Event of
Default and whether it shall be occasioned by the provisions of Article
Thirteen or otherwise), unless it is either inapplicable to a particular
series or it is specifically deleted or modified in or pursuant to the Board
Resolution or supplemental indenture establishing such series of Securities
or in the form of Security, for such series:
(a) default in the payment of the principal of or premium,
if any, of the Securities of such series as and when the same shall become
due and payable either at maturity, upon redemption, by declaration or
otherwise; or
(b) default in the payment of any installment of interest
on any of the Securities of such series as and when the same shall become due
and payable, and continuance of such default for a period of 30 days; or
(c) default in the payment or satisfaction of any sinking
fund or other purchase obligation with respect to Securities of such series,
as and when such obligation shall become due and payable; or
(d) failure on the part of the Issuer duly to observe or
perform any other of the covenants or agreements on the part of the Issuer in
the Securities of such series or in this Indenture continued for a period of
90 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given by certified or registered mail to
the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Securities of such series
then Outstanding; or
(e) without the consent of the Issuer a court having
jurisdiction shall enter an order for relief with respect to the Issuer or
any of its Significant Subsidiaries under any applicable bankruptcy,
insolvency or other similar law of the United States of America, any state
thereof or the District of Columbia, or without the consent of the Issuer a
court having jurisdiction shall enter a judgment, order or decree adjudging
the Issuer or any of its Significant Subsidiaries bankrupt or insolvent, or
enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Issuer or any of its Significant
Subsidiaries under any applicable bankruptcy, insolvency or other similar law
of the United States of America, any state thereof or the District of
Columbia, and the continuance of any such judgment, order or decree is
unstayed and in effect for a period of 60 consecutive days; or
(f) the Issuer or any of its Significant Subsidiaries
shall institute proceedings for entry of an order for relief with respect to
the Issuer or any of its Significant Subsidiaries under any applicable
bankruptcy, insolvency or other similar law of the United States of America,
any state thereof or the District of Columbia, or for an adjudication of
insolvency, or shall consent to the institution of bankruptcy or insolvency
proceedings against it, or shall file a petition seeking, or seek or consent
to reorganization, arrangement, composition or relief under any applicable
bankruptcy, insolvency or other similar law of the United States of America,
any state thereof or the District of Columbia, or shall consent to the filing
of such petition or to the appointment of a receiver, custodian, liquidator,
assignee, trustee, sequestrator or similar official of the Issuer or of
substantially all of its property, or the Issuer or any of its Significant
Subsidiaries shall make a general assignment for the benefit of creditors as
recognized under any applicable bankruptcy, insolvency or other similar law
of the United States of America, any state thereof or the District of
Columbia; or
(g) any other Event of Default provided with respect to
the Securities of such series.
If an Event of Default with respect to Securities of any
series then Outstanding occurs and is continuing, then and in each and every
such case, unless the principal of all of the Securities of such series shall
have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Securities of such series
then Outstanding, by notice in writing to the Issuer (and to the Trustee if
given by Securityholders), may declare the principal (or, if the Securities
of such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all the
Securities of such series and the interest, if any, accrued thereon to be due
and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, notwithstanding anything to the
contrary contained in this Indenture or in the Securities of such series.
This provision, however, is subject to the condition that, if at any time
after the unpaid principal amount (or such specified amount) of the
Securities of such series shall have been so declared due and payable and
before any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Issuer shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest, if any, upon all of the Securities of such series
and the principal of any and all Securities of such series which shall have
become due otherwise than by acceleration (with interest on overdue
installments of interest, if any, to the extent that payment of such interest
is enforceable under applicable law and on such principal at the rate borne
by the Securities of such series to the date of such payment or deposit) and
the reasonable compensation, disbursements, expenses and advances of the
Trustee and all other amounts due the Trustee under Section 6.6, and any and
all defaults under this Indenture, other than the nonpayment of such portion
of the principal amount of and accrued interest, if any, on Securities of
such series which shall have become due by acceleration, shall have been
cured or shall have been waived in accordance with Section 5.7 or provision
deemed by the Trustee to be adequate shall have been made therefor, then and
in every such case the Holders of a majority in aggregate principal amount of
the Securities of such series then Outstanding, by written notice to the
Issuer and to the Trustee, may rescind and annul such declaration and its
consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon.
Notwithstanding the previous sentence, no waiver shall be effective against
any Holder for any Event of Default or event which with notice or lapse of
time or both would be an Event of Default with respect to any covenant or
provision which cannot be modified or amended without the consent of the
Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event.
If any Event of Default with respect to the Issuer specified in
Section 5.1(e) or 5.1(f) occurs, all unpaid principal amount (or, if the
Securities of any series then Outstanding are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of each such series) and accrued interest on all Securities of each
series then Outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act by the Trustee or any
Securityholder.
If the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such
case the Issuer, the Trustee and the Securityholders shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Issuer, the Trustee and the Securityholders shall
continue as though no such proceeding had been taken.
Except with respect to an Event of Default pursuant to
Section 5.1 (a), (b) or (c), the Trustee shall not be charged with knowledge
of any Event of Default unless written notice thereof shall have been given
to a Responsible Officer by the Issuer, a paying agent or any Securityholder.
SECTION 5.2 Payment of Securities on Default; Suit
Therefor. The Issuer covenants that (a) if default shall be made in the
payment of any installment of interest upon any of the Securities of any
series then Outstanding as and when the same shall become due and payable,
and such default shall have continued for a period of 30 days, or (b) if
default shall be made in the payment of the principal of any of the
Securities of such series as and when the same shall have become due and
payable, whether at maturity of the Securities of such series or upon
redemption or by declaration or otherwise, then, upon demand of the Trustee,
the Issuer will pay to the Trustee, for the benefit of the Holders of the
Securities, the whole amount that then shall have become due and payable on
all such Securities of such series for principal or interest, if any, or
both, as the case may be, with interest upon the overdue principal and (to
the extent that payment of such interest is enforceable under applicable law)
upon the overdue installments of interest, if any, at the rate borne by the
Securities of such series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
a reasonable compensation to the Trustee, its agents, attorneys and counsel,
and any expenses or liabilities incurred by the Trustee hereunder other than
through its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at
law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or any other
obligor on the Securities of such series and collect in the manner provided
by law out of the property of the Issuer or any other obligor on the
Securities of such series, wherever situated, the moneys adjudged or decreed
to be payable.
If there shall be pending proceedings for the bankruptcy or
for the reorganization of the Issuer or any other obligor on the Securities
of any series then Outstanding under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or if a receiver or trustee or
similar official shall have been appointed for the property of the Issuer or
such other obligor, or in the case of any other similar judicial proceedings
relative to the Issuer or other obligor upon the Securities of such series,
or to the creditors or property of the Issuer or such other obligor, the
Trustee, irrespective of whether the principal of the Securities of such
series shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any
demand pursuant to the provisions of this Section 5.2, shall be entitled and
empowered by intervention in such proceedings or otherwise to file and prove
a claim or claims for the whole amount of principal and interest, if any,
owing and unpaid in respect of the Securities of such series, and, in case of
any judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Securityholders allowed in such judicial proceedings
relative to the Issuer or any other obligor on the Securities of such series,
its or their creditors, or its or their property, and to collect and receive
any moneys or other property payable or deliverable on any such claims, and
to distribute the same after the deduction of its charges and expenses, and
any receiver, assignee or trustee or similar official in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make
such payments to the Trustee, and, if the Trustee shall consent to the making
of such payments directly to the Securityholders, to pay to the Trustee any
amount due it for compensation and expenses or otherwise pursuant to Section
6.6, including counsel fees and expenses incurred by it up to the date of
such distribution. To the extent that such payment of reasonable
compensation, expenses and counsel fees and expenses out of the estate in any
such proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the Holders of the
Securities of such series may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities, or the production thereof at
any trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Securities of the series in respect of
which such judgment has been recovered.
SECTION 5.3 Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee pursuant to Section 5.2 with respect to
Securities of any series then Outstanding shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Securities of such series, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:
FIRST: To the payment of costs and expenses of collection
and reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and liabilities incurred, and all
advances made, by the Trustee pursuant to Section 6.6 except as a
result of its negligence or bad faith;
SECOND: If the principal of the Outstanding Securities of
such series shall not have become due and be unpaid, to the payment
of interest, if any, on the Securities of such series, in the order
of the maturity of the installments of such interest, if any, with
interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest, if any, at the
rate borne by the Securities of such series, such payment to be made
ratably to the Persons entitled thereto;
THIRD: If the principal of the Outstanding Securities of
such series shall have become due, by declaration or otherwise, to
the payment of the whole amount then owing and unpaid upon the
Securities of such series for principal and interest, if any, with
interest on the overdue principal and (to the extent that such
interest has been collected by the Trustee) upon overdue installments
of interest, if any, at the rate borne by the Securities of such
series; and in case such moneys shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Securities of such
series, then to the payment of such principal and interest, if any,
without preference or priority of principal over interest or of
interest over principal, or of any installment of interest over any
other installment of interest, or of any Security over any other
Security, ratably to the aggregate of such principal and accrued and
unpaid interest; and
FOURTH: To the payment of any surplus then remaining to
the Issuer, its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same.
No claim for interest which in any manner at or after
maturity shall have been transferred or pledged separate or apart from the
Securities to which it relates, or which in any manner shall have been kept
alive after maturity by an extension (otherwise than pursuant to an extension
made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding), purchase, funding or otherwise by
or on behalf or with the consent or approval of the Issuer shall be entitled,
in case of a default hereunder, to any benefit of this Indenture, except
after prior payment in full of the principal of all Securities of any series
then Outstanding and of all claims for interest not so transferred, pledged,
kept alive, extended, purchased or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of
any Securities of any series then Outstanding shall have any right by virtue
of or by availing of any provision of this Indenture to institute any suit,
action or proceeding in equity or at law upon or under or with respect to
this Indenture or for the appointment of a receiver or trustee or similar
official, or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless the Holders of not
less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request to the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
any such action, suit or proceeding, it being understood and intended, and
being expressly covenanted by the Holder of every Security of such series
with every other Holder and the Trustee, that no one or more Holders of
Securities of such series shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture or of the
Securities to affect, disturb or prejudice the rights of any other Holder of
such Securities of such series, or to obtain or seek to obtain priority over
or preference as to any other such Holder, or to enforce any right under this
Indenture or the Securities, except in the manner herein provided and for the
equal, ratable and common benefit of all Holders of Securities of such
series.
Notwithstanding any other provisions in this Indenture, but
subject to Article Thirteen, the right of any Holder of any Security to
receive payment of the principal of, premium, if any, and interest, if any,
on such Security, on or after the respective due dates expressed in such
Security, or to institute suit for the enforcement of any such payment on or
after such respective dates shall not be impaired or affected without the
consent of such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event
of Default hereunder, the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or
by proceedings in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in
aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
SECTION 5.6 Remedies Cumulative and Continuing. All
powers and remedies given by this Article Five to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the Securityholders, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the
Trustee or of any Securityholder to exercise any right or power accruing upon
any default occurring and continuing as aforesaid shall impair any such right
or power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 5.4, every
power and remedy given by this Article Five or by law to the Trustee or to
the Securityholders may be exercised from time to time, and as often as shall
be deemed expedient, by the Trustee or by the Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults
by Majority of Securityholders. The Holders of a majority in aggregate
principal amount of the Securities of any series then Outstanding shall have
the right to direct the time, method, and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to Securities of such series; provided,
however, that (subject to the provisions of Section 6.1) the Trustee shall
have the right to decline to follow any such direction if the Trustee shall
determine upon advice of counsel that the action or proceeding so directed
may not lawfully be taken or if the Trustee in good faith by its board of
directors, its executive committee, or a trust committee of directors or
Responsible Officers or both shall determine that the action or proceeding so
directed would involve the Trustee in personal liability. The Holders of a
majority in aggregate principal amount of the Securities of any series then
Outstanding may on behalf of the Holders of all of the Securities of such
series waive any past default or Event of Default hereunder and its
consequences except a default in the payment of interest, if any, on, or the
principal of, the Securities of such series. Upon any such waiver the
Issuer, the Trustee and the Holders of the Securities of such series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this
Section 5.7, said default or Event of Default shall for all purposes of the
Securities and this Indenture be deemed to have been cured and to be not
continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within
30 days after the occurrence of a default, with respect to Securities of any
series then Outstanding, mail to all Holders of Securities of such series, as
the names and the addresses of such Holders appear upon the Securities
register, notice of all defaults known to the Trustee with respect to such
series, unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for the purpose of this Section 5.8 being hereby
defined to be the events specified in clauses (a), (b), (c), (d), (e), (f)
and (g) of Section 5.1, not including periods of grace, if any, provided for
therein and irrespective of the giving of the written notice specified in
said clause (d) but in the case of any default of the character specified in
said clause (d) no such notice to Securityholders shall be given until at
least 60 days after the giving of written notice thereof to the Issuer
pursuant to said clause (d)); provided, however, that, except in the case of
default in the payment of the principal of or interest, if any, on any of the
Securities, or in the payment or satisfaction of any sinking fund or other
purchase obligation, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or
a trust committee of directors or Responsible Officers or both, of the
Trustee in good faith determines that the withholding of such notice is in
the best interests of the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to
pay the cost of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against
any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.9 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount
of the Securities of any series then Outstanding, or to any suit instituted
by any Securityholders for the enforcement of the payment of the principal of
or interest, if any, on any Security against the Issuer on or after the due
date expressed in such Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default. In case an Event of Default with respect
to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or waiving of
all such Events of Default with respect to such series which may have
occurred:
(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders pursuant to Section 5.7 relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if there shall be reasonable
ground for believing that the repayment of such funds or adequate indemnity
against such liability is not reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to
Section 6.1:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
or Issuer Order (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors may be
evidenced to the Trustee by a Board Resolution;
(c) the Trustee may consult with counsel of its selection
and any advice of such counsel promptly confirmed in writing shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the provisions
of this Indenture (including, without limitation, pursuant to Section 5.7),
unless such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might
be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of Default, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the Holders of not less than a majority in
aggregate principal amount of the Securities of all series affected then
Outstanding; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses
of every such investigation shall be paid by the Issuer or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Issuer upon
demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder;
(h) The Trustee shall not be charged with knowledge of any
default or Event of Default with respect to a series of Securities unless
either (i) a Responsible Officer of the Trustee assigned to the Corporate
Trust Office of the Trustee (or any successor division or department of the
Trustee) shall have actual knowledge of such default or Event of Default or
(ii) written notice of such default or Event of Default shall have been given
to the Trustee by the Issuer or any other obligor on such series of
Securities or by any Holder of Securities of such series; and
(i) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of Proceeds Thereof. The recitals
contained herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture, of the Securities or of any prospectus used to sell the
Securities. The Trustee shall not be accountable for the use or application
by the Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and, subject to Sections 6.8 and 6.13, may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer with
the same rights it would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the
provisions of Section 10.4 hereof, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes
for which they were received, but need not be segregated from other funds
except to the extent required by mandatory provisions of law. Neither the
Trustee nor any agent of the Issuer or the Trustee shall be under any
liability for interest on any moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee
and Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, such compensation as
shall be agreed to in writing between the Issuer and the Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Issuer also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any and
all loss, liability, damage, claim or expense, including taxes (other than
taxes based on the income of the Trustee), incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in the premises. The obligations of the
Issuer under this Section 6.6 to compensate and indemnify the Trustee and
each predecessor Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee and
shall not be subordinate to the payment of Senior Indebtedness pursuant to
Article Thirteen. Such additional indebtedness shall be a senior claim to
that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
particular Securities. When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section 5.1 or in
connection with Section 5.9 hereof, the expenses (including the reasonable
fees and expenses of its counsel) and the compensation for the service in
connection therewith are intended to constitute expenses of administration
under any bankruptcy law. The provisions of this Section 6.6 shall survive
the resignation or removal of the Trustee and the termination of this
Indenture.
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc. Subject to Sections 6.1 and 6.2, whenever in the
administration of the trusts of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an Officers' Certificate delivered
to the Trustee, and such certificate, in the absence of negligence or bad
faith on the part of the Trustee, shall be full warrant to the Trustee for
any action taken, suffered or omitted by it under the provisions of this
Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting
Interests. This Indenture shall always have a Trustee who satisfies the
requirements of Section 310(a)(1) of the Trust Indenture Act of 1939. The
Trustee shall have a combined capital and surplus of at least $25,000,000 as
set forth in its most recent published annual report of condition. The
Trustee shall comply with Section 310(b) of the Trust Indenture Act of 1939
regarding disqualification of a trustee upon acquiring a conflicting
interest.
SECTION 6.9 Persons Eligible for Appointment as Trustee;
Different Trustees for Different Series. The Trustee for each series of
Securities hereunder shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any state or
the District of Columbia having a combined capital and surplus of at least
$25,000,000, and which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal, state
or District of Columbia authority, or a corporation or other Person permitted
to act as trustee by the Commission. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. No obligor upon the Securities or any Affiliate
of such obligor shall serve as trustee upon the Securities. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 6.9, the Trustee shall resign immediately in the manner and
with the effect specified in Section 6.10.
A different Trustee may be appointed by the Issuer for any
series of Securities prior to the issuance of such Securities. If the
initial Trustee for any series of Securities is to be a trustee other than
_______________________, the Issuer and such Trustee shall, prior to the
issuance of such Securities, execute and deliver an indenture supplemental
hereto, which shall provide for the appointment of such Trustee as Trustee
for the Securities of such series and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Trustee.
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee. (a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign with respect to one or more or all series
of Securities by giving written notice of resignation to the Issuer. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by
written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Article Five, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 6.8 with respect to any series of
Securities after written request therefor by the Issuer or
by any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six
months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.9 and shall
fail to resign after written request therefor by the Issuer
or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting
with respect to any series of Securities, or shall be
adjudged a bankrupt or insolvent, or a receiver or
liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the Board of
Directors one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions
of Article Five, any Securityholder who has been a bona fide Holder of a
Security or Securities of such series for at least six months may on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee with respect to such series. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal
amount of the Securities of each series then Outstanding may at any time
remove the Trustee with respect to Securities of such series and appoint a
successor trustee with respect to the Securities of such series by delivering
to the Trustee so removed, to the successor trustee so appointed and to the
Issuer the evidence provided for in Section 7.1 of the action in that regard
taken by the Securityholders. If no successor trustee shall have been so
appointed with respect to any series and have accepted appointment within 30
days after the delivery of such evidence of removal, the Trustee may petition
any court of competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona fide Holder of a Security
or Securities of the applicable series for at least six months may, subject
to the provisions of Article Five, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, appoint a successor trustee.
(d) Any resignation or removal of the Trustee with respect
to any series and any appointment of a successor trustee with respect to such
series pursuant to any of the provisions of this Section 6.10 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 6.11.
SECTION 6.11 Acceptance of Appointment by Successor
Trustee. Any successor trustee appointed as provided in Section 6.10 shall
execute and deliver to the Issuer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee with respect to all or any
applicable series shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations with respect to such series of its predecessor
hereunder, with like effect as if originally named as trustee for such series
hereunder; but, nevertheless, on the written request of the Issuer or of the
successor trustee, upon payment of its charges then unpaid, the trustee
ceasing to act shall, subject to Section 10.4, pay over to the successor
trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all such rights,
powers, duties and obligations. Upon request of any such successor trustee,
the Issuer shall execute any and all instruments in writing for more fully
and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the
Securities of one or more (but not all) series, the Issuer, the predecessor
Trustee and each successor trustee with respect to the Securities of any
applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the predecessor
Trustee with respect to the Securities of any series as to which the
predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts under separate indentures.
No successor trustee with respect to any series of
Securities shall accept appointment as provided in this Section 6.11 unless
at the time of such acceptance such successor trustee shall be qualified
under the provisions of Section 6.8 and eligible under the provisions of
Section 6.9.
Upon acceptance of appointment by any successor trustee as
provided in this Section 6.11, the Issuer shall give notice thereof to the
Holders of Securities of each series affected, by mailing such notice to such
Holders at their addresses as they shall appear on the registry books. If
the Issuer fails to give such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee. Any corporation into which the Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee (including
the trust created by this Indenture), shall be the successor of the Trustee
hereunder, provided that such corporation shall be qualified under the
provisions of Section 6.8 and eligible under the provisions of Section 6.9,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary
notwithstanding.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Securities of any
series shall have been authenticated but not delivered, any such successor to
the Trustee may adopt the certificate of authentication of any predecessor
Trustee and deliver such Securities so authenticated; and, in case at that
time any of the Securities of any series shall not have been authenticated,
any successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificate shall have the full force which it is
anywhere in the Securities of such series or in this Indenture provided that
the certificate of the Trustee shall have; provided, that the right to adopt
the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13 Preferential Collection of Claims Against the
Issuer. The Trustee shall comply with Section 311(a) of the Trust Indenture
Act of 1939, excluding any creditor relationship listed in Section 311(b) of
the Trust Indenture Act of 1939. A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act of 1939 to the
extent indicated therein.
SECTION 6.14 Appointment of Authenticating Agent. As long
as any Securities of a series remain Outstanding, the Trustee may, by an
instrument in writing, appoint with the approval of the Issuer an
authenticating agent (the "Authenticating Agent") which shall be authorized
to act on behalf of the Trustee to authenticate Securities, including
Securities issued upon exchange, registration of transfer, partial redemption
or pursuant to Section 2.9. Securities of each such series authenticated by
such Authenticating Agent shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee. Whenever reference is made in this Indenture to the authentication
and delivery of Securities of any series by the Trustee or to the Trustee's
Certificate of Authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating
Agent for such series and a Certificate of Authentication executed on behalf
of the Trustee by such Authenticating Agent. Such Authenticating Agent shall
at all times be a corporation organized and doing business under the laws of
the United States of America or of any state or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $25,000,000 (determined as provided
in Section 6.9 with respect to the Trustee) and subject to supervision or
examination by federal or state authority.
Any corporation into which any Authenticating Agent may be
merged or converted, or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business (including the authenticating agency contemplated
by this Indenture) of any Authenticating Agent, shall continue to be the
Authenticating Agent with respect to all series of Securities for which it
served as Authenticating Agent without the execution or filing of any paper
or any further act on the part of the Trustee or such Authenticating Agent.
Any Authenticating Agent may at any time, and if it shall cease to be
eligible shall, resign by giving written notice of resignation to the Trustee
and to the Issuer. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.14 with
respect to one or more series of Securities, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Issuer and
the Issuer shall provide notice of such appointment to all Holders of
Securities of such series in the manner and to the extent provided in Section
11.4. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. The Issuer agrees to pay to the
Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series
shall have no responsibility or liability for any action taken by it as such
at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in
person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article Seven.
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities. Subject to Sections 6.1 and 6.2, the execution of any
instrument by a Securityholder or his agent or proxy may be proved in the
following manner:
(a) The fact and date of the execution by any Holder of
any instrument may be proved by the certificate of any notary public or other
officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the person executing such instruments acknowledged to
him the execution thereof, or by an affidavit of a witness to such execution
sworn to before any such notary or other such officer. Where such execution
is by or on behalf of any legal entity other than an individual, such
certificate or affidavit shall also constitute sufficient proof of the
authority of the person executing the same.
(b) The ownership of Securities shall be proved by the
Security register or by a certificate of the Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer,
the Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and, subject to the provisions of this
Indenture, interest, if any, on such Security and for all other purposes; and
neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee
shall be affected by any notice to the contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Securities of any or all series have
concurred in any direction, consent or waiver under this Indenture,
Securities which are owned by the Issuer or by any other obligor on the
Securities with respect to which such determination is being made or by any
Affiliate of the Issuer or any other obligor on the Securities with respect
to which such determination is being made, shall be disregarded and deemed
not to be Outstanding for the purpose of any such determination, except that
for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver only Securities which a
Responsible Officer of the Trustee knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Issuer or any other obligor upon the Securities
or any Affiliate of the Issuer or any other obligor on the Securities. In
case of a dispute as to such right, the advice of counsel shall be full
protection in respect of any decision made by the Trustee in accordance with
such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described Persons; and, subject to Sections 6.1
and 6.2, the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the fact that
all Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.5 Right of Revocation of Action Taken. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.1, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the
case may be, specified in this Indenture in connection with such action, any
Holder of a Security the serial number of which is shown by the evidence to
be included among the serial numbers of the Securities the Holders of which
have consented to such action may, by filing written notice at the Corporate
Trust Office and upon proof of holding as provided in this Article Seven,
revoke such action so far as concerns such Security provided that such
revocation shall not become effective until three Business Days after such
filing. Except as aforesaid, any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange
or substitution therefor or on registration of transfer thereof, irrespective
of whether or not any notation in regard thereto is made upon any such
Security. Any action taken by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action shall be
conclusively binding upon the Issuer, the Trustee and the Holders of all the
Securities affected by such action.
SECTION 7.6 Record Date for Consents and Waivers. The
Issuer may, but shall not be obligated to, establish a record date for the
purpose of determining the Persons entitled to (i) waive any past default
with respect to the Securities of such series in accordance with Section 5.7
of the Indenture, (ii) consent to any supplemental indenture in accordance
with Section 8.2 of the Indenture or (iii) waive compliance with any term,
condition or provision of any covenant hereunder. If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and any
such Persons, shall be entitled to waive any such past default, consent to
any such supplemental indenture or waive compliance with any such term,
condition or provision, whether or not such Holder remains a Holder after
such record date; provided, however, that unless such waiver or consent is
obtained from the Holders, or duly designated proxies, of the requisite
principal amount of Outstanding Securities of such series prior to the date
which is the 120th day after such record date, any such waiver or consent
previously given shall automatically and without further action by any Holder
be cancelled and of no further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of the execution thereof) for
one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any property or
assets;
(b) to evidence the succession of another Person to the
Issuer, or successive successions, and the assumption by the successor Person
of the covenants, agreements and obligations of the Issuer pursuant to
Article Nine;
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as the Issuer and the
Trustee shall consider to be for the protection of the Holders of all or any
series of Securities (and if such covenants, restrictions, conditions or
provisions are to be for the protection of less than all series of
Securities, stating that the same are expressly being included solely for the
protection of such series) and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default permitting the enforcement of
all or any of the several remedies provided in this Indenture as herein set
forth; provided, however, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may provide
for a particular period of grace after default (which period may be shorter
or longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may limit
the right of the Holders of a majority in aggregate principal amount of the
Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Issuer may
deem necessary or desirable, provided, however, that no such action shall
materially adversely affect the interests of the Holders of the Securities;
(e) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 and 2.3;
(f) to provide for the issuance of Securities of any
series in coupon form (including Securities registrable as to principal only)
and to provide for exchangeability of such Securities for the Securities
issued hereunder in fully registered form and to make all appropriate changes
for such purpose;
(g) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification of
this Indenture under the Trust Indenture Act of 1939, or under any similar
federal statute hereafter enacted, and to add to this Indenture such other
provisions as may be expressly permitted by the Trust Indenture Act of 1939,
excluding, however, the provisions referred to in Section 316(a)(2) of the
Trust Indenture Act of 1939 as in effect at the date as of which this
instrument was executed or any corresponding provision provided for in any
similar federal statute hereafter enacted; and
(h) to evidence and provide for the acceptance of
appointment hereunder of a Trustee other than ______________________ as
Trustee for a series of Securities and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.9 hereof;
(i) subject to Section 8.2 hereof, to add to or modify the
provisions hereof as may be necessary or desirable to provide for the
denomination of Securities in foreign currencies which shall not adversely
affect the interests of the Holders of the Securities in any material
respect;
(j) to modify the covenants or Events of Default of the
Issuer solely in respect of, or add new covenants or Events of Default of the
Issuer that apply solely to, Securities not Outstanding on the date of such
supplemental indenture; and
(k) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the Securities
of one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to
the requirements of Section 6.11.
The Trustee is hereby authorized to join with the Issuer in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any
property thereunder, but the Trustee shall not be obligated to enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the Holders of any of the
Securities then Outstanding, notwithstanding any of the provisions of Section
8.2.
SECTION 8.2 Supplemental Indentures with Consent of
Securityholders. With the consent (evidenced as provided in Article Seven)
of the Holders of not less than a majority in aggregate principal amount of
the Securities then Outstanding of any series affected by such supplemental
indenture, the Issuer, when authorized by a Board Resolution (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from
time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of any supplemental indenture or
of modifying in any manner the rights of the Holders of the Securities of
such series; provided, that no such supplemental indenture shall (a) extend
the stated final maturity of the principal of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest, if any, thereon (or, in the case of an Original Issue Discount
Security, reduce the rate of accretion of original issue discount thereon),
or reduce or alter the method of computation of any amount payable on
redemption, repayment or purchase by the Issuer thereof (or the time at which
any such redemption, repayment or purchase may be made), or make the
principal thereof (including any amount in respect of original issue
discount), or interest, if any, thereon payable in any coin or currency other
than that provided in the Securities or in accordance with the terms of the
Securities, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof or the amount thereof provable in bankruptcy in each case
pursuant to Article Five, or impair or affect the right of any Securityholder
to institute suit for the payment thereof or, if the Securities provide
therefor, any right of repayment or purchase at the option of the
Securityholder, in each case without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security
so affected. No consent of any Holder of any Security shall be necessary
under this Section 8.2 to permit the Trustee and the Issuer to execute
supplemental indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any
covenant, Event of Default or other provision of this Indenture which has
expressly been included solely for the benefit of one or more particular
series of Securities, or which modifies the rights of Holders of Securities
of such series, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors (which resolution may provide general
terms or parameters for such action and may provide that the specific terms
of such action may be determined in accordance with or pursuant to an Issuer
Order) certified by the secretary or an assistant secretary of the Issuer
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of the Holders of the
Securities as aforesaid and other documents, if any, required by Section 7.1,
the Trustee shall join with the Issuer in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may at its discretion, but shall not be obligated to, enter into
such supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section 8.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee
of any supplemental indenture pursuant to the provisions of this Section 8.2,
the Issuer (or the Trustee at the request and expense of the Issuer) shall
give notice thereof to the Holders of then Outstanding Securities of each
series affected thereby, as provided in Section 11.4. Any failure of the
Issuer to give such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and shall be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Issuer and the Holders of Securities of each series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and shall be deemed to
be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 8.4 Documents to Be Given to Trustee. The
Trustee, subject to the provisions of Sections 6.1 and 6.2, shall be entitled
to receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article
Eight complies with the applicable provisions of this Indenture and that all
conditions precedent to the execution and delivery of such supplemental
indenture have been satisfied.
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures. Securities of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Eight may bear a notation in form approved by the
Trustee for such series as to any matter provided for by such supplemental
indenture or as to any action taken by Securityholders. If the Issuer or the
Trustee shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Issuer, to any modification of
this Indenture contained in any such supplemental indenture may be prepared
and executed by the Issuer, authenticated by the Trustee and delivered in
exchange for the Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain
Terms. Subject to the provisions of Section 9.2, nothing contained in this
Indenture or in any of the Securities shall prevent any consolidation or
merger of the Issuer with or into any other Person or Persons (whether or not
affiliated with the Issuer), or successive consolidations or mergers in which
the Issuer or its successor or successors shall be a party or parties, or
shall prevent any sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Issuer to any other Person
(whether or not affiliated with the Issuer) authorized to acquire and operate
the same; provided, however, and the Issuer hereby covenants and agrees, that
any such consolidation, merger, sale, lease, exchange or other disposition
shall be upon the conditions that (a) immediately after giving effect to such
consolidation, merger, sale, lease, exchange or other disposition of the
Person (whether the Issuer or such other Person) formed by or surviving any
such consolidation or merger, or to which such sale, lease, exchange or other
disposition shall have been made, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing; (b) the Person (if other than the
Issuer) formed by or surviving any such consolidation or merger, or to which
such sale, lease, exchange or other disposition shall have been made, shall
be a corporation or partnership organized under the laws of the United States
of America, any state thereof or the District of Columbia; and (c) the due
and punctual payment of the principal of and interest, if any, on all the
Securities, according to their tenor, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Issuer, shall be expressly assumed, by supplemental
indenture satisfactory in form to the Trustee executed and delivered to the
Trustee, by the Person (if other than the Issuer) formed by such
consolidation, or into which the Issuer shall have been merged, or by the
Person which shall have acquired or leased such property.
SECTION 9.2 Successor Corporation to be Substituted. In
case of any such consolidation or merger or any sale, conveyance or lease of
all or substantially all of the property of the Issuer and upon the
assumption by the successor Person, by supplemental indenture executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due
and punctual payment of the principal of, premium, if any, and interest, if
any, on all of the Securities and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Issuer,
such successor Person shall succeed to and be substituted for the Issuer,
with the same effect as if it had been named herein as the party of the first
part, and the Issuer (including any intervening successor to the Issuer which
shall have become the obligor hereunder) shall be relieved of any further
obligation under this Indenture and the Securities; provided, however, that
in the case of a sale, lease, exchange or other disposition of the property
and assets of the Issuer (including any such intervening successor), the
Issuer (including any such intervening successor) shall continue to be liable
on its obligations under this Indenture and the Securities to the extent, but
only to the extent, of liability to pay the principal of and interest, if
any, on the Securities at the time, places and rate prescribed in this
Indenture and the Securities. Such successor Person thereupon may cause to
be signed, and may issue either in its own name or in the name of the Issuer,
any or all of the Securities issuable hereunder which theretofore shall not
have been signed by the Issuer and delivered to the Trustee; and, upon the
order of such successor Person instead of the Issuer and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall
have been signed and delivered by the officers of the Issuer to the Trustee
for authentication, and any Securities which such successor Person thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though all of such
Securities had been issued at the date of the execution hereof.
In case of any such consolidation or merger or any sale,
lease, exchange or other disposition of all or substantially all of the
property and assets of the Issuer, such changes in phraseology and form (but
not in substance) may be made in the Securities, thereafter to be issued, as
may be appropriate.
SECTION 9.3 Opinion of Counsel to be Given Trustee. The
Trustee, subject to Sections 6.1 and 6.2, shall receive an Officers'
Certificate and Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, lease, exchange or other disposition and any
such assumption complies with the provisions of this Article Nine.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
COVENANT DEFEASANCE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (a)
If at any time (i) the Issuer shall have paid or caused to be paid the
principal of, premium, if any, and interest, if any, on all the Securities
Outstanding (other than Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.9) as and when
the same shall have become due and payable, or (ii) the Issuer shall have
delivered to the Trustee for cancellation all Securities theretofore
authenticated (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9); and
if, in any such case, the Issuer shall also pay or cause to be paid all other
sums payable hereunder by the Issuer (including all amounts payable to the
Trustee pursuant to Section 6.6), then this Indenture shall cease to be of
further effect, and the Trustee, on demand of the Issuer accompanied by an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the satisfaction and discharge contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging such satisfaction and
discharging this Indenture. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred, and to
compensate the Trustee for any services thereafter reasonably and properly
rendered, by the Trustee in connection with this Indenture or the Securities.
(b) If at any time (i) the Issuer shall have paid or
caused to be paid the principal of, premium, if any, and interest, if any, on
all the Securities of any series Outstanding (other than Securities of such
series which have been destroyed, lost or stolen and which have been replaced
or paid as provided in Section 2.9) as and when the same shall have become
due and payable, or (ii) the Issuer shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated (other
than any Securities of such series which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 2.9), or (iii) in
the case of any series of Securities with respect to which the exact amount
described in clause (B) below can be determined at the time of making the
deposit referred to in such clause (B), (A) all the Securities of such series
not theretofore delivered to the Trustee for cancellation shall have become
due and payable, or by their terms are to become due and payable within one
year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and (B)
the Issuer shall have irrevocably deposited or caused to be deposited with
the Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such series,
cash in an amount (other than moneys repaid by the Trustee or any paying
agent to the Issuer in accordance with Section 10.4) or non-callable, non-
prepayable bonds, notes, bills or other similar obligations issued or
guaranteed by the United States government or any agency thereof the full and
timely payment of which are backed by the full faith and credit of the United
States ("U.S. Government Obligations"), maturing as to principal and
interest, if any, at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (1) the
principal of, premium, if any, and interest, if any, on all Securities of
such series on each date that such principal of, premium, if any, or
interest, if any, is due and payable, and (2) any mandatory sinking fund
payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of such series;
then the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such series on the date of the deposit
referred to in clause (B) above and the provisions of this Indenture with
respect to the Securities of such series shall no longer be in effect
(except, in the case of clause (iii) of this Section 10.1(b), as to (I)
rights of registration of transfer and exchange of Securities of such series,
(II) rights of substitution of mutilated, defaced, destroyed, lost or stolen
Securities of such series, (III) rights of Holders of Securities of such
series to receive payments of principal thereof and premium, if any, and
interest, if any, thereon upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the Holders of Securities of
such series to receive mandatory sinking fund payments thereon, if any, when
due, (IV) the rights, obligations, duties and immunities of the Trustee
hereunder, (V) the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (VI) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same.
(c) The following provisions shall apply to the Securities
of each series unless specifically otherwise provided in a Board Resolution,
Officers' Certificate or indenture supplemental hereto provided pursuant to
Section 2.3. In addition to discharge of the Indenture pursuant to the next
preceding paragraph, in the case of any series of Securities with respect to
which the exact amount described in subparagraph (A) below can be determined
at the time of making the deposit referred to in such subparagraph (A), the
Issuer shall be deemed to have paid and discharged the entire indebtedness on
all the Securities of such a series on the 91st day after the date of the
deposit referred to in subparagraph (A) below, and the provisions of this
Indenture with respect to the Securities of such series shall no longer be in
effect (except as to (i) rights of registration of transfer and exchange of
Securities of such series, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities of such series, (iii) rights of Holders
of Securities of such series to receive payments of principal thereof,
premium, if any, and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the
Holders of Securities of such series to receive mandatory sinking fund
payments, if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, (v) the rights of the Holders of Securities of such series
as beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them and (vi) the obligations of the Issuer
under Section 3.2 with respect to Securities of such series) and the Trustee,
on demand of the Issuer accompanied by an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent contemplated
by this provision have been complied with, and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging the same, if
(A) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such
series (1) cash in an amount, or (2) U.S. Government Obligations,
maturing as to principal and interest, if any, at such times and in
such amounts as will insure the availability of cash, or (3) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (I)
the principal of, premium, if any, and interest, if any, on all
Securities of such series on each date that such principal or
interest, if any, is due and payable, and (II) any mandatory sinking
fund payments on the dates on which such payments are due and payable
in accordance with the terms of the Indenture and the Securities of
such series;
(B) such deposit will not result in a breach or violation
of, or constitute a default under, any agreement or instrument to
which the Issuer is a party or by which it is bound; and
(C) the Issuer has delivered to the Trustee an Opinion of
Counsel based on the fact that (1) the Issuer has received from, or
there has been published by, the Internal Revenue Service a ruling or
(2), since the date hereof, there has been a change in the applicable
United States federal income tax law, in either case to the effect
that, and such opinion shall confirm that, the Holders of the
Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same
amount and in the same manner and at the same times, as would have
been the case if such deposit, defeasance and discharge had not
occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for
Payment of Securities. Subject to Section 10.4, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Section 10.1
shall be held in trust, and such moneys and all moneys from such U.S.
Government Obligations shall be applied by it to the payment, either directly
or through any paying agent (including the Issuer acting as its own paying
agent), to the Holders of the particular Securities of such series for the
payment or redemption of which such moneys and U.S. Government Obligations
have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest, if any, but such moneys and U.S.
Government Obligations need not be segregated from other funds except to the
extent required by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under
the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years. Any moneys deposited with or paid to the
Trustee or any paying agent for the payment of the principal of, premium, if
any, or interest, if any, on any Security of any series and not applied but
remaining unclaimed for two years after the date upon which such principal,
premium, if any, or interest, if any, shall have become due and payable,
shall, upon the written request of the Issuer and unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed
property law, be repaid to the Issuer by the Trustee for such series or such
paying agent and the Holder of the Securities of such series shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property laws, thereafter look only to the Issuer for any
payment which such Holder may be entitled to collect, and all liability of
the Trustee or any paying agent with respect to such moneys shall thereupon
cease.
SECTION 10.5 Indemnity for U.S. Government Obligations.
The Issuer shall pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 10.1 or the principal or interest received in
respect of such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders,
Officers and Directors of Issuer Exempt from Individual Liability. No
recourse under or upon any obligation, covenant or agreement contained in
this Indenture, or in any Security, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such or against any past,
present or future stockholder, officer or director, as such, of the Issuer,
or any partner of the Issuer or of any successor, either directly or through
the Issuer or any successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or
equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities by the Holders thereof and
as part of the consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit
of Parties and Holders of Securities. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to give to any
Person, other than the parties hereto and their successors and the Holders of
the Senior Indebtedness and the Holders of the Securities, any legal or
equitable right, remedy or claim under this Indenture or under any covenant
or provision herein contained, all such covenants and provisions being for
the sole benefit of the parties hereto and their successors and of the
Holders of the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture. All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Issuer shall bind its successors
and assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Holders of Securities. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities to or on the Issuer, or as required pursuant to the
Trust Indenture Act of 1939, may be given or served by being deposited
postage prepaid, first-class mail (except as otherwise specifically provided
herein) addressed (until another address of the Issuer is filed by the Issuer
with the Trustee) to K. Hovnanian Enterprises, Inc., 10 Highway 35, P.O. Box
500, Red Bank, New Jersey 07701. Any notice, direction, request or demand by
the Issuer or any Holder of Securities to or upon the Trustee shall be deemed
to have been sufficiently given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee with the
Issuer) to ____________________________, [address], [attention: Corporate
Trust Administration (K. Hovnanian Enterprises, Inc. [specify series of
Securities])].
Where this Indenture provides for notice to Holders of
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder entitled thereto, at his last address as it appears in the
Security register. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities
in regular mail service, it shall be impracticable to mail notice to the
Issuer when such notice is required to be given pursuant to any provision of
this Indenture, then any manner of giving such notice as shall be reasonably
satisfactory to the Trustee shall be deemed to be sufficient notice.
SECTION 11.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein. Upon any application or demand
by the Issuer to the Trustee to take any action under any of the provisions
of this Indenture, or as required pursuant to the Trust Indenture Act of
1939, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent
have been complied with, except that in the case of any such application or
demand as to which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular application or
demand, no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture
(other than a certificate provided pursuant to Section 4.3(d)) and delivered
to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an opinion as to whether or not such covenant or
condition has been complied with, and (d) a statement as to whether or not,
in the opinion of such person, such condition or covenant has been complied
with.
Any certificate, statement or opinion of an officer of the
Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous. Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual matters, on
information with respect to which is in the possession of the Issuer, upon
the certificate, statement or opinion of or representations by an officer or
officers of the Issuer, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous.
Any certificate, statement or opinion of an officer of the
Issuer or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant
or firm of accountants in the employ of the Issuer, unless such officer or
counsel, as the case may be, knows that the certificate or opinion or
representations with respect to the accounting matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or
in the exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of
public accountants filed with and directed to the Trustee shall contain a
statement that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays. If the date of maturity of principal of or interest, if any, on
the Securities of any series or the date fixed for redemption, purchase or
repayment of any such Security shall not be a Business Day, then payment of
interest, if any, premium, if any, or principal need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the date fixed for
redemption, purchase or repayment, and, in the case of payment, no interest
shall accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, or is deemed applicable to this Indenture by virtue of the
provisions, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 11.8 GOVERNING LAW. THIS INDENTURE AND EACH
SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW
YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAWS.
SECTION 11.9 Counterparts. This Indenture may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of
this Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified, as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions.
Notice of redemption to the Holders of Securities of any series to be
redeemed as a whole or in part at the option of the Issuer shall be given by
mailing notice of such redemption by first class mail, postage prepaid, at
least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Securities of such series at their last
addresses as they shall appear in the Security register. Any notice which is
mailed in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the Holder receives the notice. Failure to
give notice by mail, or any defect in the notice to the Holder of any
Security of a series designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the redemption of any other
Security of such series.
The notice of redemption to each such Holder shall specify
(i) the principal amount of each Security of such series held by such Holder
to be redeemed, (ii) the date fixed for redemption, (iii) the redemption
price, (iv) the place or places of payment, (v) the CUSIP number relating to
such Securities, (vi) that payment will be made upon presentation and
surrender of such Securities, (vii) whether such redemption is pursuant to
the mandatory or optional sinking fund, or both, if such be the case, (viii)
whether interest, if any, (or, in the case of Original Issue Discount
Securities, original issue discount) accrued to the date fixed for redemption
will be paid as specified in such notice and (ix) whether on and after said
date interest, if any, (or, in the case of Original Issue Discount
Securities, original issue discount) thereon or on the portions thereof to be
redeemed will cease to accrue. In case any Security of a series is to be
redeemed in part only, the notice of redemption shall state the portion of
the principal amount thereof to be redeemed and shall state that on and after
the date fixed for redemption, upon surrender of such Security, a new
Security or Securities of such series in principal amount equal to the
unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be
redeemed at the option of the Issuer shall be given by the Issuer or, at the
Issuer's request, by the Trustee in the name and at the expense of the
Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section 12.2, the Issuer will deposit
with the Trustee or with one or more paying agents (or, if the Issuer is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.5) an amount of money sufficient to redeem on the
redemption date all the Securities of such series so called for redemption at
the appropriate redemption price, together with accrued interest, if any, to
the date fixed for redemption. The Issuer will deliver to the Trustee at
least 45 days prior to the date fixed for redemption (unless a shorter notice
period shall be satisfactory to the Trustee) an Officers' Certificate stating
the aggregate principal amount of Securities to be redeemed. In case of a
redemption at the election of the Issuer prior to the expiration of any
restriction on such redemption, the Issuer shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officers' Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be
redeemed, the Trustee, within 10 Business Days after the Issuer gives written
notice to the Trustee that such redemption is to occur, shall select, in such
manner as it shall deem appropriate and fair, Securities of such series to be
redeemed. Notice of the redemption shall be given only after such selection
has been made. Securities may be redeemed in part in multiples equal to the
minimum authorized denomination for Securities of such series or any multiple
thereof. The Trustee shall promptly notify the Issuer in writing of the
Securities of such series selected for redemption and, in the case of any
Securities of such series selected for partial redemption, the principal
amount thereof to be redeemed. For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to the redemption of
Securities of any series shall relate, in the case of any Security redeemed
or to be redeemed only in part, to the portion of the principal amount of
such Security which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption.
If notice of redemption has been given as provided by this Article Twelve,
the Securities or portions of Securities specified in such notice shall
become due and payable on the date and at the place or places stated in such
notice at the applicable redemption price, together with interest, if any,
accrued to the date fixed for redemption, and on and after said date (unless
the Issuer shall default in the payment of such Securities at the redemption
price, together with interest, if any, accrued to said date) interest, if any
(or, in the case of Original Issue Discount Securities, original issue
discount) on the Securities or portions of Securities so called for
redemption shall cease to accrue, and such Securities shall cease from and
after the date fixed for redemption (unless an earlier date shall be
specified in a Board Resolution, Officers' Certificate or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or pursuant to
which the form and terms of the Securities of such series were established)
except as provided in Sections 6.5 and 10.4, to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest, if any, to the date fixed for redemption. On
presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest, if any, accrued thereon to the date fixed for redemption;
provided that payment of interest, if any, becoming due on or prior to the
date fixed for redemption shall be payable to the Holders of Securities
registered as such on the relevant record date subject to the terms and
provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the redemption price shall, until paid
or duly provided for, bear interest from the date fixed for redemption at the
rate of interest or Yield to Maturity (in the case of an Original Issue
Discount Security) borne by such Security.
Upon presentation of any Security redeemed in part only,
the Issuer shall execute and the Trustee shall authenticate and deliver to or
on the order of the Holder thereof, at the expense of the Issuer, a new
Security or Securities of such series, and of like tenor, of authorized
denominations, in principal amount equal to the unredeemed portion of the
Security so presented.
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. Securities shall be excluded from
eligibility for selection for redemption if they are identified by
registration and certificate number in an Officers' Certificate delivered to
the Trustee at least 45 days prior to the last date on which notice of
redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Issuer, or (b) a Person
specifically identified in such written statement as an Affiliate of the
Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The
minimum amount of any sinking fund payment provided for by the terms of the
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by
the terms of the Securities of any series is herein referred to as an
"optional sinking fund payment." The date on which a sinking fund payment is
to be made is herein referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any series of Securities in cash, the Issuer may
at its option (a) deliver to the Trustee Securities of such series
theretofore purchased or otherwise acquired (except upon redemption pursuant
to the mandatory sinking fund) by the Issuer or receive credit for Securities
of such series (not previously so credited) theretofore purchased or
otherwise acquired (except as aforesaid) by the Issuer and delivered to the
Trustee for cancellation pursuant to Section 2.10, (b) receive credit for
optional sinking fund payments (not previously so, credited) made pursuant to
this Section 12.5, or (c) receive credit for Securities of such series (not
previously so credited) redeemed by the Issuer through any optional
redemption provision contained in the terms of such series. Securities so
delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund
payment date for any series, the Issuer will deliver to the Trustee an
Officers' Certificate (a) specifying the portion of the mandatory sinking
fund payment to be satisfied by payment of cash and the portion to be
satisfied by credit of Securities of such series and the basis for such
credit, (b) stating that none of the Securities of such series to be so
credited has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured or otherwise ceased to exist)
and are continuing, and (d) stating whether or not the Issuer intends to
exercise its right to make an optional sinking fund payment with respect to
such series and, if so, specifying the amount of such optional sinking fund
payment which the Issuer intends to pay on or before the next succeeding
sinking fund payment date. Any Securities of such series to be credited and
required to be delivered to the Trustee in order for the Issuer to be
entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to
Section 2.10 to the Trustee with such Officers' Certificate (or reasonably
promptly thereafter if acceptable to the Trustee). Such Officers'
Certificate shall be irrevocable and upon its receipt by the Trustee the
Issuer shall become unconditionally obligated to make all the cash payments
or payments therein referred to, if any, on or before the next succeeding
sinking fund payment date. Failure of the Issuer, on or before any such 60th
day, to deliver such Officers' Certificate and Securities (subject to the
parenthetical clause in the second preceding sentence) specified in this
paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option
to deliver or credit Securities of such series in respect thereof, and (ii)
that the Issuer will make no optional sinking fund payment with respect to
such series as provided in this Section 12.5.
If the sinking fund payment or payments (mandatory or
optional or both) to be made in cash on the next succeeding sinking fund
payment date plus any unused balance of any preceding sinking fund payments
made in cash shall exceed $50,000, or a lesser sum if the Issuer shall so
request with respect to the Securities of any particular series, such cash
shall be applied on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund redemption price
together with accrued interest, if any, to the date fixed for redemption. If
such amount shall be $50,000 or less and the Issuer makes no such request,
then it shall be carried over until a sum in excess of $50,000 is available.
The Trustee shall select, in the manner provided in Section 12.2, for
redemption on such sinking fund payment date a sufficient principal amount of
Securities of such series to absorb said cash, as nearly as may be, and shall
(if requested in writing by the Issuer) inform the Issuer of the serial
numbers of the Securities of such series (or portions thereof) so selected.
The Issuer, or the Trustee, in the name and at the expense of the Issuer (if
the Issuer shall so request the Trustee in writing) shall cause notice of
redemption of the Securities of such series to be given in substantially the
manner provided in Section 12.2 (and with the effect provided in Section
12.3) for the redemption of Securities of such series in part at the option
of the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to
the next cash sinking fund payment for such series and, together with such
payment, shall be applied in accordance with the provisions of this Section
12.5. Any and all sinking fund moneys held on the stated maturity date of
the Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of,
and interest, if any, on, the Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer
shall pay to the Trustee in cash or shall otherwise provide for the payment
of all interest, if any, accrued to the date fixed for redemption on
Securities to be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any
Securities of a series with sinking fund moneys or give any notice of
redemption of Securities for such series by operation of the sinking fund
during the continuance of a default in payment of interest on such Securities
or of any Event of Default with respect to such series except that, where the
giving of notice of redemption of any Securities shall theretofore have been
made, the Trustee shall redeem or cause to be redeemed such Securities,
provided that it shall have received from the Issuer a sum sufficient for
such redemption. Except as aforesaid, and subject to Article Thirteen, any
moneys in the sinking fund for such series at the time when any such default
or Event of Default known to a Responsible Officer of the Trustee shall
occur, and any moneys thereafter paid into the sinking fund, shall, during
the continuance of such default or Event of Default, be deemed to have been
collected under Article Five and held for the payment of all such Securities.
In case such Event of Default shall have been waived as provided in Article
Five or the default cured on or before the 60th day preceding the sinking
fund payment date in any year, such moneys shall thereafter be applied on the
next succeeding sinking fund payment date in accordance with this Section to
the redemption of such Securities.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior
Indebtedness. (a) The Issuer covenants and agrees, and each Holder of
Securities of each series, by his acceptance thereof, likewise covenants and
agrees, that anything in this Indenture or the Securities of any series to
the contrary notwithstanding, the indebtedness evidenced by the Securities of
each series is subordinate and junior in right of payment, to the extent
provided herein, to all Senior Indebtedness, whether outstanding on the date
of execution of this Indenture or thereafter created, incurred or assumed,
and that the subordination is for the benefit of the holders of Senior
Indebtedness.
(b) Subject to Section 13.4, if (i) the Issuer shall
default in the payment of any principal of, premium, if any, or interest, if
any, on any Senior Indebtedness when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration of
acceleration or otherwise, or (ii) any other default shall occur with respect
to Senior Indebtedness and the maturity of such Senior Indebtedness has been
accelerated in accordance with its terms, then, upon written notice of such
default to the Issuer and the Trustee by the holders of Senior Indebtedness
or any trustee therefor, unless and until, in either case, the default has
been cured or waived, or has ceased to exist, or any such acceleration has
been rescinded or such Senior Indebtedness has been paid in full, no direct
or indirect payment (in cash, property, securities, by set-off or otherwise)
shall be made or agreed to be made on account of the principal of, premium,
if any, or interest, if any, on any of the Securities, or in respect of any
redemption, retirement, purchase or other acquisition of any of the
Securities other than those made in capital stock of the Issuer (or cash in
lieu of fractional shares thereof).
(c) If any default (other than a default described in
paragraph (b) of this Section 13.1) shall occur under the Senior
Indebtedness, pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods
occurs (a "Senior Nonmonetary Default"), then, upon the receipt by the Issuer
and the Trustee of written notice thereof (a "Payment Notice") from or on
behalf of holders of such Senior Indebtedness specifying an election to
prohibit such payment and other action by the Issuer in accordance with the
following provisions of this paragraph (c), the Issuer may not make any
payment or take any other action that would be prohibited by paragraph (b) of
this Section 13.1 during the period (the "Payment Blockage Period")
commencing on the date of receipt of such Payment Notice and ending on the
earlier of (i) the date, if any, on which the holders of such Senior
Indebtedness or their representative notify the Trustee that such Senior
Nonmonetary Default is cured or waived or ceases to exist or the Senior
Indebtedness to which such Senior Nonmonetary Default relates is discharged
or (ii) the 179th day after the date of receipt of such Payment Notice.
Notwithstanding the provisions described in the immediately preceding
sentence, the Issuer may resume payments on the Securities following such
Payment Blockage Period. Any number of Payment Notices may be given;
provided, however, that (i) not more than one Payment Notice shall be given
within a period of any 360 consecutive days, and (ii) no default that existed
upon the date of such Payment Notice or the commencement of such Payment
Blockage Period (whether or not such event of default is on the same issue of
Senior Indebtedness) shall be made the basis for the commencement of any
other Payment Blockage Period.
(d) If (i) (A) without the consent of the Issuer, a
receiver, conservator, liquidator or trustee of the Issuer or of any of its
property is appointed by the order or decree of any court or agency or
supervisory authority having jurisdiction, and such decree or order remains
in effect for more than 60 days or (B) the Issuer is adjudicated bankrupt or
insolvent or (C) any of its property is sequestered by court order and such
order remains in effect for more than 60 days or (D) a petition is filed
against the Issuer under any state or federal bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
receivership law of any jurisdiction whether now or hereafter in effect
(including without limitation the Bankruptcy Code), and is not dismissed
within 60 days after such filing; or (ii) the Issuer (A) commences a
voluntary case or other proceeding seeking liquidation, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation or
other relief with respect to itself or its debt or other liabilities under
any bankruptcy, insolvency or other similar law now or hereafter in effect
(including without limitation the Bankruptcy Code) or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or (B) consents to any such relief
or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or (C) fails
generally to, or cannot, pay its debts generally as they become due or (D)
takes any corporate action to authorize or effect any of the foregoing; or
(iii) any Subsidiary of the Issuer takes, suffers or permits to exist any of
the events or conditions referred to in the foregoing clause (i) or (ii),
then all Senior Indebtedness (including any interest thereon accruing after
the commencement of any such proceedings) shall first be paid in full before
any payment or distribution, whether in cash, securities or other property,
shall be made to any Holder of any Securities on account thereof. Any
payment or distribution, whether in cash, securities or other property (other
than securities of the Issuer or any other corporation provided for by a plan
of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in these subordination provisions with respect
to the indebtedness evidenced by the Securities to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or adjustment) which would otherwise
(but for these subordination provisions) be payable or deliverable in respect
of the Securities of any series shall be paid or delivered directly to the
holders of Senior Indebtedness in accordance with the priorities then
existing among such holders until all Senior Indebtedness (including any
interest thereon accruing after the commencement of any such proceedings)
shall have been paid in full. In the event of any such proceeding, after
payment in full of all sums owing with respect to Senior Indebtedness, the
Holders of the Securities, together with the holders of any obligations of
the Issuer ranking on a parity with the Securities, shall be entitled to be
paid from the remaining assets of the Issuer the amounts at the time due and
owing on account of unpaid principal of and interest, if any, on the
Securities and such other obligations before any payment or other
distribution, whether in cash, property or otherwise, shall be made on
account of any capital stock or any obligations of the Issuer ranking junior
to the Securities and such other obligations.
(e) If, notwithstanding the foregoing, any payment or
distribution of any character, whether in cash, securities or other property
(other than securities of the Issuer or any other corporation provided for by
a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent provided in the subordination provisions with respect
to the indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), shall be received by
the Trustee or any Holder in contravention of any of the terms hereof, such
payment or distribution of securities shall be received in trust for the
benefit of and shall be paid over or delivered and transferred to the holders
of the Senior Indebtedness then outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all such Senior
Indebtedness in full. In the event of the failure of the Trustee or any
Holder to endorse or assign any such payment, distribution or security, each
holder of such Senior Indebtedness is hereby irrevocably authorized to
endorse or assign the same.
(f) No present or future holder of any Senior Indebtedness
shall be prejudiced in the right to enforce subordination of the indebtedness
evidenced by the Securities by any act or failure to act on the part of the
Issuer or any Holder of Securities. Nothing contained herein shall impair,
as between the Issuer and the Holders of Securities of each series, the
obligation of the Issuer to pay to such Holders the principal of and
interest, if any, on such Securities or prevent the Trustee or the Holder
from exercising all rights, powers and remedies otherwise permitted by
applicable law or hereunder upon a default or Event of Default hereunder, all
subject to the rights of the holders of the Senior Indebtedness to remove
cash, securities or other property otherwise payable or deliverable to the
Holders.
(g) Senior Indebtedness shall not be deemed to have been
paid in full unless the holders thereof shall have received cash, securities
or other property equal to the amount of such Senior Indebtedness then
outstanding. Upon the payment in full of all Senior Indebtedness, the
Holders of Securities of each series shall be subrogated to all rights of any
holders of Senior Indebtedness to receive any further payment or
distributions applicable to the Senior Indebtedness until the indebtedness
evidenced by the Securities of such series shall have been paid in full and
such payments or distributions received by such Holders, by reason of such
subrogation, of cash, securities or other property which otherwise would be
paid or distributed to the holders of Senior Indebtedness, shall, as between
the Issuer and its creditors other than the holders of Senior Indebtedness,
on the one hand, and such Holders, on the other hand, be deemed to be a
payment by the Issuer on account of Senior Indebtedness, and not on account
of the Securities of such series.
(h) The provisions of this Section 13.1 shall not impair
any rights, interests, remedies or powers of any secured creditor of the
Issuer in respect of any security interest the creation of which is not
prohibited by the provisions of this Indenture.
(i) The securing of any obligations of the Issuer,
otherwise ranking on a parity with the Securities, shall not be deemed to
prevent such obligations from constituting, respectively, obligations ranking
on a parity with the Securities.
SECTION 13.2 Reliance on Certificate of Liquidating Agent;
Further Evidence as to Ownership of Senior Indebtedness. Upon any payment or
distribution of assets of the Issuer, the Trustee and the Holders shall be
entitled to rely upon an order or decree issued by any court of competent
jurisdiction in which such dissolution or winding up or liquidation or
reorganization or arrangement proceedings are pending or upon a certificate
of the bankruptcy trustee, receiver, assignee for the benefit of creditors or
other Person making such payment or distribution, delivered to the Trustee or
to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Thirteen. In the absence of any such bankruptcy
trustee, receiver, assignee or other Person, the Trustee shall be entitled to
rely upon written notice by a Person representing himself to be a holder of
Senior Indebtedness (or a trustee or representative on behalf of such holder)
as evidence that such Person is a holder of Senior Indebtedness (or is such a
trustee or representative). If the Trustee determines, in good faith, that
further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distributions
pursuant to this Article Thirteen, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, as to the extent to which
such Person is entitled to participate in such payment or distribution, and
to other facts pertinent to the rights of such Person under this Article
Thirteen, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 13.3 Payment Permitted If No Default. Nothing
contained in this Article Thirteen or elsewhere in this Indenture, or in any
of the Securities, shall prevent (a) the Issuer at any time, except during
the pendency of any default with respect to Senior Indebtedness described in
Section 13.1(b) or Section 13.1(c) or of any of the events described in
Section 13.1(d), from making payments of the principal of or interest, if
any, on the Securities, or (b) the application by the Trustee or any paying
agent of any moneys deposited with it hereunder to payments of the principal
of or interest, if any, on the Securities, if, at the time of such deposit,
the Trustee or such paying agent, as the case may be, did not have the
written notice provided for in Section 13.5 of any event prohibiting the
making of such deposit, or if, at the time of such deposit (whether or not in
trust) by the Issuer with the Trustee or paying agent (other than the Issuer)
such payment would not have been prohibited by the provisions of this Article
Thirteen, and the Trustee or any paying agent shall not be affected by any
notice to the contrary received by it on or after such date.
SECTION 13.4 Disputes with Holders of Certain Senior
Indebtedness. Any failure by the Issuer to make any payment on or under any
Senior Indebtedness, other than any Senior Indebtedness as to which the
provisions of this Section 13.4 shall have been waived by the Issuer in the
instrument or instruments by which the Issuer incurred, assumed, guaranteed
or otherwise created such Senior Indebtedness, shall not be deemed a default
under Section 13.1 hereof if (i) the Issuer shall be disputing its obligation
to make such payment or perform such obligation, and (ii) either (A) no final
judgment relating to such dispute shall have been issued against the Issuer
which is in full force and effect and is not subject to further review,
including a judgment that has become final by reason of the expiration of the
time within which a party may seek further appeal or review, or (B) if a
judgment that is subject to further review or appeal has been issued, the
Issuer shall in good faith be prosecuting an appeal or other proceeding for
review, and a stay of execution shall have been obtained pending such appeal
or review.
SECTION 13.5 Trustee Not Charged with Knowledge of
Prohibition. Anything in this Article Thirteen or elsewhere in this
Indenture contained to the contrary notwithstanding, the Trustee shall not at
any time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment of moneys to or by the Trustee and shall
be entitled to assume conclusively that no such facts exist and that no event
specified in clauses (b) and (c) of Section 13.1 has happened unless and
until the Trustee shall have received an Officers' Certificate to the effect
or notice in writing to that effect signed by or on behalf of the holder or
holders, or the representatives, of Senior Indebtedness who shall have been
certified by the Issuer or otherwise established to the reasonable
satisfaction of the Trustee to be such holder or holders or representatives
or from any trustee under any indenture pursuant to which such Senior
Indebtedness shall be outstanding; provided, however, that, if the Trustee
shall not have received the Officers' Certificate or notice provided for in
this Section 13.5 at least three Business Days preceding the date upon which
by the terms hereof any moneys become payable for any purpose (including,
without limitation, the payment of either the principal of or interest, if
any, on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such moneys and apply the same to the purpose for which they were received
and shall not be affected by any notice to the contrary that may be received
by it within three Business Days preceding such date. The Issuer shall give
prompt written notice to the Trustee and to each paying agent of any facts
that would prohibit any payment of moneys to or by the Trustee or any paying
agent, and the Trustee shall not be charged with knowledge of the curing of
any default or the elimination of any other fact or condition preventing such
payment or distribution unless and until the Trustee shall have received an
Officers' Certificate to such effect.
SECTION 13.6 Trustee to Effectuate Subordination. Each
Holder of Securities by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination as between such Holder and holders of Senior
Indebtedness as provided in this Article Thirteen and appoints the Trustee
its attorney-in-fact for any and all such purposes.
SECTION 13.7 Rights of Trustee as Holder of Senior
Indebtedness. The Trustee shall be entitled to all the rights set forth in
this Article Thirteen with respect to any Senior Indebtedness which may at
the time be held by it, to the same extent as any other holder of Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article Thirteen shall apply
to claims of, or payments to, the Trustee under or pursuant to Section 6.6.
SECTION 13.8 Article Applicable to Paying Agents. In case
at any time any paying agent other than the Trustee shall have been appointed
by the Issuer and be then acting hereunder, the term "Trustee" as used in
this Article Thirteen shall in such case (unless the context shall otherwise
require) be construed as extending to and including such paying agent within
its meaning as fully for all intents and purposes as if the paying agent were
named in this Article Thirteen in addition to or in place of the Trustee;
provided, however, that Sections 13.5 and 13.7 shall not apply to the Issuer
if it acts as paying agent.
SECTION 13.9 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Issuer or by any act or failure
to act, in good faith, by any such holder, or by any noncompliance by the
Issuer with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof which any such holder may have or be otherwise
charged with. The holders of Senior Indebtedness, may at any time or from
time to time and in their absolute direction, change the manner, place or
terms of payment, change or extend the time of payment of, or renew or alter,
any such Senior Indebtedness, or amend or supplement any instrument pursuant
to which any such Senior Indebtedness is issued or by which it may be
secured, or release any security therefor, or exercise or refrain from
exercising any other of their rights under such Senior Indebtedness,
including, without limitation, the waiver of default thereunder, all without
notice to or assent from the Holders of the Securities or the Trustee and
without affecting the obligations of the Issuer, the Trustee or the Holders
of Securities under this Article Thirteen.
SECTION 13.10 Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of the Senior Indebtedness, and shall not be liable to any such
holders if it shall mistakenly pay over or distribute money or assets to
Securityholders or the Issuer. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of
its covenants or obligations as are specifically set forth in this Article
Thirteen and no implied covenants or obligations with respect to holders of
Senior Indebtedness shall be read into this Indenture against the Trustee.
ARTICLE FOURTEEN
SUBORDINATED GUARANTEE
SECTION 14.1 Guarantee.
Hovnanian Enterprises, Inc. (hereinafter referred to as the
"Guarantor," which term includes any successor thereto) hereby
unconditionally guarantees (such guarantee to be referred to herein as the
"Guarantee"), on a subordinated basis, 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 Security or the obligations of the Company hereunder or
thereunder, (i) the due and punctual payment of the principal of and any
premium or interest on the Securities, whether at maturity or on an interest
payment date, by acceleration, pursuant to an offer to purchase Securities 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 thereunder shall be promptly paid in
full, all in accordance with the terms hereof and thereof including all
amounts payable to the Trustee under Section 6.6 hereof, and (ii) in case of
any extension of time of payment or renewal of any Securities or any of such
other obligations, the same shall be promptly paid in full when due or to be
performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise.
If the Company fails to make any payment when due of any
amount so guaranteed for whatever reason, the Guarantor 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 of any series, this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities or
the Trustee with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge
or defense of such Guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, demand of performance, filing of claims with
a court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, the benefit of discussion,
protest, notice and all demand whatsoever and covenants that the Guarantee
shall not be discharged except by complete performance of the obligations
contained in the Securities, in this Indenture and in this Article 14. If
any Holder 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 Holder,
this Article 14, 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 Holders 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 5 hereof 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 acceleration of such obligations as provided in
Article 5 hereof such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purpose of this
Article 14. In addition, without limiting the foregoing, upon the
effectiveness of an acceleration under Article 5, the Trustee may make a
demand for payment on the Securities under 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 14.1 shall not be
valid or become obligatory for any purpose with respect to a Security until
the certificate of authentication on such Security shall have been signed by
the Trustee or any duly appointed agent.
SECTION 14.2 Guarantee Subordinated to Senior Debt of the
Guarantor.
The Guarantor agrees, and each Holder of the Securities by
his acceptance thereof likewise agrees, that the payments pursuant to the
Guarantee by the Guarantor shall be subordinated in accordance with the
following provisions of this Article 14 to the prior payment in full of all
Senior Debt of the Guarantor.
"Senior Debt of the Guarantor" means the Principal of and
interest on:
(1) all indebtedness for money borrowed by the
Guarantor or which is evidenced by a bond,
debenture, note or other similar instrument or
agreement whether or not for money borrowed;
(2) lease obligations of the Guarantor;
(3) all indebtedness, secured or unsecured, in
connection with the acquisition or improvement of
any property or asset or the acquisition of any
business by the Guarantor;
(4) all indebtedness secured by any mortgage, lien,
pledge, charge or encumbrance upon property owned
by the Guarantor and all indebtedness secured in
the manner specified in this clause (4) even if
the Guarantor has not assumed or become liable for
the payment thereof;
(5) all customer deposits held by the Guarantor in
escrow accounts pending closing of the related
sales;
(6) all indebtedness of the Guarantor created or
arising under any conditional sale or other title
retention agreement with respect to property
acquired by the Guarantor or otherwise
representing the deferred and unpaid balance of
the purchase price of any such property, including
all indebtedness created or arising in the manner
specified in this clause (6) even though the
rights and remedies of the seller or lender under
such agreement in the event of default are limited
to repossession or sale of such property;
(7) guarantees by the Guarantor, direct or indirect,
of any indebtedness of another Person of the types
referred to in clauses (1), (2), (3), (4), (5) or
(6); and
(8) contingent obligations of the Guarantor in respect
of, or to purchase or otherwise acquire or be
responsible or liable for through the purchase of
products or services, irrespective of whether such
products are delivered or such services are
rendered, any such indebtedness referred to in
clauses (1), (2), (3), (4), (5) or (6),
which indebtedness, lease obligation, deposit, guarantee or contingent
obligation the Guarantor has directly or indirectly created, incurred,
assumed, guaranteed or otherwise become liable or responsible for, whether
currently outstanding or hereafter created. All references to indebtedness
include any renewals, extensions, refundings, amendments and modifications of
any such indebtedness issued in exchange for such indebtedness; provided,
however, that Senior Debt of the Guarantor shall not include, without
limitation (i) a Guarantee, (ii) the guarantee by the Guarantor of the
Subordinated Notes, (iii) accounts payable or any other indebtedness to trade
creditors created or assumed by the Guarantor in the ordinary course of
business in connection with the obtaining of materials or services, (iv) any
liability for federal, state or local taxes owed or owing by the Guarantor
and (v) any indebtedness as to which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such indebtedness is on a parity with or otherwise not superior
in right of payment to a Guarantee.
This Article 14 shall constitute a continuing offer to all
persons who, in reliance upon such provisions, become holders of, or continue
to hold, Senior Debt of the Guarantor, and such provisions are made for the
benefit of the holders of Senior Debt of the Guarantor, and such holders are
made obligees hereunder and any one or more of them may enforce such
provisions.
SECTION 14.3 Guarantor Not to Make Payments With Respect
to Securities in Certain Circumstances.
(a) Upon the maturity of the principal of any Senior
Debt of the Guarantor (other than payment of sinking fund
installments) by lapse of time, acceleration or otherwise, all
principal thereof and interest thereon shall first be paid in full,
or such payment duly provided for in cash or in a manner satisfactory
to the holders of such Senior Debt of the Guarantor, before any
payment, pursuant to the Guarantee, is made on account of the
principal or interest on the Securities or to acquire any of the
Securities or on account of the mandatory redemption provisions in
the Securities (except mandatory redemption payments made in respect
of Securities acquired by the Guarantor before the maturity of such
Senior Debt of the Guarantor).
(b) Unless Section 14.4 shall be applicable, upon (1)
the occurrence of a Payment Default with respect to Senior Debt of
the Guarantor and receipt by the Guarantor and the Trustee of written
notice of such occurrence or (2) upon the acceleration of such
indebtedness, then no payment or distribution of any assets of the
Guarantor of any kind or character shall be made by the Guarantor or
the Trustee on account of principal of (or premium, if any) or
interest on the Securities or on account of the purchase or
redemption or other acquisition of Securities, unless and until such
Payment Default shall have been cured or waived in writing or shall
have ceased to exist or such Senior Debt of the Guarantor shall have
been discharged, after which the Guarantor shall resume making any
and all required payments in respect of the Securities, including any
missed payments.
(c) Unless Section 14.4 shall be applicable, upon (1)
the occurrence of a Non-Payment Default and (2) receipt by the
Trustee of written notice of such occurrence, then no payment or
distribution of any assets of the Guarantor of any kind or character
shall be made by the Guarantor or the Trustee on account of any
principal of (or premium, if any) or interest on the Securities or on
account of the purchase or redemption or other acquisition of
Securities, for a period ("Payment Blockage Period") commencing on
the earlier of the date of receipt by the Trustee of such written
notice from the holder of Senior Debt of the Guarantor or of the
Company, or any representative of a holder of Senior Debt of the
Guarantor or of the Company unless and until (subject to any blockage
of payment that may then be in effect under subsection (a) of this
Section) the earlier of (x) more than 120 days shall have elapsed
since receipt of such written notice by the Guarantor or the Trustee,
whichever was earlier, (y) such Non-Payment Default shall have been
cured or waived in writing or shall have ceased to exist or such
Senior Debt of the Guarantor or of the Company shall have been
discharged or (z) such Payment Blockage Period shall have been
terminated by written notice to the Guarantor or to the Company, as
the case may be, or to the Trustee from the holders of the Senior
Debt of the Guarantor or of the Company or any representative of the
holders of the Senior Debt of the Guarantor or of the Company
initiating such Payment Blockage Period, after which, in the case of
clause (x), (y) or (z), the Guarantor shall promptly resume making
any and all required payments in respect of the Securities, including
any missed payments. In no event shall a Payment Blockage Period
extend beyond 120 days from the date of the receipt by the Trustee of
the notice referred to in clause (2) hereof (the "Initial Period").
Any number of additional Payment Blockage Periods may be commenced
during the Initial Period; provided, however, that no such additional
period shall extend beyond the Initial Period. After the expiration
of the Initial Period, no Payment Blockage Period may be commenced on
the basis of a Non-Payment Default on the Senior Debt which was the
basis of a Payment Blockage Period commenced during the Initial
Period until at least 270 consecutive days have elapsed from the last
day of the Initial Period. No Non-Payment Default which existed or
was continuing on the date of the commencement of any Payment
Blockage Period and of which the applicable Senior Debt holder(s) are
aware shall be, or be made, the basis for the commencement of a
second Payment Blockage Period whether or not within a period of 270
consecutive days unless such event of default shall have been cured
or waived for a period of not less than 90 consecutive days.
(d) In the event that notwithstanding the provisions
of this Section 14.3 the Guarantor shall make, pursuant to this
Guarantee, any payment or distribution of any character to the
Trustee on account of the principal of or interest on the Securities,
or on account of the mandatory redemption provisions, after the
happening of an event of default with respect to any Senior Debt of
the Guarantor based on a default in the payment of the principal or
interest on Senior Debt of the Guarantor, or after receipt by the
Trustee of written notice as provided in this Section 14.3 of an
event of default with respect to any Senior Debt of the Guarantor, or
after the acceleration of the Securities of any series pursuant to
Section 5.1, then, but only if the Trustee is in receipt of the
notice specified in Section 14.7, unless and until such default or
event of default shall have been cured or waived or shall have ceased
to exist, or such acceleration shall have been rescinded, such
payment (subject to the provisions of Sections 14.7 and 14.8) shall
be held by the Trustee in trust for the benefit of, and, if the
Senior Debt of the Guarantor shall have been declared immediately due
and payable, shall be paid forthwith over and delivered to, the
holders of Senior Debt of the Guarantor (pro rata as to each of such
holders on the basis of the respective amounts of Senior Debt of the
Guarantor held by them) or their representative or the trustee under
the indenture or other agreement (if any) pursuant to which Senior
Debt of the Guarantor may have been issued, as their respective
interests may appear, such payments to be made in accordance with an
Officers' Certificate as provided in Section 11.5 (on which the
Trustee may conclusively rely) identifying all holders of Senior Debt
of the Guarantor and the principal amount of Senior Debt of the
Guarantor then outstanding held by each and stating the reasons why
such Officers' Certificate is being delivered to the Trustee, for
application to the payment of all Senior Debt of the Guarantor
remaining unpaid to the extent necessary to pay all Senior Debt 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 Debt of the Guarantor. In the event of the failure
of any Holder of a Security to endorse or assign any such payment or
distribution, each holder of Senior Debt of the Guarantor is hereby
irrevocably authorized to endorse or assign the same. The Guarantor
shall give prompt notice to the Trustee of any default under any
Senior Debt of the Guarantor or under any agreement pursuant to which
Senior Debt of the Guarantor may have been issued, as required by
Section 3.5.
SECTION 14.4 Guarantee Subordinated to Prior Payment of
All Senior Debt of the Guarantor on Dissolution, Winding Up, Liquidation or
Reorganization of the Guarantor.
In the event of (i) any insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment, composition or other
similar proceeding relating to the Guarantor, its creditors or its property,
(ii) any case or proceeding for the liquidation, dissolution or other
winding-up of the Guarantor, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings, (iii) any assignment by the
Guarantor for the benefit of creditors, or (iv) any other marshalling of the
assets of the Guarantor:
(a) the holders of all Senior Debt of the Guarantor
shall first be entitled to receive payment in full
(or to have such payment duly provided for) of the
principal and interest due thereon (including any
interest thereon accruing after commencement of
any such proceeding) before the Holders of the
Securities are entitled to receive, pursuant to
this Guarantee any payment or any distribution,
whether in cash, securities or other property, on
account of the principal or interest on the
Securities;
(b) any payment or distribution of assets of the
Company of any kind or character, whether in cash,
property or securities (other than securities of
the Guarantor as reorganized or readjusted or
securities of the Guarantor or any other company,
trust or corporation provided for by a plan of
reorganization or readjustment, junior or the
payment of which is otherwise subordinate, at
least to the extent provided in this Article, to
the payment of all Senior Debt of the Guarantor at
the time outstanding and to the payment of all
securities issued in exchange therefor to the
holders of the Senior Debt of the Guarantor at the
time outstanding), to which the Holders of the
Securities or the Trustee on behalf of the Holders
of the Securities would be entitled, pursuant to
this Guarantee except for the provisions of this
Article 14.4, including any such payment or
distribution which may be payable or deliverable
by reason of the payment of any other indebtedness
of 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 Senior Debt of the Guarantor or
their representative(s), or to the trustee under
any indenture under which Senior Debt 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
Debt of the Guarantor held or represented by
each), to the extent necessary to make payment in
full of all Senior Debt of the Guarantor remaining
unpaid after giving effect to any concurrent
payment or distribution or provision therefor to
the holders of such Senior Debt of the Guarantor;
and
(c) in the event that notwithstanding the foregoing
provisions of this Section 14.4, any payment or
distribution of assets of the Guarantor of any
kind or character, whether in cash, property or
securities shall be received, pursuant to the
Guarantee, by the Trustee or the Holders of the
Securities on account of principal or interest on
the Securities before all Senior Debt of the
Guarantor is paid in full, or effective provisions
made for its payment, such payment or
distribution(subject to the provisions of Sections
14.7 and 14.8) shall be received and held in trust
for and shall be paid over or delivered to the
liquidating trustee, agent or other person making
such payment or distribution or to the holders of
the Senior Debt of the Guarantor remaining unpaid
or unprovided for or their representative, or to
the trustee under any indenture under which Senior
Debt of the Guarantor may have been issued (pro
rata as provided in subsection (b) above), for
application to the payment of such Senior Debt of
the Guarantor until all such Senior Debt 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 Debt of the Guarantor.
If the Guarantor effects a transaction permitted by Article
Nine, such transaction shall not be deemed to be a dissolution, winding up,
liquidation or reorganization of the Guarantor for purposes of this Section.
The Guarantor shall give prompt written notice to the
Trustee of any dissolution, winding up, liquidation or reorganization of the
Guarantor, assignment for the benefit of creditors by the Guarantor or any
other marshalling of assets of the Guarantor.
SECTION 14.5 Holders to be Subrogated to Rights of Holders
of Senior Debt of the Guarantor.
Subject to the payment in full of all Senior Debt of the
Guarantor, the Holders of the Securities shall be subrogated to the rights of
the holders of Senior Debt of the Guarantor to receive payments or
distributions of assets of the Guarantor applicable to the Senior Debt of the
Guarantor until all amounts owing under the Guarantee shall be paid in full
and for the purpose of such subrogation no payments or distributions to the
holders of Senior Debt of the Guarantor by virtue of this Article 14 which
otherwise would have been made to the Holders of the Securities, shall, as
between the Guarantor, its creditors other than holders of its Senior Debt of
the Guarantor and the Holders, be deemed to be a payment by the Guarantor to
or on account of the Senior Debt of the Guarantor, it being understood that
the provisions of this Article 14 are solely for the purpose of defining the
relative rights of the holders of Senior Debt of the Guarantor on the one
hand and the Holders on the other hand.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article shall
have been applied, pursuant to the provisions of this Article, to the payment
of Senior Debt of the Guarantor, then and in such case, the Holders shall be
entitled to receive from the holders of such Senior Debt of the Guarantor at
the time outstanding any payments or distributions received by such holders
of such Senior Debt of the Guarantor in excess of the amount sufficient to
pay all amounts payable under or in respect of such Senior Debt of the
Guarantor in full.
SECTION 14.6 Obligations of the Guarantor Unconditional.
Nothing contained in this Article 14 or elsewhere in this
Indenture or in any Security is intended to or shall impair, as between the
Guarantor and the Holders, the obligations of the Guarantor, which are
absolute and unconditional, to pay to the Holders the principal of and
interest on the Securities as and when the same shall become due and payable
in accordance with the provisions of this Guarantee or is intended to or
shall affect the relative rights of the Holders and creditors of the
Guarantor other than the holders of the Senior Debt of the Guarantor, nor
shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon Default
under this Indenture, subject to the rights, if any, under this Article 14 of
the holders of Senior Debt of the Guarantor in respect of cash, property or
securities of the Guarantor received upon the exercise of any such remedy.
Upon any distribution of assets of the Guarantor referred
to in this Article 14, the Trustee, subject to the provisions of Sections 6.1
and 6.2, and the Holders of the Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of the liquidating trustee or agent or other person
making any distribution to the Trustee or to the Holders of the Securities,
for the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the
Guarantor, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article 14.
SECTION 14.7 Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice.
The Trustee shall not at any time be charged with knowledge
of the existence of any facts which would prohibit the making of any payment
to or by the Trustee, and the Trustee shall not be required to withhold
payment to the Holders of Securities as provided in Section 14.3(d), unless
and until the Trustee shall have received written notice thereof at its
Corporate Trust Office from the Guarantor or from one or more holders of
Senior Debt of the Guarantor or from any representative thereof or trustee
therefor identifying the specific sections of this Indenture involved and
describing in detail the facts that would obligate the Trustee to withhold
payments to Holders of Securities, as well as any other facts required by the
next succeeding paragraph of this Section 14.7; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Sections
6.1 and 6.2, shall be entitled to assume conclusively that no such facts
exist.
The Trustee shall be entitled to rely on the delivery to it
of a written notice by a person representing himself to be a holder of Senior
Debt of the Guarantor (or a trustee on behalf of such holder) to establish
that such notice has been given by a holder of Senior Debt of the Guarantor
or a trustee on behalf of any such holder. In the event that the Trustee
determines in good faith that further evidence is required with respect to
the right of any person as a holder of Senior Debt of the Guarantor to
participate in any payment or distribution pursuant to this Article 14, the
Trustee may request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of the Guarantor
held by such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts pertinent to
the rights of such person under this Article 14, and if such evidence is not
furnished the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment.
SECTION 14.8 Application by Trustee of Monies Deposited
with It.
Except as provided in Section 10 any deposit of monies by
the Guarantor with the Trustee or any Paying Agent (whether or not in trust)
for the payment of the principal or interest on any Securities shall be
subject to the provisions of Sections 14.2, 14.3, 14.4 and 14.5 except that,
if prior to the opening of business on the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including,
without limitation, the payment, pursuant to this Guarantee, of either the
principal or the interest on any Security) the Trustee shall not have
received with respect to such monies the notice provided for in Section 14.7,
then the Trustee shall have full power and authority to receive such monies
and to apply the same to the purpose for which they were received and shall
not be affected by any notice to the contrary which may be received by it on
or after such date, without, however, limiting any rights that holders of
Senior Debt of the Guarantor may have to recover any such payments from the
Holders in accordance with the provisions of this Article.
SECTION 14.9 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantor or Holders of Senior Debt of the Guarantor.
No right of any present or future holders of any Senior
Debt 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 Debt of the
Guarantor may extend, renew, modify or amend the terms of the Senior Debt 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 this Indenture or the
Holders.
SECTION 14.10 Holders Authorize Trustee to Effectuate
Subordination of Securities.
Each Holder of the Securities by his acceptance thereof
authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article 14 and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Guarantor (whether in bankruptcy,
insolvency or receivership proceedings, voluntary liquidation or upon
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Guarantor, the timely filing of
a claim for the unpaid balance, pursuant to this Guarantee, of its or his
Securities in the form required in said proceedings and cause said claim to
be approved. If the Trustee does not file a proper claim or proof of debt in
the form required in such proceeding on or prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of
Senior Debt of the Guarantor have the right to file and are hereby authorized
to file an appropriate claim for and on behalf of the Holders of said
Securities.
SECTION 14.11 Right of Trustee to Hold Senior Debt of the
Guarantor.
The Trustee in its individual capacity, shall be entitled
to all of the rights set forth in this Article 14 in respect of any Senior
Debt of the Guarantor at any time held by it to the same extent as any other
holder of such Senior Debt of the Guarantor, and nothing in this Indenture
shall be construed to deprive the Trustee of any of its rights as such
holder.
SECTION 14.12 Trustee Not Fiduciary for Holders of Senior
Debt of the Guarantor.
With respect to the holders of Senior Debt of the
Guarantor, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article 14,
and no implied covenants or obligations with respect to the holders of Senior
Debt of the Guarantor shall be read into this Indenture against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Debt of the Guarantor and the Trustee shall not be liable to any
holder of Senior Debt of the Guarantor if it shall pay over or deliver to
Holders of Securities, the Guarantor or any other person monies or assets to
which any holder of Senior Debt of the Guarantor shall be entitled by virtue
of this Article 14 or otherwise.
SECTION 14.13 Article 14 Not To Prevent Events of Default.
The failure to make a payment on account of principal or
interest on the Securities of any series by reason of any provision in this
Article 14 shall not be construed as preventing the occurrence of an Event of
Default under Section 5.1.
SECTION 14.14 Execution and Delivery of Guarantee.
To evidence the Guarantee set forth in this Article 14, the
Guarantor hereby agrees that the Guarantee Notation, substantially in the
form of Exhibit A hereto, shall be endorsed on each Security authenticated
and delivered by the Trustee 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 the Guarantee
Notation on each Security.
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 14.15 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 Debt of the Company.
SECTION 14.16 Officers' Certificate.
If there occurs an event referred to in the first sentence
of Section 14.4(c) or the first sentence of Section 14.4, the Guarantor shall
promptly give to the Trustee an Officers' Certificate (on which the Trustee
may conclusively rely) identifying all holders of Senior Debt of the
Guarantor and the principal amount of Senior Debt of the Guarantor then
outstanding held by each such holder and stating the reasons why such
Officers' Certificate is being delivered to the Trustee.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, as of the date first written above.
HOVNANIAN ENTERPRISES, INC.
By:_____________________________
Title:__________________________
__________________, as Trustee
By:_____________________________
Title:__________________________
EXHIBIT A
[FORM OF NOTATION OF SECURITY
RELATING TO GUARANTEE]
GUARANTEE
Hovnanian Enterprises, Inc. (hereinafter referred to as the
"Guarantor", which term includes any successor person under the Indenture
(the "Indenture") referred to in the Security upon which this notation is
endorsed), has unconditionally guaranteed on a subordinated basis (i) the due
and punctual payment of the principal of, premium, if any, and interest on
the Securities, whether at maturity, by acceleration or otherwise, the due
and punctual payment of interest on the overdue principal of, premium, if
any, and interest, if any, on the Securities, to the extent lawful, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms set forth in Article
14 of the Indenture and (ii) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
The obligations of the Guarantor to the Holders and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth
and are expressly subordinated and subject in right of payment to the prior
payment in full of all Senior Debt of the Guarantor, to the extent and in the
manner provided in Article 14 of the Indenture and reference is hereby made
to such Indenture for the terms of the Guarantee and the subordination
thereof therein made.
No stockholder, officer, director or incorporator, as such,
past, present or future, of the Guarantor shall have any personal liability
under the Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
The Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication of the Securities upon which
this Guarantee is endorsed shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
Guarantor
[SEAL] HOVNANIAN ENTERPRISES, INC.
By_____________________________
By_____________________________
____________________
[FN]
This Cross Reference Sheet is not part of the Indenture.
Exhibit 4.9
=============================================================================
HOVNANIAN ENTERPRISES, INC.
and
[WARRANT AGENT]
As Warrant Agent
________________
Warrant Agreement -- [Common Stock]
[Preferred Stock]
Dated as of _______________________
_________________
=============================================================================
[FN]
Options represented by bracketed or blank sections herein shall be
determined in conformity with the applicable prospectus supplement or
supplements
TABLE OF CONTENTS
Page
ARTICLE I.
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES . . . . . . . . 4
SECTION 1.1. Issuance of Warrants . . . . . . . . . . . . . . . 4
SECTION 1.2. Execution and Delivery of Warrant Certificates . . 4
SECTION 1.3. Issuance of Warrant Certificates . . . . . . . . . 5
SECTION 1.4. Temporary Warrant Certificate . . . . . . . . . . 6
ARTICLE II.
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS . . . . . . . . . . . 6
SECTION 2.1. Warrant Price . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Duration and Exercise of Warrants . . . . . . . . 6
SECTION 2.3. No Fractional Shares to Be Issued . . . . . . . . 7
SECTION 2.4. Covenant to Reserve Shares for Issuance on
Exercise . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.5. Share Record Date . . . . . . . . . . . . . . . . 9
SECTION 2.6. Rights Upon Dissolution or Liquidation . . . . . . 9
ARTICLE III.
ADJUSTMENT OF WARRANT PRICE AND
SHARES OF [COMMON] [PREFERRED] STOCK PURCHASABLE . . . . 10
SECTION 3.1. Adjustment of Warrant Price . . . . . . . . . . . 10
[SECTION 3.2. Adjustment of shares of [Common] [Preferred]
Stock Purchasable Upon Exercise of Warrants . . . . . . 15
SECTION 3.3. Statements on Warrants . . . . . . . . . . . . . . 15
ARTICLE IV.
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES . . . . . . . . 15
SECTION 4.1. No Rights as Warrant Securityholder Conferred
by Warrants or Warrant Certificates . . . . . . . . . . 15
SECTION 4.2. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.3. Holder of Warrant Certificate May Enforce
Rights . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.4. Reclassification, Consolidation, Merger, Share
Exchange, Sale or Conveyance . . . . . . . . . . . . . . 16
ARTICLE V.
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES . . . . . . . . . . . 17
SECTION 5.1. Exchange and Transfer of Warrant Certificates . . 17
SECTION 5.2. Treatment of Holders of Warrant Certificates . . . 18
SECTION 5.3. Cancellation of Warrant Certificates . . . . . . . 18
ARTICLE VI.
CONCERNING THE WARRANT AGENT . . . . . . . . . 18
SECTION 6.1. Warrant Agent . . . . . . . . . . . . . . . . . . 18
SECTION 6.2. Conditions of Warrant Agent's Obligations . . . . 19
(a) Compensation and Indemnification . . . . . . . 19
(b) Agent for the Company . . . . . . . . . . . . . 19
(c) Counsel . . . . . . . . . . . . . . . . . . . . 19
(d) Documents . . . . . . . . . . . . . . . . . . . 19
(e) Certain Transactions . . . . . . . . . . . . . 19
(f) No Liability for Interest . . . . . . . . . . . 19
(g) No Liability for Invalidity . . . . . . . . . . 20
(h) No Responsibility for Representations . . . . . 20
(i) No Implied Obligations . . . . . . . . . . . . 20
SECTION 6.3. Resignation and Appointment of Successor . . . . . 20
ARTICLE VII.
[REDEMPTION;] [ACCELERATED SHARE CONVERSION
DATE AND] [CONVERSION OF WARRANTS INTO SHARES] . . . . . 21
[SECTION 7.1. Redemption . . . . . . . . . . . . . . . . . . . 21
SECTION 7.2. Accelerated Share Conversion Date . . . . . . . . 22
SECTION 7.3. Conversion of Warrants into Shares . . . . . . . . 22
SECTION 7.4. Notice of Proposed Actions . . . . . . . . . . . . 23
ARTICLE VIII.
MISCELLANEOUS . . . . . . . . . . . . . 24
SECTION 8.1. Amendment . . . . . . . . . . . . . . . . . . . . 24
SECTION 8.2. Notices and Demands to the Company and Warrant
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8.3. Addresses . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.4. Applicable Law . . . . . . . . . . . . . . . . . . 25
SECTION 8.5. Delivery of Prospectus . . . . . . . . . . . . . . 25
SECTION 8.6. Obtaining of Governmental Approvals . . . . . . . 25
SECTION 8.7. Persons Having Rights under Warrant Agreement . . 25
SECTION 8.8. Headings . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.9. Counterparts . . . . . . . . . . . . . . . . . . . 25
SECTION 8.10. Inspection of Agreement . . . . . . . . . . . . . 25
HOVNANIAN ENTERPRISES, INC.
Form of [Common Stock][Preferred Stock]
Warrant Agreement
THIS WARRANT AGREEMENT dated as of
between Hovnanian Enterprises, Inc., a Delaware corporation (the "Company,")
and [Warrant Agent], as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Company proposes to sell [if Warrants are sold
with Debt Securities or Preferred Stock -- [title of Debt Securities or
Preferred Stock being offered] (the "Offered Securities") with] warrant
certificates evidencing one or more warrants (the "Warrants" or individually
a "Warrant") representing the right to purchase [ ] shares of the Company's
common stock, par value $.01 per share (the "Common Stock"), [ ] shares of
the Company's preferred stock, par value $.01 per share (the "Preferred
Stock," collectively with the Common Stock, the "Warrant Securities"), such
warrant certificates and other warrant certificates issued pursuant to this
Agreement being herein called the "Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company in connection with the issuance, exchange, exercise and
replacement of the Warrant Certificates, and in this Agreement wishes to set
forth, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions on which they may be issued,
exchanged, exercised and replaced;
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES
SECTION 1.1. Issuance of Warrants. [If Warrants alone --
Upon issuance, each Warrant Certificate shall evidence one or more Warrants.]
[If Offered Securities and Warrants -- Warrants shall be [initially] issued
in connection with the issuance of the Offered Securities [but shall be
separately transferable on and after (the "Detachable
Date")][and shall not be separately transferable] and each Warrant
Certificate shall evidence one or more Warrants.] Each Warrant evidenced
thereby shall represent the right, subject to the provisions contained herein
and therein, to purchase Warrant Securities. [If Offered
Securities and Warrants -- Warrant Certificates shall be initially issued in
units with the Offered Securities and each Warrant Certificate included in
such a unit shall evidence Warrants for each shares of
Offered Securities included in such unit.]
SECTION 1.2. Execution and Delivery of Warrant
Certificates. Each Warrant Certificate, whenever issued, shall be in
registered form substantially in the form set forth in Exhibit A hereto,
shall be dated and may have such letters, numbers, or other
marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as the officers of the Company
executing the same may approve (execution thereof to be conclusive evidence
of such approval) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed, or to conform to usage. The
Warrant Certificates shall be executed on behalf of the Company by [its
Chairman of the Board, the President, any Senior Vice President, or any Vice
President and by the Secretary or any Assistant Secretary] under its
corporate seal reproduced thereon. Such signatures may be manual or
facsimile signatures of such authorized officers and may be imprinted or
otherwise reproduced in the Warrant Certificates. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificates shall be valid for any purpose, and
no Warrant evidenced thereby shall be exercisable, until such Warrant
Certificate has been countersigned by the manual signature of the Warrant
Agent. Such signature by the Warrant Agent upon any Warrant Certificate
executed by the Company shall be conclusive evidence that the Warrant
Certificate so countersigned has been duly issued hereunder.
In case any officer of the Company who shall have signed any
of the Warrant Certificates either manually or by facsimile signature shall
cease to be such officer before the Warrant Certificates so signed shall have
been countersigned and delivered by the Warrant Agent, such Warrant
Certificates may be countersigned and delivered notwithstanding that the
person who signed such Warrant Certificates ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company
by such persons as, at the actual date of the execution of such Warrant
Certificate, shall be the proper officers of the Company, although at the
date of the execution of this Agreement any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as
used herein shall mean any person in whose name at the time any Warrant
Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose [If Offered Securities and Warrants are not
immediately detachable -- or upon the register of the Offered Securities
prior to the Detachable Date. Prior to the Detachable Date, the Company
will, or will cause the registrar of the Offered Securities to, make
available at all times to the Warrant Agent such information as to holders of
the Offered Securities with Warrants as may be necessary to keep the Warrant
Agent's records up to date].
SECTION 1.3. Issuance of Warrant Certificates. Warrant
Certificates evidencing the right to purchase an aggregate total number not
exceeding Warrant Securities (except as provided in Sections
1.4, 3.1 and 4.2) may be executed by the Company and delivered to the Warrant
Agent upon the execution of this Warrant Agreement or from time to time
thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates
duly executed on behalf of the Company, countersign Warrant Certificates
evidencing Warrants representing the right to purchase up to
Warrant Securities and shall deliver such Warrant Certificates to or upon the
order of the Company. Subsequent to such issuance of the Warrant
Certificates, the Warrant Agent shall countersign a Warrant Certificate only
if the Warrant Certificate is issued in exchange or substitution for one or
more previously countersigned Warrant Certificates or in connection with
their transfer, as hereinafter provided or as provided in Section 2.3(c).
SECTION 1.4. Temporary Warrant Certificate. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and
upon the order of the Company, the Warrant Agent shall authenticate and
deliver, temporary Warrant Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced substantially of the tenor of
the definitive Warrant Certificate in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Warrant Certificates may determine, as evidenced
by their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company
will cause definitive Warrant Certificates to be prepared without
unreasonable delay. After the preparation of definitive Warrant
Certificates, the temporary Warrant Certificates shall be exchangeable for
definitive Warrant Certificates upon surrender of the temporary Warrant
Certificates at the corporate trust office of the Warrant Agent [or
], without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Warrant Certificates the Company shall execute and the
Warrant Agent shall authenticate and deliver in exchange therefor definitive
Warrant Certificates representing the same aggregate number of Warrants.
Until so exchanged, the temporary Warrant Certificates shall in all respects
be entitled to the same benefits under this Agreement as definitive Warrant
Certificates.
ARTICLE II.
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.1. Warrant Price. (a) During the period from
, through and including , the exercise price of each
Warrant will be . During the period from ,
through and including , the exercise price of each Warrant
will be . Such purchase price of Warrant Securities is
referred to in this Warrant Agreement as the "Warrant Price." No adjustment
shall be made for any dividends on any Warrant Securities issuable upon
exercise of any Warrants.
(b) Warrants may be exercised by the holders thereof at
any time, at the Warrant Price then in effect, when the Warrant Securities
are registered pursuant to an effective registration statement under the
Securities Act. Warrants shall in no event be exercisable for the purchase
of Warrant Securities at any time when such Warrant Securities are not
registered pursuant to an effective registration statement under the
Securities Act.
The Company shall be required to register the Warrant
Securities, or holders will have such other rights, only as provided in
Section 2.3.
The Company shall promptly give all holders notice of the
effectiveness of a registration statement in respect of Warrant Securities
and of any subsequent lapses in the effectiveness of such registration
statement.
SECTION 2.2. Duration and Exercise of Warrants. (a) The
registered holder of any Warrant Certificate may exercise the Warrants
evidenced thereby in whole or in part at any time after ,
upon surrender of the Warrant Certificate with the form of election to
purchase on the reverse side thereof duly executed, to the Warrant Agent at
the principal office of the Warrant Agent [in the Borough of Manhattan, City
and State of New York,] together with payment of the Warrant Price for each
share of [Common] [Preferred] Stock as to which the Warrants are exercised,
at or prior to 5:00 P.M. ([New York time]) on [the earliest of (i) ,
(the "Scheduled Share Conversion Date"), (ii) the Accelerated Share
Conversion Date as defined in Section 7.1 hereof, or (iii) the business day
immediately preceding the Redemption Date as defined in Section 7.1 hereof]
[ [or such later date as the Company may designate, by notice
to the Warrant Agent and the holders of the Warrant Certificates mailed to
their addresses as set forth in the record books of the Warrant Agent] (the
"Expiration Date"). Each Warrant not exercised at or before 5:00 P.M. [New
York City time], on the Expiration Date shall become void, and all rights of
the holder of the Warrant Certificate evidencing such Warrant under this
Agreement shall cease].
(b) The Warrant Price for each share of [Common]
[Preferred] Stock pursuant to the exercise of a Warrant shall initially be
, shall be subject to adjustment as provided in Article VII hereof, and shall
be payable in lawful money of the United States of America.
(c) Upon receipt of a Warrant Certificate, with the form
of election to purchase on the reverse side thereof, duly executed,
accompanied by payment of the Warrant Price for the shares to be purchased
and an amount equal to any applicable transfer tax in cash, or by check, bank
draft or postal or express money order payable to the order of the Company,
the Warrant Agent shall thereupon promptly (i) requisition from any transfer
agent of the [Common] [Preferred] Stock of the Company certificates for the
number of whole shares of [Common] [Preferred] Stock to be purchased and,
when appropriate, for the number of fractional shares to be sold by the
Warrant Agent, and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of issuance of
fractional shares or Warrants, and (iii) promptly after receipt of such
certificates cause the same to be delivered to or upon the order of the
registered holder of such Warrant Certificate, registered in such name or
names as may be designated by such holder, and , when appropriate, after
receipt promptly deliver such cash to or upon the order of the registered
holder of such Warrant Certificate.
(d) In case the registered holder of any Warrant
Certificate shall exercise less than all the Warrants evidenced thereby, a
new Warrant Certificate evidencing Warrants equivalent to the Warrants
remaining unexercised shall be issued by the Warrant Agent to the registered
holder of such Warrant Certificate or to his duly authorized assigns, subject
to the provisions of Section 2.4 hereof.
(e) The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and concurrently pay to the
Company all monies received for the purchase of shares of [Common]
[Preferred] Stock through the exercise of Warrants.
SECTION 2.3. No Fractional Shares to Be Issued. (a)
Notwithstanding anything to the contrary contained in this Agreement, if the
number of shares of [Common] [Preferred] Stock purchasable on the exercise of
each Warrant is not a whole number, the Company shall not be required to
issue any fraction of a share of [Common] [Preferred] Stock or to distribute
stock certificates that evidence fractional shares of [Common] [Preferred]
Stock or to issue a Warrant Certificate representing a fractional Warrant
upon exercise of any Warrants. If Warrant Certificates evidencing more than
one Warrant shall be surrendered for exercise at one time by the same holder,
the number of full shares which shall be issuable upon exercise thereof shall
be computed on the basis of the aggregate number of Warrants so surrendered.
[If any fraction of a share of [Common] [Preferred] Stock would, except for
the provisions of this Section 2.3, be issuable on the exercise of any
Warrant or Warrants, the Company shall purchase such fraction for an amount
in cash equal to such fraction of the then current market price of a share of
[Common] [Preferred] Stock. The Warrant holders, by their acceptance of the
Warrant Certificates, expressly waive their right to receive any fraction of
a share of [Common] [Preferred] Stock or a stock certificate representing a
fraction of a share of [Common] [Preferred] Stock.
(b) If the number of shares purchasable upon the
exercise of each Warrant is adjusted pursuant to Section 3.1(l), the Company
shall nonetheless not be required to issue fractions of shares upon exercise
of the Warrants or to distribute share certificates which evidence fractional
shares, nor shall the Company be required to make any cash adjustment in
respect of a fractional interest in a share, but the fractional interest to
which any person is entitled shall be sold in the manner set forth in
subsection (c) of this Section 2.3 by the Warrant Agent, acting as agent for
the person entitled to such fractional interest, except as otherwise provided
in such subsection.
(c) The Warrant Agent shall remit to such person the
proceeds of the sale of any such fractional interest sold by it as such
agent. Fractional interests shall be non-transferable except by or to the
Warrant Agent acting as herein authorized. The Warrant Agent may sell
fractional interests on the basis of market prices of the Warrants or shares
of [Common] [Preferred] Stock as determined by the Warrant Agent in its sole
discretion. In lieu of making an actual sale of a fractional interest, the
Company may authorize the Warrant Agent to value fractional interests without
actual sale on the basis of the current market price of the Warrants or
shares of [Common] [Preferred] Stock as determined by the Warrant Agent in
its sole discretion.
SECTION 2.4. Covenant to Reserve Shares for Issuance on
Exercise. The Company covenants that it will at all times reserve and keep
available out of its authorized but unissued Warrant Securities or its
authorized and issued Warrant securities held in its Treasury, solely for the
purpose of issue upon exercise of Warrants, the full number of Warrant
Securities, if any, then issuable if all outstanding Warrants then
exercisable were to be exercised. The Company covenants that, subject to
payment of the Warrant Price, all shares of [Common] [Preferred] Stock which
shall be so issuable shall be duly and validly issued and fully paid and
nonassessable.
[The Company hereby authorizes and directs its current and
future transfer agents for the shares of [Common] [Preferred] Stock and for
any shares of the Company's capital stock issuable upon the exercise of any
of the Warrants at all times to reserve such number of authorized shares as
shall be requisite for such purpose. The Company will supply such transfer
agents with duly executed stock certificates for such purposes and will
provide or otherwise make available any cash which may be payable as provided
in this Article II.]
The Company covenants that if any shares of [Common]
[Preferred] Stock required to be reserved for purposes of exercise of
Warrants require, under any federal or state law or rule or regulation of any
national securities exchange, registration with or approval of any
governmental authority, or listing on any national securities exchange before
such shares may be issued upon exercise, the Company will in good faith and
as expeditiously as possible endeavor to cause such shares to be duly
registered, approved or listed on the relevant national securities exchange,
as the case may be; provided, however, that in no event shall such shares of
[Common] [Preferred] Stock be issued, and the Company is hereby authorized to
suspend the exercise of all Warrants, for the period during which such
registration, approval or listing is required but not in effect.
The Company further covenants and agrees that it will pay
when due and payable any and all Federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Warrant
Certificates or of any shares of [Common] [Preferred] Stock upon the exercise
or conversion of Warrants. The Company shall not, however, be required to
pay any transfer tax which may be payable in respect of any transfer involved
in the transfer or delivery of Warrant Certificates or the issuance or
conversion or delivery of Certificates for shares of [Common] [Preferred]
Stock in a name other than that of the registered holder of the Warrant
Certificate evidencing Warrants surrendered for exercise or to issue or
deliver any certificates for shares of [Common] [Preferred] Stock upon the
exercise or conversion of any Warrants until any such tax shall have been
paid (any such tax being payable by the holder of such Warrant Certificate at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 2.5. Share Record Date. Each person in whose name
any certificate for shares of [Common] [Preferred] Stock is issued upon the
exercise of Warrants shall for all purposes be deemed to have become the
holder of record of the shares of [Common] [Preferred] Stock represented
thereby on, and such certificate shall be dated, the date upon which the
Warrant Certificate evidencing such Warrants was duly surrendered and payment
of the Warrant Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which
the [Common] [Preferred] Stock transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding business day on
which the [Common] [Preferred] Stock transfer books of the Company are open.
Prior to the exercise of the Warrants evidenced thereby, the holder of a
[Common] [Preferred] Stock Warrant Certificate shall not be entitled to any
rights of a shareholder of the Company with respect to shares for which the
Warrants shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
SECTION 2.6. Rights Upon Dissolution or Liquidation.
Notwithstanding any other provision of this Agreement relating to the rights
of holders of Warrant Certificates, in the event that, at any time after the
date hereof, there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company, then the Company shall give notice
by first-class mail to each holder of an outstanding Warrant at such holder's
address as it appears on the Warrant Register at the earliest practicable
time (and, in any event, not less than twenty days before any date set for
definitive action), of the date on which such dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall also
specify the date as of which the holders of record of [Common] [Preferred]
Stock or other securities, if any, underlying the Warrants shall be entitled
to exchange their shares for securities, money or other property deliverable
upon such dissolution, liquidation or winding up, as the case may be, on
which date each holder of outstanding Warrants shall receive cash or other
property (taking into account the Warrant Price then if effect) which it
would have been entitled to receive had the Warrants been exercisable and
exercised immediately prior to such dissolution, liquidation or winding up
and the rights to exercise the Warrants shall terminate.
ARTICLE III.
ADJUSTMENT OF WARRANT PRICE AND
SHARES OF [COMMON] [PREFERRED] STOCK PURCHASABLE
SECTION 3.1. Adjustment of Warrant Price. The Warrant
Price specified in Section 2.1 shall be subject to adjustment from time to
time as follows:
(a) In case the Company shall (i) pay a dividend or make
a distribution on the Warrant Securities in shares of its [Common]
[Preferred] Stock, (ii) subdivide the outstanding Warrant Securities into a
greater number of shares, (iii) combine the outstanding Warrant Securities
into a smaller number of shares or (iv) issue any shares of its capital stock
in a reclassification of the shares of [Common] [Preferred] Stock (including
any such reclassification in connection with a consolidation, merger or share
exchange in which the Company is the continuing corporation), the Warrant
Price in effect at such time shall be adjusted so that the holder of any
Warrant thereafter surrendered for exercise shall be entitled to receive the
number of shares of [Common] [Preferred] Stock which he would have owned or
have been entitled to receive after the happening of any of the events
described above had such Warrant been exercised immediately prior to the
record date in the case of a dividend or the effective date in the case of a
subdivision or combination. An adjustment made pursuant to this subparagraph
(a) shall become effective immediately after the record date in the case of a
dividend, except as provided in subparagraph (h) below, and shall become
effective immediately after the effective date in the case of a subdivision
or combination.
(b) In case the Company shall issue rights or warrants
to all holders of [Common] [Preferred] Stock entitling them (for a period
expiring within 45 days after the record date mentioned below) to subscribe
for or purchase shares of [Common] [Preferred] Stock at a price per share
less than the current market price per share of [Common] [Preferred] Stock
(as defined for purposes of this subparagraph (b) in subparagraph (e) below),
at the record date for the determination of stockholders entitled to receive
such rights or warrants, the Warrant Price in effect after such record date
shall be determined by multiplying such Warrant Price by a fraction, the
numerator of which shall be the number of shares of [Common] [Preferred]
Stock outstanding at the close of business on the record date for issuance of
such rights or warrants plus the number of shares of [Common] [Preferred]
Stock which the aggregate offering price of the total number of shares of
[Common] [Preferred] Stock so offered would purchase at such current market
price, and the denominator of which shall be the number of shares of [Common]
[Preferred] Stock outstanding at the close of business on the record date for
issuance of such rights or warrants plus the number of additional shares of
[Common] [Preferred] Stock receivable upon exercise of such rights or
warrants. Such adjustment shall be made successively whenever any such
rights or warrants are issued, and shall become effective immediately, except
as provided in subparagraph (h) below, after such record date. In case such
subscription price may be paid in a consideration part or all of which shall
be in a form other than cash, the value of such consideration shall be as
determined by the Board of Directors of the Company, whose determination
shall be conclusive, and described in a statement filed with the Warrant
Agent. Shares of [Common] [Preferred] Stock owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not
so issued, the Warrant Price shall again be adjusted to be the Warrant Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall distribute to all holders
of shares of [Common] [Preferred] Stock (including any such distribution made
in connection with a consolidation, merger or share exchange in which the
Company is the continuing corporation) any shares of capital stock of the
Company (other than shares of [Common] [Preferred] Stock) or evidences of its
indebtedness or assets (excluding cash dividends or distributions paid from
retained earnings of the Company or from any surplus legally available for
dividends under the laws of the state of incorporation of the Company and
dividends payable in shares of [Common] [Preferred] Stock) or rights or
warrants to subscribe for or purchase any of its securities (excluding those
rights or warrants referred to in subparagraph (b) above) (any of the
foregoing being hereinafter in this subparagraph (c) called the
"Securities"), then, in each such case, unless the Company elects to reserve
such Securities (or, at the option of the Company, pay cash as provided
below) for distribution to the holders of the Warrants upon the exercise of
the Warrants so that any such holder exercising Warrants will receive such
exercise, in addition to the Shares of [Common][Preferred] Stock to which
such holder is entitled, the amount and kind of such Securities which such
holder would have received if such holder had, immediately prior to the
record date for the distribution of the Securities, exercised its Warrants
into Warrant Securities (or, at the option of the Company, a sum equal to the
value thereof at the time of distribution as determined by the Company's
Board of Directors in its sole discretion), the Warrant Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Warrant Price in effect immediately prior to the date of such distribution by
a fraction the numerator of which shall be the current market price per share
(as defined for purposes of this subparagraph (c) in subparagraph (e) below)
of the shares of [Common] [Preferred] Stock on the record date mentioned
above less the then fair market value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive) of the
portion of the Securities so distributed allocable to one share of [Common]
[Preferred] Stock, and the denominator of which shall be the current market
price per share (determined as provided in subparagraph (e) below) of the
share of [Common] [Preferred] Stock. Such adjustment shall become effective
immediately prior to the opening of business on the day following the record
date for the determination of shareholders entitled to receive such
distribution. In the event that such distribution is not so made, the
Warrant Price shall again be adjusted to be the Warrant Price which would
then be in effect if such date fixed for the determination of shareholders
entitled to receive such distribution had not been fixed.
(d) If, pursuant to subparagraph (b) or (c) above, the
number of shares of Warrant Securities into which a Warrant is convertible
shall have been adjusted because the Company has declared a dividend, or made
a distribution, on the outstanding shares of Warrant Securities in the form
of any right or warrant to purchase securities of the Company, or the Company
has issued any such right or warrant, then, upon the expiration of any such
unexercised right or unexercised warrant, the Warrant Price shall forthwith
be adjusted to equal the Warrant Price that would have applied had such right
or warrant never been declared, distributed or issued.
(e) For the purposes of any computation under
subparagraph (b) above, the current market price per share of [Common]
[Preferred] Stock or of any other security (herein collectively referred to
as a "security") at the date herein specified shall be deemed to be the
average of the reported last sales prices for the [thirty consecutive Trading
Days (as defined below) commencing forty-five Trading Days (as defined below)
before the date in question] [ten consecutive Trading Days (as defined
below) selected by the Company commencing not less than twenty nor more than
thirty days before the date in question]. For the purpose of any computation
under subparagraph (c) above, the current market price per security on any
date shall be deemed to be the average of the reported last sales prices for
the ten consecutive Trading Days before the date in question. The reported
last sales price for each day (whether for purposes of subparagraph (b) or
subparagraph (c)) shall be the reported last sales price, regular way, or, in
case no sale takes place on such day, the average of the reported closing bid
and asked prices, regular way, in either case as reported on the New York
Stock Exchange Composite Tape or, if such security is not listed or admitted
to trading on the New York Stock Exchange at such time, on the principal
national securities exchange on which such security is listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, on the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or, if such
security is not quoted on such National Market System, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for the security on each such
day shall not have been reported through NASDAQ, the average of the bid and
asked prices for such date as furnished by any New York Stock Exchange member
firm regularly making a market in such security selected for such purpose by
the Board of Directors of the Company or a committee thereof or, if no such
quotations are available, the fair market value of such security as
determined by a New York Stock Exchange member firm regularly making a market
in the shares of [Common] [Preferred] Stock selected for such purpose by the
Board of Directors of the Company or a committee thereof. As used herein,
the term "Trading Day" with respect to a security means (x) if such security
is listed or admitted for trading on the New York Stock Exchange or another
national securities exchange, a day on which the New York Stock Exchange or
such other national securities exchange is open for business or (y) if such
security is quoted on the National Market System of the NASDAQ, a day on
which trades may be made on such National Market System or (z) otherwise, any
day other than a Saturday or Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order
to close.
(f) No adjustment in the Warrant Price shall be required
unless such adjustment would require an increase or decrease of at least [1%]
in such Warrant Price; provided, however, that any adjustments which by
reason of this paragraph (f) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Article III shall be made to the nearest cent or to
the nearest .01 of a share, as the case may be, with one-half cent and .005
of a share, respectively, being rounded upward. Anything in this Article III
to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Warrant Price, in addition to those required by this
paragraph (f), as it in its discretion shall determine to be advisable in
order that any stock dividend, subdivision of shares, distribution of rights
or warrants to purchase stock or securities, or distribution of other assets
(other than cash dividends) hereafter made by the Company to its stockholders
shall not be taxable.
(g) Whenever the Warrant Price is adjusted as herein
provided, the Company shall file with the transfer agent a certificate,
signed by [the Chairman of the Board, the President, any Senior Vice
President, or any Vice President] of the Company, setting forth the Warrant
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment, which certificate shall be conclusive evidence of
the correctness of such adjustment; provided, however, that the failure of
the Company to file such officers' certificate shall not invalidate any
corporate action by the Company.
(h) In any case in which this Article III provides that
an adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (y) issuing
to the holder of any Warrant converted after such record date and before the
occurrence of such event the additional shares of Warrant Securities or other
assets issuable upon such exercise by reason of the adjustment required by
such event over and above the Warrant Securities or other assets issuable
upon such exercise before giving effect to such adjustment and (z) paying to
such holder any amount of cash in lieu of any fractional share; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(i) Whenever the Warrant Price is adjusted as provided
in Article III, the Company shall cause to be mailed to each holder of
Warrants at its then registered address by first-class mail, postage prepaid,
a notice of such adjustment of the Warrant Price setting forth such adjusted
Exercise Price and the effective date of such adjusted Exercise Price;
provided, however, that the failure of the Company to give such notice shall
not invalidate any corporate action by the Company.
(j) In the event that at any time, as a result of an
adjustment made pursuant to Section 3.1, the holder of any Warrant thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than shares of [Common] [Preferred] Stock, thereafter the
number of such other shares so receivable upon exercise of any Warrant 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 the shares
contained in Section 3.1(a) through (c), inclusive, and the provisions of
Sections 2.3, 2.4 and 2.5 with respect to the shares of [Common] [Preferred]
Stock shall apply on like terms to any such other shares.
(k) All Warrants originally issued by the Company
subsequent to any adjustment made to the Warrant Price hereunder shall
evidence the right to purchase, at the adjusted Warrant Price, the number of
shares of [Common] [Preferred] Stock purchasable from time to time hereunder
upon exercise of the Warrants, all subject to further adjustment as provided
herein.
(l) Unless the Company shall have exercised its election
as provided in Section 3.1(m), upon each adjustment of the Warrant Price as a
result of the calculations made in Section 3.1(a),(b) or (c), each Warrant
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Warrant Price,
that number of shares (calculated to the nearest hundredth) obtained by (i)
multiplying the number of shares covered by a Warrant immediately prior to
this adjustment of the number of shares by the Warrant Price in effect
immediately prior to such adjustment of the Warrant Price and (ii) dividing
the product so obtained by the Warrant Price in effect immediately after such
adjustment of the Warrant Price.
(m) The Company may elect on or after the date of any
adjustment of the Warrant Price to adjust the number of Warrants, in
substitution for any adjustment in the number of shares of [Common]
[Preferred] Stock purchasable upon the exercise of a Warrant as provided in
Section 3.2. Each of the Warrants outstanding after such adjustment of the
number of Warrants shall be exercisable for one share of [Common] [Preferred]
Stock. Each Warrant held of record prior to such adjustment of the number of
Warrants shall become that number of Warrants (calculated to the nearest
hundredth) obtained by dividing the Warrant Price in effect prior to
adjustment of the Warrant Price by the Warrant Price in effect after
adjustment of the Warrant Price. The Company shall make a public
announcement of its election to adjust the number of Warrants, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Warrant
Price is adjusted or any day thereafter, but shall be at least 10 days later
than the date of the public announcement. Upon each adjustment of the number
of Warrants pursuant to this subsection (l) the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Warrant
Certificates on such record date Warrant Certificates evidencing, subject to
Section 2.4, the additional Warrants to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause
to be distributed to such holders of record in substitution and replacement
for the Warrant Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Warrant Certificates evidencing all the Warrants to which such holders shall
be entitled after such adjustment. Warrant Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Warrant Price) and
shall be registered in the names of the holders of record of Warrant
Certificates on the record date specified in the public announcement.
(n) Irrespective of any adjustment or change in the
Warrant Price or the number of shares of [Common] [Preferred] Stock issuable
upon the exercise of the Warrants, the Warrant Certificates theretofore and
thereafter issued may continue to express the Warrant Price per share and the
number of shares which were expressed upon the initial Warrant Certificates
issued hereunder.
(o) Anything in this Article III to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Warrant Price, in addition to those adjustments required by this Article III,
as it in its sole discretion shall determine to be advisable in order that
any consolidation or subdivision of the shares of [Common] [Preferred] Stock,
issuance wholly for cash of any shares of [Common] [Preferred] Stock at less
than the current market price, issuance wholly for cash of shares of [Common]
[Preferred] Stock or securities which by their terms are convertible into or
exchangeable for Common Stock, stock dividend, issuance of rights, options or
warrants referred to hereinabove in this Article III, or other event referred
to hereinabove in this Article III treated for Federal income tax purposes as
a dividend of stock or stock rights, hereinafter made by the Company to its
common shareholders, shall not be taxable to the recipients.
[SECTION 3.2. Adjustment of shares of [Common] [Preferred]
Stock Purchasable Upon Exercise of Warrants. The number of Warrant
Securities that may be purchased upon exercise of a Warrant shall be
determined by multiplying the number of shares of [Common] [Preferred] Stock
which would otherwise (but for the provisions of this Section 3.2) be
issuable upon such exercise by a fraction of which (a) the numerator is
and (b) the denominator is $ minus deductions made from (and/or
plus additions to) the Warrant Price pursuant to Sections 3.1(a) or (c)
hereof. The Warrant Price per share of [Common] [Preferred] Stock shall be
adjusted and readjusted from time to time as provided in this Article III
and, as so adjusted or readjusted, shall remain in effect until a further
adjustment or readjustment thereof is required by this Article III.]
SECTION 3.3. Statements on Warrants. The form of Warrant
Certificate need not be changed because of any adjustment made pursuant to
this Article III, and Warrant Certificates issued after such adjustment may
state the same Warrant Price and the same number of shares of [Common]
[Preferred] Stock as are stated in the Warrant Certificates initially issued
pursuant to this Agreement. The Company, however, may at any time in its
sole discretion (which shall be conclusive) make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificate thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
ARTICLE IV.
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 4.1. No Rights as Warrant Securityholder Conferred
by Warrants or Warrant Certificates. No Warrant Certificates or Warrant
evidenced thereby shall entitle the holder thereof to any of the rights of a
holder of Warrant Securities, including, without limitation, the right to
vote at, or to receive notice of, any meeting of shareholders of the Company;
the consent of action or proceeding of the Company; no such holder, by reason
of the ownership or possession of a Warrant or the Warrant Certificate
representing the same, either at, before or after exercising such Warrant,
shall have any right to receive any cash dividends, stock dividends,
allotments or rights, or other distributions (except as specifically provided
herein), paid, allotted or distributed or distributable to the stockholders
of the Company prior to the date of the exercise of such Warrant; and no such
holder shall have any right not expressly conferred by the Warrant or Warrant
Certificate that such holder holds.
SECTION 4.2. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it and the Company of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of indemnity
reasonably satisfactory to the Warrant Agent and the Company, and, in the
case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute, and an authorized officer of the
Warrant Agent shall manually countersign and deliver, in exchange for or in
lieu of the lost, stolen, destroyed or mutilated Warrant Certificate, a new
Warrant Certificate of the same tenor and evidencing a like number of
Warrants. Upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Warrant Agent) in
connection therewith. Every substitute Warrant Certificate executed and
delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Warrant Certificate shall represent an additional contractual obligation of
the Company, whether or not the lost, stolen or destroyed Warrant Certificate
shall be at any time enforceable by anyone, and shall be entitled to the
benefits of this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions
of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement of mutilated, lost,
stolen or destroyed Warrant Certificates.
SECTION 4.3. Holder of Warrant Certificate May Enforce
Rights. Notwithstanding any of the provisions of this Agreement, any holder
of a Warrant Certificate, without the consent of the Warrant Agent, the
Trustee, the holder of any Warrant Securities or the holder of any other
Warrant Certificate, may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding against the
Company suitable to enforce, or otherwise in respect of, his right to
exercise the Warrants evidenced by his Warrant Certificate in the manner
provided in his Warrant Certificate and in this Agreement.
SECTION 4.4. Reclassification, Consolidation, Merger, Share
Exchange, Sale or Conveyance. In case any of the following shall occur while
any Warrants are outstanding: [(a) any reclassification or change of the
outstanding shares of Warrant Securities (other than a change in par value,
or from par value to no par value, or as a result of a subdivision or
combination of the Warrant Securities);] or (b) any consolidation, merger,
share exchange or combination of the Company with or into another corporation
(other than a merger or consolidation of the Company in which the Company is
the continuing corporation and which does not result in any reclassification
or change of outstanding shares of [Common] [Preferred] Stock) as a result of
which holders of Warrant Securities shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Warrant Securities; or (c) any sale or conveyance of the
property or assets of the Company as, or substantially as, an entirety to any
other entity as a result of which holders of Warrant Securities shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Warrant Securities; then the
Company, or such successor or purchasing corporation, as the case may be,
shall make appropriate provision by amendment of this Agreement or otherwise
so that the holders of the Warrants then outstanding shall have the right at
any time thereafter, upon exercise of such Warrants, to receive the kind and
amount of shares of stock and other securities and property or assets
receivable upon such reclassification, change, consolidation, merger, share
exchange, combination, sale or conveyance [(or at the option of the Company,
a sum equal to the value thereof at the time of the distribution as
determined by the Board of Directors in its sole discretion)] as would be
received by a holder of the number of shares of Warrant Securities issuable
upon exercise of such Warrant immediately prior to such reclassification,
change, consolidation, share exchange, merger, sale or conveyance, and, in
the case of a consolidation, merger, share exchange, sale or conveyance the
Company shall thereupon be relieved of any further obligation hereunder or
under the Warrants, and the Company as the predecessor corporation may
thereupon or at any time thereafter be dissolved, wound up or liquidated.
Such successor or assuming corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of the Company, any or all of
the Warrants issuable hereunder which theretofore shall not have been signed
by the Company, and may execute and deliver Warrant Securities in its own
name, in fulfillment of its obligations to deliver Warrant Securities upon
exercise of the Warrants. All the Warrants so issued shall in all respects
have the same legal rank and benefit under this Agreement as the Warrants
theretofore or thereafter issued in accordance with the terms of this
Agreement as though all of such Warrants had been issued at the date of the
execution hereof. In any case of any such reclassification, change,
consolidation, merger, sale or conveyance, such changes in phraseology and
form (but not in substance) may be made in the Warrants thereafter to be
issued as may be appropriate.
The Warrant Agent may receive a written opinion of legal
counsel as conclusive evidence that any such reclassification, change,
merger, share exchange, consolidation, sale or conveyance complies with the
provisions of this Section 4.4.
ARTICLE V.
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES
SECTION 5.1. Exchange and Transfer of Warrant Certificates,
[If Offered Securities with Warrants which are immediately detachable --
Upon] [If Offered Securities with Warrants which are not immediately
detachable -- Prior to the Detachable Date a Warrant Certificate may be
exchanged or transferred only together with the Offered Security to which the
Warrant Certificate was initially attached, and only for the purpose of
effecting or in conjunction with an exchange or transfer of such Offered
Security. Prior to any Detachable Date, each transfer of the Offered
Security on the register of the Offered Securities shall operate also to
transfer the related Warrant Certificates. After the Detachable Date, upon]
surrender at the corporate trust office of the Warrant Agent [or ],
Warrant Certificates evidencing Warrants may be exchanged for Warrant
Certificates in other denominations evidencing such Warrants or the transfer
thereof may be registered in whole or in part; provided that such other
Warrant Certificates evidence the same aggregate number of Warrants as the
Warrant Certificates so surrendered. The Warrant Agent shall keep, at its
corporate trust office [and at ], books in which, subject to such
reasonable regulations as it may prescribe, it shall register Warrant
Certificates and exchanges and transfers of outstanding Warrant Certificates,
upon surrender of the Warrant Certificates to the Warrant Agent at its
corporate trust office [or ] for exchange or registration of
transfer, properly endorsed or accompanied by appropriate instruments of
registration of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Warrant Agent. No service charge shall
be made for any exchange or registration of transfer of Warrant Certificates,
but the Company may require payment of a sum sufficient to cover any stamp or
other tax or other governmental charge that may be imposed in connection with
any such exchange or registration of transfer. Whenever any Warrant
Certificates are so surrendered for exchange or registration of transfer, an
authorized officer of the Warrant Agent shall manually countersign and
deliver to the person or persons entitled thereto a Warrant Certificate or
Warrant Certificates duly authorized and executed by the Company, as so
requested. The Warrant Agent shall not be required to effect any exchange or
registration of transfer which will result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants
and a fraction of a Warrant. All Warrant Certificates issued upon any
exchange or registration of transfer of Warrant Certificates shall be the
valid obligations of the Company, evidencing the same obligations, and
entitled to the same benefits under this Agreement, as the Warrant
Certificate surrendered for such exchange or registration of transfer.
SECTION 5.2. Treatment of Holders of Warrant Certificates.
[If Offered Securities and Warrants are not immediately detachable -- Prior
to the Detachable Date, the Company, the Warrant Agent and all other persons
may treat the owner of the Offered Security as the owner of the Warrant
Certificates initially attached thereto for any purpose or as the person
entitled to exercise the rights represented by the Warrants evidenced by such
Warrant Certificates, any notice to the contrary notwithstanding. After the
Detachable Date, and] [P]rior to due presentment of a Warrant Certificate for
registration of transfer, the Company, the Warrant Agent and all other
persons may treat the holder of a Warrant Certificate as the owner thereof
for any purpose and as the person entitled to exercise the rights represented
by the Warrants evidenced thereby, any notice to the contrary
notwithstanding.
SECTION 5.3. Cancellation of Warrant Certificates. Any
Warrant Certificates surrendered for exchange, registration of transfer or
exercise of the Warrants evidenced thereby shall, if surrendered to the
Company, be delivered to the Warrant Agent and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly canceled
by the Warrant Agent and shall not be reissued and, except as expressly
permitted by this Agreement, no Warrant Certificate shall be issued hereunder
in exchange or in lieu thereof. The Warrant Agent shall deliver to the
Company from time to time or otherwise dispose of canceled Warrant
Certificates in a manner satisfactory to the Company.
ARTICLE VI.
CONCERNING THE WARRANT AGENT
SECTION 6.1. Warrant Agent. The Company hereby appoints
[Warrant Agent] as Warrant Agent of the Company in respect of the Warrants
and the Warrant Certificates upon the terms and subject to the conditions
herein set forth; and [Warrant Agent] hereby accepts such appointment. The
Warrant Agent shall have the powers and authority granted to and conferred
upon it in the Warrant Certificates and hereby and such further powers and
authority to act on behalf of the Company as the Company may hereafter grant
to or confer upon it. All of the terms and provisions with respect to such
powers and authority contained in the Warrant Certificates are subject to and
governed by the terms and provisions hereof.
SECTION 6.2. Conditions of Warrant Agent's Obligations.
The Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any claim
of such liability.
(b) Agent for the Company. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent
is acting solely as agent of the Company and does not assume any obligations
or relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel
satisfactory to it, and the written advice of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with the
advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing suffered by
it in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) Certain Transactions. The Warrant Agent and its officers,
directors and employees may become the owner of, or acquire any interest in,
Warrants, with the same rights that it or they would have if it were not the
Warrant Agent hereunder, and, to the extent permitted by applicable law, it
or they may engage or be interested in any financial or other transaction
with the Company and may act on, or as depositary, trustee or agent for, any
committee or body of holders of Warrant Securities or other obligations of
the Company as freely as if it were not the Warrant Agent hereunder. Nothing
in the Warrant Agreement shall be deemed to prevent the Warrant Agent from
acting as Trustee under any of the Indentures.
(f) No Liability for Interest. Unless otherwise agreed with the
Company, the Warrant Agent shall have no liability for interest on any monies
at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have
no liability with respect to any invalidity of this Agreement or any of the
Warrant Certificates (except as to the Warrant Agent's countersignature
thereon).
(h) No Responsibility for Representations. The Warrant Agent
shall not be responsible for any of the recitals or representations herein or
in the Warrant Certificates (except as to the Warrant Agent's counter-
signature thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations
shall be read into this Agreement or the Warrant Certificates against the
Warrant Agent. The Warrant Agent shall not be under any obligation to take
any action hereunder which may tend to involve it in any expense or
liability, the payment of which within a reasonable time is not, in its
reasonable opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and
delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant Certificates. The
Warrant Agent shall have no duty or responsibility in case of any default by
the Company in the performance of its covenants or agreements contained
herein or in the Warrant Certificates or in the case of the receipt of any
written demand from a holder of a Warrant Certificate with respect to such
default, including, without limiting the generality of the foregoing, any
duty or responsibility to initiate or attempt to initiate any proceedings at
law or otherwise or, except as provided in Section 7.2 hereof, to make any
demand upon the Company.
SECTION 6.3. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders from time to time of
the Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrants have been exercised or are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such
agent by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided that such date shall not be less than three months after the date on
which such notice is given unless the Company otherwise agrees. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying
such removal and the date when it shall become effective. Such resignation
or removal shall take effect upon the appointment by the Company, as
hereinafter provided, of a successor Warrant Agent (which shall be a bank or
trust company authorized under the laws of the jurisdiction of its
organization to exercise corporate trust powers) and the acceptance of such
appointment by such successor Warrant Agent. The obligation of the Company
under Section 6.2(a) shall continue to the extent set forth therein
notwithstanding the resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign,
or shall be removed, or shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or shall commence a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or under any
other applicable Federal or State bankruptcy, insolvency or similar law, or
shall consent to the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Warrant Agent or its property or affairs, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action, or a decree or order for
relief by a court having jurisdiction in the premises shall have been entered
in respect of the Warrant Agent in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law, or a decree or order
by a court having jurisdiction in the premises shall have been entered for
the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant
Agent or of its property or affairs for the purpose of rehabilitation,
conservation, winding up or liquidation, a successor Warrant Agent, qualified
as aforesaid, shall be appointed by the Company by an instrument in writing,
filed with the successor Warrant Agent. Upon the appointment as aforesaid of
a successor Warrant Agent and acceptance by the successor Warrant Agent of
such appointment, the Warrant Agent shall cease to be Warrant Agent
hereunder.
(d) Any successor Warrant Agent appointed hereunder
shall execute, acknowledge and deliver to its predecessor and to the Company
an instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or conveyance, shall
become vested with all the authority, rights, powers, trusts, immunities,
duties and obligations of such predecessor with like effect as if originally
named Warrant Agent hereunder, and such predecessor, upon payment of its
charges and disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit
with or held by such predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent
hereunder may be merged or converted or any corporation with which the
Warrant Agent may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation to which substantially all the assets and business
of the Warrant Agent have been transferred, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
ARTICLE VII.
[REDEMPTION;] [ACCELERATED SHARE CONVERSION
DATE AND] [CONVERSION OF WARRANTS INTO SHARES]
[SECTION 7.1. Redemption. The Company may, at its option,
at any time from and after , and at or prior to 5:00 p.m.,
[New York time], on the earlier of the Scheduled Share Conversion Date or the
Accelerated Share Conversion Date (as defined in Section 7.2, redeem all but
not less than all of the then outstanding Warrants at a redemption price of $
per Warrant, subject to adjustment pursuant to the provisions of Section
7.3(b). Such price, as the same may be from time to time adjusted, is
hereinafter referred to as the "Redemption Price." If the Company should
desire to exercise such right to redeem all of the then outstanding Warrants,
it will give notice of such redemption to the holders thereof as follows:
Notice of such redemption to holders of Warrants shall be
mailed to all such holders not less than 30 nor more than 90 days prior to
the date fixed for redemption to their last addresses as they appear upon the
registry books of the Warrant Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will specify the date
fixed for redemption ("Redemption Date") and the Redemption Price. The
notice will state that payment of the Redemption Price will be made at the
office or agency of the Warrant Agent or at the option of the Company at a
specified office of the Company in the City of Dallas, State of Texas, upon
presentation and surrender of such Warrants, and will also state that the
right to exercise the Warrants will terminate at the close of business on the
business day immediately preceding the Redemption Date.
On or before the Redemption Date, the Company shall deposit
with the Warrant Agent funds in form satisfactory to the Warrant Agent
sufficient to redeem the then outstanding Warrants at the Redemption Price.]
[SECTION 7.2. Accelerated Share Conversion Date. If the
price of a share of [Common] [Preferred] Stock (as determined pursuant to the
second sentence of Section 3.1(e)) for each of 10 consecutive trading days is
at least $ , subject to adjustment pursuant to the provisions of Section
7.3(b) (such price, as the same may from time to time be adjusted, is
hereinafter referred to as the "Acceleration Price"), then the Company may,
at its option, accelerate the date on which the Warrants shall be converted
into shares of [Common] [Preferred] Stock and cease to be exercisable. If
the Company shall so accelerate such date, it shall give notice of such
acceleration within 30 days after the end of any such 10 consecutive trading
day period to the holders of Warrants as follows:
Notice of such acceleration shall be mailed to all holders
of Warrants not less than 30 nor more than 90 days prior to the date
specified in such notice as the date on which the Warrants shall be converted
into shares of [Common] [Preferred] Stock and cease to be exercisable (the
"Accelerated Share Conversion Date") to their last addresses as they appear
upon the registry books of the Warrant Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of acceleration will specify the
Accelerated Share Conversion Date and the Acceleration Price.]
[SECTION 7.3. Conversion of Warrants into Shares. (a) To
the extent that any Warrant Certificates remain outstanding at the expiration
of the period during which the Warrants are exercisable, as set forth in
Section 2.3(a) hereof, the unexercised Warrants represented thereby shall be
converted automatically into shares of [Common] [Preferred] Stock at the rate
of [ ] share[s] of [Common] [Preferred] Stock for each [ ] Warrants. The
registered holders of such Warrant Certificates shall be deemed to have
become holders of record of such share or shares of [Common] [Preferred]
Stock as of the date of such conversion. If the number of shares of [Common]
[Preferred] Stock purchasable upon the exercise of each Warrant is adjusted
pursuant to Section 3.2, the rate at which shares of [Common] [Preferred]
Stock are issued upon such conversion of unexercised Warrants at the
expiration of the period during which the Warrants are exercisable shall be
adjusted in order that the total number of shares of [Common] [Preferred]
Stock issued for each [ ] unexercised Warrants at such expiration equals
the number of such shares purchasable upon the exercise of each Warrant after
such adjustment. Notwithstanding the foregoing provisions of this Section
7.3, no fractional shares of [Common] [Preferred] Stock shall be issuable
upon such conversion. In lieu of fractional shares, there shall be paid to
the registered holders of Warrant Certificates at the time such Warrant
Certificates are so converted an amount in cash equal to the same fraction of
the current market value of a share of [Common] [Preferred] Stock. For the
purposes of this Section 7.3, the current market value of a share of [Common]
[Preferred] Stock shall be the closing price of a share of [Common]
[Preferred] Stock (as determined pursuant to the second sentence of Section
3.1(e)) for the trading day immediately prior to the date of such conversion.
After such conversion of outstanding and unexercised Warrants into shares of
[Common] [Preferred] Stock, the holder of any Warrant Certificate
representing such Warrants shall surrender the same to the Warrant Agent (or,
if this Agreement shall have been terminated, to the transfer agent for
shares of [Common] [Preferred] Stock) and such holder shall be entitled, upon
such surrender, to receive in exchange therefor a certificate or certificates
representing the number of whole shares of [Common] [Preferred] Stock into
which such Warrants shall have been converted as aforesaid and payments as
aforesaid for any fractional share represented thereby (without interest).
Unless and until so surrendered, such Warrant Certificates shall be deemed
for all purposes (subject to the further provisions of this paragraph) to
evidence the ownership of the whole number of shares of [Common] [Preferred]
Stock into which the Warrants evidenced thereby have been so converted.
Unless and until any such Warrant Certificate shall be so surrendered,
dividends or distributions payable to holders of record of shares of [Common]
[Preferred] Stock shall not be paid to the holder of any such Warrant
Certificate not surrendered, but there shall be paid to the record holder of
such Warrant Certificate, with respect to the shares of [Common] [Preferred]
Stock issued upon such conversion therefor, (i) upon such surrender the
amount of the dividends or distributions which shall theretofore have become
payable thereon, but without interest, and (ii) after such surrender, the
amount of any dividend or distribution with a record date prior to surrender
and the payment date of which shall be subsequent to surrender, such amount
to be paid on such payment date.
(b) Upon each adjustment of the Warrant Price of the
Warrants, the Redemption Price and the Acceleration Price in effect
immediately prior to the adjustment shall be adjusted to be a price equal to
the product of the Redemption Price or the Acceleration Price, as the case
may be, in effect immediately prior to the adjustment of the Warrant Price
multiplied by a fraction the numerator of which is the Warrant Price which
was in effect immediately after the adjustment of the Warrant Price and the
denominator of which is the Warrant Price immediately prior to such
adjustment.]
SECTION 7.4. Notice of Proposed Actions. In case the
Company shall propose (a) to pay any dividend payable in stock of any class
to the holders of its Common [or Preferred] Stock or to make any other
distribution to the holders of its Common [or Preferred] Stock (other than a
cash dividend), or (b) to offer to the holders of its Common Stock rights or
warrants to subscribe for or to purchase any additional Common Stock or
shares of stock of any class or any other securities, rights or options, or
(c) to effect any reclassification of its Common [or Preferred] Stock (other
than a reclassification involving only the subdivision or combination of
outstanding Common [or Preferred] Stock), or (d) to effect any consolidation,
merger, share exchange or sale, transfer or other disposition of all or
substantially all of the property, assets or business of the Company, or (e)
to effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Warrant, in
accordance with Section 8.2, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution
or rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, disposition, liquidation, dissolution,
or winding up is to take place and the date of participation therein by the
holders of Common [or Preferred] Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (a)
or (b) above at least ten days prior to the record date for determining
holders of the Common [or Preferred] Stock for purposes of such action, and
in the case of any such action, at least ten days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of Common [or Preferred] Stock, whichever shall be the earlier. The
failure to give notice required by this Section 7.4 or any defect therein
shall not affect the legality or validity of the action taken by the Company
or the vote upon any such action.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1. Amendment. (a) This Agreement and the
Warrant Certificates may be amended by the Company and the Warrant Agent,
without the consent of the registered holders of the Warrant Certificates or
the Warrant holders, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective or inconsistent provision contained
herein or therein, for the purpose of appointing a successor Warrant Agent in
accordance with Section 6.3 or in any other manner which the Company may deem
to be necessary or desirable and which will not materially and adversely
affect the interests of the Warrant holders.
(b) The Company and the Warrant Agent may modify or amend
this Agreement and the Warrant Certificates, with the consent of the holders
of not fewer than a majority in number of the then outstanding unexercised
Warrants affected by such modification or amendment, for any purpose;
provided, however, that no such modification or amendment that decreases or
increases the Warrant Price, shortens the period of time during which the
Warrants may be exercised, or otherwise materially and adversely affects the
exercise rights of the holders or reduces the percentage of outstanding
Warrants the consent of the holders of which is required for modification or
amendment of this Agreement or the Warrant Certificates, may be made without
the consent of each Warrant holder affected thereby.
SECTION 8.2. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to
the Company by the holder of a Warrant Certificate pursuant to the provisions
of the Warrant Certificates, the Warrant Agent shall promptly forward such
notice or demand to the Company.
SECTION 8.3. Addresses. Any communication from the Company
to the Warrant Agent with respect to this Agreement shall be addressed to
[Warrant Agent], , Attention: ,
and any communication from the Warrant Agent to the Company with respect to
this Agreement shall be addressed to Hovnanian Enterprises, Inc., 10 Highway
35, P.O. Box 500, Red Bank, New Jersey 07701, Attention: J. Larry Sorsby (or
such other address as shall be specified in writing by the Warrant Agent or
by the Company).
SECTION 8.4. Applicable Law. The validity, interpretation
and performance of this Agreement and each Warrant Certificate issued
hereunder and of the respective terms and provisions thereof shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.5. Delivery of Prospectus. The Company will
furnish to the Warrant Agent sufficient copies of a prospectus relating to
the Warrant Securities deliverable upon exercise of the Warrants (the
"Prospectus"), and the Warrant Agent agrees that upon the exercise of any
Warrant, the Warrant Agent will deliver to the holder of the Warrant
Certificate evidencing such Warrant, prior to or concurrently with the
delivery of the Warrant Securities issued upon such exercise, a Prospectus.
The Warrant Agent shall not, by reason of any such delivery, assume any
responsibility for the accuracy or adequacy of such Prospectus.
SECTION 8.6. Obtaining of Governmental Approvals. The
Company will from time to time take all action which may be necessary to
obtain and keep effective any and all permits, consents and approvals of
governmental agencies and authorities and securities acts filings under
United States Federal and State laws (including, without limitation, a
registration statement in respect of the Warrants and Warrant Securities
under the Securities Act of 1933), which may be or become requisite in
connection with the issuance, sale, transfer and delivery of the Warrant
Securities issued upon exercise of the Warrant Certificates, the exercise of
the Warrants, the issuance, sale, transfer and delivery of the Warrants or
upon the expiration of the period during which the Warrants are exercisable.
SECTION 8.7. Persons Having Rights under Warrant Agreement.
Nothing in this Agreement shall give to any person other than the Company,
the Warrant Agent and the holders of the Warrant Certificates any legal or
equitable right, remedy or claim under or by reason of this Agreement.
SECTION 8.8. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of
the provisions hereof.
SECTION 8.9. Counterparts. This Agreement may be executed
in any number of counterparts, each of which as so executed shall be deemed
to be an original, but such counterparts shall together constitute but one
and the same instrument.
SECTION 8.10. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the principal
corporate trust office of the Warrant Agent for inspection by the holder of
any Warrant Certificate. The Warrant Agent may require such holder to submit
his Warrant Certificate for inspection by it.
IN WITNESS WHEREOF, Hovnanian Enterprises, Inc. and [Warrant
Agent] have caused this Agreement to be signed by their respective duly
authorized officers, and their respective corporate seals to be affixed
hereunto, and the same to be attested by their respective Secretaries or one
of their respective Assistant Secretaries, all as of the date first above
written.
HOVNANIAN ENTERPRISES, INC.
By _________________________
Title:
Attest:
_________________________
Title:
[WARRANT AGENT]
By _________________________
Title:
Attest:
_________________________
Title:
Exhibit A
FORM OF WARRANT CERTIFICATE
[Face of Warrant Certificate]
[Form of Legend if Offered Prior to _______________ this Warrant
Securities with Warrants which Certificate cannot be transferred or
are not immediately detachable. exchanged unless attached to a [Title
of Offered Securities].]
[Form of Legend if Warrants are Prior to _______________, Warrants
not immediately exercisable. evidence by this Warrant Certificate
cannot be exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
HOVNANIAN ENTERPRISES, INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
VOID AFTER 5:00 P.M., [NEW YORK CITY] TIME, ON _______________ OR EARLIER IF
NOTICE OF REDEMPTION OR ACCELERATION IS GIVEN
No. __________ __________ Warrants
This certifies that [the bearer is the] [
or registered assigns is the registered] owner of the above
indicated number of Warrants, each Warrant entitling such owner [if Offered
Securities with Warrants which are not immediately detachable -- , subject to
the registered owner qualifying as a "holder" of this Warrant Certificate, as
hereinafter defined] to purchase, at any time [after 5:00 P.M., [New York
City] time, on and] on or before [the earliest of (i)] 5:00
P.M. [New York City] time on , , [(ii) the Accelerated Share Conversion
Date as defined in the Warrant Agreement (referred to herein) or (iii) the
business day immediately prior to the Redemption Date as defined in the
Warrant Agreement,] [Common Stock, par value $.01 per share] [Preferred
Stock, par value $.01 per share] (the "Warrant Securities"), of Hovnanian
Enterprises, Inc. (the "Company"), issued and to be issued under the Warrant
Agreement (as hereinafter defined), on the following basis: during the
period from , through and including , the
exercise price of each Warrant will be $ per share; during the period
from , through and including , the exercise
price of each Warrant will be $ per share (the "Warrant Price"). No
adjustment shall be made for any dividends on any Warrant Securities issuable
upon exercise of any Warrant.
The holder may exercise the Warrants evidenced hereby by
providing certain information set forth on the back hereof, including any
applicable certifications if the Warrant Securities are issuable in bearer
form, and by paying in full in lawful money of the United States of America
[in cash or by certified check or official bank check or by bank wire
transfer, in each case,] [by bank wire transfer] in immediately available
funds, the Warrant Price for each Warrant exercised to the Warrant Agent (as
hereinafter defined) and by surrendering this Warrant Certificate, with the
purchase form on the back hereof duly executed, at the corporate trust office
of [Warrant Agent], or its successor as warrant agent (the "Warrant Agent"),
[or ] currently at the address specified on the reverse
hereof, and upon compliance with and subject to the conditions set forth
herein and in the Warrant Agreement (as hereinafter defined).
The term "holder" as used herein shall mean [if Offered
Securities with Warrants which are not immediately detachable -- , prior to
(the "Detachable Date"), the registered owner of the Company's
[title of Offered Securities] to which this Warrant Certificate is initially
attached, and after such Detachable Date,] the person in whose name at the
time this Warrant Certificate shall be registered upon the books to be
maintained by the Warrant Agent for that purpose pursuant to Section 5.1 of
the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant
Certificate may be exercised to purchase Warrant Securities in registered
form in denominations of and any integral multiples thereof.
Upon any exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement dated as of (the "Warrant
Agreement") between the Company and the Warrant Agent and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which
terms and provisions the holder of this Warrant Certificate consents by
acceptance hereof. Copies of the Warrant Agreement are on file at the above-
mentioned office of the Warrant Agent [and at ].
[If Offered Securities with Warrants which are not
immediately detachable -- Prior to , this Warrant Certificate may
be exchanged or transferred only together with the [Title of Offered
Securities] ("Offered Securities") to which this Warrant Certificate was
initially attached, and only for the purpose of effecting, or in conjunction
with, an exchange or transfer of such Offered Security. After such date,
this] [if Offered Securities with Warrants which are immediately detachable
- -- Transfer of this] Warrant Certificate may be registered when this Warrant
Certificate is surrendered at the corporate trust office of the Warrant Agent
[or ] by the registered owner or his assigns, in person or by an
attorney duly authorized in writing, in the manner and subject to the
limitations provided in the Warrant Agreement.]
[If Offered Securities with Warrants which are not
immediately detachable -- Except as provided in the immediately preceding
paragraph, after] [If Offered Securities with Warrants which are immediately
detachable or Warrants alone -- After] countersignature by the Warrant Agent
and prior to the expiration of this Warrant Certificate, this Warrant
Certificate may be exchanged at the corporate trust office of the Warrant
Agent [or ] for Warrant Certificates representing the same
aggregate number of Warrants.
The Warrants evidenced by this Certificate may be redeemed
by the Company at its option at any time from and after [ ] but before they
are converted into [Common] [Preferred] Stock, at a redemption price of [ ]
per Warrant subject to adjustment, in accordance with the terms of the
Warrant Agreement.
If the price of a share of [Common] [Preferred] Stock
(determined in accordance with the Warrant Agreement) for each of 10
consecutive trading days is at least [ ] (subject to adjustment as provided
in the Warrant Agreement), the Company may, at its option, accelerate the
date on which the Warrants shall be converted into [Common] [Preferred] Stock
and cease to be exercisable.
If the Warrants evidenced by this Warrant Certificate remain
outstanding at the expiration of the period during which Warrants are
exercisable, as set forth in the first paragraph of this Warrant Certificate,
such Warrants shall thereupon be converted into [ ] shares of [Common]
[Preferred] Stock for each [ ] unexercised Warrants hereunder (subject to
adjustments as provided in the Warrant Agreement). After such conversion of
outstanding Warrants represented by this Warrant Certificate into shares of
[Common] [Preferred] Stock, the holder of this Warrant Certificate shall
surrender the same to the Warrant Agent (or, if the Warrant Agreement shall
have been terminated, to the transfer agent for [Common] [Preferred] Stock)
and the holder shall be entitled, upon such surrender, to receive in exchange
therefor a certificate or certificates representing the number of whole
shares of [Common] [Preferred] Stock into which such Warrants shall have been
converted as aforesaid. Unless and until so surrendered, this Warrant
Certificate shall be deemed for all purposes (subject to the further
provisions of this paragraph) to evidence the ownership of the whole number
of shares of [Common] [Preferred] Stock into which the Warrants evidenced
thereby have been so converted. Unless and until this Warrant Certificate
shall be so surrendered, dividends or distributions payable to holders of
record of Common Stock shall not be paid to the holder of this Warrant
Certificate, but there shall be paid to the record holder of this Warrant
Certificate, with respect to the [Common] [Preferred] Stock issued upon such
conversion therefor, (i) upon such surrender, the amount of the dividends or
distributions which shall theretofore have become payable thereon, but
without interest, and (ii) after such surrender, the amount of any dividend
or distribution with a record date prior to surrender and the payment date of
which shall be subsequent to surrender, such amount to be paid on such
payment date.
No holder of this Warrant Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of [Common]
[Preferred] Stock or of any other securities of the Company which may at any
time be issuable on the exercise or conversion thereof, nor shall anything
contained in the Warrant Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action (whether upon
any recapitalization, issue of stock, reclassification of stock, change of
par value, consolidation, share exchange, merger, conveyance, or otherwise)
or, except as provided in the Warrant Agreement, to receive notice of
meetings, or to receive dividends or subscription rights or otherwise, until
the Warrant or Warrants evidenced by this Warrant Certificate shall have been
exercised or converted as provided in the Warrant Agreement.
This Warrant Certificate shall not be valid or obligatory
for any purpose until countersigned by the Warrant Agent.
Dated as of __________________
HOVNANIAN ENTERPRISES, INC.
By: __________________________
Attest:
_____________________________
Countersigned:
[WARRANT AGENT],
As Warrant Agent
By: _________________________
Authorized Signature
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must
pay in [U.S.] Dollars [in cash or by certified check or official bank check
or by bank wire transfer] [by bank wire transfer] [in immediately available
funds] the Warrant Price in full for Warrants exercised to [Warrant Agent],
[corporate trust department] [insert address of Warrant Agent], Attn.
[or ], which [payment] [wire transfer] must specify the name of
the holder and the number of Warrants exercised by such holder. In addition,
the holder must complete the information required below, including any
applicable certifications if the Warrant Securities are issuable in bearer
form, and present this Warrant Certificate in person or by mail (certified or
registered mail is recommended) to the Warrant Agent at the appropriate
address set forth below. This Warrant Certificate, completed and duly
executed, must be received by the Warrant Agent within five business days of
the [payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise
Warrants, evidenced by this Warrant Certificate, to purchase
[Common Stock] [Preferred Stock] of [Title of Warrant Securities] (the
"Warrant Securities") and represents that he has tendered payment for such
Warrant Securities in [U.S.] Dollars [in cash or by certified check or
official bank check or by bank wire transfer, in each case] [by bank wire
transfer] in immediately available funds to the order of Hovnanian
Enterprises, Inc., c/o [insert name and address of Warrant Agent], in the
amount of in accordance with the terms hereof. The undersigned
requests that said principal amount of Warrant Securities be in fully
registered form in the authorized denominations, registered in such names and
delivered all as specified in accordance with the instructions set forth
below.
If the number of Warrants exercised is less than all of the
Warrants evidenced hereby, the undersigned requests that a new Warrant
Certificate representing the remaining Warrants evidenced hereby be issued
and delivered to the undersigned unless otherwise specified in the
instructions below.
Dated: ____________________ Name__________________________
______________________________ Address_______________________
(Insert Social Security or Other
Identifying Number of Holder) _______________________
Signature Guaranteed Signature_____________________
_____________________________
(Signature must conform in all
respects to name of holder as
specified on face of this
Warrant Certificate and must
bear a signature guarantee by a
bank, trust company or member
broker of the New York, Midwest
or Pacific Stock Exchanges)
The Warrants evidenced hereby may be exercised at the
following addresses:
By hand at ___________________________________
___________________________________
___________________________________
___________________________________
By mail at ___________________________________
___________________________________
___________________________________
___________________________________
[Instructions as to form and delivery of Warrant Securities
and, if applicable, Warrant Certificates evidencing unexercised Warrants --
complete as appropriate.]
Assignment
[Form of Assignment To Be Executed If Holder
Desires To Transfer Warrants Evidenced Hereby]
FOR VALUE RECEIVED ______________________________ hereby
sells, assigns and transfers unto
______________________________ ______________________________
(Please print name) (Please insert social security
or other identifying number)
______________________________
(Address)
______________________________
(City, including zip code)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _______________ Attorney, to transfer said
Warrant Certificate on the Books of the Warrant Agent with full power of
substitution in the premises.
Dated:
______________________________
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Warrant Certificate and
must bear a signature guarantee by a
bank, trust company or member broker of
the New York, Midwest or Pacific Stock
Exchange)
Signature Guaranteed
______________________________
____________________
[FN]
Complete or modify the provisions of this Form as appropriate to
reflect the terms of the Warrants, Warrant Securities and Offered
Securities.
Exhibit 4.10
=============================================================================
HOVNANIAN ENTERPRISES, INC.
and
[WARRANT AGENT]
As Warrant Agent
______________
Warrant Agreement -- Debt Securities
Dated as of ____________________
______________
=============================================================================
TABLE OF CONTENTS
Page
ARTICLE I.
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES. . . . . . . . . 5
SECTION 1.1. Issuance of Warrants. . . . . . . . . . . . . . . 5
SECTION 1.2. Execution and Delivery of Warrant Certificates. . 5
SECTION 1.3. Issuance of Warrant Certificates. . . . . . . . . 6
SECTION 1.4. Temporary Warrant Certificate . . . . . . . . . . 6
ARTICLE II.
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS. . . . . . . . . . . . 7
SECTION 2.1. Warrant Price . . . . . . . . . . . . . . . . . . 7
SECTION 2.2. Duration of Warrants . . . . . . . . . . . . . . 7
SECTION 2.3. Exercise of Warrants . . . . . . . . . . . . . . 7
ARTICLE III.
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES . . . . . . . . 8
SECTION 3.1. No Rights as Warrant Securityholder Conferred
by Warrants or Warrant Certificates . . . . . . . 8
SECTION 3.2. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. . . . . . . . . . . . . . . . . . . 8
SECTION 3.3. Holder of Warrant Certificate May Enforce
Rights. . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.4. Consolidation, Merger, Sale or Conveyance . . . . 9
ARTICLE IV.
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES . . . . . . . . . . 9
SECTION 4.1. Exchange and Transfer of Warrant Certificates . . 9
SECTION 4.2. Treatment of Holders of Warrant Certificates. . . 10
SECTION 4.3. Cancellation of Warrant Certificates. . . . . . . 10
ARTICLE V.
CONCERNING THE WARRANT AGENT. . . . . . . . . . 11
SECTION 5.1. Warrant Agent . . . . . . . . . . . . . . . . . . 11
SECTION 5.2. Conditions of Warrant Agent's Obligations . . . . 11
(a) Compensation and Indemnification . . . . . . . 11
(b) Agent for the Company. . . . . . . . . . . . . 11
(c) Counsel. . . . . . . . . . . . . . . . . . . . 11
(d) Documents. . . . . . . . . . . . . . . . . . . 11
(e) Certain Transactions . . . . . . . . . . . . . 11
(f) No Liability for Interest. . . . . . . . . . . 12
(g) No Liability for Invalidity. . . . . . . . . . 12
(h) No Responsibility for Representations. . . . . 12
(i) No Implied Obligations . . . . . . . . . . . . 12
SECTION 5.3. Resignation and Appointment of Successor . . . 12
ARTICLE VI.
MISCELLANEOUS . . . . . . . . . . . . . 14
SECTION 6.1. Amendment. . . . . . . . . . . . . . . . . . . 14
SECTION 6.2. Notices and Demands to the Company and
Warrant Agent. . . . . . . . . . . . . . . . . 14
SECTION 6.3. Addresses . . . . . . . . . . . . . . . . . . . 14
SECTION 6.4. Applicable Law . . . . . . . . . . . . . . . . . 14
SECTION 6.5. Delivery of Prospectus . . . . . . . . . . . . . 14
SECTION 6.6. Obtaining of Governmental Approvals . . . . . . 14
SECTION 6.7. Persons Having Rights under Warrant Agreement . . 15
SECTION 6.8. Headings . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.9. Counterparts . . . . . . . . . . . . . . . . . . 15
SECTION 6.10. Inspection of Agreement . . . . . . . . . . . . . 15
HOVNANIAN ENTERPRISES, INC.
Form of Hovnanian Debt Warrant Agreement
THIS WARRANT AGREEMENT dated as of _________________
between Hovnanian Enterprises, Inc., a Delaware corporation (hereinafter
called the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to) and , as Warrant
Agent (herein called the "Warrant Agent").
WHEREAS, the Company has entered into an indenture (the
"[Senior] [Senior Subordinated] [Subordinated] Indenture") dated as of [FOR
SENIOR DEBT: , between the Company and , as trustee
(the "Senior Trustee")] [FOR SENIOR SUBORDINATED DEBT: ,
between the Company and , as trustee (the "Senior
Subordinated Trustee") [FOR SUBORDINATED DEBT: , between the
Company and
, as trustee (the "Subordinated Trustee")], providing for the
issuance from time to time of its unsecured [senior] [senior subordinated]
[subordinated] debentures, notes or other evidences of indebtedness (the
"[Senior] [Senior Subordinated] [Subordinated] Debt Securities"), to be
issued in one or more series as provided in the [Senior] [Senior
Subordinated] [Subordinated] Indenture; [if Warrant Securities are not under
same Indenture as Debt Securities to which they are attached -- and an
Indenture (the "[Senior] [Senior Subordinated] [Subordinated] Indenture," the
Senior, Senior Subordinated and Subordinated Indentures being referred to
collectively as the "Indentures") dated as of between the
Company and , as trustee (the "[Senior] [Senior
Subordinated] [Subordinated] Trustee," (the Senior, Senior Subordinated and
Subordinated Trustees being referred to collectively as the "Trustee"),
providing for the issuance from time to time of its [senior] [senior
subordinated] [subordinated] debentures, notes or other evidences of
indebtedness (the "[Senior] [Senior Subordinated] [Subordinated] Debt
Securities," the [Senior] [Senior Subordinated] and [Subordinated] Debt
Securities being referred to collectively as the "Debt Securities"), to be
issued in one or more series as provided in the [ ]
Indenture]; and
WHEREAS, the Company proposes to sell [if Warrants are sold
with Debt Securities or Preferred Stock -- [title of Debt Securities or
Preferred Stock being offered] (the "Offered Securities") with] warrant
certificates evidencing one or more warrants (the "Warrants" or individually
a "Warrant") representing the right to purchase [title of Debt Securities
purchasable through exercise of Warrants] (the "Warrant Securities"), such
warrant certificates and other warrant certificates issued pursuant to this
Agreement being herein called the "Warrant Certificates;" and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company in connection with the issuance, exchange, exercise and
replacement of the Warrant Certificates, and in this Agreement wishes to set
forth, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions on which they may be issued,
exchanged, exercised and replaced;
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES
SECTION 1.1. Issuance of Warrants. [If Warrants alone --
Upon issuance, each Warrant Certificate shall evidence one or more Warrants.]
[If Offered Securities and Warrants -- Warrants shall be [initially] issued
in connection with the issuance of the Offered Securities [but shall be
separately transferable on and after (the "Detachable Date")]
[and shall not be separately transferable] and each Warrant Certificate shall
evidence one or more Warrants.] Each Warrant evidenced thereby shall
represent the right, subject to the provisions contained herein and therein,
to purchase a Warrant Security in the principal amount of . [If
Offered Securities and Warrants -- Warrant Certificates shall be initially
issued in units with the Offered Securities and each Warrant Certificate
included in such a unit shall evidence Warrants for each [
principal amount] [ shares] of Offered Securities included in such
unit.]
SECTION 1.2. Execution and Delivery of Warrant
Certificates. Each Warrant Certificate, whenever issued, shall be in
[registered] [bearer] form substantially in the form set forth in Exhibit A
hereto, shall be dated and may have such letters, numbers, or
other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as the officers of the Company
executing the same may approve (execution thereof to be conclusive evidence
of such approval) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed, or to conform to usage. The
Warrant Certificates shall be executed on behalf of the Company by [the
Chairman of the Board, the President, any Senior Vice President or any Vice
President and by the Secretary or any Assistant Secretary] under its
corporate seal reproduced thereon. Such signatures may be manual or
facsimile signatures of such authorized officers and may be imprinted or
otherwise reproduced in the Warrant Certificates. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificates shall be valid for any purpose, and
no Warrant evidenced thereby shall be exercisable, until such Warrant
Certificate has been countersigned by the manual signature of the Warrant
Agent. Such signature by the Warrant Agent upon any Warrant Certificate
executed by the Company shall be conclusive evidence that the Warrant
Certificate so countersigned has been duly issued hereunder.
In case any officer of the Company who shall have signed any
of the Warrant Certificates either manually or by facsimile signature shall
cease to be such officer before the Warrant Certificates so signed shall have
been countersigned and delivered by the Warrant Agent, such Warrant
Certificates may be countersigned and delivered notwithstanding that the
person who signed such Warrant Certificates ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company
by such persons as, at the actual date of the execution of such Warrant
Certificate, shall be the proper officers of the Company, although at the
date of the execution of this Agreement any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as
used herein shall mean [the bearer of such Warrant Certificate] [any person
in whose name at the time any Warrant Certificate shall be registered upon
the books to be maintained by the Warrant Agent for that purpose] [If Offered
Securities and Warrants are not immediately detachable -- or [the bearer]
[upon the register] of the Offered Securities prior to the Detachable Date.
[Prior to the Detachable Date, the Company will, or will cause the registrar
of the Offered Securities to, make available at all times to the Warrant
Agent such information as to holders of the Offered Securities with Warrants
as may be necessary to keep the Warrant Agent's records up to date]].
SECTION 1.3. Issuance of Warrant Certificates. Warrant
Certificates evidencing the right to purchase an aggregate principal amount
not exceeding aggregate principal amount of Warrant Securities
(except as provided in Sections 1.4, 2.3(c), 3.2 and ) may be executed by
the Company and delivered to the Warrant Agent upon the execution of this
Warrant Agreement or from time to time thereafter. The Warrant Agent shall,
upon receipt of Warrant Certificates duly executed on behalf of the Company,
countersign Warrant Certificates evidencing Warrants representing the right
to purchase up to principal amount of Warrant Securities and shall
deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such issuance of the Warrant Certificates, the Warrant Agent
shall countersign a Warrant Certificate only if the Warrant Certificate is
issued in exchange or substitution for one or more previously countersigned
Warrant Certificates or in connection with their transfer, as hereinafter
provided or as provided in Section 2.3(c).
SECTION 1.4. Temporary Warrant Certificate. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and
upon the order of the Company, the Warrant Agent shall authenticate and
deliver, temporary Warrant Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced substantially of the tenor of
the definitive Warrant Certificate in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Warrant Certificates may determine, as evidenced
by their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company
will cause definitive Warrant Certificates to be prepared without
unreasonable delay. After the preparation of definitive Warrant
Certificates, the temporary Warrant Certificates shall be exchangeable for
definitive Warrant Certificates upon surrender of the temporary Warrant
Certificates at the corporate trust office of the Warrant Agent [or
], without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Warrant Certificates the Company shall execute and the
Warrant Agent shall authenticate and deliver in exchange therefor definitive
Warrant Certificates representing the same aggregate number of Warrants.
Until so exchanged, the temporary Warrant Certificates shall in all respects
be entitled to the same benefits under this Agreement as definitive Warrant
Certificates.
ARTICLE II.
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.1. Warrant Price. During the period from
, through and including , the exercise price of each Warrant
shall be plus [accrued amortization of the original issue
discount] [accrued interest] from . During the period from
, through and including , the exercise price of each Warrant will be
plus [accrued amortization of the original issue discount] [accrued
interest] from . [In each case, the original issue discount will
be amortized at a % annual rate, computed on an annual basis using the
"interest" method and using a 360-day year consisting of twelve 30-day
months]. Such purchase price of Warrant Securities is referred to in this
Agreement as the "Warrant Price." [The original issue discount for each
principal amount of Warrant Securities is .]
SECTION 2.2. Duration of Warrants. Each Warrant may be
exercised in whole at any time, as specified herein, on or after [the date
thereof] [ ] and at or before 5:00 P.M., [New York City time], on
[or such later date as the Company may designate, by notice to the
Warrant Agent and the holders of Warrant Certificates mailed to their
addresses as set forth in the record books of the Warrant Agent] (the
"Expiration Date"). Each Warrant not exercised at or before 5:00 P.M., [New
York City time], on the Expiration Date shall become void, and all rights of
the holder of the Warrant Certificate evidencing such Warrant under this
Agreement shall cease.
SECTION 2.3. Exercise of Warrants. (a) During the period
specified in Section 2.2 any whole number of Warrants may be exercised by
providing certain information as set forth on the reverse side of the Warrant
Certificate and by paying in full, in lawful money of the United States of
America [in cash or by certified check or official bank check or by bank wire
transfer, in each case,] [by bank wire transfer] [in immediately available
funds] the Warrant Price for each Warrant exercised, to the Warrant Agent at
its corporate trust office [or at ], provided that such exercise
is subject to receipt within five business days of such [payment] [wire
transfer] by the Warrant Agent of the Warrant Certificate with the form of
election to purchase Warrant Securities set forth on the reverse side of the
Warrant Certificate properly completed and duly executed [including any
applicable certifications if the Warrant Securities are issuable in bearer
form]. The date on which payment in full of the Warrant Price is received by
the Warrant Agent shall, subject to receipt of the Warrant Certificate as
aforesaid, be deemed to be the date on which the Warrant is exercised. The
Warrant Agent shall deposit all funds received by it in payment of the
Warrant Price in an account of the Company maintained with it and shall
advise the Company by telephone at the end of each day on which a [payment]
[wire transfer] for the exercise of Warrants is received of the amount so
deposited to its account. The Warrant Agent shall promptly confirm such
telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly
as practicable, advise the Company and the [Trustee under the Indenture
relating to the Warrant Securities] of (i) the number of Warrants exercised,
(ii) the instructions of each holder of the Warrant Certificates evidencing
such Warrants with respect to delivery of the Warrant Securities to which
such holder is entitled upon such exercise, (iii) delivery of Warrant
Certificates evidencing the balance, if any, of the Warrants remaining after
such exercise and (iv) such other information as the Company or such Trustee
shall reasonably require.
(c) As promptly as practicable after the exercise of any
Warrant, the Company shall issue, pursuant to the Indenture relating to the
Warrant Securities, in authorized denominations to or upon the order of the
holder of the Warrant Certificate evidencing such Warrant, the Warrant
Securities to which such holder is entitled, in fully registered form,
registered in such name or names as may be directed by such holder. If fewer
than all of the Warrants evidenced by such Warrant Certificate are exercised,
the Company shall execute, and an authorized officer of the Warrant Agent
shall manually countersign and deliver, a new Warrant Certificate evidencing
the number of such Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issue of the Warrant Securities, and in the
event that any such transfer is involved, the Company shall not be required
to issue or deliver any Warrant Security until such tax or other charge shall
have been paid or it has been established to the Company's satisfaction that
no such tax or other charge is due.
ARTICLE III.
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.1. No Rights as Warrant Securityholder Conferred
by Warrants or Warrant Certificates. No Warrant Certificates or Warrant
evidenced thereby shall entitle the holder thereof to any of the rights of a
holder of Warrant Securities, including, without limitation, the right to
receive the payment of principal of, premium, if any, or interest on Warrant
Securities or to enforce any of the covenants in the Indenture relating to
the Warrant Securities.
SECTION 3.2. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it and the Company of the Ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of indemnity
reasonably satisfactory to the Warrant Agent and the Company, and, in the
case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute, and an authorized officer of the
Warrant Agent shall manually countersign and deliver, in exchange for or in
lieu of the lost, stolen, destroyed or mutilated Warrant Certificate, a new
Warrant Certificate of the same tenor and evidencing a like number of
Warrants. Upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Warrant Agent) in
connection therewith. Every substitute Warrant Certificate executed and
delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Warrant Certificate shall represent an additional contractual obligation of
the Company, whether or not the lost, stolen or destroyed Warrant Certificate
shall be at any time enforceable by anyone, and shall be entitled to the
benefits of this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions
of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement of mutilated, lost,
stolen or destroyed Warrant Certificates.
SECTION 3.3. Holder of Warrant Certificate May Enforce
Rights. Notwithstanding any of the provisions of this Agreement, any holder
of a Warrant Certificate, without the consent of the Warrant Agent, the
Trustee, the holder of any Warrant Securities or the holder of any other
Warrant Certificate, may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding against the
Company suitable to enforce, or otherwise in respect of, his right to
exercise the Warrants evidenced by his Warrant Certificate in the manner
provided in his Warrant Certificate and in this Agreement.
SECTION 3.4. Consolidation, Merger, Sale or Conveyance. If
at any time there shall be a consolidation merger, sale or conveyance to
which Article Nine of the Indenture relating to the Warrant Securities
applies, then in any such event the successor or assuming corporation
referred to therein shall succeed to and be substituted for the Company, with
the same effect, subject to such Indenture, as if it had been named herein
and in the Warrant as the Company; the Company shall thereupon be relieved of
any further obligation hereunder or under the Warrants, and the Company as
the predecessor corporation may thereupon or at any time thereafter be
dissolved, wound up or liquidated. Such successor or assuming corporation
thereupon may cause to be signed, and may issue either in its own name or in
the name of the Company, any or all of the Warrants issuable hereunder which
theretofore shall not have been signed by the Company, and may execute and
deliver Warrant Securities in its own name pursuant to such Indenture, in
fulfillment of its obligations to deliver Warrant Securities upon exercise of
the Warrants. All the Warrants so issued shall in all respects have the same
legal rank and benefit under this Agreement as the Warrants theretofore or
thereafter issued in accordance with the terms of this Agreement as though
all of such Warrants had been issued at the date of the execution hereof. In
any case of any such consolidation, merger, sale or conveyance, such changes
in phraseology and form (but not in substance) may be made in the Warrants
thereafter to be issued as may be appropriate.
The Warrant Agent may receive a written opinion of legal
counsel as conclusive evidence that any such consolidation, merger, sale or
conveyance complies with the provisions of this Section 3.4 and such
Indenture.
ARTICLE IV.
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES.
SECTION 4.1. Exchange and Transfer of Warrant Certificates,
[If Offered Securities with Warrants which are immediately detachable --
Upon] [If Offered Securities with Warrants which are not immediately
detachable -- Prior to the Detachable Date a Warrant Certificate may be
exchanged or transferred only together with the Offered Security to which the
Warrant Certificate was initially attached, and only for the purpose of
effecting or in conjunction with an exchange or transfer of such Offered
Security. Prior to any Detachable Date, each transfer of the Offered
Security on the register of the Offered Securities shall operate also to
transfer the related Warrant Certificates. After the Detachable Date, upon]
surrender at the corporate trust office of the Warrant Agent [or ],
Warrant Certificates evidencing Warrants may be exchanged for Warrant
Certificates in other denominations evidencing such Warrants [or the transfer
thereof may be registered in whole or in part]; provided that such other
Warrant Certificates evidence the same aggregate number of Warrants as the
Warrant Certificates so surrendered. [The Warrant Agent shall keep, at its
corporate trust office [and at ], books in which, subject to such
reasonable regulations as it may prescribe, it shall register Warrant
Certificates and exchanges and transfers of outstanding Warrant Certificates,
upon surrender of the Warrant Certificates to the Warrant Agent at its
corporate trust office [or ] for exchange or registration of
transfer, properly endorsed or accompanied by appropriate instruments of
registration of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Warrant Agent.] No service charge shall
be made for any exchange [or registration of transfer] of Warrant
Certificates, but the Company may require payment of a sum sufficient to
cover any stamp or other tax or other governmental charge that may be imposed
in connection with any such exchange [or registration of transfer]. Whenever
any Warrant Certificates are so surrendered for exchange [or registration of
transfer], an authorized officer of the Warrant Agent shall manually
countersign and deliver to the person or persons entitled thereto a Warrant
Certificate or Warrant Certificates duly authorized and executed by the
Company, as so requested. The Warrant Agent shall not be required to effect
any exchange [or registration of transfer] which will result in the issuance
of a Warrant Certificate evidencing a fraction of a Warrant or a number of
full Warrants and a fraction of a Warrant. All Warrant Certificates issued
upon any exchange [or registration of transfer] of Warrant Certificates shall
be the valid obligations of the Company, evidencing the same obligations, and
entitled to the same benefits under this Agreement, as the Warrant
Certificate surrendered for such exchange [or registration of transfer].
SECTION 4.2. Treatment of Holders of Warrant Certificates.
[If Offered Securities and Warrants are not immediately detachable -- Prior
to the Detachable Date, the Company, the Warrant Agent and all other persons
may treat the owner of the Offered Security as the owner of the Warrant
Certificates initially attached thereto for any purpose or as the person
entitled to exercise the rights represented by the Warrants evidenced by such
Warrant Certificates, any notice to the contrary notwithstanding. After the
Detachable Date,] [if registered Warrants -- and prior to due presentment of
a Warrant Certificate for registration of transfer,] [t]he Company, the
Warrant Agent and all other persons may treat the holder of a Warrant
Certificate as the owner thereof for any purpose and as the person entitled
to exercise the rights represented by the Warrants evidenced thereby, any
notice to the contrary notwithstanding.
SECTION 4.3. Cancellation of Warrant Certificates. Any
Warrant Certificates surrendered for exchange[, registration of transfer] or
exercise of the Warrants evidenced thereby shall, if surrendered to the
Company, be delivered to the Warrant Agent and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly cancelled
by the Warrant Agent and shall not be reissued and, except as expressly
permitted by this Agreement, no Warrant Certificate shall be issued hereunder
in exchange or in lieu thereof. The Warrant Agent shall deliver to the
Company from time to time or otherwise dispose of cancelled Warrant
Certificates in a manner satisfactory to the Company.
ARTICLE V.
CONCERNING THE WARRANT AGENT.
SECTION 5.1. Warrant Agent. The Company hereby appoints
as Warrant Agent of the Company in respect of the
Warrants and the Warrant Certificates upon the terms and subject to the
conditions herein set forth; and hereby
accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Warrant Certificates and
hereby and such further powers and authority to act on behalf of the Company
as the Company may hereafter grant to or confer upon it. All of the terms
and provisions with respect to such powers and authority contained in the
Warrant Certificates are subject to and governed by the terms and provisions
hereof.
SECTION 5.2. Conditions of Warrant Agent's Obligations.
The Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any claim
of such liability.
(b) Agent for the Company. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent
is acting solely as agent of the Company and does not assume any obligations
or relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel
satisfactory to it, and the written advice of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with the
advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing suffered by
it in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) Certain Transactions. The Warrant Agent and its officers,
directors and employees may become the owner of, or acquire any interest in,
Warrants, with the same rights that it or they would have if it were not the
Warrant Agent hereunder, and, to the extent permitted by applicable law, it
or they may engage or be interested in any financial or other transaction
with the Company and may act on, or as depositary, trustee or agent for, any
committee or body of holders of Warrant Securities or other obligations of
the Company as freely as if it were not the Warrant Agent hereunder. Nothing
in the Warrant Agreement shall be deemed to prevent the Warrant Agent from
acting as Trustee under any of the Indentures.
(f) No Liability for Interest. Unless otherwise agreed with the
Company, the Warrant Agent shall have no liability for interest on any monies
at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have
no liability with respect to any invalidity of this Agreement or any of the
Warrant Certificates (except as to the Warrant Agent's countersignature
thereon).
(h) No Responsibility for Representations. The Warrant Agent
shall not be responsible for any of the recitals or representations herein or
in the Warrant Certificates (except as to the Warrant Agent's counter-
signature thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations
shall be read into this Agreement or the Warrant Certificates against the
Warrant Agent. The Warrant Agent shall not be under any obligation to take
any action hereunder which may tend to involve it in any expense or
liability, the payment of which within a reasonable time is not, in its
reasonable opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and
delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant Certificates. The
Warrant Agent shall have no duty or responsibility in case of any default by
the Company in the performance of its covenants or agreements contained
herein or in the Warrant Certificates or in the case of the receipt of any
written demand from a holder of a Warrant Certificate with respect to such
default, including, without limiting the generality of the foregoing, any
duty or responsibility to initiate or attempt to initiate any proceedings at
law or otherwise or, except as provided in Section 6.2 hereof, to make any
demand upon the Company.
SECTION 5.3. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders from time to time of
the Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrants have been exercised or are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such
agent by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided that such date shall not be less than three months after the date on
which such notice is given unless the Company otherwise agrees. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying
such removal and the date when it shall become effective. Such resignation
or removal shall take effect upon the appointment by the Company, as
hereinafter provided, of a successor Warrant Agent (which shall be a bank or
trust company authorized under the laws of the jurisdiction of its
organization to exercise corporate trust powers) and the acceptance of such
appointment by such successor Warrant Agent. The obligation of the Company
under Section 5.2(a) shall continue to the extent set forth therein
notwithstanding the resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign,
or shall be removed, or shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or shall commence a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or under any
other applicable Federal or State bankruptcy, insolvency or similar law, or
shall consent to the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Warrant Agent or its property or affairs, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action, or a decree or order for
relief by a court having jurisdiction in the premises shall have been entered
in respect of the Warrant Agent in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law, or a decree or order
by a court having jurisdiction in the premises shall have been entered for
the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant
Agent or of its property or affairs for the purpose of rehabilitation,
conservation, winding up or liquidation, a successor Warrant Agent, qualified
as aforesaid, shall be appointed by the Company by an instrument in writing,
filed with the successor Warrant Agent. Upon the appointment as aforesaid of
a successor Warrant Agent and acceptance by the successor Warrant Agent of
such appointment, the Warrant Agent shall cease to be Warrant Agent
hereunder.
(d) Any successor Warrant Agent appointed hereunder
shall execute, acknowledge and deliver to its predecessor and to the Company
an instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or conveyance, shall
become vested with all the authority, rights, powers, trusts, immunities,
duties and obligations of such predecessor with like effect as if originally
named Warrant Agent hereunder, and such predecessor, upon payment of its
charges and disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit
with or held by such predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent
hereunder may be merged or converted or any corporation with which the
Warrant Agent may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation to which substantially all the assets and business
of the Warrant Agent have been transferred, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
ARTICLE VI.
MISCELLANEOUS
SECTION 6.1. Amendment. (a) This Agreement may be amended
by the parties hereto, without the consent of the holder of any Warrant
Certificate, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective provision contained herein, or
making any other provisions with respect to matters or questions arising
under this Agreement as the Company and the Warrant Agent may deem necessary
or desirable; provided that such action shall not affect adversely the
interests of the holders of the Warrant Certificates.
(b) The Company and the Warrant Agent may modify or
amend this Agreement and the Warrant Certificates, with the consent of not
fewer than a majority in number of the then outstanding unexercised Warrants
affected by such modification or amendment, for any purpose; provided,
however, that no such modification or amendment that decreases or increases
the Exercise Price, shortens the period of time during which the Warrants may
be exercised or otherwise materially and adversely affects the exercise
rights of the Holders or reduces the percentage of outstanding Warrants the
consent of the holder of which is required for modification or amendment of
this Agreement or the Warrant Certificates, may be made without the consent
of each holder affected thereby.
SECTION 6.2. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to
the Company by the holder of a Warrant Certificate pursuant to the provisions
of the Warrant Certificates, the Warrant Agent shall promptly forward such
notice or demand to the Company.
SECTION 6.3. Addresses. Any communication from the Company
to the Warrant Agent with respect to this Agreement shall be addressed to
[Warrant Agent], , Attention: ,
and any communication from the Warrant Agent to the Company with respect to
this Agreement shall be addressed to Hovnanian Enterprises, Inc., 10 Highway
35, P.O. Box 500, Red Bank, New Jersey 07701, Attention: J. Larry Sorsby (or
such other address as shall be specified in writing by the Warrant Agent or
by the Company).
SECTION 6.4. Applicable Law. The validity, interpretation
and performance of this Agreement and each Warrant Certificate issued
hereunder and of the respective terms and provisions thereof shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 6.5. Delivery of Prospectus. The Company will
furnish to the Warrant Agent sufficient copies of a prospectus relating to
the Warrant Securities deliverable upon exercise of the Warrants (the
"Prospectus"), and the Warrant Agent agrees that upon the exercise of any
Warrant, the Warrant Agent will deliver to the holder of the Warrant
Certificate evidencing such Warrant, prior to or concurrently with the
delivery of the Warrant Securities issued upon such exercise, a Prospectus.
The Warrant Agent shall not, by reason of any such delivery, assume any
responsibility for the accuracy or adequacy of such Prospectus.
SECTION 6.6. Obtaining of Governmental Approvals. The
Company will from time to time take all action which may be necessary to
obtain and keep effective any and all permits, consents and approvals of
governmental agencies and authorities and securities acts filings under
United States Federal and State laws (including, without limitation, a
registration statement in respect of the Warrants and Warrant Securities
under the Securities Act of 1933), which may be or become requisite in
connection with the issuance, sale, transfer and delivery of the Warrant
Securities issued upon exercise of the Warrant Certificates, the exercise of
the Warrants, the issuance, sale, transfer and delivery of the Warrants or
upon the expiration of the period during which the Warrants are exercisable.
SECTION 6.7. Persons Having Rights under Warrant Agreement.
Nothing in this Agreement shall give to any person other than the Company,
the Warrant Agent and the holders of the Warrant Certificates any right,
remedy or claim under or by reason of this Agreement.
SECTION 6.8. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of
the provisions hereof.
SECTION 6.9. Counterparts. This Agreement may be executed
in any number of counterparts, each of which as so executed shall be deemed
to be an original, but such counterparts shall together constitute but one
and the same instrument.
SECTION 6.10. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the principal
corporate trust office of the Warrant Agent for inspection by the holder of
any Warrant Certificate. The Warrant Agent may require such holder to submit
his Warrant Certificate for inspection by it.
IN WITNESS WHEREOF, Hovnanian Enterprises, Inc. and [Warrant
Agent] have caused this Agreement to be signed by their respective duly
authorized officers, and their respective corporate seals to be affixed
hereunto, and the same to be attested by their respective Secretaries or one
of their respective Assistant Secretaries, all as of the date first above
written.
HOVNANIAN ENTERPRISES, INC.
By _________________________
Title:
Attest:
_________________________
Title:
[WARRANT AGENT]
By _________________________
Title:
Attest:
_________________________
Title:
Exhibit A
FORM OF WARRANT CERTIFICATE
[Face of Warrant Certificate]
[Form of Legend if Offered Prior to _______________ this
Securities with Warrants which Warrant Certificate cannot be
are not immediately detachable. transferred or exchanged unless
attached to a [Title of Offered
Securities].]
[Form of Legend if Warrants are Prior to _______________,
not immediately exercisable. Warrants evidence by this Warrant
Certificate cannot be exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
HOVNANIAN ENTERPRISES, INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
VOID AFTER 5:00 P.M., [NEW YORK CITY TIME], ON _______________
No. __________ __________ Warrants
This certifies that [the bearer is the] [
or registered assigns is the registered] owner of the above
indicated number of Warrants, each Warrant entitling such owner [if Offered
Securities with Warrants which are not immediately detachable -- , subject to
the [bearer] [registered owner] qualifying as a "holder" of this Warrant
Certificate, as hereinafter defined] to purchase, at any time [after
5:00 P.M., [New York City time], on and] on or before
5:00 P.M., [New York City time], on ,
principal amount of [Title of Warrant Securities] (the "Warrant Securities")
of Hovnanian Enterprises, Inc. (the "Company"), issued and to be issued under
the Indenture (as hereinafter defined), on the following basis: during the
period from , through and including , the
exercise price of each Warrant will be plus [accrued amortization of
the original issue discount] [accrued interest] from ; during
the period from , through and including , the
exercise price of each Warrant will be plus [accrued amortization of
the original issue discount] [accrued interest] from ; [in
each case, the original issue discount will be amortized at a % annual
rate, computed on an annual basis using the "interest" method and using a
360-day year consisting of twelve 30-day months] (the "Warrant Price"). [The
original issue discount for each principal amount of Warrant
Securities is .] The holder may exercise the Warrants evidenced
hereby by providing certain information set forth on the back hereof,
including any applicable certifications if the Warrant Securities are
issuable in bearer form, and by paying in full in lawful money of the United
States of America [in cash or by certified check or official bank check or by
bank wire transfer, in each case,] [by bank wire transfer] in immediately
available funds, the Warrant Price for each Warrant exercised to the Warrant
Agent (as hereinafter defined) and by surrendering this Warrant Certificate,
with the purchase form on the back hereof duly executed, at the corporate
trust office of [Warrant Agent], or its successor as warrant agent (the
"Warrant Agent"), [or ] currently at the address specified on the
reverse hereof, and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement (as hereinafter defined).
The term "holder" as used herein shall mean [if Offered
Securities with Warrants which are not immediately detachable -- , prior to
(the "Detachable Date"), the registered owner of the Company's
[title of Offered Securities] to which this Warrant Certificate is initially
attached, and after such Detachable Date,] [the bearer of this Warrant
Certificate] [the person in whose name at the time this Warrant Certificate
shall be registered upon the books to be maintained by the Warrant Agent for
that purpose pursuant to Section 4.1 of the Warrant Agreement].
Any whole number of Warrants evidenced by this Warrant
Certificate may be exercised to purchase Warrant Securities in registered
form in denominations of and any integral multiples thereof.
Upon any exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement dated as of (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement are on file at the above-mentioned
office of the Warrant Agent [and at ].
The Warrant Securities to be issued and delivered upon the
exercise of the Warrants evidenced by this Warrant Certificate will be issued
under and in accordance with an indenture (the "Indenture"), dated as of [FOR
SENIOR DEBT: , between the Company and ] [FOR
SENIOR SUBORDINATED DEBT: , between the Company and ]
[FOR SUBORDINATED DEBT: , between the Company and
], as trustee (the "Trustee"), and will be subject to the terms and
provisions contained in the Indenture. Copies of the Indenture and the form
of the Warrant Securities are on file at the corporate trust office of the
Trustee [and at ].
[If Offered Securities with Warrants which are not
immediately detachable -- Prior to , this Warrant Certificate may
be exchanged or transferred only together with the [Title of Offered
Securities] ("Offered Securities") to which this Warrant Certificate was
initially attached, and only for the purpose of effecting, or in conjunction
with, an exchange or transfer of such Offered Security. After such date,
this] [if Offered Securities with Warrants which are immediately detachable
- -- Transfer of this] Warrant Certificate may be registered when this Warrant
Certificate is surrendered at the corporate trust office of the Warrant Agent
[or ] by the registered owner or his assigns, in person or by an
attorney duly authorized in writing, in the manner and subject to the
limitations provided in the Warrant Agreement] [effected by delivery, and the
Company and the Warrant Agent may treat the bearer hereof as the owner for
all purposes].
[If Offered Securities with Warrants which are not
immediately detachable -- Except as provided in the immediately preceding
paragraph, after] [If Offered Securities with Warrants which are immediately
detachable or Warrants alone -- After] countersignature by the Warrant Agent
and prior to the expiration of this Warrant Certificate, this Warrant
Certificate may be exchanged at the corporate trust office of the Warrant
Agent [or ] for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof
to any of the rights of a holder of the Warrant Securities, including,
without limitation, the right to receive payments of principal of, premium,
if any, or interest, if any, on the Warrant Securities or to enforce any of
the covenants of the Indenture.
This Warrant Certificate shall not be valid or obligatory
for any purpose until countersigned by the Warrant Agent.
Dated as of _____________________.
HOVNANIAN ENTERPRISES, INC.
By: _____________________
Attest:
_____________________________
Countersigned:
[WARRANT AGENT],
As Warrant Agent
By: ___________________________
Authorized Signature
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must
pay in [U.S.] Dollars [in cash or by certified check or official bank check
or by bank wire transfer] [by bank wire transfer] [in immediately available
funds] the Warrant Price in full for Warrants exercised to [Warrant Agent],
[corporate trust department] [insert address of Warrant Agent], Attn.
[or ], which [payment] [wire transfer] must specify the name of
the holder and the number of Warrants exercised by such holder. In addition,
the holder must complete the information required below and present this
Warrant Certificate in person or by mail (certified or registered mail is
recommended) to the Warrant Agent at the appropriate address set forth below.
This Warrant Certificate, completed and duly executed, must be received by
the Warrant Agent within five business days of the [payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise
Warrants, evidenced by this Warrant Certificate, to purchase
principal amount of the [Title of Warrant Securities ] (the "Warrant
Securities") of Hovnanian Enterprises, Inc. and represents that he has
tendered payment for such Warrant Securities in [U.S.] Dollars [in cash or by
certified check or official bank check or by bank wire transfer, in each
case] [by bank wire transfer] in immediately available funds to the order of
Hovnanian Enterprises, Inc., c/o , [address of
Warrant Agent], in the amount of in accordance with the terms
hereof. The undersigned requests that said principal amount of Warrant
Securities be in the authorized denominations, registered in such names and
delivered all as specified in accordance with the instructions set forth
below.
If the number of Warrants exercised is less than all of the
Warrants evidenced hereby, the undersigned requests that a new Warrant
Certificate representing the remaining Warrants evidenced hereby be issued
and delivered to the undersigned unless otherwise specified in the
instructions below.
Dated: ____________________ Name__________________________
______________________________ Address_______________________
(Insert Social Security or Other
Identifying Number of Holder) _______________________
[If registered Warrant -- Signature_____________________
Signature Guaranteed [If registered Warrant --
_____________________________] (Signature must conform in all
respects to name of holder as
specified on face of this Warrant
Certificate and must bear a
signature guarantee by a bank,
trust company or member broker of
the New York, Midwest or Pacific
Stock Exchanges)]
The Warrants evidenced hereby may be exercised at the
following addresses:
By hand at ___________________________________
___________________________________
___________________________________
___________________________________
By mail at ___________________________________
___________________________________
___________________________________
___________________________________
[Instructions as to form and delivery of Warrant Securities
and, if applicable, Warrant Certificates evidencing unexercised Warrants --
complete as appropriate.]
Assignment
[Form of Assignment To Be Executed If Holder
Desires To Transfer Warrants Evidenced Hereby]
FOR VALUE RECEIVED ______________________________ hereby
sells, assigns and transfers unto
______________________________ ______________________________
(Please print name) (Please insert social security
or other identifying number)
______________________________
(Address)
______________________________
(City, including zip code)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _______________ Attorney, to transfer said
Warrant Certificate on the Books of the Warrant Agent with full power of
substitution in the premises.
Dated:
______________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Warrant
Certificate and must bear a signature
guarantee by a bank, trust company or
member broker of the New York,
Midwest or Pacific Stock Exchange)
Signature Guaranteed
______________________________
____________________
[FN]
Complete or modify the provisions of this Form as appropriate to
reflect the terms of the Warrants, Warrant Securities and Offered
Securities.
Exhibit 4.11
============================================================================
K. HOVNANIAN ENTERPRISES, INC.
As Issuer
and
HOVNANIAN ENTERPRISES, INC.
As Guarantor
and
[WARRANT AGENT]
As Warrant Agent
______________
Warrant Agreement -- Debt Securities
Dated as of
______________
============================================================================
TABLE OF CONTENTS
Page
ARTICLE I.
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES . . . . . . . . 5
SECTION 1.1. Issuance of Warrants . . . . . . . . . . . . . . 5
SECTION 1.2. Execution and Delivery of Warrant
Certificates . . . . . . . . . . . . . . . . . . . 5
SECTION 1.3. Issuance of Warrant Certificates . . . . . . . . 6
SECTION 1.4. Temporary Warrant Certificate . . . . . . . . . . 6
ARTICLE II.
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS . . . . . . . . . . . 7
SECTION 2.1. Warrant Price . . . . . . . . . . . . . . . . . . 7
SECTION 2.2. Duration of Warrants . . . . . . . . . . . . . . 7
SECTION 2.3. Exercise of Warrants . . . . . . . . . . . . . . 7
ARTICLE III.
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES . . . . . . . . . 8
SECTION 3.1. No Rights as Warrant Securityholder Conferred
by Warrants or Warrant Certificates . . . . . . . . 8
SECTION 3.2. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates . . . . . . . . . . . . . . . . . . . 8
SECTION 3.3. Holder of Warrant Certificate May Enforce
Rights . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.4. Consolidation, Merger, Sale or Conveyance . . . . . 9
ARTICLE IV.
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES . . . . . . . . . . . . 9
SECTION 4.1. Exchange and Transfer of Warrant Certificates . . . 9
SECTION 4.2. Treatment of Holders of Warrant Certificates . . . 10
SECTION 4.3. Cancellation of Warrant Certificates . . . . . . . 10
ARTICLE V.
CONCERNING THE WARRANT AGENT . . . . . . . . . . 11
SECTION 5.1. Warrant Agent . . . . . . . . . . . . . . . . . . . 11
SECTION 5.2. Conditions of Warrant Agent's Obligations . . . . . 11
(a) Compensation and Indemnification . . . . . . . . . 11
(b) Agent for the Company . . . . . . . . . . . . . . . 11
(c) Counsel . . . . . . . . . . . . . . . . . . . . . . 11
(d) Documents . . . . . . . . . . . . . . . . . . . . . 11
(e) Certain Transactions . . . . . . . . . . . . . . . 11
(f) No Liability for Interest . . . . . . . . . . . . . 12
(g) No Liability for Invalidity . . . . . . . . . . . . 12
(h) No Responsibility for Representations . . . . . . . 12
(i) No Implied Obligations . . . . . . . . . . . . . . 12
SECTION 5.3. Resignation and Appointment of Successor . . . . . 12
ARTICLE VI.
GUARANTEE . . . . . . . . . . . . . . . 14
SECTION 6.1. Guarantee . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII.
MISCELLANEOUS . . . . . . . . . . . . . . 14
SECTION 7.1. Amendment . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7.2. Notices and Demands to the Company and
Warrant Agent . . . . . . . . . . . . . . . . . . 15
SECTION 7.3. Addresses . . . . . . . . . . . . . . . . . . . . 15
SECTION 7.4. Applicable Law . . . . . . . . . . . . . . . . . 15
SECTION 7.5. Delivery of Prospectus . . . . . . . . . . . . . 15
SECTION 7.6. Obtaining of Governmental Approvals . . . . . . . 15
SECTION 7.7. Persons Having Rights under Warrant Agreement . . 16
SECTION 7.8. Headings . . . . . . . . . . . . . . . . . . . . 16
SECTION 7.9. Counterparts . . . . . . . . . . . . . . . . . . 16
SECTION 7.10. Inspection of Agreement . . . . . . . . . . . . . 16
K. HOVNANIAN ENTERPRISES, INC.
Form of K. Hovnanian Debt Warrant Agreement
THIS WARRANT AGREEMENT dated as of between
K. Hovnanian Enterprises, Inc., a New Jersey corporation (hereinafter called
the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to), Hovnanian Enterprises, Inc., a Delaware
corporation (hereinafter called the "Guarantor," which term includes any
successor corporation under the Indenture hereinafter referred to), and
, as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Company has entered into an indenture (the
"[Senior] [Senior Subordinated] [Subordinated] Indenture") dated as of [FOR
SENIOR DEBT: , between the Company and , as
trustee (the "Senior Trustee")] [FOR SENIOR SUBORDINATED DEBT:
, between the Company and , as
trustee (the "Senior Subordinated Trustee"), [FOR SUBORDINATED DEBT:
, between the Company and , as trustee (the
"Subordinated Trustee")], providing for the issuance from time to time of its
unsecured [senior] [senior subordinated] [subordinated] debentures, notes or
other evidences of indebtedness (the "[Senior] [Senior Subordinated]
[Subordinated] Debt Securities"), to be issued in one or more series as
provided in the [Senior] [Senior Subordinated] [Subordinated] Indenture; [if
Warrant Securities are not under same Indenture as Debt Securities to which
they are attached -- and an Indenture (the "[Senior] [Senior Subordinated]
[Subordinated] Indenture," the Senior, Senior Subordinated and Subordinated
Indentures being referred to collectively as the "Indentures") dated as of
between the Company and , as trustee (the
"[Senior] [Senior Subordinated] [Subordinated] Trustee," (the Senior, Senior
Subordinated and Subordinated Trustees being referred to collectively as the
"Trustee"), providing for the issuance from time to time of its [senior]
[senior subordinated] [subordinated] debentures, notes or other evidences of
indebtedness (the "[Senior] [Senior Subordinated] [Subordinated] Debt
Securities", the [Senior] [Senior Subordinated] and [Subordinated] Debt
Securities being referred to collectively as the "Debt Securities"), to be
issued in one or more series as provided in the [ ]
Indenture]; and
WHEREAS, the Company proposes to sell [if Warrants are sold
with Debt Securities or Preferred Stock -- [title of Debt Securities or
Preferred Stock being offered] (the "Offered Securities") with] warrant
certificates evidencing one or more warrants (the "Warrants" or individually
a "Warrant") representing the right to purchase [title of Debt Securities
purchasable through exercise of Warrants] (the "Warrant Securities"), such
warrant certificates and other warrant certificates issued pursuant to this
Agreement being herein called the "Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company in connection with the issuance, exchange, exercise and
replacement of the Warrant Certificates, and in this Agreement wishes to set
forth, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions on which they may be issued,
exchanged, exercised and replaced;
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES
SECTION 1.1. Issuance of Warrants. [If Warrants alone --
Upon issuance, each Warrant Certificate shall evidence one or more Warrants.]
[If Offered Securities and Warrants -- Warrants shall be [initially] issued
in connection with the issuance of the Offered Securities [but shall be
separately transferable on and after (the "Detachable Date")]
[and shall not be separately transferable] and each Warrant Certificate shall
evidence one or more Warrants.] Each Warrant evidenced thereby shall
represent the right, subject to the provisions contained herein and therein,
to purchase a Warrant Security in the principal amount of . [If
Offered Securities and Warrants -- Warrant Certificates shall be initially
issued in units with the Offered Securities and each Warrant Certificate
included in such a unit shall evidence Warrants for each [
principal amount] [ shares] of Offered Securities included in such
unit.]
SECTION 1.2. Execution and Delivery of Warrant
Certificates. Each Warrant Certificate, whenever issued, shall be in
[registered] [bearer] form substantially in the form set forth in Exhibit A
hereto, shall be dated and may have such letters, numbers, or
other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as the officers of the Company
executing the same may approve (execution thereof to be conclusive evidence
of such approval) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed, or to conform to usage. The
Warrant Certificates shall be executed on behalf of the Company by [the
Chairman of the Board, the President, any Senior Vice President or any Vice
President and by the Secretary or any Assistant Secretary] under its
corporate seal reproduced thereon. Such signatures may be manual or
facsimile signatures of such authorized officers and may be imprinted or
otherwise reproduced in the Warrant Certificates. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificates shall be valid for any purpose, and
no Warrant evidenced thereby shall be exercisable, until such Warrant
Certificate has been countersigned by the manual signature of the Warrant
Agent. Such signature by the Warrant Agent upon any Warrant Certificate
executed by the Company shall be conclusive evidence that the Warrant
Certificate so countersigned has been duly issued hereunder.
In case any officer of the Company who shall have signed any
of the Warrant Certificates either manually or by facsimile signature shall
cease to be such officer before the Warrant Certificates so signed shall have
been countersigned and delivered by the Warrant Agent, such Warrant
Certificates may be countersigned and delivered notwithstanding that the
person who signed such Warrant Certificates ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company
by such persons as, at the actual date of the execution of such Warrant
Certificate, shall be the proper officers of the Company, although at the
date of the execution of this Agreement any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as
used herein shall mean [the bearer of such Warrant Certificate] [any person
in whose name at the time any Warrant Certificate shall be registered upon
the books to be maintained by the Warrant Agent for that purpose] [If Offered
Securities and Warrants are not immediately detachable -- or [the bearer]
[upon the register] of the Offered Securities prior to the Detachable Date.
[Prior to the Detachable Date, the Company will, or will cause the registrar
of the Offered Securities to, make available at all times to the Warrant
Agent such information as to holders of the Offered Securities with Warrants
as may be necessary to keep the Warrant Agent's records up to date]].
SECTION 1.3. Issuance of Warrant Certificates. Warrant
Certificates evidencing the right to purchase an aggregate principal amount
not exceeding aggregate principal amount of Warrant Securities
(except as provided in Sections 1.4, 2.3(c), 3.2 and ) may be executed by
the Company and delivered to the Warrant Agent upon the execution of this
Warrant Agreement or from time to time thereafter. The Warrant Agent shall,
upon receipt of Warrant Certificates duly executed on behalf of the Company,
countersign Warrant Certificates evidencing Warrants representing the right
to purchase up to principal amount of Warrant Securities and shall
deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such issuance of the Warrant Certificates, the Warrant Agent
shall countersign a Warrant Certificate only if the Warrant Certificate is
issued in exchange or substitution for one or more previously countersigned
Warrant Certificates or in connection with their transfer, as hereinafter
provided or as provided in Section 2.3(c).
SECTION 1.4. Temporary Warrant Certificate. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and
upon the order of the Company, the Warrant Agent shall authenticate and
deliver, temporary Warrant Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced substantially of the tenor of
the definitive Warrant Certificate in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Warrant Certificates may determined, as evidenced
by their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company
will cause definitive Warrant Certificates to be prepared without
unreasonable delay. After the preparation of definitive Warrant
Certificates, the temporary Warrant Certificates shall be exchangeable for
definitive Warrant Certificates upon surrender of the temporary Warrant
Certificates at the corporate trust office of the Warrant Agent [or
], without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Warrant Certificates the Company shall execute and the
Warrant Agent shall authenticate and deliver in exchange therefor definitive
Warrant Certificates representing the same aggregate number of Warrants.
Until so exchanged, the temporary Warrant Certificates shall in all respects
be entitled to the same benefits under this Agreement as definitive Warrant
Certificates.
ARTICLE II.
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.1. Warrant Price. During the period from
, through and including , the exercise price of each Warrant
shall be plus [accrued amortization of the original issue
discount] [accrued interest] from . During the period from
, through and including , the exercise price of each Warrant will
be plus [accrued amortization of the original issue discount]
[accrued interest] from . [In each case, the original issue
discount will be amortized at a % annual rate, computed on an annual
basis using the "interest" method and using a 360-day year consisting of
twelve 30-day months]. Such purchase price of Warrant Securities is referred
to in this Agreement as the "Warrant Price". [The original issue discount
for each principal amount of Warrant Securities is .]
SECTION 2.2. Duration of Warrants. Each Warrant may be
exercised in whole at any time, as specified herein, on or after [the date
thereof] [ ] and at or before 5:00 P.M., [New York City time], on
[or such later date as the Company may designate, by notice to the
Warrant Agent and the holders of Warrant Certificates mailed to their
addresses as set forth in the record books of the Warrant Agent] (the
"Expiration Date"). Each Warrant not exercised at or before 5:00 P.M., [New
York City time], on the Expiration Date shall become void, and all rights of
the holder of the Warrant Certificate evidencing such Warrant under this
Agreement shall cease.
SECTION 2.3. Exercise of Warrants. (a) During the period
specified in Section 2.2 any whole number of Warrants may be exercised by
providing certain information as set forth on the reverse side of the Warrant
Certificate and by paying in full, in lawful money of the United States of
America [in cash or by certified check or official bank check or by bank wire
transfer, in each case,] [by bank wire transfer] [in immediately available
funds] the Warrant Price for each Warrant exercised, to the Warrant Agent at
its corporate trust office [or at ], provided that such exercise
is subject to receipt within five business days of such [payment] [wire
transfer] by the Warrant Agent of the Warrant Certificate with the form of
election to purchase Warrant Securities set forth on the reverse side of the
Warrant Certificate properly completed and duly executed [including any
applicable certifications if the Warrant Securities are issuable in bearer
form]. The date on which payment in full of the Warrant Price is received by
the Warrant Agent shall, subject to receipt of the Warrant Certificate as
aforesaid, be deemed to be the date on which the Warrant is exercised. The
Warrant Agent shall deposit all funds received by it in payment of the
Warrant Price in an account of the Company maintained with it and shall
advise the Company by telephone at the end of each day on which a [payment]
[wire transfer] for the exercise of Warrants is received of the amount so
deposited to its account. The Warrant Agent shall promptly confirm such
telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly
as practicable, advise the Company and the [Trustee under the Indenture
relating to the Warrant Securities] of (i) the number of Warrants exercised,
(ii) the instructions of each holder of the Warrant Certificates evidencing
such Warrants with respect to delivery of the Warrant Securities to which
such holder is entitled upon such exercise, (iii) delivery of Warrant
Certificates evidencing the balance, if any, of the Warrants remaining after
such exercise, and (iv) such other information as the Company or such Trustee
shall reasonable require.
(c) As promptly as practicable after the exercise of any
Warrant, the Company shall issue, pursuant to the Indenture, in authorized
denominations to or upon the order of the holder of the Warrant Certificate
evidencing such Warrant, the Warrant Securities to which such holder is
entitled, in fully registered form, registered in such name or names as may
be directed by such holder. If fewer than all of the Warrants evidenced by
such Warrant Certificate are exercised, the Company shall execute, and an
authorized officer of the Warrant Agent shall manually countersign and
deliver, a new Warrant Certificate evidencing the number of such Warrants
remaining unexercised.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issue of the Warrant Securities, and in the
event that any such transfer is involved, the Company shall not be required
to issue or deliver any Warrant Security until such tax or other charge shall
have been paid or it has been established to the Company's satisfaction that
no such tax or other charge is due.
ARTICLE III.
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.1. No Rights as Warrant Securityholder Conferred
by Warrants or Warrant Certificates. No Warrant Certificates or Warrant
evidenced thereby shall entitle the holder thereof to any of the rights of a
holder of Warrant Securities, including, without limitation, the right to
receive the payment of principal of, premium, if any, or interest on Warrant
Securities or to enforce any of the covenants in the Indenture relating to
the Warrant Securities.
SECTION 3.2. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it and the Company of the Ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of indemnity
reasonably satisfactory to the Warrant Agent and the Company, and, in the
case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute, and an authorized officer of the
Warrant Agent shall manually countersign and deliver, in exchange for or in
lieu of the lost, stolen, destroyed or mutilated Warrant Certificate, a new
Warrant Certificate of the same tenor and evidencing a like number of
Warrants. Upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Warrant Agent) in
connection therewith. Every substitute Warrant Certificate executed and
delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Warrant Certificate shall represent an additional contractual obligation of
the Company, whether or not the lost, stolen or destroyed Warrant Certificate
shall be at any time enforceable by anyone, and shall be entitled to the
benefits of this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions
of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement of mutilated, lost,
stolen or destroyed Warrant Certificates.
SECTION 3.3. Holder of Warrant Certificate May Enforce
Rights. Notwithstanding any of the provisions of this Agreement, any holder
of a Warrant Certificate, without the consent of the Warrant Agent, the
Trustee, the holder of any Warrant Securities or the holder of any other
Warrant Certificate, may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding against the
Company suitable to enforce, or otherwise in respect of, his right to
exercise the Warrants evidenced by his Warrant Certificate in the manner
provided in his Warrant Certificate and in this Agreement.
SECTION 3.4. Consolidation, Merger, Sale or Conveyance. If
at any time there shall be a consolidation merger, sale or conveyance to
which Article Nine of the Indenture relating to the Warrant Securities
applies, then in any such event the successor or assuming corporation
referred to therein shall succeed to and be substituted for the Company, with
the same effect, subject to such Indenture, as if it had been named herein
and in the Warrant as the Company; the Company shall thereupon be relieved of
any further obligation hereunder or under the Warrants, and the Company as
the predecessor corporation may thereupon or at any time thereafter be
dissolved, wound up or liquidated. Such successor or assuming corporation
thereupon may cause to be signed, and may issue either in its own name or in
the name of the Company, any or all of the Warrants issuable hereunder which
theretofore shall not have been signed by the Company, and may execute and
deliver Warrant Securities in its own name pursuant to such Indenture, in
fulfillment of its obligations to deliver Warrant Securities upon exercise of
the Warrants. All the Warrants so issued shall in all respects have the same
legal rank and benefit under this Agreement as the Warrants theretofore or
thereafter issued in accordance with the terms of this Agreement as though
all of such Warrants had been issued at the date of the execution hereof. In
any case of any such consolidation, merger, sale or conveyance, such changes
in phraseology and form (but not in substance) may be made in the Warrants
thereafter to be issued as may be appropriate.
The Warrant Agent may receive a written opinion of legal
counsel as conclusive evidence that any such consolidation, merger, sale or
conveyance complies with the provisions of this Section 3.4 and such
Indenture.
ARTICLE IV.
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES.
SECTION 4.1. Exchange and Transfer of Warrant Certificates,
[If Offered Securities with Warrants which are immediately detachable --
Upon] [If Offered Securities with Warrants which are not immediately
detachable -- Prior to the Detachable Date a Warrant Certificate may be
exchanged or transferred only together with the Offered Security to which the
Warrant Certificate was initially attached, and only for the purpose of
effecting or in conjunction with an exchange or transfer of such Offered
Security. Prior to any Detachable Date, each transfer of the Offered
Security on the register of the Offered Securities shall operate also to
transfer the related Warrant Certificates. After the Detachable Date upon]
surrender at the corporate trust office of the Warrant Agent [or ],
Warrant Certificates evidencing Warrants may be exchanged for Warrant
Certificates in other denominations evidencing such Warrants [or the transfer
thereof may be registered in whole or in part]; provided that such other
Warrant Certificates evidence the same aggregate number of Warrants as the
Warrant Certificates so surrendered. [The Warrant Agent shall keep, at its
corporate trust office [and at ], books in which, subject to such
reasonable regulations as it may prescribe, it shall register Warrant
Certificates and exchanges and transfers of outstanding Warrant Certificates,
upon surrender of the Warrant Certificates to the Warrant Agent at its
corporate trust office [or ] for exchange or registration of
transfer, properly endorsed or accompanied by appropriate instruments of
registration of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Warrant Agent.] No service charge shall
be made for any exchange [or registration of transfer] of Warrant
Certificates, but the Company may require payment of a sum sufficient to
cover any stamp or other tax or other governmental charge that may be imposed
in connection with any such exchange [or registration of transfer]. Whenever
any Warrant Certificates are so surrendered for exchange [or registration of
transfer], an authorized officer of the Warrant Agent shall manually
countersign and deliver to the person or persons entitled thereto a Warrant
Certificate or Warrant Certificates duly authorized and executed by the
Company, as so requested. The Warrant Agent shall not be required to effect
any exchange [or registration of transfer] which will result in the issuance
of a Warrant Certificate evidencing a fraction of a Warrant or a number of
full Warrants and a fraction of a Warrant. All Warrant Certificates issued
upon any exchange [or registration of transfer] of Warrant Certificates shall
be the valid obligations of the Company, evidencing the same obligations, and
entitled to the same benefits under this Agreement, as the Warrant
Certificate surrendered for such exchange [or registration of transfer].
SECTION 4.2. Treatment of Holders of Warrant Certificates.
[If Offered Securities and Warrants are not immediately detachable -- Prior
to the Detachable Date, the Company, the Warrant Agent and all other persons
may treat the owner of the Offered Security as the owner of the Warrant
Certificates initially attached thereto for any purpose or as the person
entitled to exercise the rights represented by the Warrants evidenced by such
Warrant Certificates, any notice to the contrary notwithstanding. After the
Detachable Date,] [if registered Warrants -- and prior to due presentment of
a Warrant Certificate for registration for registration of transfer,] the
Company, the Warrant Agent and all other persons may treat the holder of a
Warrant Certificate as the owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced
thereby, any notice to the contrary notwithstanding.
SECTION 4.3. Cancellation of Warrant Certificates. Any
Warrant Certificates surrendered for exchange[, registration of transfer] or
exercise of the Warrants evidenced thereby shall, if surrendered to the
Company, be delivered to the Warrant Agent and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly cancelled
by the Warrant Agent and shall not be reissued and, except as expressly
permitted by this Agreement, no Warrant Certificate shall be issued hereunder
in exchange or in lieu thereof. The Warrant Agent shall deliver to the
Company from time to time or otherwise dispose of cancelled Warrant
Certificates in a manner satisfactory to the Company.
ARTICLE V.
CONCERNING THE WARRANT AGENT.
SECTION 5.1. Warrant Agent. The Company hereby appoints
as Warrant Agent of the
Company in respect of the Warrants and the Warrant Certificates upon the
terms and subject to the conditions herein set forth; and
hereby accepts such appointment. The Warrant Agent shall have
the powers and authority granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on
behalf of the Company as the Company may hereafter grant to or confer upon
it. All of the terms and provisions with respect to such powers and
authority contained in the Warrant Certificates are subject to and governed
by the terms and provisions hereof.
SECTION 5.2. Conditions of Warrant Agent's Obligations.
The Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any claim
of such liability.
(b) Agent for the Company. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent
is acting solely as agent of the Company and does not assume any obligations
or relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel
satisfactory to it, and the written advice of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with the
advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing suffered by
it in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers,
directors and employees, may become the owner of, or acquire any interest in,
Warrants, with the same rights that it or they would have if it were not the
Warrant Agent hereunder, and, to the extent permitted by applicable law, it
or they may engage or be interested in any financial or other transaction
with the Company and may act on, or as depositary, trustee or agent for, any
committee or body of holders of Warrant Securities or other obligations of
the Company as freely as if it were not the Warrant Agent hereunder. Nothing
in the Warrant Agreement shall be deemed to prevent the Warrant Agent from
acting as Trustee under any of the Indentures.
(f) No Liability for Interest. Unless otherwise agreed with the
Company, the Warrant Agent shall have no liability for interest on any monies
at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have
no liability with respect to any invalidity of this Agreement or any of the
Warrant Certificates (except as to the Warrant Agent's countersignature
thereon).
(h) No Responsibility for Representations. The Warrant Agent
shall not be responsible for any of the recitals or representations herein or
in the Warrant Certificates (except as to the Warrant Agent's counter-
signature thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations
shall be read into this Agreement or the Warrant Certificates against the
Warrant Agent. The Warrant Agent shall not be under any obligation to take
any action hereunder which may tend to involve it in any expense or
liability, the payment of which within a reasonable time is not, in its
reasonable opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and
delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant Certificates. The
Warrant Agent shall have no duty or responsibility in case of any default by
the Company in the performance of its covenants or agreements contained
herein or in the Warrant Certificates or in the case of the receipt of any
written demand from a holder of a Warrant Certificate with respect to such
default, including, without limiting the generality of the foregoing, any
duty or responsibility to initiate or attempt to initiate any proceedings at
law or otherwise or, except as provided in Section 6.2 hereof, to make any
demand upon the Company.
SECTION 5.3. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders from time to time of
the Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrants have been exercised or are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such
agent by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided that such date shall not be less than three months after the date on
which such notice is given unless the Company otherwise agrees. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying
such removal and the date when it shall become effective. Such resignation
or removal shall take effect upon the appointment by the Company, as
hereinafter provided, of a successor Warrant Agent (which shall be a bank or
trust company authorized under the laws of the jurisdiction of its
organization to exercise corporate trust powers) and the acceptance of such
appointment by such successor Warrant Agent. The obligation of the Company
under Section 5.2(a) shall continue to the extent set forth therein
notwithstanding the resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign,
or shall be removed, or shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or shall commence a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or under any
other applicable Federal or State bankruptcy, insolvency or similar law or
shall consent to the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Warrant Agent or its property or affairs, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action, or a decree or order for
relief by a court having jurisdiction in the premises shall have been entered
in respect of the Warrant Agent in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law; or a decree or order
by a court having jurisdiction in the premises shall have been entered for
the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant
Agent or of its property or affairs for the purpose of rehabilitation,
conservation, winding up or liquidation, a successor Warrant Agent, qualified
as aforesaid, shall be appointed by the Company by an instrument in writing,
filed with the successor Warrant Agent. Upon the appointment as aforesaid of
a successor Warrant Agent and acceptance by the successor Warrant Agent of
such appointment, the Warrant Agent shall cease to be Warrant Agent
hereunder.
(d) Any successor Warrant Agent appointed hereunder
shall execute, acknowledge and deliver to its predecessor and to the Company
an instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or conveyance, shall
become vested with all the authority, rights, powers, trusts, immunities,
duties and obligations of such predecessor with like effect as if originally
named Warrant Agent hereunder, and such predecessor, upon payment of its
charges and disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit
with or held by such predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent
hereunder may be merged or converted or any corporation with which the
Warrant Agent may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a
party or any corporation to which the Warrant Agent shall be a party ,or any
corporation to which substantially all the assets and business of the
Warrant Agent, provided that it shall be qualified as aforesaid, shall be the
successor Warrant Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties hereto.
ARTICLE VI.
GUARANTEE
SECTION 6.1. Guarantee. The Guarantor irrevocably and
unconditionally guarantees to the Holders and their successors and permitted
assigns, the full and punctual payment, performance, satisfaction and
discharge in full when due of all of the obligations and liabilities of
Issuer under and in accordance herewith including without limitation all
amounts payable hereunder or in connection herewith. The Guarantor agrees
that its obligations hereunder shall be unconditional, absolute and
independent, irrespective of the value, genuineness, validity, regularity or
enforceability of this Agreement, the Warrants or any other agreement or
instrument referred to herein or therein, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance
whatsoever which might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, it being the intent of this Section 6.1
that the obligations of The Guarantor hereunder shall be absolute and
unconditional under any and all circumstances, and that this guaranty may be
enforced against it without first pursuing of exhausting any remedies or
claims against Issuer or any other Person.
The Guarantor waives promptness, diligence, notice of acceptance,
presentment, protest and dishonor with respect to obligations and liabilities
of Issuer hereunder and notice thereof and any other notice with respect to
this guaranty and the obligations guaranteed hereby.
The guarantees set forth herein are continuing guarantees and shall
remain in full force and effect until all obligations of Issuer guaranteed
hereby have been paid, performed, satisfied, and discharged in full and shall
insure to the benefit of and be enforceable by the Holders or their
respective successors and permitted assigns. No failure to exercise, and no
delay in exercising, any right hereunder, shall operate as a waiver thereof.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
The obligations of the Guarantor under this Section 6.1 shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of Issuer in respect of the guaranteed obligations is
rescinded or must be otherwise restored by any Holder, whether as a result of
any proceedings in bankruptcy or reorganization or otherwise, and the
Guarantor agrees that it will indemnify each Holder on demand for all
reasonable costs and expenses (including, without limitation, fees of
counsel) incurred by such Holder in connection with such rescission or
restoration.
The Guarantor hereby agrees that until the payment and satisfaction
in full of all guaranteed obligations hereunder of the Holders it shall not
exercise any right or remedy arising by reason of any performance by it of
its guarantee in Section 6.1 hereof, whether by subrogation or otherwise,
against Issuer.
ARTICLE VII.
MISCELLANEOUS
SECTION 7.1. Amendment. (a) This Agreement may be
amended by the parties hereto, without the consent of the holder of any
Warrant Certificate, for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective provision contained herein, or
making any other provisions with respect to matters or questions arising
under this Agreement as the Company and the Warrant Agent may deem necessary
or desirable; provided that such action shall not affect adversely the
interests of the holders of the Warrant Certificates.
(b) The Company and the Warrant Agent may modify or
amend this Agreement and the Warrant Certificates, with the consent of not
fewer than a majority in number of the then outstanding unexercised Warrants
affected by such modification or amendment, for any purpose; provided,
however, that no such modification or amendment that decreases or increases
the Exercise Price, shortens the period of time during which the Warrants may
be exercised or otherwise materially and adversely affects the exercise
rights of the Holders or reduces the percentage of outstanding Warrants the
consent of the holder of which is required for modification or amendment of
this Agreement or the Warrant Certificates, may be made without the consent
of each holder affected thereby.
SECTION 7.2. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to
the Company by the holder of a Warrant Certificate pursuant to the provisions
of the Warrant Certificates, the Warrant Agent shall promptly forward such
notice or demand to the Company.
SECTION 7.3. Addresses. Any communication from the Company
to the Warrant Agent with respect to this Agreement shall be addressed to
,
, Attention: and any communication from the
Warrant Agent to the Company with respect to this Agreement shall be
addressed to K. Hovnanian Enterprises, Inc., 10 Highway 35, P.O. Box 500, Red
Bank, New Jersey 07701, Attention: J. Larry Sorsby (or such other address as
shall be specified in writing by the Warrant Agent or by the Company).
SECTION 7.4. Applicable Law. The validity, interpretation
and performance of this Agreement and each Warrant Certificate issued
hereunder and of the respective terms and provisions thereof shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 7.5. Delivery of Prospectus. The Company will
furnish to the Warrant Agent sufficient copies of a prospectus relating to
the Warrant Securities deliverable upon exercise of the Warrants (the
"Prospectus"), and the Warrant Agent agrees that upon the exercise of any
Warrant, the Warrant Agent will deliver to the holder of the Warrant
Certificate evidencing such Warrant, prior to or concurrently with the
delivery of the Warrant Securities issued upon such exercise, a Prospectus.
The Warrant Agent shall not, by reason of any such delivery, assume any
responsibility for the accuracy or adequacy of such Prospectus.
SECTION 7.6. Obtaining of Governmental Approvals. The
Company will from time to time take all action which may be necessary to
obtain and keep effective any and all permits, consents and approvals of
governmental agencies and authorities and securities acts filings under
United States Federal and State laws (including without limitation a
registration statement in respect of the Warrants and Warrant Securities
under the Securities Act of 1933), which may be or become requisite in
connection with the issuance, sale, transfer, and delivery of the Warrant
Securities issued upon exercise of the Warrant Certificates, the exercise of
the Warrants, the issuance, sale, transfer and delivery of the Warrants or
upon the expiration of the period during which the Warrants are exercisable.
SECTION 7.7. Persons Having Rights under Warrant Agreement.
Nothing in this Agreement shall give to any person other than the Company,
the Warrant Agent and the holders of the Warrant Certificates any right,
remedy or claim under or by reason of this Agreement.
SECTION 7.8. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of
the provisions hereof.
SECTION 7.9. Counterparts. This Agreement may be executed
in any number of counterparts, each of which as so executed shall be deemed
to be an original, but such counterparts shall together constitute but one
and the same instrument.
SECTION 7.10. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the principal
corporate trust office of the Warrant Agent for inspection by the holder of
any Warrant Certificate. The Warrant Agent may require such holder to submit
his Warrant Certificate for inspection by it.
IN WITNESS WHEREOF, K. Hovnanian Enterprises, Inc.,
Hovnanian Enterprises, Inc. and have
caused this Agreement to be signed by their respective duly authorized
officers, and their respective corporate seals to be affixed hereunto, and
the same to be attested by their respective Secretaries or one of their
respective Assistant Secretaries, all as of the day and year first above
written.
K. HOVNANIAN ENTERPRISES, INC.
By _____________________
Title:
Attest:
_________________________
Title:
HOVNANIAN ENTERPRISES, INC.,
as Guarantor
By _____________________
Title:
Attest:
_________________________
Title:
[WARRANT AGENT]
By _________________________
Title:
Attest:
_________________________
Title:
Exhibit A
FORM OF WARRANT CERTIFICATE
[Face of Warrant Certificate]
[Form of Legend if Offered Prior to this Warrant
Securities with Warrants which Certificate cannot be transferred or
are not immediately detachable. exchanged unless attached to a [Title
of Offered Securities].]
[Form of Legend if Warrants are Prior to , Warrants
not immediately exercisable. evidence by this Warrant Certificate
cannot be exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
K. HOVNANIAN ENTERPRISES, INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
VOID AFTER 5:00 P.M. [NEW YORK CITY TIME], ON
No. Warrants
This certifies that [the bearer is the] [
or registered assigns is the registered] owner of the above
indicated number of Warrants, each Warrant entitling such owner [if Offered
Securities with Warrants which are not immediately detachable , subject to
the [bearer] [registered owner] qualifying as a "holder" of this Warrant
Certificate, as hereinafter defined] to purchase, at any time [after
5:00 P.M., [New York City time], on and] on or before
5:00 P.M., [New York City time], on , principal
amount of [Title of Warrant Securities] (the "Warrant Securities"), of K.
Hovnanian Enterprises, Inc. (the "Company"), issued and to be issued under
the Indenture (as hereinafter defined), on the following basis: during the
period from , through and including , the
exercise price of each Warrant will be plus [accrued amortization of
the original issue discount] [accrued interest] from ; during
the period from , through and including , the
exercise price of each Warrant will be plus [accrued amortization of
the original issue discount] [accrued interest] from ; [in
each case, the original issue discount will be amortized at a % annual
rate, computed on an annual basis using the "interest" method and using a
360-day year consisting of twelve 30-day months] (the "Warrant Price"). [The
original issue discount for each principal amount of Warrant
Securities is .] The holder may exercise the Warrants evidenced
hereby by providing certain information set forth on the back hereof,
including any applicable certifications if the Warrant Securities are
issuable in bearer form, and by paying in full in lawful money of the United
States of America [in cash or by certified check or official bank check or by
bank wire transfer, in each case,] [by bank wire transfer] in immediately
available funds, the Warrant Price for each Warrant exercised to the Warrant
Agent (as hereinafter defined) and by surrendering this Warrant Certificate,
with the purchase form on the back hereof duly executed, at the corporate
trust office of , or its successor as warrant agent (the
"Warrant Agent"), [or ] currently at the address specified on the
reverse hereof, and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement (as hereinafter defined).
The term "holder" as used herein shall mean [if Offered
Securities with Warrants which are not immediately detachable -- , prior to
(the "Detachable Date"), the registered owner of the Company's
[title of Offered Securities] to which this Warrant Certificate is initially
attached, and after such Detachable Date,] [the bearer of this Warrant
Certificate] [the person in whose name at the time this Warrant Certificate
shall be registered upon the books to be maintained by the Warrant Agent for
that purpose pursuant to Section 4.1 of the Warrant Agreement].
Any whole number of Warrants evidenced by this Warrant
Certificate may be exercised to purchase Warrant Securities in registered
form in denominations of and any integral multiples thereof.
Upon any exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement dated as of (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement are on file at the above-mentioned
office of the Warrant Agent [and at ].
The Warrant Securities to be issued and delivered upon the
exercise of the Warrants evidenced by this Warrant Certificate will be issued
under and in accordance with an indenture (the "Indenture"), dated as of [FOR
SENIOR DEBT: , between the Company and ] [FOR
SENIOR SUBORDINATED DEBT: , between the Company and
] [FOR SUBORDINATED DEBT: , between the Company and
], as trustee (the "Trustee"), and will be subject to the terms
and provisions contained in the Indenture. Copies of the Indenture and the
form of the Warrant Securities are on file at the corporate trust office of
the Trustee [and at ].
[If Offered Securities with Warrants which are not
immediately detachable -- Prior to , this Warrant Certificate
may be exchanged or transferred only together with the [Title of Offered
Securities] ("Offered Securities") to which this Warrant Certificate was
initially attached, and only for the purpose of effecting, or in conjunction
with, an exchange or transfer of such Offered Security. After such date,
this] [if Offered Securities with Warrants which are immediately detachable
- -- Transfer of this] Warrant Certificate may be registered when this Warrant
Certificate is surrendered at the corporate trust office of the Warrant Agent
[or ] by the registered owner or his assigns, in person or by an
attorney duly authorized in writing, in the manner and subject to the
limitations provided in the Warrant Agreement.] [effected by delivery and the
Company and the Warrant Agent may treat the bearer hereof as the owner for
all purposes.]
[If Offered Securities with Warrants which are not
immediately detachable -- Except as provided in the immediately preceding
paragraph, after] [If Offered Securities with Warrants which are immediately
detachable or Warrants alone -- After] countersignature by the Warrant Agent
and prior to the expiration of this Warrant Certificate, this Warrant
Certificate may be exchanged at the corporate trust office of the Warrant
Agent [or ] for Warrant Certificates representing the
same aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof
to any of the rights of a holder of the Warrant Securities, including,
without limitation, the right to receive payments of principal of, premium,
if any, or interest, if any, on the Warrant Securities or to enforce any of
the covenants of the Indenture.
This Warrant Certificate shall not be valid or obligatory
for any purpose until countersigned by the Warrant Agent.
Dated as of .
K. HOVNANIAN ENTERPRISES, INC.
By: _____________________
Attest:
_____________________________
Countersigned:
HOVNANIAN ENTERPRISES, INC.,
As Guarantor
By: _________________________
[WARRANT AGENT],
As Warrant Agent
By: _________________________
Authorized Signature
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must
pay in Dollars [in cash or by certified check or official bank check or by
bank wire transfer] [by bank wire transfer] [in immediately available funds]
the Warrant Price in full for Warrants exercised to
, [corporate trust department] [insert address of Warrant Agent], Attn.
[or ], which [payment] [wire transfer] must specify
the name of the holder and the number of Warrants exercised by such holder.
In addition, the holder must complete the information required below and
present this Warrant Certificate in person or by mail (certified or
registered mail is recommended) to the Warrant Agent at the appropriate
address set forth below. This Warrant Certificate, completed and duly
executed, must be received by the Warrant Agent within five business days of
the [payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise
Warrants, evidenced by this Warrant Certificate, to purchase
principal amount of the [Title of Warrant Securities ] (the "Warrant
Securities") of K. Hovnanian Enterprises, Inc. and represents that he has
tendered payment for such Warrant Securities in Dollars [in cash or by
certified check or official bank check or by bank wire transfer, in each
case] [by bank wire transfer] in immediately available funds to the order of
K. Hovnanian Enterprises, Inc., c/o
, [address of Warrant Agent], in the amount of in accordance
with the terms hereof. The undersigned requests that said principal amount
of Warrant Securities be in the authorized denominations, registered in such
names and delivered all as specified in accordance with the instructions set
forth below.
If the number of Warrants exercised is less than all of the
Warrants evidenced hereby, the undersigned requests that a new Warrant
Certificate representing the remaining Warrants evidenced hereby be issued
and delivered to the undersigned unless otherwise specified in the
instructions below.
Dated:_____________________ Name ____________________________________
Address__________________________________
(Insert Social Security or
Other Identifying Number of __________________________________
Holder)
Signature________________________________
[If registered Warrant -- [If registered Warrant --
Signature Guaranteed (Signature must conform in all
_____________________________] respects to name of holder as
specified on face of this
Warrant Certificate and must
bear a signature guarantee by
a bank, trust company or
member broker of the New York,
Midwest or Pacific Stock
Exchanges]
The Warrants evidenced hereby may be exercised at the
following addresses:
By hand at ___________________________________
___________________________________
___________________________________
___________________________________
By mail at ___________________________________
___________________________________
___________________________________
___________________________________
[Instructions as to form and delivery of Warrant Securities
and, if applicable, Warrant Certificated evidencing unexercised Warrants --
complete as appropriate.]
Assignment
[Form of Assignment To Be Executed If Holder
Desires To Transfer Warrants Evidenced Hereby]
FOR VALUE RECEIVED ______________________________ hereby
sells, assigns and transfers unto
______________________________ ______________________________
(Please print name) (Please insert social security
or other identifying number)
______________________________
(Address)
______________________________
(City, including zip code)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _______________ Attorney, to transfer said
Warrant Certificate on the Books of the Warrant Agent with full power of
substitution in the premises.
Dated:
________________________
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Warrant Certificate and
must bear a signature guarantee by a
bank, trust company or member broker of
the New York, Midwest or Pacific Stock
Exchange)
Signature Guaranteed
____________________
____________________
[FN]
Complete or modify the provisions of this Form as appropriate to
reflect the terms of the Warrants, Warrant Securities and Offered
Securities.
Exhibit 5.1
Simpson Thacher & Bartlett
A PARTNERSHIP WHICH INCLUDES PROFESSIONAL CORPORATIONS
425 Lexington Avenue
New York, N.Y, 10017-3954
(212) 455-2000
_____
Direct Dial Number Facsimile: (212) 455-2502 E-mail Address
Telex: 129158
June 24, 1998
Hovnanian Enterprises, Inc.
10 Highway 35
P.O. Box 500
Red Bank, New Jersey 07701
K. Hovnanian Enterprises, Inc.
10 Highway 35
P.O. Box 500
Red Bank, New Jersey 07701
Ladies and Gentlemen:
This opinion is delivered in connection with the Registration
Statement on Form S-3 (the "Registration Statement") filed with the
Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), filed jointly by Hovnanian Enterprises,
Inc., a Delaware corporation ("Hovnanian"), and K. Hovnanian Enterprises,
Inc., a wholly owned subsidiary of Hovnanian and a New Jersey corporation
("K. Hovnanian"), which Registration Statement constitutes Amendment No. 1 to
Registration Statement No. 333-51991, which relates to (i) preferred stock of
Hovnanian, par value $.01 per share ("Preferred Stock"), common stock of
Hovnanian, par value $.01 per share ("Common Stock"), unsecured debt
securities of Hovnanian consisting of notes, debentures or other evidences of
indebtedness ("Hovnanian Debt Securities"), which may be senior, senior
subordinated or subordinated, and warrants to purchase Preferred Stock,
Common Stock or Hovnanian Debt Securities ("Hovnanian Warrants") and (ii)
unsecured debt securities of K. Hovnanian consisting of notes, debentures or
other evidences of indebtedness ("K. Hovnanian Debt Securities," and together
with the Hovnanian Debt Securities, the "Debt Securities"), which may be
senior, senior subordinated or subordinated and which will be fully and
unconditionally guaranteed by Hovnanian (the "Debt Guarantee"), and warrants,
which will be fully and unconditionally guaranteed by Hovnanian (the "Warrant
Guarantee") to purchase K. Hovnanian Debt Securities ("K. Hovnanian
Warrants," and together with the Hovnanian Warrants, the "Warrants"), to be
issued and sold by Hovnanian and/or K. Hovnanian from time to time pursuant
to Rule 415 under the Act for an aggregate initial offering price not to
exceed $300,000,000 together with any additional such securities that may be
sold pursuant to a Registration Statement filed under Rule 462 of the Act.
We have examined (i) the Registration Statement, (ii) the form
of Senior Indenture to be executed by Hovnanian and such trustee as shall be
named therein (the "Hovnanian Senior Debt Indenture"), (iii) the form of
Senior Subordinated Indenture to be executed by Hovnanian and such trustee as
shall be named therein (the "Hovnanian Senior Subordinated Debt Indenture"),
(iv) the form of Subordinated Indenture to be executed by Hovnanian and such
trustee as shall be named therein (the "Hovnanian Subordinated Debt
Indenture," and together with the Hovnanian Senior Debt Indenture and the
Hovnanian Senior Subordinated Debt Indenture, the "Hovnanian Indentures"),
(v) the form of Warrant Agreement relating to the purchase of Preferred Stock
or Common Stock and the form of Warrant Agreement relating to the purchase of
Hovnanian Debt Securities to be executed by Hovnanian and such warrant agent
as shall be named therein (the "Hovnanian Warrant Agreements"), (vi) the form
of Senior Indenture to be executed by K. Hovnanian, Hovnanian, as guarantor,
and such trustee as shall be named therein (the "K. Hovnanian Senior Debt
Indenture"), (vii) the form of Senior Subordinated Indenture to be executed
by K. Hovnanian, Hovnanian, as guarantor, and such trustee as shall be named
therein (the "K. Hovnanian Senior Subordinated Debt Indenture"), (viii) the
form of Subordinated Indenture to be executed by K. Hovnanian, Hovnanian, as
guarantor, and such trustee as shall be named therein (the "K. Hovnanian
Subordinated Debt Indenture," and together with the K. Hovnanian Senior Debt
Indenture and the K. Hovnanian Senior Subordinated Debt Indenture, the "K.
Hovnanian Indentures;" the K. Hovnanian Indentures together with the
Hovnanian Indentures are the "Indentures") and (ix) the form of Warrant
Agreement to be executed by K. Hovnanian, Hovnanian, as guarantor, and such
warrant agent as shall be named therein (the "K. Hovnanian Warrant
Agreement," and together with the Hovnanian Warrant Agreements, the "Warrant
Agreements"). In addition, we have examined, and have relied as to matters
of fact upon originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, agreements, documents and other
instruments and such certificates or comparable documents of public officials
and of officers and representatives of Hovnanian and K. Hovnanian, and have
made such other and further investigations as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents.
We have also assumed that (i) the Registration Statement, and
any amendments thereto (including post-effective amendments) and any
additional Registration Statement filed under Rule 462, will have become
effective under the Act, (ii) a prospectus supplement (a "Prospectus
Supplement") will have been prepared and filed with the Commission describing
the Preferred Stock, Common Stock, Debt Securities and/or Warrants offered
thereby, (iii) all Preferred Stock, Common Stock, Debt Securities and
Warrants issued will be issued and sold in compliance with applicable federal
and state securities laws and solely in the manner stated in the Registration
Statement and the appropriate Prospectus Supplement and (iv) a definitive
purchase, underwriting or similar agreement with respect to any Preferred
Stock, Common Stock, Debt Securities and/or Warrants offered will have been
duly authorized and validly executed and delivered by Hovnanian, K. Hovnanian
and the other parties thereto.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. With respect to Preferred Stock, when (i) the
shares of Preferred Stock to be issued have been duly authorized by
the shareholders of Hovnanian, (ii) the Board of Directors of
Hovnanian (the "Hovnanian Board") has taken all necessary corporate
action to approve the issuance and terms of such Preferred Stock, the
terms of the offering thereof and related matters and (iii) such
shares of Preferred Stock have been issued and delivered in accordance
with the provisions of the applicable definitive purchase,
underwriting or similar agreement approved by the Hovnanian Board,
upon payment of the consideration therefor provided for therein, such
shares of Preferred Stock will be legally issued, fully paid and
nonassessable.
2. With respect to Common Stock, when (i) the shares
of Common Stock to be issued have been duly authorized by the
shareholders of Hovnanian, (ii) the Hovnanian Board has taken all
necessary corporate action to approve the issuance and terms of such
Common Stock, the terms of the offering thereof and related matters
and (iii) such shares of Common Stock have been issued and delivered
in accordance with the provisions of the applicable definitive
purchase, underwriting or similar agreement approved by the Hovnanian
Board, upon payment of the consideration therefor provided for
therein, such shares of Common Stock will be legally issued, fully
paid and nonassessable.
3. With respect to Debt Securities to be issued
under the Senior Debt Indentures, when (i) the Senior Debt Indentures
have been duly authorized and validly executed and delivered by
Hovnanian and/or K. Hovnanian to the trustee, (ii) the Senior Debt
Indentures have been duly authorized, executed and delivered by the
Trustee, (iii) the Senior Debt Indentures have been duly qualified
under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), (iv) the Hovnanian Board and/or the Board of
Directors of K. Hovnanian (the "K. Hovnanian Board") have taken all
necessary corporate action to approve the issuance and terms of such
Debt Securities, the terms of the offering thereof and related matters
and (v) such Debt Securities have been duly executed, authenticated,
issued and delivered in accordance with the provisions of the Senior
Debt Indentures and the applicable definitive purchase, underwriting
or similar agreement approved by the Hovnanian Board and/or the K.
Hovnanian Board, upon payment of the consideration therefor provided
for therein, such Debt Securities will be legally issued by Hovnanian
and/or K. Hovnanian and will constitute valid and legally binding
obligations of Hovnanian and/or K. Hovnanian, enforceable against
Hovnanian and/or K. Hovnanian in accordance with their terms.
4. With respect to Debt Securities to be issued
under the Senior Subordinated Debt Indentures, when (i) the Senior
Subordinated Debt Indentures have been duly authorized and validly
executed and delivered by Hovnanian and/or K. Hovnanian to the
trustee, (ii) the Senior Subordinated Debt Indentures have been duly
authorized, executed and delivered by the Trustee, (iii) the Senior
Subordinated Debt Indentures have been duly qualified under the Trust
Indenture Act, (iv) the Hovnanian Board and/or the K. Hovnanian Board
have taken all necessary corporate action to approve the issuance and
terms of such Debt Securities, the terms of the offering thereof and
related matters and (v) such Debt Securities have been duly executed,
authenticated, issued and delivered in accordance with the provisions
of the Senior Subordinated Debt Indentures and the applicable
definitive purchase, underwriting or similar agreement approved by the
Hovnanian Board and/or the K. Hovnanian Board, upon payment of the
consideration therefor provided for therein, such Debt Securities will
be legally issued by Hovnanian and/or K. Hovnanian and will constitute
valid and legally binding obligations of Hovnanian and/or K.
Hovnanian, enforceable against Hovnanian and/or K. Hovnanian in
accordance with their terms.
5. With respect to Debt Securities to be issued
under the Subordinated Debt Indentures, when (i) the Subordinated Debt
Indentures have been duly authorized and validly executed and
delivered by Hovnanian and/or K. Hovnanian to the trustee, (ii) the
Subordinated Debt Indentures have been duly authorized, executed and
delivered by the Trustee, (iii) the Subordinated Debt Indentures have
been duly qualified under the Trust Indenture Act, (iv) the Hovnanian
Board and/or the K. Hovnanian Board have taken all necessary corporate
action to approve the issuance and terms of such Debt Securities, the
terms of the offering thereof and related matters and (v) such Debt
Securities have been duly executed, authenticated, issued and
delivered in accordance with the provisions of the Subordinated Debt
Indentures and the applicable definitive purchase, underwriting or
similar agreement approved by the Hovnanian Board and/or the K.
Hovnanian Board, upon payment of the consideration therefor provided
for therein, such Debt Securities will constitute valid and legally
binding obligations of Hovnanian and/or K. Hovnanian, enforceable
against Hovnanian and/or K. Hovnanian in accordance with their terms.
6. With respect to the Warrants, when (i) the
Hovnanian Board and/or the K. Hovnanian Board have taken all necessary
corporate action to approve the creation of and issuance and terms of
the Warrants, the terms of the offering thereof and related matters,
(ii) the Warrant Agreements have been duly authorized and validly
executed and delivered by Hovnanian and/or K. Hovnanian and the
warrant agent appointed by Hovnanian and/or K. Hovnanian and (iii) the
Warrants or certificates representing the Warrants have been duly
executed, countersigned, registered and delivered in accordance with
the Warrant Agreements and the applicable definitive purchase,
underwriting or similar agreement approved by the Hovnanian Board
and/or the K. Hovnanian Board, upon payment of the consideration
therefor provided for therein, the Warrants will be duly authorized
and validly issued by Hovnanian and/or K. Hovnanian and will
constitute valid and legally binding obligations of Hovnanian and/or
K. Hovnanian, enforceable against Hovnanian and/or K. Hovnanian in
accordance with their terms.
7. With respect to the Debt Guarantee to be made
under the K. Hovnanian Indentures, when (i) the Hovnanian Board has
taken all necessary corporate action to approve the Debt Guarantee,
(ii) the K. Hovnanian Indentures have been duly authorized and validly
executed and delivered by K. Hovnanian to the trustee, (iii) the K.
Hovnanian Indentures have been duly qualified under the Trust
Indenture Act, (iv) the Debt Guarantee on the K. Hovnanian Debt
Securities has been endorsed and (v) such K. Hovnanian Debt Securities
have been duly executed, authenticated, issued and delivered in
accordance with the provisions of the K. Hovnanian Indentures and the
applicable definitive purchase, underwriting or similar agreement
approved by the Hovnanian Board and the K. Hovnanian Board, upon
payment of the consideration therefor provided for therein, the Debt
Guarantee will constitute a valid and legally binding obligation of
Hovnanian, enforceable against Hovnanian in accordance with its terms.
8. With respect to the Warrant Guarantee to be made
under the K. Hovnanian Warrant Agreement, when (i) the Hovnanian Board
has taken all necessary corporate action to approve the Warrant
Guarantee, (ii) the K. Hovnanian Warrant Agreement has been duly
authorized and validly executed and delivered by K. Hovnanian and the
warrant agent appointed by K. Hovnanian and (iii) the K. Hovnanian
Warrants or certificates representing the K. Hovnanian Warrants have
been duly executed, countersigned, registered and delivered in
accordance with the Warrant Agreements and the applicable definitive
purchase, underwriting or similar agreement approved by the Hovnanian
Board and the K. Hovnanian Board, upon payment of the consideration
therefor provided for therein, the Warrant Guarantee will constitute a
valid and legally binding obligation of Hovnanian, enforceable against
Hovnanian in accordance with its terms.
Insofar as the opinions expressed herein relate to or are
dependent upon matters governed by the laws of the State of New Jersey, we
have relied upon the opinion of Peter S. Reinhart, Esq., Senior Vice
President and General Counsel for Hovnanian.
Our opinions set forth in paragraphs 3, 4, 5, 6, 7 and 8 above
are subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
We are members of the Bar of the State of New York and we do
not express any opinion herein concerning any law other than the law of the
State of New York, the Delaware General Corporation Law and, to the extent
set forth herein, the laws of the State of New Jersey.
We hereby consent to the filing of this opinion of counsel as
Exhibit 5.1 to the Registration Statement and to the use of our name under
the caption "Legal Matters" in the Prospectus forming a part of the
Registration Statement.
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
Exhibit 5.2
[LOGO] 10 HIGHWAY 35 PO BOX 500 RED
BANK NEW JERSEY 07701 (732) 747-7800
June 24, 1998
K. Hovnanian Enterprises, Inc.
10 Highway 35
Red Bank, New Jersey 07701
Hovnanian Enterprises, Inc.
10 Highway 35
Red Bank New Jersey 07701
Dear Sirs:
I am Senior Vice President and General Counsel of K. Hovnanian
Enterprises, Inc., a New Jersey corporation ("K. Hovnanian"), and of
Hovnanian Enterprises, Inc., a Delaware corporation ("Hovnanian"). A
Registration Statement on Form S-3, as amended (the "Registration
Statement"), under the Securities Act of 1933, as amended was filed by K.
Hovnanian and Hovnanian with the Securities and Exchange Commission on the
date hereof. The Registration Statement relates to the registration of (i)
preferred stock of Hovnanian, par value $.01 per share ("Preferred Stock"),
Class A common stock of Hovnanian, par value $.01 per share ("Common Stock"),
unsecured debt securities of Hovnanian consisting of notes, debentures or
other evidences of indebtedness, which may be senior, senior subordinated or
subordinated ("Hovnanian Debt Securities"), warrants to purchase Preferred
Stock, Common Stock or Hovnanian Debt Securities ("Hovnanian Warrants"),
unsecured debt securities of K. Hovnanian consisting of notes, debentures or
other evidences of indebtedness, which may be senior, senior subordinated or
subordinated and which will be fully and unconditionally guaranteed by
Hovnanian ("K. Hovnanian Debt Securities") and warrants to purchase K.
Hovnanian Debt Securities, which will be fully and unconditionally guaranteed
by Hovnanian (the "K. Hovnanian Warrants") to be issued and sold by Hovnanian
and/or K. Hovnanian from time to time pursuant to Rule 415 under the Act for
an aggregate initial offering price not to exceed $225,000,000 and (ii) an
aggregate of up to 7,643,312 shares of Common Stock to be sold by Hovnanian
or the Selling Shareholders from time to time pursuant to Rule 415 under the
Act; together with any additional such securities that may be sold pursuant
to a Registration Statement filed under Rule 462 of the Act.
In that connection I have examined and relied upon originals or
copies, certified or otherwise identified to my satisfaction, of such
documents, corporate records, certificates and instruments relating to K.
Hovnanian and Hovnanian as I have deemed relevant and necessary to the
formation of the opinion hereinafter set forth. In such examination, I have
assumed the genuineness and authenticity of all documents examined by me and
all signatures thereon, the legal capacity of all persons executing such
documents, the conformity to originals of all copies of documents submitted
to me and the truth and correctness of any representations and warranties
contained therein.
Based upon the foregoing, I am of the opinion that:
(i) When appropriate action is taken by the Board of Directors
of K. Hovnanian or a clearly constituted committee thereof, the
K. Hovnanian Debt Securities will have been duly authorized and,
when the indenture between K. Hovnanian, Hovnanian, as
guarantor, and the trustee named therein (the "K. Hovnanian
Debt Trustee") pursuant to which the K. Hovnanian Debt
Securities will be issued (the "K. Hovnanian Indenture") has
been duly executed and delivered, the K. Hovnanian Debt
Securities, when duly executed by K. Hovnanian, authenticated
by the K. Hovnanian Debt Trustee in accordance with the terms
of the K. Hovnanian Indenture and issued and delivered against
payment therefor, will be legally issued and will constitute a
valid and binding obligation of K. Hovnanian entitled to the
benefits of the K. Hovnanian Indenture relating thereto; and
(ii) When appropriate action is taken by the Board of
Directors of K. Hovnanian or a clearly constituted committee
thereof, the K. Hovnanian Warrants will have been duly authorized
and, when the warrant agreement between K. Hovnanian, Hovnanian,
as guarantor, and the warrant agent named therein pursuant to
which the K. Hovnanian Warrants will be issued (the "Warrant
Agreement") has been duly executed and delivered, the K.
Hovnanian Warrants, when duly executed by K. Hovnanian in
accordance with the terms of the Warrant Agreement and issued
and delivered against payment therefor, will be legally issued
and will constitute a valid and binding obligation of K.
Hovnanian entitled to the benefits of the Warrant Agreement
relating thereto.
I am a member of the Bar of the State of New Jersey, and I do
not express any opinion herein concerning any law other than the law of the
State of New Jersey.
I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to me under the caption
"Legal Opinions" in the Registration Statement.
Very truly yours,
/s/ Peter S. Reinhart
Peter S. Reinhart
Senior Vice President
and General Counsel
Exhibit 12.1
HOVNANIAN ENTERPRISES, INC.
Statement setting forth computation showing the ratio of earnings
to fixed charges, including wholly owned
mortgage banking and finance subsidiaries.
(Dollars in Thousands)
Six Months Year Year Year Months Year Year
Ended Ended Ended Ended Ended Ended Ended
April 30, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Feb. 28, Feb. 28,
1998 1997 1996 1995 1994 1994 1993
Actual Actual Actual Actual Actual Actual Actual
---------- -------- -------- -------- --------- -------- --------
Net income (loss) . . . . . . . . . 10,926 (6,970) 17,287 14,128 (10,430) 18,645 9,790
Add:
Federal and State Income Taxes . 5,702 (5,154) 7,719 7,526 (5,075) 9,229 4,735
Extraordinary Loss . . . . . . . 1,277
Interest Expensed Res & Comm . . 20,566 37,704 32,157 30,744 15,668 22,530 22,269
Interest Expensed Mortgage &
Finance Subsidiaries . . . . . 1,258 1,778 2,354 2,836 2,436 4,442 5,162
Amortization of Bond Prepaid
Exp . . . . . . . . . . . . . 312 636 671 671 447 598 793
------ ------ ------ ------ ------ ------ ------
Total Earnings . . . . . . . 38,764 27,994 60,188 55,905 3,046 56,721 42,749
====== ====== ====== ====== ====== ====== ======
Fixed Charges:
Interest Incurred Res & Comm . . 14,462 34,777 35,551 37,828 18,966 25,968 22,155
Interest Incurred Mortgage &
Finance Subsidiaries . . . . . 1,258 1,778 2,354 2,836 2,436 4,442 5,162
Amortization of Bond Prepaid
Exp . . . . . . . . . . . . . 312 636 671 671 447 598 793
------ ------ ------ ------ ------ ------ ------
Total Fixed Charges . . . . . 16,032 37,191 38,576 41,335 21,849 31,008 28,110
====== ====== ====== ====== ====== ====== ======
Ratio 2.4 1.6 1.4 1.8 1.5
____________________
Earnings for the year ended October 31, 1997 were insufficient to
cover fixed charges for such period by $9,197,000.
Earnings for the eight months ended October 31, 1994 were insufficient
to cover fixed charges for such period by $18,803,000.
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 333-51991) and related Prospectus of
Hovnanian Enterprises, Inc. (the "Company") for the registration of 7,643,312
shares of its Class A common stock and $225,000,000 of preferred stock,
common stock, preferred stock warrants, common stock warrants, debt securities
and debt security warrants and to the incorporation by reference therein of our
report dated December 19, 1997, with respect to the consolidated financial
statements and schedules of the Company included in its Annual Report
(Form 10-K) for the fiscal year ended October 31, 1997, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
New York, New York
June 24, 1998
