-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JvuuPCCZizfGpJxwqrJL0rzm1QtsOwquzOgFlUuy0zIhpnc5t7bXhnaX3W8ahkma tUGwnie+6aSi3qyRubxMWA== 0000950153-98-001120.txt : 19980921 0000950153-98-001120.hdr.sgml : 19980921 ACCESSION NUMBER: 0000950153-98-001120 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19980918 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEL WEBB CORP CENTRAL INDEX KEY: 0000105189 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 860077724 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-63671 FILM NUMBER: 98711400 BUSINESS ADDRESS: STREET 1: 2231 EAST CAMELBACK ROAD CITY: PHOENIX STATE: AZ ZIP: 85016 BUSINESS PHONE: 6028088000 MAIL ADDRESS: STREET 1: 6001 NORTH 24 STREET CITY: PHOENIX STATE: AZ ZIP: 85016 FORMER COMPANY: FORMER CONFORMED NAME: WEBB DEL E CORP DATE OF NAME CHANGE: 19880728 S-3 1 S-3 1 As filed with the Securities and Exchange Commission on September 18, 1998 Registration No. _________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 DEL WEBB CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 86-0077724 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 6001 North 24th Street Phoenix, Arizona 85016 (Address, including zip code, of principal executive offices of Registrant) Registrant's telephone number including area code: (602) 808-8000 Robertson C. Jones, Esq. Senior Vice President and General Counsel Del Webb Corporation 6001 North 24th Street Phoenix, Arizona 85016 (602) 808-8000 (Name, address, including zip code, and telephone number, including area code, of agent for service of process) Copy to: Steven Meiers, Esq. Gibson, Dunn & Crutcher LLP 333 South Grand Avenue Los Angeles, California 90071 Approximate date of commencement of proposed sale to the public: As soon as practicable 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, please 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 from 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. [X] (the Facing Page is continued on the following page) 2 CALCULATION OF REGISTRATION FEE
Proposed Proposed Maximum Maximum Amount of Title of Each Class of Amount to be Offering Price Aggregate Registration Securities to be Registered Registered Per Unit (1) Offering Price (1) Fee - -------------------------------------------------------------------------------------------------------------------------------- Debt Securities............................. (2) 100% (2) (2) see below Preferred Stock............................. (2), (3) (2) (2) see below Depositary Shares........................... (2), (4) (2) (2) see below Common Stock................................ (2), (5) (2) (2) see below Stock Purchase Warrants..................... (2), (6) (2) (2) see below Totals......................... $250,000,000(2),(3), $75,750 (4), (5), (6) ================================================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee. (2) This Registration Statement covers the principal amount of Debt Securities (as to Debt Securities offered at an original issue discount, the offering price thereof) and, subject to notes 3, 4, 5 and 6, the number of other Securities listed above as may from time to time be issued at indeterminate prices, but with an aggregate initial offering price for all such Debt Securities and Other Securities not to exceed $200,000,000. The Registration Statement also includes Debt Securities issued by the Registrant that may be issued in exchange for such Preferred Stock ("Additional Debt Securities"), provided that the Additional Debt Securities that may be issued in exchange for such Preferred Stock will, at the time of issuance, be either (i) covered by a then-effective Registration Statement, if required, or (ii) issuable without registration by virtue of the exemption contained in Section 3(a)(9) of the Securities Act of 1933, as amended (or, if applicable, another then-available exemption). In addition and without limitation, the Preferred Stock covered by this Registration Statement may not be issued in exchange for outstanding securities or in any other transaction in which such securities are required to be covered by a registration statement on Form S-4 or as to which this Form S-3 Registration Statement may not be used for any other reason. The Amount to be Registered, Proposed Maximum Offering Price Per Unit, Proposed Maximum Offering Price and Amount of Registration Fee with respect to such Preferred Stock includes such Additional Debt Securities. (3) Includes Preferred Stock issued other than on conversion of Debt Securities or exercise of Stock Purchase Warrants. Also includes such presently indeterminate number of additional shares of Preferred Stock ("Additional Preferred Stock") as may be issued on (i) conversion of the Debt Securities, if and to the extent convertible into Preferred Stock, and (ii) exercise of any Stock Purchase Warrants as may be issued, if and to the extent exercisable for Preferred Stock. The Amount to be Registered, Proposed Maximum Offering Price Per Unit, Proposed Maximum Aggregate Offering Price and Amount of Registration Fee with respect to such Debt Securities and Warrants include such Additional Preferred Stock. (4) The Registration Statement covers such indeterminate number of Depositary Shares as may be issued if the Registrant elects to offer fractional interests in shares of some or all of the Preferred Stock. The Amount to be Registered, Proposed Maximum Offering Price Per Unit, Proposed Maximum Aggregate Offering Price and Amount of Registration Fee (i) with respect to such Preferred Stock include such Depositary Shares and (ii) without duplication, with respect to the Depositary Shares, include such Preferred Stock. (5) Includes Common Stock issued other than on conversion of Debt Securities, conversion of Preferred Stock or exercise of Stock Purchase Warrants. Also includes such presently indeterminate number of shares of additional Common Stock ("Additional Common Stock") as may be issued on (i) conversion of the Debt Securities, if and to the extent convertible into Common Stock, (ii) conversion of any Preferred Stock as may be issued separately, on conversion of Debt Securities or exercise of Stock Purchase Warrants, if and to the extent such Preferred Stock is convertible into Common Stock or (iii) exercise of any Stock Purchase Warrants as may be issued, if and to the extent exercisable for Common Stock. The Amount to be Registered, Proposed Maximum Offering Price Per Unit, Proposed Maximum Aggregate Offering Price and Amount of Registration Fee with respect to such Debt Securities, Preferred Stock and Stock Purchase Warrants include such Additional Common Stock. (6) Includes Stock Purchase Warrants which may be issued other than as part of Units of Stock Purchase Warrants and other Securities. Also includes additional Stock Purchase Warrants ("Additional Stock Purchase Warrants") which may be offered as part of Units of Stock Purchase Warrants and other Securities. The Amount to be Registered, Proposed Maximum Offering Price Per Unit, Proposed Maximum Aggregate Offering Price and Amount of Registration Fee with respect to such other Securities include such Additional Stock Purchase Warrants. 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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE. 3 PROSPECTUS ___________ __, 1998 $250,000,000 DEL WEBB CORPORATION Debt Securities, Preferred Stock, Common Stock and Stock Purchase Warrants Del Webb Corporation (the "Company") may offer and issue from time to time its: debt securities (the "Debt Securities") in one or more series, consisting of debentures, notes or other evidences of indebtedness and having such prices and terms as are determined at the time of sale; preferred stock, which may be issued in one or more series (the "Preferred Stock"); common stock (the "Common Stock"); and Stock Purchase Warrants to purchase Preferred Stock or Common Stock (the "Warrants" and, together with the Debt Securities, Preferred Stock and Common Stock, the "Securities"). The Securities may be issued as Units (the "Units") and in any combination, the Debt Securities may or may not be convertible into Preferred Stock or Common Stock and the Preferred Stock may or may not be convertible into Common Stock or exchangeable for Debt Securities. The accompanying Prospectus Supplement sets forth: the ranking of the Debt Securities covered thereby as senior, senior subordinated or subordinated (including junior subordinated) and the specific designation, aggregate principal amount, purchase price, maturity, interest rate (or manner of calculation thereof), time of payment of interest (if any), right to defer interest (if any), convertibility (if any) and, if applicable, Securities into which convertible and conversion price and any other specific terms of the Debt Securities; the rights, privileges and preferences of the Preferred Stock covered thereby, including whether and on what terms such Preferred Stock may be convertible into Common Stock or exchangeable for Debt Securities, and whether the Company has elected to offer any Preferred Stock in the form of depositary shares; the Preferred Stock or Common Stock for which any Warrants covered thereby will be exercisable and the exercise price; whether the Securities covered thereby will be issued in Units and, if so, the Securities which are part thereof; whether the Securities covered thereby are listed on a securities exchange; and the name of and compensation to each dealer, underwriter or agent (if any) involved in the sale of the Securities covered thereby. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Prior to issuance there will have been no market for the Debt Securities, Preferred Stock or Warrants, and there can be no assurance that a secondary market for the Debt Securities, Preferred Stock or Warrants will develop. This Prospectus may not be used to consummate sales of Securities unless accompanied by a Prospectus Supplement. The Securities may be offered through one or more different plans of distribution, including offerings through underwriters. See "Plan of Distribution." 4 IN CONNECTION WITH THE OFFERINGS OF THE DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK OR WARRANTS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK OR WARRANTS, OR ANY OF THEM, AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. AVAILABLE INFORMATION The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement (together with all amendments and exhibits thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Debt Securities, Preferred Stock, Common Stock and Warrants. This Prospectus, which constitutes part of the Registration Statement, does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the Rules and Regulations of the Commission. For further information with respect to the Company, reference is made to the Registration Statement. The Company 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. The Registration Statement, as well as such reports, proxy statements and other information filed by the Company, may be inspected and copied (at prescribed rates) at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the Commission's Regional Offices located at Northwestern Atrium Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New York, New York 10048. In addition, such reports, proxy statements and other information concerning the Company may also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005 and the Pacific Exchange, 115 Sansome Street, Suite 1104, San Francisco, California 94104. Copies of reports, proxy statements and other information electronically filed with the Commission by the Company may be inspected by accessing the Commission's World Wide Web site at http://www.sec.gov. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company's Annual Report on Form 10-K for its fiscal year ended June 30, 1998, which has been filed with the Commission, is incorporated in this Prospectus by reference. All documents filed by the Company pursuant to Sections 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 hereby are incorporated by reference in this Prospectus and made a part hereof from the date such documents are filed. Any statement contained herein or 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, in the Prospectus Supplement or in any subsequently filed document that also is or is 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. The Company will provide without charge to each person to whom a copy of this Prospectus is delivered, upon the written or oral request of such person, a copy of each document incorporated herein by reference (not including the exhibits to those documents, unless the exhibits are specifically incorporated by reference therein or herein). Requests for such copies should be directed to: Del Webb Corporation, 6001 North 24th Street, Phoenix, Arizona 85016, Attention: Secretary. Telephone requests may be directed to (602) 808-8000. 2 5 THE COMPANY Del Webb Corporation develops residential communities ranging from smaller-scale, non-amenitized communities within its conventional homebuilding operations to large-scale, master-planned communities with extensive amenities. The Company currently conducts its operations in the states of Arizona, California, Florida, Illinois, Nevada, South Carolina and Texas. The Company's primary activities involve the development of large-scale, master-planned communities with extensive amenities for active adults age 55 and over. The Company is one of the nation's leading developers of such age-qualified active adult communities. It has extensive experience in the active adult community business, having built and sold more than 60,000 homes at ten Sun City communities over the past 38 years. The Company designs, develops and markets these communities, controlling all phases of the master plan development process from land selection through the construction and sale of homes. Within its communities, the Company is usually the exclusive developer of homes. The Company was incorporated in 1946 in Arizona and reincorporated in 1994 in Delaware. The Company's principal executive offices are located at 6001 North 24th Street, Phoenix, Arizona 85016 and its telephone number is (602) 808-8000. The Company conducts substantially all of its activities through subsidiaries and, as used in this Prospectus and the accompanying Prospectus Supplement, the term the "Company" includes Del Webb Corporation and its subsidiaries unless the context indicates otherwise. USE OF PROCEEDS Unless otherwise set forth in the accompanying Prospectus Supplement, the net proceeds from the sale of the Securities will be used to reduce outstanding balances under the Company's revolving credit facility, to fund land acquisitions and development of new projects and for general corporate purposes. Amounts so repaid under the revolving credit facility may be reborrowed in the future. CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the consolidated ratio of earnings to fixed charges for the Company for the periods indicated.
FISCAL YEAR ENDED JUNE 30, ----------------------------------------- 1994 1995 1996 1997 1998 ---- ---- ---- ---- ---- Ratio of earnings to fixed charges (unaudited) ................ 1.30x 1.59x (1) 2.09x 1.79x
(1) Earnings were inadequate to cover fixed charges by $21.6 million due to a $65.0 million non-cash loss from impairment of southern California real estate inventories incurred in connection with the Company's adoption of Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. See Note 12 to the Company's Consolidated Financial Statements included in its annual report on Form 10-K for the fiscal year ended June 30, 1996. The ratio of earnings to fixed charges is calculated by dividing earnings by fixed charges. For this purpose "earnings" means earnings (loss) from continuing operations before income taxes plus (a) fixed charges and interest amortized to cost of sales minus (b) interest incurred. "Fixed charges" means total interest incurred, whether capitalized or expensed (including the portion of rent expense representative of interest costs), plus (i) debt-related fees and (ii) amortization of deferred financing costs. DESCRIPTION OF DEBT SECURITIES The Debt Securities will constitute senior, senior subordinated or subordinated (including, if applicable, junior subordinated) debt of the Company and will be issued under a Senior Debt Indenture (the "Senior Debt Indenture"), a Senior Subordinated Debt Indenture (the "Senior Subordinated Debt Indenture") or a 3 6 Subordinated Debt Securities Indenture (the "Subordinated Debt Indenture"), in each case between the Company and a Trustee (the "Trustee"). The Senior Debt Indenture, Senior Subordinated Debt Indenture and the Subordinated Debt Indenture are sometimes referred to below individually as an "Indenture" and collectively as the "Indentures." Unless otherwise stated in the Prospectus Supplement, the Trustee under the first Indenture under which Debt Securities will be issued will be Bank of Montreal Trust Company. (See "Concerning the Trustee.") The Debt Securities offered by this Prospectus and the accompanying Prospectus Supplement are referred to below as the "Offered Debt Securities." If and to the extent set forth in the accompanying Prospectus Supplement, the Offered Debt Securities will be convertible into Preferred or Common Stock of the Company or issued as part of Units of Offered Debt Securities and other Securities. If the Offered Debt Securities are to be issued as part of Units of Debt Securities and other Securities or may be issued in exchange for Preferred Stock, the Prospectus Supplement will describe any applicable material federal income tax consequences. The following summaries of certain provisions of the Indentures and the Debt Securities do not purport to be complete. Except to the extent set forth in the Prospectus Supplement with respect to a particular issue of Debt Securities, the Indentures are substantially identical, except for the provisions relating to subordination, including the fact that senior subordinated Debt Securities will rank senior to the subordinated Debt Securities. GENERAL The Indenture for the Offered Debt Securities will not limit the amount of additional indebtedness the Company or any of its subsidiaries may incur, except as may be provided in the accompanying Prospectus Supplement. The Debt Securities will be unsecured senior, senior subordinated or subordinated obligations of the Company, as set forth in the accompanying Prospectus Supplement. The Company is a holding company, which currently conducts its operations through subsidiaries. In addition to the subordination described under "Subordination of Senior Subordinated and Subordinated Debt Securities" below and as may be described in the accompanying Prospectus Supplement, this effectively subordinates the Debt Securities to all indebtedness (including trade payables) of the Company's subsidiaries. Therefore, the Company's rights and the rights of its creditors, including holders of Debt Securities, to participate in the assets of any subsidiary upon the latter's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors (including third persons who have the benefit of guarantees given by the subsidiary), except to the extent the Company may itself be a creditor with recognized claims against the subsidiary. However, in that case the claims of the Company would still be effectively junior to any indebtedness of the subsidiary to the extent the holders of that indebtedness are entitled to the benefit of security interests in the assets of the subsidiary, as well as to any indebtedness of that subsidiary which is senior to any debt or other claims held by the Company. In addition, amounts which may from time to time be outstanding under the Company's $450 million principal debt facility are guaranteed by subsidiaries of the Company that hold substantially all of its consolidated assets. The Debt Securities, including any senior Debt Securities, will not be so guaranteed. As a result, the holders of that debt outstanding under the Company's principal debt facility will have a claim against the assets of the Company's subsidiaries before those assets are available to make payments due on the Debt Securities. Also, because the Company is a holding company, it is dependent on dividends or other distributions from its subsidiaries to make payments on its indebtedness, including the Debt Securities. Such dividends or other distributions to the Company may be subject to state law, which can restrict the ability of a corporation to pay dividends or make other distributions to its shareholders and which protect the rights of creditors of a corporation, including third persons who have the benefit of guarantees given by the corporation, in the event of improperly made dividends or distributions, as well as to present or future contractual or regulatory restrictions that could materially restrict the ability of the subsidiaries to make such payments to the Company. The accompanying Prospectus Supplement discloses, to the extent material to the Company, any 4 7 contractual restrictions on the ability of the subsidiaries of the Company to make dividends, loans or advances to the Company that exist at the date of that Prospectus Supplement. Except as may be described in the accompanying Prospectus Supplement, the Indenture for the Offered Debt Securities will not restrict the Company's ability to enter into contracts in the future that limit the ability of the Company's subsidiaries to make dividends, loans or advances to it. Payments to the Company from its subsidiaries also are contingent upon the earnings of such subsidiaries and are subject to various business considerations, such as the working capital needs of the subsidiaries. Reference is made to the accompanying Prospectus Supplement for the following terms of and information relating to the Offered Debt Securities (to the extent such terms are applicable to such Debt Securities): (a) the specific designation, aggregate principal amount, purchase price and denomination; (b) the date of maturity; (c) the interest rate or rates (or the method by which such rate will be determined), if any; (d) the date from which interest will accrue and dates on which any such interest will be payable; (e) the rights of the Company to defer interest, if any; (f) the place or places where the principal of, premium, if any, and interest, if any, on the Offered Debt Securities will be payable; (g) whether the Offered Debt Securities are senior, senior subordinated or subordinated (including junior subordinated) Debt Securities; (h) any redemption, repayment or sinking fund provisions; (i) any obligation of the Company to offer to purchase the Offered Debt Securities in the event of a Change of Control (as defined) of the Company; (j) whether the Offered Debt Securities are convertible into Preferred Stock or Common Stock and the terms of the security into which they are convertible (see "Description of Capital Stock"), the conversion price, other terms related to conversion and any anti-dilution protections; (k) whether the Offered Debt Securities will be sold as part of Units consisting of Offered Debt Securities and other Securities; (l) any applicable material federal income tax consequences; and (m) any other material specific terms of the Offered Debt Securities, including any material additional events of default or covenants provided for with respect to the Offered Debt Securities and any material terms that may be required by or advisable under applicable laws or regulations. Debt Securities will 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 or as part of Units consisting of Debt Securities and other Securities may be sold or deemed to be sold at a discount below their stated principal amount. With respect to any Debt Securities as to which the Company has the right to defer interest, the holders of such Debt Securities may be allocated interest income for federal and state income tax purposes without receiving equivalent, or any, interest payments. Any material 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 federal income tax purposes will be described in the Prospectus Supplement. GLOBAL DEBT SECURITIES If any Debt Securities are represented by one or more Global Securities, the applicable Prospectus Supplement will describe the terms of the depositary arrangement with respect to such Global Securities. SUBORDINATION OF SENIOR SUBORDINATED AND SUBORDINATED DEBT SECURITIES The senior subordinated and subordinated Debt Securities will be subordinate and junior in right of payment, to the extent and in the manner to be set forth in the Indenture, to all "Senior Debt" of the Company. Except to the extent set forth in the accompanying Prospectus Supplement, the Indenture for the Offered Debt Securities that are senior subordinated or subordinated Debt Securities will define "Senior Debt" as all present or future "Indebtedness" (defined below) created, incurred, assumed or, to the extent described below, guaranteed by the Company (and all renewals, extensions or refundings thereof), unless the instrument under which such Indebtedness is created, incurred, assumed or guaranteed provides that such Indebtedness is not senior or superior in right of payment to the Offered Debt Securities in question; provided, however, that Senior Debt shall not include (a) any Indebtedness of the Company to any of its subsidiaries, (b) any trade payables of the Company or (c) except to the extent set forth or referred to in the 5 8 accompanying Prospectus Supplement, guarantees by the Company of Indebtedness outstanding at the date hereof or that may be outstanding in the future. Each Senior Subordinated Debt Indenture will provide that the Company will not issue any Indebtedness that is subordinated in right of payment to any Senior Debt of the Company and is senior in right of payment to the Debt Securities covered by the Senior Subordinated Debt Indenture. No Subordinated Debt Indenture will contain a similar provision. Except as may otherwise be provided in the accompanying Prospectus Supplement, "Indebtedness" will be defined in the Indenture for the Offered Debt Securities to mean any indebtedness of a person, contingent or otherwise, in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such person or only to a portion thereof), evidenced by bonds, notes, debentures or similar instruments or letters of credit or representing the balance deferred and unpaid of the purchase price of any property or interest therein (except any such balance that constitutes a trade payable), all capitalized lease obligations and all direct or indirect obligations that arise as a result of claims under or drawings pursuant to surety, performance, completion or maintenance bonds. By reason of such subordination, in the event of dissolution, insolvency, bankruptcy or other similar proceedings, upon any distribution of assets: (a) holders of Senior Debt will be entitled to be paid in full before payments may be made on senior subordinated and subordinated Debt Securities and the holders of senior subordinated and subordinated Debt Securities will be required to pay over their share of such distributions to the holders of Senior Debt until such Senior Debt is paid in full (except to the extent, if at all, that holders of senior subordinated and subordinated Debt Securities may receive securities that are subordinated to the same extent the senior subordinated and subordinated Debt Securities are subordinated to Senior Debt); (b) in addition, holders of senior subordinated debt will be entitled to be paid in full before payments may be made on subordinated Debt Securities and holders of subordinated Debt Securities will be required to pay over their share of such distributions to the holders of senior subordinated debt until such senior subordinated debt is paid in full (except to the extent, if at all, that holders of subordinated Debt Securities may receive securities that are subordinated to the same extent the subordinated Debt Securities are subordinated to senior subordinated debt); and (c) creditors of the Company who are not holders of senior subordinated or subordinated Debt Securities may recover less, ratably, than holders of Senior Debt and may recover more, ratably, than the holders of the senior subordinated or subordinated Debt Securities, and creditors of the Company who are not holders of subordinated Debt Securities may recover less, ratably, than holders of Senior Debt and may recover more, ratably, than holders of subordinated Debt Securities. Accordingly, such subordination may result in a reduction or elimination of payments to the holders of all senior subordinated and subordinated Debt Securities or all subordinated Debt Securities. Except as may otherwise be described in the accompanying Prospectus Supplement, no payment of principal or interest with respect to any of the Offered Debt Securities that are senior subordinated or subordinated Debt Securities may be made, nor may the Company acquire any Offered Debt Securities that are senior subordinated or subordinated Debt Securities, in each case except as set forth in the Indenture for such Offered Debt Securities, if any default with respect to Senior Debt that permits the acceleration of the maturity of any Senior Debt occurs and is continuing and such default is either the subject of judicial proceedings or the Company receives notice (a "Default Notice") of the default from a holder of Senior Debt entitled to give such a notice. By reason of these provisions, in the event of a default on any Senior Debt of the Company that is presently existing or may be incurred in the future, payments of principal of and interest and premium, if any, on the Offered Debt Securities that are senior subordinated or subordinated Debt Securities may not be permitted until such Senior Debt is paid in full. However, except as may otherwise be described in the accompanying Prospectus Supplement, the Company may resume payments in respect of the Offered Debt Securities that are senior subordinated or subordinated Debt Securities and may acquire such senior subordinated or subordinated Debt Securities if (a) 179 days pass after the Default Notice is given, if the default with respect to such Senior Debt is not then the subject of judicial proceedings, or (b) the default with respect to such Senior Debt is cured or waived and, in each case described in the foregoing clauses (a) and (b), the terms of the Indenture otherwise permit the payment or acquisition of such Offered Debt Securities at the time in question. The Company's principal credit facility restricts the acquisition by the Company of its subordinated indebtedness, including any senior subordinated or subordinated Debt Securities, prior to the 6 9 term of the principal credit facility as it may be extended from time to time, and the Indentures for the Company's $100 million of 9 3/4% Senior Subordinated Debentures, $100 million of 9% Senior Subordinated Debentures and $150 million of 9 3/4% Senior Subordinated Debentures due 2008 restrict the acquisition, prior to March 1, 2003, February 15, 2006 and January 15, 2008, respectively, of subordinated Debt Securities issued pursuant to the Subordinated Debt Indenture. The Prospectus Supplement or the information incorporated herein by reference sets forth the approximate amount of Senior Debt and Senior Subordinated Debt outstanding as of the end of the most recent fiscal quarter of the Company. CERTAIN COVENANTS OF THE COMPANY AFFIRMATIVE COVENANTS. In addition to such other covenants, if any, as may be described in the accompanying Prospectus Supplement and except as may otherwise be set forth therein, the Indenture for the Offered Debt Securities will require the Company, subject to certain limitations described therein, to, among other things, do the following: (a) deliver to the Trustee copies of all reports filed with the Commission; (b) deliver to the Trustee annual officers' certificates with respect to the Company's compliance with its obligations under that Indenture; (c) maintain its corporate existence subject to the provisions described below relating to mergers and consolidations; and (d) pay its taxes when due except where such taxes are being contested in good faith. Except as may be set forth in the accompanying Prospectus Supplement, the Indentures will not restrict the business or operations of the Company or its subsidiaries, limit their indebtedness or prohibit any liens, charges or other encumbrances on any properties or other assets they may have from time to time. DIVIDENDS AND OTHER PAYMENTS. Except as may otherwise be provided in the accompanying Prospectus Supplement and except as may otherwise be set forth in the Indenture for the Offered Debt Securities, that Indenture will generally prohibit the Company from making a "Restricted Payment" (defined below) if, at the time of the Restricted Payment, (a) an Event of Default (as defined) has occurred under the Indenture and is continuing or would occur as a consequence of the Restricted Payment or (b) if, upon giving effect to the Restricted Payment, the aggregate amount expended for all Restricted Payments exceeds the sum of (i) a specified percentage of the aggregate consolidated net earnings of the Company accrued during certain fiscal quarters, (ii) the aggregate net proceeds received by the Company from the issuance or sale of capital stock of the Company, (iii) the amount expended by the Company for the purchase, redemption or other acquisition or retirement for value of any preferred stock of the Company plus (iv) the amount set forth in the accompanying Prospectus Supplement. Except as may be otherwise provided in the accompanying Prospectus Supplement, a "Restricted Payment" will be defined as any of the following: (1) declaring or paying any dividend on, or making any distribution to the holders of, any shares of the Company's capital stock, other than dividends or distributions payable in "Equity Interests" (defined as equity securities or securities with a right to acquire equity securities (other than convertible debt securities) of the Company) or (2) purchasing, redeeming or otherwise acquiring or retiring for value any Equity Interests. CHANGE OF CONTROL. Except as may otherwise be set forth in the accompanying Prospectus Supplement, the Indenture for the Offered Debt Securities will provide that, if a Change of Control occurs, the Company will be obligated to offer to purchase all outstanding Offered Debt Securities at a purchase price equal to 100 percent of the aggregate principal amount of the Debt Securities, plus accrued and unpaid interest to the date of purchase. Any offer to purchase Offered Debt Securities upon a Change of Control will be conducted in compliance with applicable regulations under the federal securities laws, including Exchange Act Rule 14e-1. Any limitations on the Company's financial ability to purchase Offered Debt Securities upon a Change of Control will be described in the accompanying Prospectus Supplement. Except as may be otherwise provided in the accompanying Prospectus Supplement, a "Change of Control" will be defined in the Indenture for the Offered Debt Securities as any of the following: (a) all or substantially all of the Company's assets are sold as an entirety to any person or it engages in any merger, consolidation, sale of capital stock, sale of beneficial ownership interests or any other transactions as a result of which its shareholders immediately prior to such transactions own, directly or indirectly, in the aggregate less than 50 percent of the total voting power entitled to vote in the election of (i) its directors, if it is the surviving entity, or (ii) the directors, managers or trustees of (1) the surviving entity or (2) the purchaser of all or substantially all of its assets; or (b) any person 7 10 acquires more than 50 percent of the total voting power entitled to vote for directors of the Company. Except as may otherwise be set forth in the accompanying Prospectus Supplement, the Company's failure to comply with the Change of Control covenant as to the Offered Debt Securities will be an Event of Default under the Indenture for the Offered Debt Securities, as specified in the accompanying Prospectus Supplement. See "Events of Default" below. The meaning of the term "all or substantially all of the assets" has not been definitely established and is likely to be interpreted by reference to applicable state law if and at the time the issue arises and will be dependent on the facts and circumstances existing at the time. Accordingly, there may be uncertainty as to whether a holder of Offered Debt Securities can determine whether a Change of Control has occurred and exercise any remedies such holder may have upon a Change of Control. Except as described above with respect to a Change of Control or as described in the accompanying Prospectus Supplement, the Indenture for the Offered Debt Securities will not afford holders of the Debt Securities protection in the event of a highly leveraged transaction, takeover, reorganization, restructuring, recapitalization, merger or similar transaction involving the Company that may adversely affect holders of the Debt Securities. MERGER, CONSOLIDATION, SALE, LEASE OR CONVEYANCE. Except as may otherwise be provided in the accompanying Prospectus Supplement, the Indenture for the Offered Debt Securities will provide that the Company will not merge or consolidate with or into any other person and will not sell, lease or convey all or substantially all of its assets to any person, unless it is the continuing corporation, or the successor corporation or person that acquires all or substantially all of its assets is a corporation organized and existing under the laws of the United States or a State thereof or the District of Columbia and expressly assumes all of the Company's obligations under the Offered Debt Securities and the Indenture for the Offered Debt Securities and, immediately after such merger, consolidation, sale, lease or conveyance, such person or such successor corporation is not in default in the performance of the covenants and conditions in the Indenture for the Offered Debt Securities. With respect to possible uncertainties concerning the meaning of the term "all or substantially all of the assets", the possible lack of protection in a highly leveraged merger or other transaction and related possible effects on holders of the Debt Securities, see "Change of Control" above. REDEMPTION If and to the extent set forth in the accompanying Prospectus Supplement, the Company will have the right to redeem the Offered Debt Securities, in whole or from time to time in part, after the date and at the redemption prices set forth in the accompanying Prospectus Supplement. EVENTS OF DEFAULT Except as may be described in the accompanying Prospectus Supplement, an "Event of Default" will be defined under the Indenture for the Offered Debt Securities as being: (a) default for 30 days in payment of any interest on the Offered Debt Securities; (b) default in payment of any principal of the Offered Debt Securities, either at maturity (or upon any redemption), by declaration or otherwise; (c) default for 60 days after written notice in the performance of any other agreements or covenants in, or provisions of, the Offered Debt Securities or the Indenture for the Offered Debt Securities; (d) an event of default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company and certain of its subsidiaries (or the payment of which is guaranteed by the Company), other than non-recourse Indebtedness, if (i) either (1) such event of default results from the failure to pay any such Indebtedness at maturity and such default has not been cured or such acceleration rescinded or (2) as a result of such event of default, the maturity of such Indebtedness has been accelerated prior to its expressed maturity and (ii) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at maturity or the maturity of which has been so accelerated and the acceleration of which has not been rescinded, equals or exceeds the amount specified in the accompanying Prospectus Supplement; (e) failure for 60 days to discharge final judgments against the Company and certain of its subsidiaries for the payment of money aggregating the amount specified in the accompanying Prospectus Supplement or more; and (f) certain events of bankruptcy, insolvency or reorganization. 8 11 The Indenture for the Offered Debt Securities will provide that if an Event of Default (other than an Event of Default due to certain events of bankruptcy, insolvency or reorganization) has occurred and is continuing, either the Trustee or the holders of not less than 25 percent in principal amount of the Offered Debt Securities outstanding under the Indenture for the Offered Debt Securities, or such other amount as may be specified in the Prospectus Supplement, may then declare the principal of all Offered Debt Securities under that Indenture and interest accrued thereon to be due and payable immediately. Except to the extent otherwise stated in the accompanying Prospectus Supplement, the Indenture for the Offered Debt Securities will contain a provision entitling the Trustee, subject to the duty of the Trustee during a default to act with the required standard of care, to be indemnified by the holders of Offered Debt Securities before proceeding to exercise any right or power under that Indenture at the request of such holders. Subject to such provisions in the Indenture for the Offered Debt Securities for the indemnification of the Trustee and certain other limitations, the holders of a majority in principal amount of the Offered Debt Securities 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. Except to the extent otherwise stated in the accompanying Prospectus Supplement, the Indenture for the Offered Debt Securities will provide that no holder of Offered Debt Securities may institute any action against the Company under the Indenture (except actions for payment of overdue principal or interest) unless (a) such holder previously has given the Trustee written notice of the default and continuance thereof, (b) the holders of not less than 25 percent in principal amount of the Offered Debt Securities then outstanding have requested the Trustee to institute such action and offered the Trustee reasonable indemnity, (c) the Trustee has not instituted such action within 60 days of the request and (d) the Trustee has not received direction inconsistent with such written request from the holders of a majority in principal amount of the Offered Debt Securities then outstanding under the Indenture. The Indentures and the Debt Securities will provide that no director, officer, employee or shareholder of the Company, as such, will have any liability for any obligations of the Company under the Debt Securities or the Indentures. The Indentures and the Debt Securities will also each provide that each holder of the Debt Securities, by accepting the Debt Securities, waives and releases all such liability. DEFEASANCE AND DISCHARGE Except as may otherwise be provided in the accompanying Prospectus Supplement, the Company can discharge or defease its obligations under the Indenture for the Offered Debt Securities as set forth below. Under terms satisfactory to the Trustee, the Company may discharge certain obligations to holders of the Offered Debt Securities 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 United States Government Obligations (as defined in the Indenture for the Offered Debt Securities), or a combination thereof, as trust funds in an amount certified to be sufficient to pay at maturity (or upon redemption) the principal of and interest on such Offered Debt Securities. The Company may also discharge any and all of its obligations to holders of the Offered Debt Securities at any time ("defeasance"), but may not thereby avoid its duty to register the transfer or exchange of the Offered Debt Securities, to replace any temporary, mutilated, destroyed, lost or stolen Offered Debt Securities or to maintain an office or agency in respect of such Offered Debt Securities and certain other obligations. Alternatively, the Company may be released with respect to the Offered Debt Securities from the obligations imposed by specific portions of the Indenture for the Offered Debt Securities (including the covenant described above limiting consolidations, mergers, asset sales and leases) and omit to comply with such provisions without creating an Event of Default ("covenant defeasance"). Defeasance or covenant defeasance may be effected only if, among other things: (a) the Company irrevocably deposits with the Trustee cash or United States Government Obligations, or a combination thereof, as trust funds in an amount certified to be sufficient to pay at maturity the principal of and interest on all outstanding Offered Debt Securities; (b) no Event of Default under the Indenture for the Offered Debt Securities has occurred and is then continuing; 9 12 (c) the defeasance or covenant defeasance will not result in an event of default under any agreement to which the Company is a party or by which it is bound; and (d) the Company delivers to the Trustee an opinion of counsel to the effect that the holders of Debt Securities will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance or covenant defeasance and that such defeasance or covenant defeasance will not otherwise alter such holders' federal income tax treatment of principal and interest payments on the Offered Debt Securities. MODIFICATIONS TO THE INDENTURES Except as may otherwise be set forth in the accompanying Prospectus Supplement, the Indenture for the Offered Debt Securities will provide that the Company and the Trustee may enter into supplemental indentures without the consent of the holders of Offered Debt Securities to, among other things: (a) add covenants, conditions and restrictions for the protection of the holders of Offered Debt Securities or to surrender any right of the Company; (b) cure any ambiguity or correct any inconsistency in the Indenture for the Offered Debt Securities; (c) make any change that does not adversely affect the legal rights of holders of Offered Debt Securities; (d) modify, eliminate or add to the provisions of the Indenture for the Offered Debt Securities to the extent necessary to qualify that Indenture under applicable federal statutes; or (e) make any other changes in the Indenture before Offered Debt Securities are issued thereunder, provided that such changes are not prohibited by the Trust Indenture Act. Except as may otherwise be set forth in the accompanying Prospectus Supplement, the Indenture for the Offered Debt Securities also will contain provisions permitting the Company and the Trustee, with the consent of the holders of not less than a majority in principal amount of Offered Debt Securities outstanding, to add any provision to, change in any manner or eliminate any of the provisions of the Indenture for the Offered Debt Securities or modify in any manner the rights of the holders of the Offered Debt Securities so affected; provided that the Company and the Trustee may not, without the consent of the holder of each outstanding Offered Debt Security affected thereby, do, among other things, any of the following: (a) reduce the amount of Offered Debt Securities whose holders must consent to an amendment, supplement or waiver with respect to the Indenture; (b) reduce the rate of or change the time for payment of interest on any Offered Debt Security; (c) reduce the principal of or change the fixed maturity of any Offered Debt Security; or (d) waive a default in the payment of the principal of, or interest on, any Offered Debt Security. The Indentures for senior subordinated or subordinated Offered Debt Securities may not be amended to alter the subordination of any outstanding senior subordinated or subordinated Debt Securities without the consent of each holder of Senior Debt and, as to subordinated Debt Securities, also senior subordinated debt then outstanding that would be adversely affected thereby. CONCERNING THE TRUSTEE Unless otherwise stated in the Prospectus Supplement, the Trustee under the first Indenture under which Debt Securities will be issued will be Bank of Montreal Trust Company. An affiliate of Bank of Montreal Trust Company is a lender to the Company under one of the Company's short-term lines of credit. Unless stated in the applicable Prospectus Supplement, (i) it or any other Trustee may also be the Trustee under any indenture for Offered Debt Securities and (ii) any Trustee or its affiliates may be a lender to the Company, including under its principal credit facility, and may from time to time have lender or other business arrangements with the Company. The Indenture will contain certain limitations on the rights of the Trustee, should it or its affiliates then be creditors of the Company, to obtain payment of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee and its affiliates will be permitted to engage in other transactions; however, if they acquire any conflicting interest, the conflict must be eliminated or the Trustee must resign. The Holders of a majority in principal amount of the then outstanding Debt Securities issued under any Indenture will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee under that Indenture, subject to certain exceptions. Unless otherwise stated in the applicable Prospectus Supplement, the Indentures will provide that in case an Event of Default occurs and is not cured, the Trustee will be required, in the exercise of its power, to use the degree of care of a 10 13 prudent person in similar circumstances in the conduct of his, her or its affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under any Indenture at the request of any Holder, unless such Holder has offered the Trustee security and indemnity satisfactory to the Trustee. GOVERNING LAW Unless otherwise specified in the accompanying Prospectus Supplement, the Indenture for the Offered Debt Securities and the Offered Debt Securities will be governed by New York law. DESCRIPTION OF WARRANTS GENERAL Except as otherwise set forth in the accompanying prospectus supplement, the Warrants will be issued in fully registered form under a Warrant Agreement between the Company and the Warrant Agent named in the accompanying Prospectus Supplement (the "Warrant Agent"). The statements in this Prospectus relating to the Warrants and the Warrant Agreement are summaries and do not purport to be complete. Each Warrant will entitle the registered owner (the "Warrantholder") to purchase one share of Preferred or Common Stock, as set forth in the accompanying Prospectus Supplement, subject to the call provisions referred to below, from the time the Warrants are separately transferable until the date set forth in the accompanying Prospectus Supplement. The initial per share exercise price of the Warrants and the date on which the Warrants become separately transferable will be set forth in the applicable Prospectus Supplement. The Warrants can be exercised by surrendering to the Warrant Agent a Warrant certificate signed by the Warrantholder or his, her or its duly authorized agent indicating the Warrantholder's election to exercise all or portion of the Warrants evidenced by the certificate. Surrendered Warrant certificates must be accomplished by payment of the aggregate exercise price of the Warrants to be exercised (the "Warrant Price"), which payment may be made in the form of cash or a cashier's check equal to the exercise price or, if and to the extent set forth in the accompanying Prospectus Supplement, the surrender of Debt Securities in denominations at least equal to the aggregate Warrant Prices or, if applicable, any combination of cash and such denominations of Debt Securities. If the principal amount of Debt Securities surrendered is in excess of the aggregate Warrant Price so paid, only a portion of such surrendered principal amount shall be accepted against payment of the Warrant Price and new Debt Securities shall be issued in the principal amount not so applied against the aggregate Warrant Price, provided that the amount of such excess is $1,000 or an integral multiple thereof. Certificates evidencing duly exercised Warrants shall be delivered by the Warrant Agent to the transfer agent for the Preferred or Common Stock, as applicable. Upon receipt thereof, the transfer agent will be obligated to deliver or cause to be delivered, to or upon the written order of the exercising Warrantholders, certificates representing the number of shares of Preferred or Common Stock so purchased. If fewer than all of the Warrants evidenced by any certificate are exercised, the Warrant Agent will be obligated to deliver to the exercising Warrantholder a new Warrant certificate representing the unexercised Warrants. To the extent set forth in the accompanying Prospectus Supplement, the Warrant Price and the number of shares of Preferred or Common Stock purchasable upon the exercise of each Warrant are subject to adjustment in certain events, including: (i) the issuance of a stock dividend to holders of Preferred Stock or Common Stock (whichever the Warrants are exercisable for) or a combination, subdivision, or reclassification of the Preferred Stock or the Common Stock (whichever the Warrants are exercisable for); (ii) the issuance of rights, warrants or options or securities convertible into, or exchangeable for, the Preferred Stock or the Common Stock (whichever the Warrants are exercisable for), that are distributed to all holders of the Company's outstanding Preferred or Common Stock (whichever the Warrants are exercisable for) entitling them to subscribe for or purchase Preferred or Common Stock; and (iii) any distribution by the Company to the holders of its Preferred or Common Stock (whichever the Warrants are exercisable for) of evidences of indebtedness of the Company or of assets (excluding, if and to the extent set forth in the accompanying 11 14 Prospectus Supplement, certain cash dividends or distributions). To the extent set forth in the accompanying Prospectus Supplement, no adjustment in the number of shares purchasable upon exercise of the Warrants or in the Warrant Price will be required until cumulative adjustments require an adjustment of at least one percent thereof. In addition, unless the accompanying Prospectus Supplement states to the contrary, the Company may, at its option, reduce the Warrant Price at any time. No fractional shares will be issued upon exercise of Warrants, but the Company will pay the cash value of any fractional shares otherwise issuable. Notwithstanding the foregoing, unless the accompanying Prospectus Supplement states to the contrary, in case of any consolidation, merger or sale or conveyance of the property of the Company and its subsidiaries as a whole, including a consolidation or merger in which the Company is the continuing corporation and in which all or a majority of the Preferred and Common Stock outstanding immediately prior to the consolidation or merger is converted into consideration other than capital stock (or the right to receive such consideration), the holder of each outstanding Warrant shall have the right to exercise the Warrant for the kind and amount of shares of stock and other securities and property (including cash) receivable by a holder of the number of shares of Preferred and Common Stock for which such Warrant was exercisable immediately prior thereto. Adjustments to the Warrant Price (and, possibly, adjustment to the number of shares of Preferred or Common Stock purchasable upon the exercise of each Warrant), or the failure to make such adjustments, may in certain circumstances result in distributions that could be taxable as dividends under the Internal Revenue Code of 1986, as amended, to holders of the Warrants or to holders of shares of Preferred or Common Stock issued upon exercise thereof. The Company will reserve the right (but will not be obligated) to make such adjustments to the Warrant Price or in the number of shares of Preferred or Common Stock purchasable upon the exercise of each Warrant, in addition to those required in the foregoing provisions, as it shall determine to be advisable in order that certain stock-related distributions which may hereafter be made by the Company to its stockholders after the date of the accompanying Prospectus Supplement shall not be taxable to them. If all or any portion of the Warrants are callable at the option of the Company, the call provisions, including the call price and the date through which the Warrants may be exercised, will be set forth in the accompanying Prospectus Supplement. If upon expiration the unexercised Warrants will convert into Preferred or Common Stock, the manner and rate of such conversion will be set forth in the accompanying Prospectus Supplement. Holders of Warrants are not entitled, by virtue of being holders, to receive dividends or to consent or to receive notice as stockholders in respect of any meeting of stockholders for the election of directors of the Company or any other matter, to vote at any such meeting or to exercise any rights whatsoever as stockholders of the Company. The Warrant Agreement and the Warrants will provide that no director, officer, employee or shareholder of the Company, as such, will have any liability under the Warrants or the Warrant Agreement. The Warrant Agreement and the Warrants will also each provide that each holder of the Warrants, by accepting the Warrants, waives and releases all such liability. Unless otherwise specified in the accompanying Prospectus Supplement, the Warrant Agreement and the Warrants will be governed by New York law. DESCRIPTION OF CAPITAL STOCK The authorized capital stock of the Company consists of 30,000,000 shares of Common Stock, $.001 par value, and 10,000,000 shares of Preferred Stock, $.001 par value, of which 18,107,606 shares of Common Stock (exclusive of treasury shares) were issued and outstanding on June 30, 1998. No shares of Preferred Stock were outstanding at that date. COMMON STOCK Subject to the rights of holders of any outstanding Preferred Stock, the holders of outstanding shares of Common Stock are entitled to share ratably in dividends declared out of assets legally available therefor at such time and in such amounts as the Board of Directors may from time to time lawfully determine. At the 12 15 date of this Prospectus the payment of dividends on the Common Stock is limited by provisions of the Indentures for the Company's $100 million of 9 3/4% Senior Subordinated Debentures due March 1, 2003, $100 million of 9% Senior Subordinated Debentures due February 15, 2006 and $150 million of 9 3/4% Senior Subordinated Debentures due 2008 and its principal credit facility. Each holder of Common Stock is entitled to one vote for each share held by him. Holders of Common Stock are not entitled to cumulate votes for the election of directors. The Common Stock is not entitled to conversion or preemptive rights and is not subject to redemption or assessment. Subject to the rights of holders of any outstanding Preferred Stock, upon liquidation, dissolution or winding up of the Company, any assets legally available for distribution to shareholders as such are to be distributed ratably among the holders of the Common Stock at that time outstanding. The Common Stock presently outstanding is, and the Common Stock issued upon conversion of the Debt Securities, exercise of the Warrants (upon payment in full of the Warrant exercise price) or conversion of any convertible Preferred Stock offered hereby, as the case may be, will be, fully paid and nonassessable. The Common Stock is listed on the New York and Pacific Stock Exchanges. PREFERRED STOCK The authorized shares of Preferred Stock are issuable, without further shareholder approval, in one or more series as determined by the Board of Directors, with such rights, privileges and preferences as are fixed by the Board of Directors, including dividend, liquidation and other rights preferred over the Common Stock, subject to the restrictions in the Indentures and credit facility referred to above. The Preferred Stock issuable upon exercise of any Warrants exercisable for Preferred Stock (upon payment in full of the Warrant exercise price) or conversion of any Debt Securities convertible into Preferred Stock will be fully paid and nonassessable. The Preferred Stock may be convertible and, if so convertible, may be converted into one or both of Common Stock and Debt Securities. The Preferred Stock may also be exchangeable, at the option of the Company, for Debt Securities (see "Description of Debt Securities"). If Preferred Stock or Warrants exercisable for Preferred Stock are being offered or if the Preferred Stock is exchangeable for Debt Securities, the accompanying Prospectus Supplement will describe the rights, privileges, preferences and restrictions of such Preferred Stock (including, without limitation, the designation, the number of authorized shares of the series in question, the dividend rate (or method of calculation), any voting rights, conversion rights, anti-dilution protections, exchangeability provisions and terms of the Debt Securities that are exchangeable for the Preferred Stock, any redemption provisions, liquidation preferences and any sinking fund provisions). If fractional interests in shares of Preferred Stock may be issued, there will be a depositary for the shares of Preferred Stock involved and the applicable Prospectus Supplement will describe the terms of the depositary arrangement and related matters. PLAN OF DISTRIBUTION The Company may sell the Securities to one or more underwriters for public offering and sale by them or may sell the Securities to investors directly or through agents. Any such underwriter or agent involved in the offer and sale of the Securities will be named in the applicable Prospectus Supplement. The Company may sell Securities directly to investors on its own behalf in those jurisdictions where it is authorized to do so. Underwriters may offer and sell the Securities at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Company also may, from time to time, authorize dealers, acting as Company agents, to offer and sell the Securities upon such terms and conditions as may be set forth in the Prospectus Supplement. In connection with the sale of the Securities, underwriters may receive compensation from the Company 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 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 which they may act as agents. 13 16 Any underwriting compensation paid by the Company to underwriters or agents in connection with the offering of the Securities, and any discounts or concessions or commissions allowed by underwriters to participating dealers, will be set forth in the applicable Prospectus Supplement. Dealers and 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. Underwriters, dealers and agents may be entitled, under agreements entered into with the Company, to indemnification against and contribution toward certain civil liabilities. The Debt Securities, the Preferred Stock and the Warrants will be new issues of securities with no established trading market. Any underwriters or agents to or through which Securities are sold by the Company 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 any of them may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of or trading market for any Debt Securities, Preferred Stock or Warrants. CERTAIN LEGAL MATTERS Gibson, Dunn & Crutcher LLP has rendered an opinion (filed as an exhibit to the Registration Statement) with respect to the validity of the Debt Securities, Preferred Stock, Common Stock and Warrants covered by this Prospectus. Certain legal matters in connection with offerings made by this Prospectus may be passed on for any underwriters by counsel named in the Prospectus Supplement. EXPERTS The consolidated financial statements and schedules of Del Webb Corporation and subsidiaries as of June 30, 1998 and 1997, and for each of the years in the three-year period ended June 30, 1998, have been incorporated by reference herein and in the Registration Statement in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The report of KPMG Peat Marwick LLP covering the June 30, 1996 financial statements refers to a change in the method of accounting for long-lived assets. 14 17 No dealer, salesman or any other person has been authorized to give any information or to make any representations other than those contained in this Prospectus in connection with the offer made by this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or any Underwriter. Neither the delivery of this Prospectus nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of the Company since the date hereof. This Prospectus does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not autho- rized or in and which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. TABLE OF CONTENTS
Page ---- Available Information.......................... 2 Incorporation of Certain Documents by Reference................................... 2 The Company.................................... 3 Use of Proceeds................................ 3 Consolidated Ratio of Earnings to Fixed Charges................................ 3 Description of Debt Securities................. 3 Description of Warrants........................ 11 Description of Capital Stock................... 12 Plan of Distribution........................... 13 Certain Legal Matters.......................... 14 Experts........................................ 14
DEL WEBB CORPORATION Debt Securities, Preferred Stock, Common Stock Stock Purchase Warrants PROSPECTUS , 1998 18 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION* The following are the estimated expenses of the issuance and distribution of the securities being registered, all of which will be paid by the Registrant.
Registration fee......................................................... $ 75,750 Blue Sky fees and expenses............................................... 2,000 Exchange listing fees.................................................... 30,800 Printing expenses........................................................ 50,000 Legal fees and expenses.................................................. 105,000 Accounting fees and expenses............................................. 50,000 Trustee's fees and expenses (including counsel fees)..................... 7,000 Miscellaneous............................................................ 4,450 ---------- Total............................................................... $ 325,000
*All amounts are estimated except Commission's registration fee. ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS Section 145 of the Delaware General Corporation Law and Sections 5.4 and 7.1 - 7.4 of the Company's Amended and Restated Certificate of Incorporation each provide for indemnification by the Company of its officers, directors, agents and employees under certain circumstances. In addition, the Company has entered into indemnification agreements with each of its directors and executive officers (see Exhibit 10). It is anticipated that in any Underwriting Agreements, the underwriter(s) named therein will agree to indemnify the Company, its directors and certain of its officers against certain civil liabilities, including civil liabilities under the Securities Act of 1933, as amended (the "Securities Act"). The Registrant has a policy of directors' and officers' liability insurance which insures directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances. ITEM 16. EXHIBITS 4.1 Form of Senior Debt Indenture (including form of Senior Debenture/Note/Global Security) 4.2 Form of Senior Subordinated Debt Indenture (including form of Senior Subordinated Debenture/Note/Global Security) 4.3 Form of Subordinated Debt Indenture (including form of Subordinated Debenture/Note/Global Security) 4.4 Form of Warrant Agreement (including form of Warrant) 4.5 Form of Certificate of Designations of Del Webb Corporation Pursuant to Section 151 of the Delaware General Corporation Law (the form of Certificate of Designations for the Preferred Stock) 4.6 Form of Depositary Agreement (including form of Depositary Receipt) 5 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of the securities to be issued 10 Form of Directors and Officers Indemnification Agreement (incorporated by reference to Registrant's Annual Report on Form 10-K for its fiscal year ended June 30, 1997) 12 Computation of Ratio of Earnings to Fixed Charges 23.1 Consent of KPMG Peat Marwick LLP 23.2 Consent of Gibson, Dunn & Crutcher LLP (included as part of Exhibit 5) II-1 19 24 Powers of Attorney (included at pages II-3 and II-4) 25 Statement of Eligibility of Trustee ITEM 17. UNDERTAKINGS The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement 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. (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 post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act, each filing of the registrant's 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. (5) That, for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rules 424(b)(l) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (6) That, for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (7) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 15 (other than the provisions relating to insurance), or otherwise, the registrant has 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 Registrant will, unless in the opinion of its 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. (8) The undersigned Registrant hereby undertakes to file an application, if necessary, for the purpose of determining the eligibility of any 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. II-2 20 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Phoenix, Arizona on August 31, 1998. DEL WEBB CORPORATION By: /s/ PHILIP J. DION ------------------------------- Philip J. Dion Chairman of the Board and Chief Executive Officer POWER OF ATTORNEY Each person whose signature appears below hereby constitutes and appoints Philip J. Dion, Donald V. Mickus, John A. Spencer, David E. Rau and Robertson C. Jones, and each or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments or post-effective amendments to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each such attorney-in-fact and agent, or his substitute may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signatures Title Date ---------- ----- ---- /s/ PHILIP J. DION Chairman of the Board and Chief Executive Officer August 31, 1998 - -------------------------------------------- (Principal Executive Officer) Philip J. Dion /s/ LEROY C. HANNEMAN, JR. Director, President and - -------------------------------------------- Chief Operating Officer August 31, 1998 LeRoy C. Hanneman, Jr. /s/ JOHN A. SPENCER Senior Vice President, Finance and Administration, - -------------------------------------------- and Chief Financial Officer August 31, 1998 John A. Spencer (Principal Financial Officer) /s/ DAVID E. RAU Vice President and Controller - -------------------------------------------- (Principal Accounting Officer) August 31, 1998 David E. Rau
II-3 21
/s/ D. KENT ANDERSON Director August 31, 1998 - -------------------------------------------- D. Kent Anderson /s/ MICHAEL O. MAFFIE Director August 31, 1998 - -------------------------------------------- Michael O. Maffie /s/ J. RUSSELL NELSON Director August 31, 1998 - -------------------------------------------- J. Russell Nelson /s/ PETER A. NELSON Director August 31, 1998 - -------------------------------------------- Peter A. Nelson /s/ MICHAEL E. ROSSI Director August 31, 1998 - -------------------------------------------- Michael E. Rossi /s/ GLENN W. SCHAEFFER Director August 31, 1998 - -------------------------------------------- Glenn W. Schaeffer /s/ C. ANTHONY WAINWRIGHT Director August 31, 1998 - -------------------------------------------- C. Anthony Wainwright /s/ SAM YELLEN Director August 31, 1998 - -------------------------------------------- Sam Yellen
II-4 22 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 4.1 Form of Senior Debt Indenture (including form of Senior Debenture/Note/Global Security) 4.2 Schedule of material details in which the form of Senior Subordinated Debt Indenture (including the form of Senior Subordinated Debenture/Note/Global Security) differs from the form of Senior Debt Indenture (including the form of Senior Debenture/Note/Global Security); and the form of Senior Subordinated Debt Indenture (including form of Senior Subordinated Debenture/Note/Global Security) 4.3 Schedule as to material details in which the form of Subordinated Debt Indenture (including the form of Subordinated Debenture/Note/ Global Security) differs from the form of Senior Subordinated Debt Indenture (including form of Senior Subordinated Debenture/Note/ Global Security); and the form of Subordinated Debt Indenture (including form of Subordinated Debenture/Note/Global Security) 4.4 Form of Warrant Agreement (including form of Warrant) 4.5 Form of Certificate of Designations of Del Webb Corporation Pursuant to Section 151 of the Delaware General Corporation Law (the form of Certificate of Designations for the Preferred Stock) 4.6 Form of Depositary Agreement (including form of Depositary Receipt) 5 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of the Securities to be issued 10 Form of Directors and Officers Indemnification Agreement (incorporated by reference to Registrant's Annual Report on Form 10-K for its fiscal year ended June 30, 1997) 12 Computation of Ratio of Earnings to Fixed Charges 23.1 Consent of KPMG Peat Marwick LLP 23.2 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5) 24 Power of Attorney (set forth commencing on page II-3) 25 Statement of Eligibility of Trustee EX-4.1 2 EX-4.1 1 EXHIBIT 4.1 ------------------------------------------------------------------------ ------------------------------------------------------------------------ DEL WEBB CORPORATION AND [BANK OF MONTREAL TRUST COMPANY] AS TRUSTEE $____________ ___% [Convertible] Senior [Debentures] [Notes]* INDENTURE Dated as of _____, 199_ --------------------------------------------------------------------- --------------------------------------------------------------------- ---------------- * Language in brackets indicates alternative language or provisions to be supplied. As appropriate, disclosure will be made in the relevant Prospectus Supplement as to which alternative has been chosen or provisions added and a copy of the final Indenture will be filed as an Exhibit to a Form 8-K, or other appropriate periodic report. 2 CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section ----------- ----------------- 310(a)(1)......................................................... 7.10 (a)(2)......................................................... 7.10 (a)(3)......................................................... N.A. (a)(4)......................................................... N.A. (b)............................................................ 7.08; 7.10; 10.02 (c)............................................................ N.A. 311(a)............................................................ 7.11 (b)............................................................ 7.12 (c)............................................................ N.A. 312(a)............................................................ 2.05 (b)............................................................ 10.03 (c)............................................................ 10.03 313(a)............................................................ 7.06 (b)(1)......................................................... N.A. (b)(2)......................................................... 7.06 (c)............................................................ 7.06; 10.02 (d)............................................................ 7.06 314(a)............................................................ 4.01; 10.02 (b)............................................................ N.A. (c)(1)......................................................... 10.04 (c)(2)......................................................... 10.04 (c)(3)......................................................... N.A. (d)............................................................ N.A. (e)............................................................ 10.05 (f)............................................................ N.A. 315(a)............................................................ 7.01(b) (b)............................................................ 7.05; 10.02 (c)............................................................ 7.01(a) (d)............................................................ 7.01(c) (e)............................................................ 6.11 316(a)(last sentence)............................................. 2.09 (a)(1)(A)...................................................... 6.05 (a)(1)(B)...................................................... 6.04 (a)(2)......................................................... N.A. (b)............................................................ 6.07 317(a)(1)......................................................... 6.08 (a)(2)......................................................... 6.09 (b)............................................................ 2.04 318(a)............................................................ 10.01
N.A. means not applicable. - --------------- *This Cross-Reference Table is not part of the Indenture. 3 TABLE OF CONTENTS
Page ARTICLE 1 DEFINITIONS Section 1.01. Definitions......................................................... 1 "Affiliate".................................................... 1 "Agent"........................................................ 1 "Board of Directors"........................................... 1 "capital stock"................................................ 1 "Change of Control"............................................ 1 "Company"...................................................... 2 "Consolidated Net Earnings".................................... 2 "Default"...................................................... 2 "Disqualified Stock"........................................... 3 "Equity Interests"............................................. 3 "Exchange Act"................................................. 3 "Holder" or "Securityholder"................................... 3 "Indenture".................................................... 3 "Material Subsidiary".......................................... 3 "Officers' Certificate"........................................ 3 "Opinion of Counsel"........................................... 3 "person"....................................................... 3 "principal".................................................... 3 "redemption date".............................................. 3 "redemption price"............................................. 3 "SEC".......................................................... 4 "Securities"................................................... 4 "subsidiary"................................................... 4 "TIA".......................................................... 4 "Trustee"...................................................... 4 "Trust Officer"................................................ 4 Section 1.02. Other Definitions................................................... 4 Section 1.03. Incorporation by Reference of Trust Indenture Act................... 5 Section 1.04. Rules of Construction............................................... 5
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Page ARTICLE 2 THE SECURITIES Section 2.01. Form and Dating.................................................. 6 Section 2.02. Execution and Authentication..................................... 6 Section 2.03 Registrar and Paying Agent....................................... 7 Section 2.04. Paying Agent to Hold Money in Trust.............................. 7 Section 2.05. Securityholder Lists............................................. 8 Section 2.06. Transfer and Exchange............................................ 8 Section 2.07. Replacement Securities........................................... 8 Section 2.08. Outstanding Securities........................................... 9 Section 2.09. When Treasury Securities Disregarded............................. 9 Section 2.10. Temporary Securities............................................. 9 Section 2.11. Cancellation..................................................... 10 Section 2.12. Defaulted Interest............................................... 10 Section 2.13. CUSIP Number..................................................... 10 ARTICLE 3 REDEMPTION Section 3.01. Notices to Trustee............................................... 10 Section 3.02. Selection of Securities to be Redeemed........................... 11 Section 3.03. Notice of Redemption............................................. 11 Section 3.04. Effect of Notice of Redemption................................... 12 Section 3.05. Deposit of Redemption Price...................................... 12 Section 3.06. Securities Redeemed in Part...................................... 12 [Section 3.07. Mandatory Redemption............................................. 13] ARTICLE 4 COVENANTS Section 4.01. Payment of Securities............................................ 13 Section 4.02. SEC Reports...................................................... 13 Section 4.03. Compliance Certificate........................................... 14 Section 4.04. Maintenance of Office or Agency.................................. 15 Section 4.05. Restrictions on Dividends and Other Payments..................... 15 Section 4.06. Continued Existence.............................................. 17 Section 4.07. Taxes............................................................ 17
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Page Section 4.08. Maintenance of Properties........................................... 17 Section 4.09. Insurance........................................................... 18 Section 4.10. Investment Company Act.............................................. 18 Section 4.11. Change of Control................................................... 18 ARTICLE 5 SUCCESSORS Section 5.01. When the Company May Merge, etc..................................... 20 Section 5.02. Successor Corporation Substituted................................... 20 Section 5.03. Purchase Option on Change of Control................................ 21 ARTICLE 6 DEFAULTS AND REMEDIES Section 6.01. Events of Default................................................... 21 Section 6.02. Acceleration........................................................ 23 Section 6.03. Other Remedies...................................................... 23 Section 6.04. Waiver of Past Defaults............................................. 24 Section 6.05. Control by Majority................................................. 24 Section 6.06. Limitation on Suits................................................. 24 Section 6.07. Rights of Holders to Receive Payment [and to Convert Securities]....................................... 25 Section 6.08. Collection Suit by Trustee.......................................... 25 Section 6.09. Trustee May File Proofs of Claim.................................... 25 Section 6.10. Priorities.......................................................... 26 Section 6.11. Undertaking for Costs............................................... 26 ARTICLE 7 THE TRUSTEE Section 7.01. Duties of the Trustee............................................... 26 Section 7.02. Rights of the Trustee............................................... 28 Section 7.03. Individual Rights of the Trustee.................................... 28 Section 7.04. Trustee's Disclaimer................................................ 28 Section 7.05. Notice of Defaults.................................................. 29 Section 7.06. Reports by the Trustee to Holders................................... 29 Section 7.07. Compensation and Indemnity.......................................... 29 Section 7.08. Replacement of the Trustee.......................................... 30
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Page Section 7.09. Successor Trustee by Merger, etc.................................... 31 Section 7.10. Eligibility; Disqualification....................................... 31 Section 7.11. Preferential Collection of Claims Against Company................... 32 ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE Section 8.01. Termination of Company's Obligations................................ 32 Section 8.02. Application of Trust Money.......................................... 35 Section 8.03. Repayment to Company................................................ 35 Section 8.04. Reinstatement....................................................... 35 ARTICLE 9 AMENDMENTS Section 9.01. Without the Consent of Holders...................................... 36 Section 9.02. With the Consent of Holders......................................... 37 Section 9.03. Compliance with the Trust Indenture Act............................. 38 Section 9.04. Revocation and Effect of Consents................................... 38 Section 9.05. Notation on or Exchange of Securities............................... 38 Section 9.06. The Trustee Protected............................................... 39 ARTICLE 10 GENERAL PROVISIONS Section 10.01. Trust Indenture Act Controls........................................ 39 Section 10.02. Notices............................................................. 39 Section 10.03. Communication by Holders with Other Holders......................... 40 Section 10.04. Certificate and Opinion as to Conditions Precedent.................. 40 Section 10.05. Statements Required in Certificate or Opinion....................... 40 Section 10.06. Rules by Trustee and Agents......................................... 41 Section 10.07. Legal Holidays; Business Days....................................... 41 Section 10.08. No Recourse Against Others.......................................... 41 Section 10.09. Counterparts........................................................ 41 Section 10.10. Other Provisions.................................................... 41 Section 10.11. Governing Law....................................................... 42 Section 10.12. No Adverse Interpretation of Other Agreements....................... 43 Section 10.13. Successors.......................................................... 43 Section 10.14. Severability........................................................ 43 Section 10.15. Table of Contents, Headings, Etc.................................... 43
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Page ARTICLE 11 OMITTED [ARTICLE 12 CONVERSION Section 12.01. Conversion Privilege................................................ 43 Section 12.02. Conversion Procedures............................................... 44 Section 12.03. Fractional Shares................................................... 45 Section 12.04. Taxes on Conversion................................................. 45 Section 12.05. Company to Provide Stock............................................ 45 Section 12.06. Adjustment for Change in Capital Stock.............................. 46 Section 12.07. Adjustment for Rights Issue......................................... 46 Section 12.08. Adjustment for Other Distributions.................................. 47 Section 12.09. Adjustment for [Preferred] [Common] Stock Issue..................... 48 Section 12.10. Adjustment for Convertible Securities Issue......................... 50 Section 12.10A. Special Provision Regarding Preferred Stock......................... 51 Section 12.11. Current Market Price................................................ 51 Section 12.12. Consideration Received.............................................. 52 Section 12.13 When Adjustment May Be Deferred..................................... 52 Section 12.14. When No Adjustment Required......................................... 52 Section 12.15. Notice of Adjustment................................................ 53 Section 12.16. Voluntary Reduction................................................. 53 Section 12.17. Notice of Certain Transactions...................................... 54 Section 12.18. Reorganization of Company........................................... 54 Section 12.19. Company Determination Final......................................... 55 Section 12.20. Trustee's Disclaimer................................................ 55 SIGNATURES .................................................................... 55 EXHIBIT A FORM OF SECURITY.................................................. A-1
v 8 This Indenture, dated as of ________, 199_, is between Del Webb Corporation, a Delaware corporation (the "Company"), and [Bank of Montreal Trust Company] (the "Trustee"). The Company has duly authorized the issuance of its ___% [Convertible] Senior [Debentures] [Notes] (the "Securities") and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Securities. ARTICLE 1 DEFINITIONS SECTION 1.01. DEFINITIONS. "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" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement or otherwise. "Agent" means any Registrar, Paying Agent or co-registrar. "Board of Directors" means the Board of Directors of the Company or any authorized committee of the Board of Directors. "capital stock" means any and all shares, interests, participations or other equivalents (however designated) of corporate stock. "Change of Control" means any of the following: (i) all or substantially all of the Company's assets are sold as an entirety to any person or related group of persons or the Company engages in any merger, consolidation, sale of capital stock, sale of beneficial ownership interests or any other transactions with any other person or related group of persons, with the effect that after such transactions the shareholders of the Company immediately prior to such transactions own, directly or indirectly, in the aggregate less than 50% of the total voting power entitled to vote in the election (a) of directors of the Company, if the Company is the surviving entity, or (b) of directors, managers or trustees (1) of such other person, if the Company is not the surviving entity, or (2) of such other person that 1 9 purchases all or substantially all of the Company's assets; (ii) any person or related group of persons acquires more than 50% of the total voting power entitled to vote for directors of the Company; or (iii) any person or related group of persons acquires more than 50% of the total voting power entitled to vote for directors, managers or trustees (a) of such other person surviving the transaction or (b) of such other person that purchases all or substantially all of the Company's assets. "Company" means the party named as such above until a successor replaces it in accordance with Article 5 and thereafter means the successor. "Consolidated Net Earnings" with respect to any person means, for any period, the aggregate of the Net Earnings of such person and its subsidiaries for such period, on a consolidated basis, determined in accordance with generally accepted accounting principles consistently applied; provided that the Net Earnings of any person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded. "Net Earnings" of any person for any period shall mean the net earnings (loss) of such person for such period, determined in accordance with generally accepted accounting principles consistently applied, (i) excluding (a) extraordinary items recognized in such period, (b) any gain (but including any loss except as reduced to the extent aggregate gains exceed aggregate losses, with gains in excess of losses for one period being carried forward to subsequent periods and back to prior periods for this purpose) realized upon the sale or other disposition (including, without limitation, dispositions pursuant to leaseback transactions) of any real property or equipment of such person which is not sold or otherwise disposed of in the ordinary course of business and (c) any gain (but including any loss except as reduced to the extent aggregate gains exceed aggregate losses, with gains in excess of losses for one period being carried forward to subsequent periods and back to prior periods for this purpose) realized upon the sale or other disposition of any capital stock of such person or a subsidiary of such person except when the sale of capital stock is in substance the sale of the assets of the person whose capital stock is being sold, provided that, with respect to (b) and (c) above, gains from sales of developed or undeveloped real property (including without limitation developed residential lots) from the Company's community, conventional housing and land development businesses will be deemed ordinary course and (ii) excluding any write-up in the carrying value of any asset made after ______________, provided that the application of the equity method of accounting and the translation into United States dollars of assets or liabilities in foreign currencies in accordance with generally accepted accounting principles shall not be deemed to involve any such write-up. "Default" means any event which is, or after notice or passage of time would be, an Event of Default. 2 10 "Disqualified Stock" means any capital stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the maturity date of the Securities. "Equity Interests" means capital stock or warrants, options or other rights to acquire capital stock (but excluding any debt security which is convertible into, or exchangeable for, capital stock). "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute. "Holder" or "Securityholder" means a person in whose name a Security is registered in the Registrar's books. "Indenture" means this Indenture as amended or supplemented from time to time. "Material Subsidiary" means (i) Del Webb Communities, Inc., (ii) Del Webb California Corp. and (iii) any other subsidiary of the Company, if any, named [in the final Indenture] [or] [in a supplemental indenture.] "Officers' Certificate" means a certificate signed by two Officers, one of whom must be the Chairman of the Board, the President, the Treasurer or an Executive Vice President, Senior Vice President or other Vice President of the Company. "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "principal" of a debt security, including the Securities, means the principal of the security plus the premium, if any, on the security. "redemption date" when used with respect to any of the Securities to be redeemed, means the date fixed by the Company for such redemption pursuant to this Indenture and the Securities. "redemption price" when used with respect to any of the Securities to be redeemed, means the price fixed for such redemption pursuant to this Indenture and the Securities. 3 11 "SEC" means the Securities and Exchange Commission. "Securities" means the Securities described above issued under this Indenture. "subsidiary" of any specified person means (i) a corporation a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such person or by such person and a subsidiary or subsidiaries of such person or (ii) any other person (other than a corporation) in which such person or such person and a subsidiary or subsidiaries of such person, directly or indirectly, at the date of determination thereof has at least majority ownership interest or over which it exercises control. "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77-bbbb) as in effect on the date of execution of this Indenture. "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor. "Trust Officer" means [the Chairman of the Board, the President or] any [other] officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. SECTION 1.02. OTHER DEFINITIONS. Defined in Term Section ---- ------- "Bankruptcy Law"...................................... 6.01 "Business Day"........................................ 10.07 ["Common Stock"........................................ 12.01] ["Conversion Agent..................................... 2.03] "Custodian"........................................... 6.01 "Event of Default".................................... 6.01 "Indebtedness"........................................ 11.02 "Legal Holiday"....................................... 10.07 "Officer"............................................. 10.10 "Paying Agent"........................................ 2.03 ["Preferred Stock"..................................... 12.01] ["Quoted Price"........................................ 12.03] "Registrar"........................................... 2.03 "Representative"...................................... 11.02 "Restricted Payments"................................. 4.05 "United States Government Obligations"................ 8.01 4 12 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC; "indenture securities" means the Securities; "indenture security holder" means a Securityholder or Holder; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the Securities means the Company or any other obligor on the Securities. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect at the date hereof; (3) references to "generally accepted accounting principles" shall mean generally accepted accounting principles as in effect at the date hereof; (4) "or" is not exclusive; (5) words in the singular include the plural, and in the plural include the singular; and 5 13 (6) the male, female and neuter genders include one another. ARTICLE 2 THE SECURITIES SECTION 2.01. FORM AND DATING. The Securities and the Trustee's certificate of authentication relating thereto shall be substantially in the form set forth in Exhibit A, which is part of this Indenture, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, provided that the Securities may be Global Securities and as such may be issued in either registered or bearer form. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. The Company shall approve the forms of the Securities and any notation, legend or endorsement on them. Each Security shall be dated the date of its authentication. The terms and provisions contained in the Securities shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign the Securities for the Company by manual or facsimile signature. The Company's seal shall be reproduced on the Securities. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Upon a written order of the Company signed by an Officer of the Company, the Trustee shall authenticate Securities for original issue up to $ in aggregate principal amount. The aggregate principal amount of Securities outstanding at any time may not exceed that amount except as provided in Section 2.07. 6 14 The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 or any integral multiple thereof. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same right as an Agent to deal with the Company or an Affiliate. SECTION 2.03 REGISTRAR AND PAYING AGENT. The Company shall maintain or cause to be maintained in the Borough of Manhattan, City of New York (the "New York Office"), State of New York, and in such other locations as it shall determine: (i) an office or agency where securities may be presented for registration of transfer or for exchange ("Registrar"); [and] (ii) an office or agency where Securities may be presented for payment ("Paying Agent")[; and (iii) an office or agency where Securities may be presented for conversion ("Conversion Agent")]. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may appoint one or more co-registrars[, and] one or more additional paying agents [and one or more additional conversion agents]. The term "Paying Agent" includes any additional paying agent[; and the term "Conversion Agent" includes any additional conversion agent]. The Company may change any Paying Agent, Registrar[, or] co-registrar [or Conversion Agent] without prior notice. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture and shall enter into an appropriate agency agreement with any Registrar, Paying Agent[, or] co-registrar [or Conversion Agent] not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company or any of its subsidiaries may act as Paying Agent, Registrar[, or] co-registrar [or Conversion Agent]. If the Company fails to appoint or maintain another entity as Registrar[, or] Paying Agent [, or Conversion Agent], the Trustee shall act as such, and the Trustee shall initially act as such. The Trustee shall cause to be maintained the New York Office as long as it acts as Registrar[, or] Paying Agent [or Conversion Agent]. SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall require each Paying Agent (other than the Trustee, who hereby so agrees), to agree in writing that the Paying Agent will hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of principal or interest on the Securities, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require 7 15 a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a subsidiary) shall have no further liability for the money. If the Company or a subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Securityholders all money held by it as Paying Agent. SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee on or before each interest payment date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. SECTION 2.06. TRANSFER AND EXCHANGE. Where Securities are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Company shall issue and the Trustee shall authenticate Securities at the Registrar's request. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06[, or] 9.05 [or 12.02]). The Company shall not be required (i) to issue, register the transfer of or exchange Securities during a period beginning at the opening of business 15 days before the day of any selection of Securities for redemption under Section 3.02 and ending at the close of business on the day of selection, or (ii) to register the transfer or exchange of any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. SECTION 2.07. REPLACEMENT SECURITIES. If the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the Trustee's requirements are 8 16 met. If required by the Trustee or the Company as a condition of receiving a replacement Security, the Holder must provide an indemnity bond sufficient, in the judgment of both the Company and the Trustee, to fully protect the Company, the Trustee, any Agent and any authenticating agent from any loss which any of them may suffer if the Security is replaced. The Company may charge for its expenses in replacing any Security. Every replacement Security is an additional obligation of the Company. SECTION 2.08. OUTSTANDING SECURITIES. The Securities outstanding at any time are all the Securities properly authenticated by the Trustee except for those canceled by the Trustee, those delivered to it for cancellation, and those described in this Section as not outstanding. If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If Securities are considered paid under Section 4.01, they cease to be outstanding and interest on them ceases to accrue. A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. SECTION 2.09. WHEN TREASURY SECURITIES DISREGARDED. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or an Affiliate of the Company shall be considered as though they are not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. SECTION 2.10. TEMPORARY SECURITIES. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. 9 17 SECTION 2.11. CANCELLATION. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of canceled Securities as the Company directs, provided that the Trustee shall not be required to destroy such canceled securities. The Company may not issue new Securities to replace Securities that it has paid or that have been delivered to the Trustee for cancellation. SECTION 2.12. DEFAULTED INTEREST. If the Company fails to make a payment of interest on the Securities, it shall pay such defaulted interest plus any interest payable on the defaulted interest in any lawful manner. It may pay such defaulted interest, plus any such interest payable on it, to the persons who are Securityholders on a subsequent special record date. The Company shall fix any such record date and payment date. At least 15 days before any such record date, the Company shall mail to Securityholders a notice that states the record date, payment date and amount of such interest to be paid. SECTION 2.13. CUSIP NUMBER. The Company in issuing the Securities may use a "CUSIP" number, and if so, such CUSIP number shall be included in notices of redemption or exchange as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Securities and that reliance may be placed only on the other identification numbers printed on the Securities. The Company will promptly notify the Trustee of any change in the CUSIP number. ARTICLE 3 REDEMPTION SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem Securities pursuant to the optional redemption provisions of paragraph 5 of the Securities, it shall notify the Trustee of the redemption date and the principal amount of Securities to be redeemed. 10 18 The Company shall give each notice provided for in this Section at least 60 days before the redemption date (unless a shorter notice period shall be satisfactory to the Trustee). SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed pro rata or by lot, if lawful, or if required by another method that complies with the requirements of any exchange on which the Securities are listed and that the Trustee considers fair and appropriate. The Trustee shall make the selection not more than 75 days and not less than 45 days before the redemption date from Securities outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $1,000. Securities and portions of them it selects shall be in amounts of $1,000 or integral multiples of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be called for redemption. SECTION 3.03. NOTICE OF REDEMPTION. Except as provided in Section 4.11, at least 30 days but not more than 60 days before a redemption date, the Company shall mail a notice of redemption to each Holder whose Securities are to be redeemed. The notice shall identify the Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) if any Security is being redeemed in part, the portion of the principal amount of such Security to be redeemed and that, after the redemption date, upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion will be issued; (4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (5) that interest on Securities called for redemption ceases to accrue on and after the redemption date; 11 19 (6) the paragraph of the Securities pursuant to which the Securities are being redeemed; (7) the aggregate principal amount of Securities that are being redeemed; (8) the CUSIP number of the Securities (provided that the disclaimer permitted by Section 2.13 may be made); [and] (9) the name and address of the Paying Agent [and Conversion Agent] [.][;] [(10) that Securities called for redemption may be converted at any time before the close of business on the redemption date; (11) that Holders who want to convert Securities must satisfy the requirements in paragraph 17 of the Securities; and (12) the current conversion price.] At the Company's request, the Trustee shall give notice of redemption in the Company's name and at its expense. SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date at the price set forth in the Security. SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or before the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money in immediately available funds sufficient to pay the redemption price of and accrued interest on all Securities to be redeemed on that date. The Trustee or the Paying Agent shall return to the Company any money not required for that purpose. SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Security equal in principal amount to the unredeemed portion of the Security surrendered. 12 20 [SECTION 3.07. MANDATORY REDEMPTION. To the extent lawful, the Company shall redeem ___ percent of the [initial] principal amount of the Securities [outstanding] as set forth in paragraph 5B of the Securities, which amount shall be rounded to the next highest integral multiple of $1,000, annually on each of the dates, upon the terms and subject to the conditions set forth in paragraph 6 of the Securities.] ARTICLE 4 COVENANTS SECTION 4.01. PAYMENT OF SECURITIES. The Company shall pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities. Principal and interest shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company or a subsidiary) holds on that date money designated for and sufficient to pay all principal and interest then due. To the extent lawful, the Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on (i) overdue principal, at the rate borne by the Securities, compounded semiannually; and (ii) overdue installments of interest (without regard to any applicable grace period) at the same rate, compounded semiannually. SECTION 4.02. SEC REPORTS. The Company shall deliver to the Trustee, within 15 days after it files them with the SEC, 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 SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company also shall comply with the other provisions of TIA Section 314(a). The Company shall timely comply with its reporting and filing obligations under the applicable federal securities law. If the Company is at any time not required to file annual or quarterly reports pursuant to Section 13 or 15(d) of the Exchange Act, the Company will file with the Trustee, within 15 days after the last date on which it would have been required to make such a filing with the SEC, and will upon request of a Holder mail to that Holder (as soon as practical after receipt of such request) at his or her address as it appears on the register of Securities kept by the Registrar, audited annual financial statements prepared in 13 21 accordance with generally accepted accounting principles and unaudited quarterly financial statements. Such financial statements shall be accompanied by a Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company for the period reported upon in substantially the form required under the rules and regulations of the SEC, or any successor form of similar disclosure then required under the rules and regulations of the SEC. SECTION 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, an Officers' Certificate, one of the signatories to which shall be the principal executive officer, principal financial officer or principal accounting officer of the Company, stating that a review of the activities of the Company and its subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has fully performed its obligations under this Indenture and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms and conditions hereof (or, if a Default or Events of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Securities are prohibited. The Company will, so long as any of the Securities are outstanding, deliver to the Trustee, forthwith upon becoming aware of (i) any Default, Event of Default or default in the performance of any term or condition in this Indenture or (ii) any event of default under any other mortgage, indenture or instrument as that term is used in Section 6.01(4), an Officers' Certificate specifying such Default, Event of Default or default. So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, at the time the Officers' Certificate described in the second preceding paragraph is filed, the Company also will file with the Trustee a letter or statement of the independent accountants who shall have certified the financial statements of the Company for its preceding fiscal year in connection with the annual report of the Company to its stockholders for such year to the effect that, in making the examination necessary for certification of such financial statements, nothing came to their attention that would lead them to believe that the Company has violated any of the terms or conditions contained in this Indenture, which Default remains uncured at the date of such letter or 14 22 statement or, if they shall have obtained knowledge of any such uncured Default, specifying in such letter or statement such Default or Defaults and the nature thereof, it being understood that such accountants shall not be liable directly or indirectly for failure to obtain knowledge of any such Default or Defaults and that their examination was not directed primarily toward obtaining knowledge of such noncompliance. SECTION 4.04. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain or cause to be maintained in the City of New York an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not maintained by the Trustee. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 10.10. The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain or cause to be maintained an office or agency in the City of New York for such purpose. SECTION 4.05. RESTRICTIONS ON DIVIDENDS AND OTHER PAYMENTS. The Company shall not, directly or indirectly: (1) declare or pay any dividend on, or make any distribution to the holders (as such) of, any shares of its capital stock (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company (other than any such Equity Interests owned by any subsidiary); or (3) permit any subsidiary to purchase, redeem or otherwise retire for value any Equity Interests of the Company (other than any such Equity Interests owned by any subsidiary) 15 23 (such dividends, distributions, purchases, redemptions or other acquisitions or retirements referred to in clauses (1), (2) or (3) being collectively referred to as "Restricted Payments"), if at the time of such Restricted Payment: (i) a Default or an Event of Default shall have occurred and be continuing, or would occur as a consequence thereof, or (ii) if, upon giving effect to such Restricted Payment, the aggregate amount expended (determined as set forth below) for all such Restricted Payments subsequent to the date hereof, shall exceed the sum of: (a) a percentage of the aggregate Consolidated Net Earnings of the Company (or, in the case such aggregate shall be a loss, 100% of such loss) accrued during fiscal quarters ending subsequent to a specified date, which percentage and date will be set forth in a supplemental indenture; (b) the aggregate net proceeds, including cash, the fair market value of property other than cash (as determined by the Board of Directors as evidenced by a Board resolution) and the amount of any Indebtedness (including principal, premium and interest), received by the Company from or in exchange for the issue or sale (other than to a subsidiary), subsequent to the date hereof, of capital stock of the Company (other than Disqualified Stock), other than in connection with the exchange of the Securities; (c) the amount expended for the purchase, redemption or other acquisition or retirement for value of any preferred stock of the Company; and (d) [$_________] [or] [the amount set forth in a supplemental indenture]. For purposes of any calculation pursuant to the preceding sentence which is required to be made within 60 days after the declaration of a dividend by the Company, such dividend shall be deemed to be paid at the date of declaration, and the subsequent payment of such dividend during such 60-day period shall not be treated as an additional Restricted Payment. For purposes of determining under clause (ii) above the amount expended for 16 24 Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value as determined by the Board of Directors as evidenced by a Board resolution. Notwithstanding the foregoing, the provisions of this Section 4.05 will not prevent: (i) the purchase of Securities by the Company; (ii) the payment of any dividend within 60 days after the date of declaration when the payment complied with the foregoing provisions on the date of declaration; (iii) the purchase, redemption or any acquisition or retirement for value of the Preferred Stock; (iv) the retirement of any shares of the Company's capital stock by exchange for, or out of the proceeds of the substantially concurrent sale (other than to a subsidiary) of, other shares of its capital stock (other than any Disqualified Stock), and neither such retirement nor the proceeds of any such sale or exchange, to the extent used for such retirement, shall be included in any computation made under this Section 4.05; and (v) the purchase at a price of not more than $.05 per right of any rights issued or issuable pursuant to any future rights plan of the Company. SECTION 4.06. CONTINUED EXISTENCE. Subject to Article 5, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a corporation and will refrain from taking any action that would cause its existence as a corporation to cease, including without limitation any action that would result in its liquidation, winding up or dissolution. SECTION 4.07. TAXES. The Company shall, and shall cause each of its Material Subsidiaries to, pay prior to delinquency all taxes, assessments and governmental levies, except as contested in good faith and by appropriate proceedings or where the failure to do so would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. SECTION 4.08. MAINTENANCE OF PROPERTIES. The Company shall, and shall cause each of its subsidiaries to, take reasonable action to maintain in appropriate condition each of its principal properties which in the judgment of management is essential to the business operations of the Company and its subsidiaries, taken as a whole, and the loss of which would have a material adverse effect on the financial condition of the Company and its subsidiaries, taken as a whole. Nothing contained in this Section 4.08 shall prevent or restrict the sale, abandonment or other disposition of any property which management shall deem advisable. 17 25 SECTION 4.09. INSURANCE. The Company shall, and shall cause each of its subsidiaries to, take reasonable action to maintain insurance, with financially sound and reputable insurers, to the extent and against such hazards as may be deemed appropriate by management (giving effect to self-insurance), on each of its principal properties the loss of which, in the judgment of management, would have a material adverse effect on the financial condition of the Company and its subsidiaries, taken as a whole. SECTION 4.10. INVESTMENT COMPANY ACT. The Company shall not become an investment company subject to registration under the Investment Company Act of 1940, as amended. SECTION 4.11. CHANGE OF CONTROL. Following the occurrence of any Change of Control, the Company shall offer (a "Change of Control Offer") to purchase all outstanding Securities at a purchase price equal to [101%] of the aggregate principal amount of the Securities, plus accrued and unpaid interest to the date of purchase. The Change of Control Offer shall be deemed to have commenced upon mailing of the notice described in the next succeeding paragraph and shall terminate 20 Business Days after its commencement, unless a longer offering period is required by law. Promptly after the termination of the Change of Control Offer (the "Change of Control Payment Date"), the Company shall purchase and mail or deliver payment for all Securities tendered in response to the Change of Control Offer. If the Change of Control Payment Date is on or after an interest payment record date and on or before the related interest payment date, any accrued interest will be paid to the person in whose name a Security is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Securities pursuant to the Change of Control Offer. Within 30 days after any Change of Control, the Company (with notice to the Trustee), or the Trustee upon reasonable notice and at the Company's request (and at the expense of the Company), will mail or cause to be mailed to all Holders on the date of the Change of Control a notice of the occurrence of such Change of Control and of the Holders' rights arising as a result thereof. Such notice will contain all instructions and materials necessary to enable Holders to tender their Securities to the Company. Such notice, which shall govern the terms of the Change of Control Offer, shall state: 18 26 (1) that the Change of Control Offer is being made pursuant to this Section 4.11 and the length of time the Change of Control Offer will remain open; (2) the purchase price and the Change of Control Payment Date; (3) that any Security not tendered will continue to accrue interest; (4) that any Security accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on the Change of Control Payment Date; (5) that any Security accepted for payment pursuant to any Change of Control Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice prior to termination of the Change of Control Offer; (6) that Holders will be entitled to withdraw their election if the Company, depositary or Paying Agent, as the case may be, receives, not later than the expiration of the Change of Control Offer, or such longer period as may be required by law, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Holder is withdrawing his or her election to have the Security purchased; and (7) that Holders whose Securities are purchased only in part will be issued Securities equal in principal amount to the unpurchased portion of the Securities surrendered. On or before a Change of Control Payment Date, the Company shall, to the extent lawful, (i) if the Company appoints a depositary or Paying Agent, deposit with such depositary or Paying Agent money sufficient to pay the purchase price of all Securities tendered, (ii) deliver or cause the depositary or Paying Agent to deliver to the Trustee Securities so tendered and (iii) deliver an Officers' Certificate identifying the Securities accepted for payment by the Company in accordance with the terms of this Section 4.11. The depositary, the Paying Agent or the Company, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Securities tendered by such Holder and accepted by the Company for purchase. The Company will publicly announce the 19 27 results of the Change of Control Offer on the Change of Control Payment Date. Any Change of Control Offer will be conducted in compliance with applicable tender offer rules, including Section 14(e) of the Exchange Act and Rule 14e-1 thereunder.* ARTICLE 5 SUCCESSORS SECTION 5.01. WHEN THE COMPANY MAY MERGE, ETC. The Company shall not consolidate or merge with or into, or sell, lease, convey or otherwise dispose of all or substantially all of its assets to, any person unless: (1) the corporation formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, lease, conveyance or other disposition shall have been made, is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia; (2) the corporation formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, lease, conveyance or other disposition shall have been made, assumes by supplemental indenture all the obligations of the Company under the Securities and this Indenture; and (3) immediately after the transaction no Default or Event of Default exists. The Company shall deliver to the Trustee prior to the consummation of the proposed transaction an Officers' Certificate to the foregoing effect and an Opinion of Counsel stating that the proposed transaction and such supplemental indenture comply with this Indenture. SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company in - -------- * Additional substantive covenants may be added. 20 28 accordance with Section 5.01, the successor entity formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor entity had been named as the Company herein; provided, however, that the predecessor Company in the case of a sale, lease, conveyance or other disposition shall not be released from the obligation to pay the principal of and interest on the Securities. SECTION 5.03. PURCHASE OPTION ON CHANGE OF CONTROL. This Article 5 does not affect the obligations of the Company (including without limitation any successor to the Company) under this Indenture. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" with respect to any Securities occurs if: (1) the Company defaults in the payment of interest on any Security when the same becomes due and payable and the Default continues for a period of 30 days; (2) the Company defaults in the payment of the principal of and premium, if any, on any Security when the same becomes due and payable at maturity, upon redemption or otherwise; (3) the Company fails to comply with any of its other agreements or covenants in, or provisions of, the Securities or this Indenture and the Default continues for the period and after the notice specified below; (4) an event of default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any Material Subsidiary (or the payment of which is guaranteed by the Company or a Material Subsidiary), whether such Indebtedness or guarantee now exists or shall be created hereafter, other than Indebtedness which is or will be non-recourse to the Company or a Material Subsidiary, if (a) either (i) such event of default results from the 21 29 failure to pay any such Indebtedness at maturity or (ii) as a result of such event of default the maturity of such Indebtedness has been accelerated prior to its expressed maturity and (b) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at maturity or the maturity of which has been so accelerated, aggregates [$_______] [the amount set forth in a supplemental indenture] or more; provided, however, that if such event of default shall be remedied, cured or waived, then the Event of Default hereunder by reason of such event of default shall be deemed likewise to have been remedied, cured or waived without further action by the Trustee or any of the Securityholders; or (5) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any Material Subsidiary which remains undischarged for a period (during which execution shall not be effectively stayed) of 60 days, provided that the aggregate of all such judgments exceeds [$__________] [the amount set forth in a supplemental indenture]; (6) the Company or any Material Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, (D) makes a general assignment for the benefit of its creditors, or (E) generally is unable to pay its debts as the same become due; (7) a court of competent jurisdiction enters a judgment, order or decree under any Bankruptcy Law that: (A) is for relief against the Company or any Material Subsidiary in an involuntary case, 22 30 (B) appoints a Custodian of the Company or any Material Subsidiary or for all or substantially all of their respective properties, or (C) orders the liquidation of the Company or any Material Subsidiary, and the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means title 11, U.S. Code or any similar federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. A Default under clause (3) (other than Defaults under Section 4.05, 4.06[, or] 5.01 [or, with respect to the right to convert Securities, Article XII], which Defaults shall be Events of Default with the notice but without the passage of time specified in this paragraph), (4) or (5) is not an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the then outstanding Securities notify the Company of the Default and the Company does not cure the Default within 60 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of Default specified in clauses (6) and (7) of Section 6.01) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the then outstanding Securities by notice to the Company and the Trustee, may declare the unpaid principal of and accrued interest on all the Securities to be due and payable. Upon such declaration the principal and interest shall be due and payable immediately. If an Event of Default specified in clause (6) or (7) of Section 6.01 occurs, such an amount shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of a majority in principal amount of the then outstanding Securities by notice to the Trustee may rescind an acceleration and its consequences, except nonpayment of principal or interest on the Securities, if the rescission would not conflict with any judgment or decree. SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the 23 31 payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in principal amount of the then outstanding Securities by notice to the Trustee may waive an existing Default or Event of Default and its consequences except a continuing Default or Event of Default in the payment of the principal of or interest on any Security. When a Default is waived, it is cured and stops continuing. SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in principal amount of the then outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability. SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not pursue any remedy with respect to this Indenture or the Securities unless: (1) the Holder gives to the Trustee notice of a continuing Event of Default; (2) the Holders of at least 25% in principal amount of the then outstanding Securities make a request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; 24 32 (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) during such 60-day period the Holders of a majority in principal amount of the then outstanding Securities do not give the Trustee a direction inconsistent with the request. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT [AND TO CONVERT SECURITIES]. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal and interest on the Security, on or after the respective due dates expressed in the Security[, to convert the Security as and to the extent permitted by this Indenture and the terms of the Security] or to bring suit for the enforcement of any such payment [or of the right to convert the Security] on or after such respective dates, shall not be impaired or affected without the consent of the Holder. SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and interest remaining unpaid on the Securities and interest on overdue principal and interest and such further amount as shall be sufficient to cover the costs and, to the extent lawful, expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Company, its creditors or its property. Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding. 25 33 SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; Second: to Securityholders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and Third: to the Company. The Trustee may fix a record date and payment date for any payment to Securityholders. SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the then outstanding Securities. ARTICLE 7 THE TRUSTEE The Trustee hereby accepts the trust imposed upon it by this Indenture and covenants and agrees to perform the same, as herein expressed. SECTION 7.01. DUTIES OF THE TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. 26 34 (b) Except during the continuance of an Event of Default: (1) The Trustee need perform only those duties that are specifically set forth in this Indenture and no others; and (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) of this Section; (2) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. 27 35 SECTION 7.02. RIGHTS OF THE TRUSTEE. (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in such a document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate, an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (e) The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of 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 reliance thereon. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. SECTION 7.03. INDIVIDUAL RIGHTS OF THE TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11. SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities and it shall not be responsible for any statement in the Indenture or any statement in the Securities other than its authentication. 28 36 SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Securityholder a notice of the Default within 90 days after it occurs. Except in the case of a Default in payment on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders. SECTION 7.06. REPORTS BY THE TRUSTEE TO HOLDERS. Within 60 days after the reporting date stated in Section 10.10, the Trustee shall mail to Securityholders a brief report dated as of such reporting date that complies with TIA Section 313(a), if such report is required by TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c). A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange on which the Securities are listed. The Company shall promptly notify the Trustee when the Securities are listed on any stock exchange. SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the Trustee from time to time such compensation as shall be agreed in writing between the Company and the Trustee for its services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses may include the reasonable compensation and out-of-pocket expenses of the Trustee's agents and counsel. The Company shall indemnify each of the Trustee and any successor Trustee against any loss, damage, claims, liability or out-of-pocket expenses, including taxes (other than taxes based on the income, revenues or receipts of the Trustee) incurred by it in connection with the acceptance (with respect to legal fees and other out-of-pocket expenses of the Trustee in connection with the acceptance of the trust or trusts hereunder, to the extent provided in the writing provided for in this Section 7.07) or administration of the trust or trusts hereunder, except as set forth in the next paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim with counsel, who may be outside counsel to the Company but shall in all events be reasonably satisfactory to the Trustee, and the Trustee shall cooperate in the defense. In addition, if the Company does not so defend the Trustee or 29 37 if at any time the counsel so selected is ethically prohibited from representing the Trustee (whether because of a conflict of interest or the provisions of the TIA), then the Trustee may retain one separate counsel and the Company shall pay the reasonable fees and expenses of such separate counsel. The indemnification herein extends to any settlement, provided that the Company will not be liable for any settlement made without its consent, provided further that such consent will not be unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith. To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on Securities. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(6) or (7) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. The provisions of this Section 7.07 shall survive the termination of this Indenture. SECTION 7.08. REPLACEMENT OF THE TRUSTEE. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Securities may remove the Trustee by so notifying the removed Trustee and the Company and may appoint a successor Trustee with the Company's consent. The Company may remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (3) a Custodian or public officer takes charge of the Trustee or its property; or 30 38 (4) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the then outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The removed or retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee with respect to expenses and liabilities incurred by it prior to such replacement. SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1). The Trustee shall always have a combined capital and surplus as stated in Section 10.10. The Trustee is subject to TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9). 31 39 SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship set forth in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS. (a) This Indenture shall cease to be of further effect (except that the Company's obligations under Section 7.07 and 8.03 shall survive) when all outstanding Securities theretofore authenticated and issued have been delivered (other than destroyed, lost or stolen Securities that have been replaced or paid) to the Trustee for cancellation and the Company has paid all sums payable hereunder. In addition, the Company may elect to have either paragraph (b) or paragraph (c) below be applied to the outstanding Securities upon compliance with the conditions set forth in paragraph (d). (b) Upon the Company's exercise under paragraph (a) of the option applicable to this paragraph (b), the Company shall be deemed to have been released and discharged from its obligations with respect to the outstanding Securities on the date the conditions set forth below are satisfied ("legal defeasance"). For this purpose, legal defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the outstanding Securities, which shall thereafter be deemed to be "outstanding" only for the purposes of the Sections of and matters under this Indenture referred to in (i) and (ii) below, and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following, which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of outstanding Securities to receive solely from the trust fund described in paragraph (d) below and as more fully set forth in such paragraph, payments in respect of the principal of, premium, if any, and interest on such Securities when such payments are due, (ii) the Company's obligations with respect to such Securities under Sections 2.06, 2.07 and 4.04, and, with respect to the Trustee, under Section 7.07, (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (iv) this Section 8.01. Subject to compliance with this Section 8.01, the Company may exercise its option under this paragraph (b) notwithstanding the prior exercise of its option under paragraph (c) below with respect to the Securities. 32 40 (c) Upon the Company's exercise under paragraph (a) of the option applicable to this paragraph (c), the Company shall be released and discharged from its obligations under any covenant contained in Article 5 and in Sections 4.02 through 4.12 with respect to the outstanding Securities on and after the date the conditions set forth below are satisfied ("covenant defeasance"), and the Securities shall thereafter be deemed to be not "outstanding" for the purpose of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to the outstanding Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby. (d) The following shall be the conditions to the application of either paragraph (b) or (c) above to the outstanding Securities: (1) the Company has irrevocably deposited in trust with the Trustee or, at the option of the Trustee, with a trustee, satisfactory to the Trustee and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, money or United States Government Obligations (defined below in this Section 8.01) sufficient to pay principal and interest on the Securities to maturity and all other sums payable by it hereunder; provided that (i) the trustee of the irrevocable trust shall have been irrevocably instructed to pay such money or the proceeds of such United States Government Obligations to the Trustee and (ii) the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such United States Government Obligations to the payment of said principal and interest with respect to the Securities; (2) the Company has delivered to the Trustee an Officers' Certificate stating that (A) all conditions precedent provided for relating to either the legal defeasance under paragraph (b) above or the covenant defeasance under paragraph (c) above, as the case may be, have been complied with and (B) if any other Indebtedness of the Company shall then be outstanding or committed, such legal defeasance or covenant defeasance will not violate the provisions of the agreements or instruments evidencing such Indebtedness; 33 41 (3) no Default or Event of Default shall have occurred and be continuing on the date of such deposit; (4) such legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a Default or Event of Default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (5) in the case of an election under paragraph (b) above, the Company shall have delivered to the Trustee an Opinion of Counsel from nationally recognized counsel acceptable to the Trustee stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that the Holders of the outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such legal defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same time as would have been the case if such legal defeasance had not occurred; and (6) in the case of an election under paragraph (c) above, the Company shall have delivered to the Trustee an Opinion of Counsel from nationally recognized counsel acceptable to the Trustee (i) to the effect that the Holders of the outstanding Securities will not recognize income, gain or loss for federal income tax on the same amount and in the same manner and at the same time as would have been the case if such covenant defeasance had not occurred or (ii) that the Company has received from, or there has been published by, the Internal Revenue Service a ruling to the foregoing effect. After such irrevocable deposit made pursuant to this Section 8.01 and satisfaction of the other conditions set forth herein, the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under this Indenture except for those surviving obligations specified above. As used herein, "United States Government Obligations" means direct obligations of the United States of America for the payment of which the full faith and credit of the United States of America is pledged. In order to have money available on a payment date to pay principal or interest on the Securities, the United States Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. United States Government Obligations shall not be callable at the issuer's option. 34 42 SECTION 8.02. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust money or United States Government Obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from United States Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal and interest on the Securities. Money and securities so held in trust are not subject to Article 11. SECTION 8.03. REPAYMENT TO COMPANY. Subject to Section 8.01(d), the Trustee and the Paying Agent shall promptly pay to the Company upon written request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years after the date upon which such payment shall have become due; provided, however, that the Company shall have first caused notice of such payment to the Company to be mailed to each Securityholder entitled thereto no less than 30 days prior to such payment. After payment to the Company, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person. SECTION 8.04. REINSTATEMENT. If (i) the Trustee or Paying Agent is unable to apply any money in accordance with Section 8.02 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application and (ii) the Holders of at least a majority in principal amount of the then outstanding Securities so request by written notice to the Trustee, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02; provided, however, that if the Company makes any payment of interest on or principal of any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent. 35 43 ARTICLE 9 AMENDMENTS SECTION 9.01. WITHOUT THE CONSENT OF HOLDERS. The Company and the Trustee may amend this Indenture or the Securities without notice to or the consent of any Securityholder: (1) to cure any ambiguity, defect or inconsistency; (2) to comply with Section[s] 5.01 [and 12.18]; (3) to provide for uncertificated Securities in addition to certificated Securities; (4) to make any change that does not adversely affect the legal rights hereunder of any Securityholder; (5) to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as the Company and the Trustee shall consider to be for the protection of the Securityholders, 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 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 Securityholders to waive such an Event of Default; (6) to surrender any right or power herein conferred upon the Company; (7) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of the Indenture under the TIA, or under any similar federal statute hereafter enacted; or 36 44 (8) before any Securities are issued, to make any other change in this Indenture not prohibited by the TIA. SECTION 9.02. WITH THE CONSENT OF HOLDERS. Subject to Section 6.07, the Company and the Trustee may amend this Indenture or the Securities with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities. Subject to Sections 6.04 and 6.07, the Holders of a majority in principal amount of the Securities then outstanding may also waive compliance in a particular instance by the Company with any provision of this Indenture or the Securities. However, without the consent of each Securityholder affected, an amendment or waiver under this Section may not: (1) reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver; (2) reduce the rate of or change the time for payment of interest on any Security; (3) reduce the principal of or change the fixed maturity of any Security or alter the redemption provisions with respect thereto; (4) make any Security payable in money other than that stated in the Security; (5) make any change in Section 6.04, 6.07 or 9.02 (this sentence); [or] (6) waive a default in the payment of the principal of, or interest on, any Security [or any default under Article 12; or] (7) make any change that adversely affects the right to convert any Security]. To secure a consent of the Holders under this Section, it shall not be necessary for the Holders to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. 37 45 After an amendment or waiver under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing the amendment or waiver. SECTION 9.03. COMPLIANCE WITH THE TRUST INDENTURE ACT. Every amendment to this Indenture or the Securities shall be set forth in a supplemental indenture that complies with the TIA as then in effect. SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his or her Security or portion of a Security if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers' Certificate certifying that the Holders of the requisite principal amount of Securities have consented to the amendment or waiver. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment or waiver. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those persons who were Holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment or waiver or to revoke any consent previously given, whether or not such persons continue to be Holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period. After an amendment or waiver becomes effective it shall bind every Securityholder, unless it is of the type described in any of clauses (1) through (7) of Section 9.02. In such case, the amendment or waiver shall bind each Holder of a Security who has consented to it. SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. The Trustee may place an appropriate notation about an amendment or waiver on any Security thereafter authenticated. The Company in exchange for all Securities may issue and the Trustee shall authenticate new Securities that reflect the amendment or waiver. 38 46 SECTION 9.06. THE TRUSTEE PROTECTED. The Trustee shall sign all supplemental indentures, except that the Trustee need not sign any supplemental indenture that adversely affects its rights. The Company may not sign an amendment or supplement until the Board of Directors approves it. The Trustee, subject to Sections 7.01 and 7.02, shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that any amendment, supplement or waiver is authorized or permitted by this Indenture and complies with the provisions of this Article 9. ARTICLE 10 GENERAL PROVISIONS SECTION 10.01. TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA as in effect at the date hereof or, to the extent required by law, as amended after the date hereof, the required provision shall control. SECTION 10.02. NOTICES. Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail to the other's address stated in Section 10.10. The Company or the Trustee by notice to the other may designate an additional or different address for subsequent notices or communications. Any notice or communication to a Securityholder shall be mailed by first class mail to his or her address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Securityholders, it shall mail a copy to the Trustee and each Agent at the same time. All other notices or communications shall be in writing. 39 47 SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Securityholders may communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officers' Certificate stating that, in the opinion of the Company, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of the Company, such person has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of the Company, such condition or covenant has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers' Certificate. 40 48 SECTION 10.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or a meeting of Securityholders. The Registrar [, or] Paying Agent [or Conversion Agent] may make reasonable rules and set reasonable requirements for its functions. SECTION 10.07. LEGAL HOLIDAYS; BUSINESS DAYS. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in the City of New York or in the city in which the principal office of the Trustee is located are not required to be open, and a "Business Day" is any day that is not a Legal Holiday. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 10.08. NO RECOURSE AGAINST OTHERS. No director, officer, employee or shareholder, as such, of the Company shall have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the Securities. SECTION 10.09. COUNTERPARTS. This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. SECTION 10.10. OTHER PROVISIONS. "Officer" means Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Accounting Officer, any Executive Vice President, Senior Vice President, any Vice President, the Treasurer, any other Executive Officer, the Secretary, any Assistant Treasurer or any Assistant Secretary of the Company. The Company initially appoints the Trustee as Paying Agent, Registrar and authenticating agent. 41 49 The first certificate pursuant to Section 4.03 shall be for the fiscal year ending on the first June 30 following the issuance of Securities hereunder, but in no event later than one year after the date hereof. The reporting date for Section 7.06 is September 15 of each year. The first reporting date is the first September 15 following the issuance of Securities hereunder. The Trustee shall always have a combined capital and surplus of at least $10,000,000 as set forth in its most recent published annual report of condition. The Company's address is: Del Webb Corporation 6001 24th Street Phoenix, AZ 85016 Attention: General Counsel The Trustee's address [for purposes of Sections 2.03 and 4.04] is: [Bank of Montreal Trust Company 88 Pine Street, 19th Floor New York, New York 10005] and for all other purposes hereunder is: ------------------------------- ------------------------------- ------------------------------- Attn: Corporate Trust Division.] SECTION 10.11. GOVERNING LAW. The internal laws of the State of New York shall govern this Indenture, the Securities, and all disputes arising under or related to either of them, without regard to the choice or conflicts of laws provisions thereof. If any action or proceeding shall be brought by a Holder of any of the Securities or by the Trustee in order to enforce any right or remedy under this Indenture or under the Securities, the Company hereby consents and will submit to the jurisdiction of the courts of the State of New York sitting in the City of New York or any federal court sitting in the City of New York. The Company hereby agrees to accept service of process by notice given to it pursuant to the provisions of Section 10.02. 42 50 SECTION 10.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a subsidiary. Any such other indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 10.13. SUCCESSORS. All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. SECTION 10.14. SEVERABILITY. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.15. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. ARTICLE 11 OMITTED [ARTICLE 12 CONVERSION SECTION 12.01. CONVERSION PRIVILEGE. For the purpose of this Article XII and paragraph 17 of the Securities, ["Common Stock" means the common stock of the Company as it exists on the date of this Indenture or as it may be constituted from time to time.] [and] ["Preferred Stock" means the Series __ Preferred Stock of the Company]. A Holder of a Security may convert it into [Preferred] [Common] Stock at any time during the period stated in paragraph 17 of the Securities. The 43 51 number of shares issuable upon conversion of a Security is determined as follows: (i) divide the principal amount to be converted by the conversion price in effect on the conversion date; then (ii) round the result to the nearest 1/100th of a share. The initial conversion price is stated in paragraph 17 of the Securities. The conversion price is subject to adjustment. A Holder may convert a portion of a Security if the portion is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to conversion of all of a Security also apply to conversion of a portion of it. SECTION 12.02. CONVERSION PROCEDURE. To convert a Security a Holder must satisfy the requirements in paragraph 17 of the Securities. The date on which the Holder satisfies all those requirements is the conversion date. As soon as practical, the Company shall deliver through the Conversion Agent a certificate for the number of full shares of [Preferred] [Common] Stock issuable upon the conversion and a check for any fractional share. The person in whose name the certificate is registered shall be treated as a stockholder of record on and after the conversion date. No payment or adjustment will be made for accrued interest on a converted Security or dividends on any [Preferred] [Common] Stock issued. However, interest will be paid on any interest payment date with respect to Securities surrendered for conversion after a record date for the payment of interest to the registered Holder on such record date. If a Holder converts more than one Security at the same time, the number of full shares issuable upon the conversion shall be based on the total principal amount of the Securities converted. Upon a surrender of a Security that is converted in part, the Company shall issue and the Trustee shall authenticate for the Holder a new Security equal in principal amount to the unconverted portion of the Security surrendered. If the last day on which a Security may be converted is a Legal Holiday in a place where a Conversion Agent is located, the Security may be surrendered to that Conversion Agent on the next succeeding day that is not a Legal Holiday. 44 52 SECTION 12.03. FRACTIONAL SHARES. The Company will not issue a fractional share of [Preferred] [Common] Stock upon conversion of a Security. Instead the Company will deliver its check for the current market value of the fractional share. The current market value of a fraction of a share is determined as follows: (i) multiply the current market price of a full share by the fraction; then (ii) round the result to the nearest cent. The current market price of a share of [Preferred] [Common] Stock is the Quoted Price of the [Preferred] [Common] Stock on the last trading day prior to the conversion date. As used in Sections 12.03 and 12.11, the "Quoted Price" of the Common Stock is the last reported sales price of the [Preferred] [Common] Stock on the New York Stock Exchange or such other securities exchange on which the [Preferred] [Common] Stock may then be listed, or if the Common Stock is not listed on a securities exchange, the last reported sales price of the [Preferred] [Common] Stock as reported by NASDAQ, National Market System or if neither so reported or listed, the last reported bid price of the [Preferred] [Common] Stock. In the absence of such a quotation, the Company shall determine the current market price on the basis of such quotations or other information as it considers appropriate. SECTION 12.04. TAXES ON CONVERSION. If a Holder of a Security converts it, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of [Preferred] [Common] Stock upon the conversion. However, the Holder shall pay any such tax which is due because the shares are issued in a name other than the Holder's name. SECTION 12.05. COMPANY TO PROVIDE STOCK. The Company has reserved and shall continue to reserve out of its authorized but unissued [Preferred] [Common] Stock or its [Preferred] [Common] Stock held in treasury enough shares of [Preferred] [Common] Stock to permit the conversion of the Securities in full. All shares of [Preferred] [Common] Stock which may be issued upon conversion of the Securities shall be fully paid and non-assessable. The Company will endeavor to comply with all securities laws regulating the offer and delivery of shares of [Preferred] [Common] Stock upon conversion of Securities and will endeavor to list such shares on each national securities exchange on which the [Preferred] [Common] Stock is listed. 45 53 SECTION 12.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. Subject to Section 12.18, if the Company: (1) pays a dividend or makes a distribution on its [Preferred] [Common] Stock in shares of its [Preferred] [Common] Stock; (2) subdivides its outstanding shares of [Preferred] [Common] Stock into a greater number of shares; (3) combines its outstanding shares of [Preferred] [Common] Stock into a smaller number of shares; (4) makes a distribution on its [Preferred] [Common] Stock in shares of its capital stock other than [Preferred] [Common] Stock; or (5) issues by reclassification of its [Preferred] [Common] Stock any shares of its capital stock; then the conversion privilege and the conversion price in effect immediately prior to such action shall be adjusted so that the Holder of a Security thereafter converted may receive the number of shares of capital stock of the Company which he would have owned immediately following such action if he had converted the Security immediately prior to such action. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment a Holder of a Security upon conversion of it may receive shares of two or more classes of capital stock of the Company, the Company shall determine the allocation of the adjusted conversion price between the classes of capital stock. After such allocation, the conversion privilege and the conversion price of each class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to [Preferred] [Common] Stock in this Article. SECTION 12.07. ADJUSTMENT FOR RIGHTS ISSUE. If the Company distributes any rights or warrants [other than the Warrants (the "Warrants") which are issued as part of unit consisting of Warrants and the Securities] to all holders of its [Preferred] [Common] Stock entitling them for a period expiring within 60 days after the record date mentioned below to purchase shares of [Preferred] [Common] Stock at 46 54 a price per share less than the current market price per share on that record date, the conversion price shall be adjusted in accordance with the formula set forth below and the paragraph following such formula: N x P ------ C' = C x O + M ----------------- O + N where: C' = the adjusted conversion price. C = the current conversion price. O = the number of shares of [Preferred] [Common] Stock outstanding on the record date. N = the number of additional shares of [Preferred] [Common] Stock offered. P = the offering price per share of the additional shares. M = the current market price per share of [Preferred] [Common] Stock on the record date. The adjustment shall be made successively whenever any such rights become exercisable or such warrants are issued and shall become effective immediately after the rights become exercisable or after the record date for the determination of stockholders entitled to receive the warrants. If at the end of the period during which such warrants or rights are exercisable, not all warrants or rights shall have been exercised, the conversion price shall be immediately readjusted to what it would have been if "N" in the above formula had been the number of shares actually issued. SECTION 12.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company distributes to all holders of its [Preferred] [Common] Stock (as such) any of its assets or debt securities or any rights or warrants to purchase assets, debt securities or other securities of the Company, the conversion price shall be adjusted in accordance with the formula set forth below and the paragraph following such formula: C' = C x M - F ----- M 47 55 where: C' = the adjusted conversion price. C = the current conversion price. M = the current market price per share of [Preferred] [Common] Stock on the record date mentioned below. F = the fair market value on the record date of the assets, securities, rights or warrants applicable to one share of [Preferred] [Common] Stock. The Board of Directors shall determine the fair market value. The adjustment shall be made successively whenever any such rights become exercisable or any such distribution (other than of such rights) is made and shall become effective immediately after any such rights become exercisable (as to rights) or after the record date for the determination of stockholders entitled to receive the distribution (as to other distributions). Notwithstanding the foregoing, no adjustment shall be made in the event that rights become exercisable if and to the extent Holders of Securities have received or are entitled to receive such rights upon conversion. In addition, to the extent the rights or warrants expire unexercised, then the conversion price shall be promptly readjusted to the conversion price which would then be in effect had the adjustment been made based on the number of rights or warrants exercised. This Section does not apply to regular cash dividends or cash distributions paid out of consolidated current earnings as shown on the books of the Company. Also, this Section does not apply to rights or warrants referred to in Section 12.07, including the Warrants. SECTION 12.09. ADJUSTMENT FOR [PREFERRED] [COMMON] STOCK ISSUE. If the Company issues shares of [Preferred] [Common] Stock for a consideration per share less than the current market price per share on the date the Company fixes the offering price of such additional shares, the conversion price shall be adjusted in accordance with the formula: O + P --- C' = C x M ------- A 48 56 where: C' = the adjusted conversion price. C = the then current conversion price. O = the number of shares outstanding immediately prior to the issuance of such additional shares. P = the aggregate consideration received for the issuance of such additional shares. M = the current market price per share on the date of issuance of such additional shares. A = the number of shares outstanding immediately after the issuance of such additional shares. The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance. This Section does not apply to (i) any of the transactions described in Sections 12.07, 12.08 and 12.10, (ii) the conversion of Securities, or the conversion, exchange or exercise of other securities convertible or exchangeable for [Preferred] [Common] Stock, (iii) [Preferred] [Common] Stock issued to the Company's employees under bona fide employee plans adopted by the Board of Directors and approved by the holders of [Preferred] [Common] Stock when required by law, if such [Preferred] [Common] Stock would otherwise be covered by this Section (but only to the extent that the aggregate number of shares excluded hereby and issued after the date of this Indenture shall not exceed [5%] of the [Preferred] [Common] Stock outstanding at the time of the adoption of each such plan, exclusive of antidilution adjustments thereunder), (iv) [Preferred] [Common] Stock issued to acquire, or in the acquisition of, all or any portion of a business as a going concern or of developed, undeveloped or mixed real property, in an arms-length transaction between the Company and an unaffiliated third party, whether such acquisition shall be effected by purchase of assets, exchange of securities, merger, consolidation or otherwise, (v) [Preferred] [Common] Stock issued in a bona fide public offering pursuant to a firm commitment underwriting or (vi) [Preferred] [Common] Stock issued on exercise of rights if and to the extent Holders of Securities have received or are entitled to receive such rights upon conversion. 49 57 SECTION 12.10. ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE. If the Company issues any securities convertible into or exchangeable or exercisable for [Preferred] [Common] Stock (other than the Securities or securities issued in transactions described in Sections 12.07 and 12.08) for a consideration per share of [Preferred] [Common] Stock initially deliverable upon conversion, exchange or exercise of such securities less than the current market price per share on the date of issuance of such securities, the conversion price shall be adjusted in accordance with this formula: O + P -- C' = C x M ------ O + D where: C' = the adjusted conversion price. C = the then current conversion price. O = the number of shares outstanding immediately prior to the issuance of such securities. P = the aggregate consideration received for the issuance of such securities (including as determined in Section 12.12(3)). M = the current market price per share on the date of issuance of such securities. D = the maximum number of shares deliverable upon conversion or in exchange for or upon exercise of such securities at the initial conversion, exchange or exercise rate. The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance. If all of the [Preferred] [Common] Stock deliverable upon conversion, exchange or exercise of such securities have not been issued when such securities are no longer convertible, exchangeable or exercisable, then the conversion price shall promptly be readjusted to the conversion price which would then be in effect had the adjustment upon the issuance of such securities been made on the basis of the actual number of shares of [Preferred] [Common] Stock issued upon conversion, exchange or exercise of such securities. This Section does not apply to (1) convertible securities issued to acquire, or in the acquisition of, all or any portion of a business as a going concern or of developed, undeveloped or mixed real property, in an arms- 50 58 length transaction between the Company and an unaffiliated third party, whether such acquisition shall be effected by purchase of assets, exchange of securities, merger, consolidation or otherwise, or (ii) convertible securities issued in a bona fide public offering pursuant to a firm commitment underwriting. SECTION 12.10A. SPECIAL PROVISION REGARDING PREFERRED STOCK. In addition to the foregoing adjustments and without duplication, if (x) prior to the exercise of a Security an event ("Event") occurs which, under the Certificate of Designations with respect to the Preferred Stock, would have required an adjustment in the number of share(s) of Common Stock into which the shares of Preferred Stock acquired on conversion of the Securities would have been convertible if such Security had previously been converted into Preferred Stock (but such Preferred Stock acquired on conversion had not been converted into Common Stock), then (y) after the Event, such share of Preferred Stock shall, when acquired on conversion of the Security, be convertible into the same number of share(s) of Common Stock into which it would have been convertible if such Security had been converted into Preferred Stock (but such Preferred Stock acquired on conversion had not been converted into Common Stock) prior to the Event. The adjustment required by the foregoing sentence shall be made each time there is an Event, provided that no adjustment shall be made under this Section 12.10A unless that adjustment results in a change of 1%, provided further that all adjustments not made by virtue of the preceding "provided" clause shall be carried forward and made when the aggregate of all such adjustments results in a change of at least 1%.]* SECTION 12.11. CURRENT MARKET PRICE. In Sections 12.07, 12.08, 12.09 and 12.10, the current market price per share of [Preferred] [Common] Stock on any date is the average of the Quoted Prices (as defined in Section 12.03) of the [Preferred] [Common] Stock for 20 consecutive trading days commencing 30 trading days before the date in question. In the absence of one or more such quotations, the Company shall determine the current market price on the basis of such quotations or other information as it considers appropriate. - ----------------------- * This provision will be used, if at all, if the Securities are exercisable for Preferred Stock which is convertible into Common Stock. 51 59 SECTION 12.12. CONSIDERATION RECEIVED. For purposes of any computation respecting consideration received pursuant to Sections 12.09 and 12.10, the following shall apply: (1) in the case of the issuance of shares of [Preferred] [Common] Stock for cash, the consideration shall be the amount of such cash, provided that in no case shall any deduction be made for any commissions, discounts or, without limitation, other expenses incurred by the Company for any underwriting of the issue or otherwise in connection therewith, (2) in the case of the issuance of shares of [Preferred] [Common] Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof as determined in good faith by the Board of Directors (irrespective of the accounting treatment thereof), whose determination shall be conclusive, and described in a Board resolution which shall be filed with the Trustee; and (3) in the case of the issuance of securities convertible into or exchangeable or exercisable for shares, the aggregate consideration received therefor shall be deemed to be the consideration received by the Company for the issuance of such securities plus the additional minimum consideration, if any, to be received by the Company upon the conversion or exchange thereof (the consideration in each case to be determined in the same manner as provided in clauses (1) and (2) of this Section). SECTION 12.13. WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the conversion price need be made unless the adjustment would require an increase or decrease of at least 1% in the conversion price. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Article shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. SECTION 12.14. WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made for a transaction referred to in Sections 12.06, 12.07, 12.08, 12.09 or 12.10 if all Securityholders are entitled to participate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis 52 60 and notice on which holders of [Preferred] [Common] Stock participate in the transaction. No adjustment need be made for rights to purchase [Preferred] [Common] Stock pursuant to a Company plan for reinvestment of dividends or interest. No adjustment need be made for a change in the par value or no par value of the [Preferred] [Common] Stock. To the extent the Securities become convertible into cash, no adjustment need be made thereafter as to the cash. Interest will not accrue or be deemed to accrue on the cash for this purpose. In any case in which this Article 12 or the Securities shall require that an adjustment in the conversion price be made effective as of a record date for a specified event and notwithstanding anything to the contrary in this Article 12 of the Securities, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Security converted after such record date, the [Preferred] [Common] Stock or other capital stock of the Company, if any, issuable upon such conversion over and above the [Preferred] [Common] Stock or other capital stock of the Company, if any, issuable upon such conversion on the basis of the conversion price in effect prior to such adjustment; provided, however, [that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing, subject to the following proviso, such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment and, provided further,] to the extent such event does not occur, the adjustment made in respect of such non-occurrence shall be retroactive and affect each conversion security converted between such Record Date and the date of such non-occurrence. SECTION 12.15. NOTICE OF ADJUSTMENT. Whenever the conversion price is adjusted, the Company shall promptly mail to Securityholders a notice of the adjustment. The Company shall file with the Trustee a certificate from the Company's independent public accountants briefly stating the facts requiring the adjustment and the manner of computing it. The certificate shall be conclusive evidence that the adjustment is correct, absent manifest error. SECTION 12.16. VOLUNTARY REDUCTION. The Company from time to time may reduce the conversion price by any amount for any period of time if the period is at least [20] days and if the reduction is irrevocable during the period; provided that in no event may 53 61 the conversion price be less than the then par value of a share of [Preferred] [Common] Stock, if any. Whenever the conversion price is reduced, the Company shall mail to Securityholders a notice of the reduction. The Company shall mail the notice at least 15 days before the date the reduced conversion price takes effect. The notice shall state the reduced conversion price and the period it will be in effect. A reduction of the conversion price does not change or adjust the conversion price otherwise in effect for purposes of Sections 12.06, 12.07, 12.08, 12.09 and 12.10. SECTION 12.17. NOTICE OF CERTAIN TRANSACTIONS. If: (1) the Company takes any action that would require an adjustment in the conversion price pursuant to Sections 12.06, 12.07, 12.08, 12.09 or 12.10 and if the Company does not let Securityholders participate pursuant to Section 12.14 [or which is referred to in Section 12.10A]; (2) the Company takes any action that would require a supplemental indenture pursuant to Section 12.18; or (3) there is a liquidation or dissolution of the Company, the Company shall mail to Securityholders and to the Trustee a notice stating the proposed record date, proposed effective date or other relevant proposed date of the act in question. The Company shall mail the notice at least [15] days before such date. Failure to mail the notice or any defect in it shall not affect the validity of the transaction. SECTION 12.18. REORGANIZATION OF COMPANY. If the Company is a party to a transaction subject to Section 5.01, or a transaction which reclassifies or changes its outstanding [Preferred] [Common] Stock, upon consummation of such transaction the Securities shall automatically become convertible into the kind and amount of securities, cash or other assets which the Holder of a Security would have owned immediately after the transaction if the Holder had converted the Security immediately before the effective date of the transaction. Concurrently with the consummation of such transaction, the person obligated to issue securities or deliver cash or other assets upon conversion of the Securities shall enter into a supplemental indenture so providing and 54 62 further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Article. The Company or, if applicable, the other person shall mail to Securityholders a notice describing the transaction and supplemental indenture. If securities deliverable upon conversion of Securities, as provided above, are themselves convertible into the securities of an Affiliate of the other person, that Affiliate shall join in the supplemental indenture and the supplemental indenture shall so provide. If this Section applies, Section 12.06 does not apply. SECTION 12.19. COMPANY DETERMINATION FINAL. Any determination that the Company or the Board of Directors must make pursuant to Section 12.03, 12.06, 12.08, 12.09, 12.10, 12.11, 12.12 or 12.14 is conclusive. SECTION 12.20. TRUSTEE'S DISCLAIMER. The Trustee has no duty to determine when an adjustment under this Article should be made, how it should be made or what it should be. The Trustee has no duty to determine whether any provisions of a supplemental indenture under Section 12.18 are correct. The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities. The Trustee shall not be responsible for the Company's failure to comply with this Article. Each Conversion Agent other than the Company shall have the same protection under this Section as the Trustee.] The parties have caused this Indenture to be duly executed and attested, all as of the date first above written, in _____________, _____________, signifying their agreements contained in this Indenture. SIGNATURES DEL WEBB CORPORATION By:_______________________________ Attest: ________________________ 55 63 [Bank of Montreal Trust Company] as Trustee ----------------------------- Attest: - ------------------------- 56 64 EXHIBIT A (FACE OF SECURITY)* No. $ CUSIP No. ____ DEL WEBB CORPORATION promises to pay to or registered assigns, the principal sum of Dollars on ________________________ _____% [CONVERTIBLE] SENIOR [DEBENTURE] [NOTE] DUE ________ Interest Payment Dates: _______________ and _______________ Record Dates: _______________ and _______________ This is one of the Securities Dated: mentioned in the Indenture referred to below: [Bank of Montreal Trust Company,] DEL WEBB CORPORATION as Trustee By:_________________________ By:_________________________ Authorized Signatory By:_________________________ ________________________ * Global Securities will have any appropriate modifications and will bear essentially the following legend: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO BELOW AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES. A-1 65 (BACK OF SECURITY) _____________ ___% [Convertible] Senior [Debenture] [Note] Due __________ 1. Interest. Del Webb Corporation, a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest semiannually on _________ and _________ of each year. Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from _________, 199_. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. Method of Payment. The Company will pay interest on the Securities (except defaulted interest) to the persons who are registered holders of Securities at the close of business on the record date for the next interest payment date even though Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal and interest by check payable in such money. It may mail an interest check to a holder's registered address. 3. Paying Agent [, and] Registrar [and Conversion Agent]. [____________ _____________________] (the "Trustee") will act as Paying Agent [, and] Registrar [and Conversion Agent]. The Company may change the Paying Agent, Registrar or co-registrar without prior notice. The Company or any of its subsidiaries may act in any such capacity. 4. Indenture. The Company issued the Securities under an Indenture dated as of ___________, 199_ [as modified by a Supplemental Indenture dated as of ___________, 199_] ([collectively, ]the "Indenture") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of the Indenture. The Securities are subject to, and qualified by, all such terms, certain of which are summarized hereon, and Securityholders are referred to the Indenture and such Act for a statement of such terms. The Securities are unsecured general obligations of the Company limited to $__________ in aggregate principal amount [of which $___________ may only be issued as 'Additional Securities' on or before the 30th day after the date of, and pursuant to the terms of, that certain Underwriting Agreement dated _________, 199_ by and between the Company and _________________. The Company will not originally issue any Additional A-2 66 Securities except pursuant to the Underwriting Agreement. If no Additional Securities are issued the Securities will be limited to $____________ in aggregate principal amount.] Capitalized terms not defined below have the same meaning as is given to them in the Indenture. 5[A]. Optional Redemption. The Company may not redeem the Securities prior to ____________. Thereafter, the Company may redeem all the Securities at any time or some of them from time to time at the redemption prices (expressed in percentages of principal amount) set forth below plus accrued interest to the redemption date, if redeemed during the 12-month period beginning _________ of the years starting with _____ indicated below. Year Percentage Year Percentage and thereafter 100.000 [5B. Mandatory Redemption. The Company will redeem ___% of the [initial] principal amount of Securities [(including any Additional Securities)] [then outstanding] on ____________, and on each _________ thereafter through ___________ at a redemption price of 100% of principal amount, plus accrued interest to the redemption date. The Company may reduce the principal amount of Securities to be redeemed pursuant to this paragraph 6 by subtracting 100% of the principal amount (excluding premium) of any Securities that [Securityholders have converted,] the Company has delivered to the Trustee for cancellation or the Company has previously purchased, redeemed, retired or acquired other than pursuant to this paragraph 6, provided that the Company may so subtract the same Security only once.] 6. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of Securities to be redeemed at his or her registered address. Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. In the event of a redemption of less than all of the Securities, the Securities will be chosen for redemption by the Trustee, generally pro rata or by lot. On and after the redemption date interest ceases to accrue on Securities or portions of them called for redemption. If this Security is redeemed subsequent to a record date with respect to any interest payment date specified above and on or prior to such interest payment A-3 67 date, then any accrued interest will be paid to the person in whose name this Security is registered at the close of business on such record date. 7. Change of Control. Upon a Change of Control, the Company shall make a Change of Control Offer to purchase all outstanding securities at a price equal to 101% of the aggregate principal amount of the Securities, plus accrued and unpaid interest to the date of purchase. To accept the Change of Control Offer, the Holder hereof must comply with the terms thereof, including surrendering this Security, with the "Option of Holder to Elect Purchase" portion hereof completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent, at the address specified in the notice of the Change of Control Offer mailed to Holders as provided in the Indenture, prior to termination of the Change of Control Offer. 8. [Omitted.] 9. Denominations, Transfer, Exchange. The Securities are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. As a condition of transfer, the Registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Security or portion of a Security selected for redemption. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before a selection of Securities to be redeemed. 10. Persons Deemed Owners. The registered holder of a Security may be treated as its owner for all purposes. 11. Amendments and Waivers. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the holders of at least a majority in principal amount of the then outstanding Securities and any existing default may be waived with the consent of the holders of a majority in principal amount of the then outstanding Securities. Without the consent of any Securityholder, the Indenture or the Securities may be amended: to cure any ambiguity, defect or inconsistency; to provide for assumption of the Company's obligations to Securityholders; to make any change that does not adversely affect the rights of any Securityholder; to add to the covenants of the Company, for the benefit of the Securityholders; or to modify the Indenture to effect its qualification under the TIA. 12. Defaults and Remedies. An Event of Default is: default for 30 days in payment of interest on the Securities; default in payment of principal of and premium, if any, on the Securities; failure by the Company for 60 days after notice to it to comply with any of its other agreements in the Indenture or the Securities or, in the case of failure by the Company to maintain its corporate A-4 68 existence or to comply with the restrictions on payments of dividends and other distributions, the restrictions on consolidation, merger or transfer or lease of substantially all its assets [or the provisions regarding conversion of the Securities], with such notice but without such passage of time; certain defaults under and accelerations prior to maturity of certain Indebtedness; certain final judgments which remain undischarged; and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the then outstanding Securities may declare all the Securities to be due and payable immediately, except that in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Securities become due and payable without further action or notice. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, holders of a majority in principal amount of the then outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company must furnish an annual compliance certificate to the Trustee. 13. Trustee Dealings with the Company. [Bank of Montreal Trust Company], the Trustee under the Indenture, or any of its Affiliates, in their individual or any other capacities, may make or continue loans to or guaranteed by, accept deposits from and perform services for the Company or its Affiliates and may otherwise deal with the Company or its Affiliates as if [Bank of Montreal Trust Company] were not Trustee. 14. No Recourse Against Others. No director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the Securities. 15. Authentication. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants by the entireties, JT TEN = joint tenants with right of survivorship and not as tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to Minors Act. The Company will furnish to any Securityholder upon written request and without charge a copy of the Indenture, which has in it the text of this Security A-5 69 larger type. Requests may be made to: Treasurer, Del Webb Corporation, 2231 East Camelback Road, P.O. Box 29040, Phoenix, AZ 85016. [17. Conversion. A holder of a Security may convert it into [Preferred] [Common] Stock of the Company at any time before the close of business on ________,_____. If the Security is called for redemption, the holder may convert it at any time before the close of business on the redemption date (unless the Company shall default in payment due upon redemption thereof). The initial conversion price of $__ per share is subject to adjustment in certain events. To determine the number of shares issuable upon conversion of a Security, divide the principal amount to be converted by the conversion price in effect on the conversion date. On conversion, no payment or adjustment for interest will be made. However, interest will be paid on any interest payment date with respect to Securities surrendered for conversion after a record date for the payment of interest to the registered holder on such record date. The Company will deliver a check for any fractional share. To convert a Security a holder must (1) complete and sign the conversion notice on the back of the Security, (2) surrender the Security to a Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Registrar or Conversion Agent and (4) pay any transfer or similar tax if required by the Indenture or applicable law. A holder may convert a portion of a Security if the portion is $1,000 or an integral multiple of $1,000. The conversion price is subject to adjustment as set forth in the Indenture in certain events. No adjustment in the conversion price will be required unless such adjustment would require a change of at least 1% in the price then in effect; but any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. The Company from time to time may voluntarily reduce the conversion price for a period of time. If the Company is a party to a consolidation or merger or a transfer or lease of all or substantially all of its assets, the Securities automatically become convertible into the kind and amount of securities, cash or other assets which the Holder of a Security would have owned immediately after such transaction if the Holder had converted the Security immediately before the effective date of the transaction.] A-6 70 ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to: - ------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint: - ------------------------------------------- agent to transfer this Security on the books of the Company. The agent may substitute another to act for him or her. Date: ----------------------- [CONVERSION NOTICE To convert this Security into [Preferred] [Common] Stock of the Company, check the box: / / To convert only part of this Security, state the amount: $ If you want the stock certificate made out in another person's name, fill in the form below: (insert other person's soc. sec. or tax I.D. no.) - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- (Print or type other person's name, address and zip code.) Your signature: ---------------------------- - ------------------------------------------- (Sign exactly as your name appears on the other side of this Security)] Signature Guarantee: A-7 71 [OPTION OF HOLDER TO ELECT PURCHASE] If you want to elect to have this Security purchased by the Company pursuant to Section 4.11 of the Indenture and paragraph 7 of this Security, check the box: / / If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.11 of the Indenture and paragraph 7 of this Security, state the amount: $___________ Date:____________________ Your Signature: ________________________ (Sign exactly as your name appears on the other side of this Security) Signature Guarantee: A-8 EX-4.2 3 EX-4.2 1 EXHIBIT 4.2 SCHEDULE OF MATERIAL DETAILS IN WHICH THE FORM OF SENIOR SUBORDINATED DEBT INDENTURE (INCLUDING FORM OF SENIOR SUBORDINATED DEBENTURE/ NOTE) DIFFERS FROM EXHIBIT 4.1, THE FORM OF SENIOR DEBT INDENTURE (INCLUDING FORM OF SENIOR DEBENTURE/NOTE) The form of Senior Subordinated Debt Indenture (including the form of Senior Subordinated Debenture/Note) (the "Senior Subordinated Debt Indenture") differs from Exhibit 4.1, the form of Senior Debt Indenture (including the form of Senior Debenture/Note) (the "Senior Debt Indenture"), in the following respects: (1) The word "Senior" in the Senior Debt Indenture is changed to the words "Senior Subordinated" in the Senior Subordinated Debt Indenture; (2) Section 4.12 of the form of Senior Subordinated Debt Indenture and the reference to Section 4.12 in the Table of Contents to the Senior Subordinated Debt Indenture are not present in the form of Senior Debt Indenture; and (3) Article 11 and the reference to Article 11 in the Table of Contents in the Senior Subordinated Debt Indenture and paragraph 8 of the form of Senior Subordinated Debenture/Note are not present in form of Senior Debt Indenture and the form of Senior Debenture/Note; and In addition, a few other provisions concerning subordination of the Senior Subordinated Debentures/Notes, which are included in the Senior Subordinated Debt Indenture, are not applicable to, and do not appear in, the Indenture for the Senior Debentures/Notes. 2 EXHIBIT 4.2 DEL WEBB CORPORATION AND [BANK OF MONTREAL TRUST COMPANY] AS TRUSTEE $____________ ___% [Convertible] Senior Subordinated [Debentures] [Notes]* INDENTURE Dated as of _____, 199_ ---------------- * Language in brackets indicates alternative language or provisions to be supplied. As appropriate, disclosure will be made in the relevant Prospectus Supplement as to which alternative has been chosen or provisions added and a copy of the final Indenture will be filed as an Exhibit to a Form 8-K, or other appropriate periodic report. 3 CROSS-REFERENCE TABLE* Trust Indenture Act Section Indenture Section 310(a)(1)............................................. 7.10 (a)(2)............................................. 7.10 (a)(3)............................................. N.A. (a)(4)............................................. N.A. (b)................................................ 7.08; 7.10; 10.02 (c)................................................ N.A. 311(a)................................................ 7.11 (b)................................................ 7.12 (c)................................................ N.A. 312(a)................................................ 2.05 (b)................................................ 10.03 (c)................................................ 10.03 313(a)................................................ 7.06 (b)(1)............................................. N.A. (b)(2)............................................. 7.06 (c)................................................ 7.06; 10.02 (d)................................................ 7.06 314(a)................................................ 4.01; 10.02 (b)................................................ N.A. (c)(1)............................................. 10.04 (c)(2)............................................. 10.04 (c)(3)............................................. N.A. (d)................................................ N.A. (e)................................................ 10.05 (f)................................................ N.A. 315(a)................................................ 7.01(b) (b)................................................ 7.05; 10.02 (c)................................................ 7.01(a) (d)................................................ 7.01(c) (e)................................................ 6.11 316(a)(last sentence)................................. 2.09 (a)(1)(A).......................................... 6.05 (a)(1)(B).......................................... 6.04 (a)(2)............................................. N.A. (b)................................................ 6.07 317(a)(1)............................................. 6.08 (a)(2)............................................. 6.09 (b)................................................ 2.04 318(a)................................................ 10.01 N.A. means not applicable. - --------------- *This Cross-Reference Table is not part of the Indenture. 4 TABLE OF CONTENTS Page ARTICLE 1 Definitions Section 1.01. Definitions............................................. 1 "Affiliate"......................................... 1 "Agent"............................................. 1 "Board of Directors"................................ 1 "capital stock"..................................... 1 "Change of Control"................................. 1 "Company"........................................... 2 "Consolidated Net Earnings"......................... 2 "Default"........................................... 2 "Disqualified Stock"................................ 3 "Equity Interests".................................. 3 "Exchange Act"...................................... 3 "Holder" or "Securityholder"........................ 3 "Indenture"......................................... 3 "Material Subsidiary"............................... 3 "Officers' Certificate"............................. 3 "Opinion of Counsel"................................ 3 "person"............................................ 3 "principal"......................................... 3 "redemption date"................................... 3 "redemption price".................................. 3 "SEC"............................................... 4 "Securities"........................................ 4 "subsidiary"........................................ 4 "TIA"............................................... 4 "Trustee"........................................... 4 "Trust Officer"..................................... 4 Section 1.02. Other Definitions....................................... 4 Section 1.03. Incorporation by Reference of Trust Indenture Act....... 5 Section 1.04. Rules of Construction................................... 5 i 5 Page ARTICLE 2 The Securities Section 2.01. Form and Dating....................................... 6 Section 2.02. Execution and Authentication.......................... 6 Section 2.03. Registrar and Paying Agent............................ 7 Section 2.04. Paying Agent to Hold Money in Trust................... 7 Section 2.05. Securityholder Lists.................................. 8 Section 2.06. Transfer and Exchange................................. 8 Section 2.07. Replacement Securities................................ 8 Section 2.08. Outstanding Securities................................ 9 Section 2.09. When Treasury Securities Disregarded.................. 9 Section 2.10. Temporary Securities.................................. 9 Section 2.11. Cancellation.......................................... 10 Section 2.12. Defaulted Interest.................................... 10 Section 2.13. CUSIP Number.......................................... 10 ARTICLE 3 Redemption Section 3.01. Notices to Trustee.................................... 10 Section 3.02. Selection of Securities to be Redeemed................ 11 Section 3.03. Notice of Redemption.................................. 11 Section 3.04. Effect of Notice of Redemption........................ 12 Section 3.05. Deposit of Redemption Price........................... 12 Section 3.06. Securities Redeemed in Part........................... 12 [Section 3.07. Mandatory Redemption Provision........................ 13] ARTICLE 4 Covenants Section 4.01. Payment of Securities................................. 13 Section 4.02. SEC Reports........................................... 13 Section 4.03. Compliance Certificate................................ 14 Section 4.04. Maintenance of Office or Agency....................... 15 Section 4.05. Restrictions on Dividends and Other Payments.......... 15 Section 4.06. Continued Existence................................... 17 Section 4.07. Taxes ................................................ 17 ii 6 Page Section 4.08. Maintenance of Properties............................... 17 Section 4.09. Insurance............................................... 18 Section 4.10. Investment Company Act.................................. 18 Section 4.11. Change of Control....................................... 18 Section 4.12. Limitation in Ranking of Future Indebtedness............ 20 ARTICLE 5 Successors Section 5.01. When the Company May Merge, etc......................... 20 Section 5.02. Successor Corporation Substituted....................... 21 Section 5.03. Purchase Option on Change of Control.................... 21 ARTICLE 6 Defaults And Remedies Section 6.01. Events of Default....................................... 21 Section 6.02. Acceleration............................................ 23 Section 6.03. Other Remedies.......................................... 24 Section 6.04. Waiver of Past Defaults................................. 24 Section 6.05. Control by Majority..................................... 24 Section 6.06. Limitation on Suits..................................... 24 Section 6.07. Rights of Holders to Receive Payment [and to Convert Securities]........................... 25 Section 6.08. Collection Suit by Trustee.............................. 25 Section 6.09. Trustee May File Proofs of Claim........................ 25 Section 6.10. Priorities.............................................. 26 Section 6.11. Undertaking for Costs................................... 26 ARTICLE 7 The Trustee Section 7.01. Duties of the Trustee................................... 27 Section 7.02. Rights of the Trustee................................... 28 Section 7.03. Individual Rights of the Trustee........................ 28 Section 7.04. Trustee's Disclaimer.................................... 29 Section 7.05. Notice of Defaults...................................... 29 Section 7.06. Reports by the Trustee to Holders....................... 29 Section 7.07. Compensation and Indemnity.............................. 29 Section 7.08. Replacement of the Trustee.............................. 30 iii 7 Page Section 7.09. Successor Trustee by Merger, etc........................ 31 Section 7.10. Eligibility; Disqualification........................... 32 Section 7.11. Preferential Collection of Claims Against Company....... 32 ARTICLE 8 Satisfaction And Discharge Of Indenture Section 8.01. Termination of Company's Obligations.................... 32 Section 8.02. Application of Trust Money.............................. 35 Section 8.03. Repayment to Company.................................... 35 Section 8.04. Reinstatement........................................... 35 ARTICLE 9 Amendments Section 9.01. Without the Consent of Holders.......................... 36 Section 9.02. With the Consent of Holders............................. 37 Section 9.03. Compliance with the Trust Indenture Act................. 38 Section 9.04. Revocation and Effect of Consents....................... 38 Section 9.05. Notation on or Exchange of Securities................... 39 Section 9.06. The Trustee Protected................................... 39 ARTICLE 10 General Provisions Section 10.01. Trust Indenture Act Controls............................ 39 Section 10.02. Notices................................................. 39 Section 10.03. Communication by Holders with Other Holders............. 40 Section 10.04. Certificate and Opinion as to Conditions Precedent...... 40 Section 10.05. Statements Required in Certificate or Opinion........... 40 Section 10.06. Rules by Trustee and Agents............................. 41 Section 10.07. Legal Holidays; Business Days........................... 41 Section 10.08. No Recourse Against Others.............................. 41 Section 10.09. Counterparts............................................ 41 Section 10.10. Other Provisions........................................ 41 Section 10.11. Governing Law........................................... 42 Section 10.12. No Adverse Interpretation of Other Agreements........... 43 Section 10.13. Successors.............................................. 43 Section 10.14. Severability............................................ 43 Section 10.15. Table of Contents, Headings, Etc........................ 43 iv 8 Page ARTICLE 11 Subordination Section 11.01. Agreement to Subordinate................................ 43 Section 11.02. Certain Definitions..................................... 44 Section 11.03. Liquidation; Dissolution; Bankruptcy.................... 44 Section 11.04. Default on Senior Indebtedness.......................... 45 Section 11.05. Acceleration of Securities.............................. 45 Section 11.06. When Distributions Must Be Paid Over.................... 46 Section 11.07. Notice by the Company................................... 46 Section 11.08. Subrogation............................................. 46 Section 11.09. Relative Rights......................................... 47 Section 11.10. Subordination May Not Be Impaired by the Company........ 47 Section 11.11. Distribution or Notice to the Representative............ 47 Section 11.12. Rights of the Trustee and Paying Agent.................. 47 Section 11.13. No Fiduciary Duty to Holders of Senior Indebtedness..... 49 [ARTICLE 12 Conversion Section 12.01. Conversion Privilege.................................... 49 Section 12.02. Conversion Procedure.................................... 50 Section 12.03. Fractional Shares....................................... 50 Section 12.04. Taxes on Conversion..................................... 51 Section 12.05. Company to Provide Stock................................ 51 Section 12.06. Adjustment for Change in Capital Stock.................. 51 Section 12.07. Adjustment for Rights Issue............................. 52 Section 12.08. Adjustment for Other Distributions...................... 53 Section 12.09. Adjustment for [Preferred] [Common] Stock Issue......... 54 Section 12.10. Adjustment for Convertible Securities Issue............. 55 Section 12.10A. Special Provision Regarding Preferred Stock............. 56 Section 12.11. Current Market Price.................................... 57 Section 12.12. Consideration Received.................................. 57 Section 12.13. When Adjustment May Be Deferred......................... 58 Section 12.14. When No Adjustment Required............................. 58 Section 12.15. Notice of Adjustment.................................... 59 Section 12.16. Voluntary Reduction..................................... 59 Section 12.17. Notice of Certain Transactions.......................... 59 Section 12.18. Reorganization of Company............................... 60 Section 12.19. Company Determination Final............................. 60 Section 12.20. Trustee's Disclaimer.................................... 60] SIGNATURES ........................................................ 61 EXHIBIT A FORM OF SECURITY...................................... A-1 v 9 This Indenture, dated as of ________, 199_, is between Del Webb Corporation, a Delaware corporation (the "Company"), and [Bank of Montreal Trust Company] (the "Trustee"). The Company has duly authorized the issuance of its ___% [Convertible] Senior Subordinated [Debentures] [Notes] (the "Securities") and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Securities. ARTICLE 1 DEFINITIONS SECTION 1.01. DEFINITIONS. "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" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement or otherwise. "Agent" means any Registrar, Paying Agent or co-registrar. "Board of Directors" means the Board of Directors of the Company or any authorized committee of the Board of Directors. "capital stock" means any and all shares, interests, participations or other equivalents (however designated) of corporate stock. "Change of Control" means any of the following: (i) all or substantially all of the Company's assets are sold as an entirety to any person or related group of persons or the Company engages in any merger, consolidation, sale of capital stock, sale of beneficial ownership interests or any other transactions with any other person or related group of persons, with the effect that after such transactions the shareholders of the Company immediately prior to such transactions own, directly or indirectly, in the aggregate less than 50% of the total voting power entitled to vote in the election (a) of directors of the Company, if the Company is the surviving entity, or (b) of directors, managers or trustees (1) of such other person, if the Company is not the surviving entity, or (2) of such other person that 1 10 purchases all or substantially all of the Company's assets; (ii) any person or related group of persons acquires more than 50% of the total voting power entitled to vote for directors of the Company; or (iii) any person or related group of persons acquires more than 50% of the total voting power entitled to vote for directors, managers or trustees (a) of such other person surviving the transaction or (b) of such other person that purchases all or substantially all of the Company's assets. "Company" means the party named as such above until a successor replaces it in accordance with Article 5 and thereafter means the successor. "Consolidated Net Earnings" with respect to any person means, for any period, the aggregate of the Net Earnings of such person and its subsidiaries for such period, on a consolidated basis, determined in accordance with generally accepted accounting principles consistently applied; provided that the Net Earnings of any person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded. "Net Earnings" of any person for any period shall mean the net earnings (loss) of such person for such period, determined in accordance with generally accepted accounting principles consistently applied, (i) excluding (a) extraordinary items recognized in such period, (b) any gain (but including any loss except as reduced to the extent aggregate gains exceed aggregate losses, with gains in excess of losses for one period being carried forward to subsequent periods and back to prior periods for this purpose) realized upon the sale or other disposition (including, without limitation, dispositions pursuant to leaseback transactions) of any real property or equipment of such person which is not sold or otherwise disposed of in the ordinary course of business and (c) any gain (but including any loss except as reduced to the extent aggregate gains exceed aggregate losses, with gains in excess of losses for one period being carried forward to subsequent periods and back to prior periods for this purpose) realized upon the sale or other disposition of any capital stock of such person or a subsidiary of such person except when the sale of capital stock is in substance the sale of the assets of the person whose capital stock is being sold, provided that, with respect to (b) and (c) above, gains from sales of developed or undeveloped real property (including without limitation developed residential lots) from the Company's community, conventional housing and land development businesses will be deemed ordinary course and (ii) excluding any write-up in the carrying value of any asset made after ______________, provided that the application of the equity method of accounting and the translation into United States dollars of assets or liabilities in foreign currencies in accordance with generally accepted accounting principles shall not be deemed to involve any such write-up. "Default" means any event which is, or after notice or passage of time would be, an Event of Default. 2 11 "Disqualified Stock" means any capital stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the maturity date of the Securities. "Equity Interests" means capital stock or warrants, options or other rights to acquire capital stock (but excluding any debt security which is convertible into, or exchangeable for, capital stock). "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute. "Holder" or "Securityholder" means a person in whose name a Security is registered in the Registrar's books. "Indenture" means this Indenture as amended or supplemented from time to time. "Material Subsidiary" means (i) Del Webb Communities, Inc., (ii) Del Webb California Corp. and (iii) any other subsidiary of the Company, if any, named [in the final Indenture] [or] [in a supplemental indenture.] "Officers' Certificate" means a certificate signed by two Officers, one of whom must be the Chairman of the Board, the President, the Treasurer or an Executive Vice President, Senior Vice President or other Vice President of the Company. "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "principal" of a debt security, including the Securities, means the principal of the security plus the premium, if any, on the security. "redemption date" when used with respect to any of the Securities to be redeemed, means the date fixed by the Company for such redemption pursuant to this Indenture and the Securities. "redemption price" when used with respect to any of the Securities to be redeemed, means the price fixed for such redemption pursuant to this Indenture and the Securities. 3 12 "SEC" means the Securities and Exchange Commission. "Securities" means the Securities described above issued under this Indenture. "subsidiary" of any specified person means (i) a corporation a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such person or by such person and a subsidiary or subsidiaries of such person or (ii) any other person (other than a corporation) in which such person or such person and a subsidiary or subsidiaries of such person, directly or indirectly, at the date of determination thereof has at least majority ownership interest or over which it exercises control. "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77-bbbb) as in effect on the date of execution of this Indenture. "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor. "Trust Officer" means [the Chairman of the Board, the President or] any [other] officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. SECTION 1.02. OTHER DEFINITIONS. Defined in Term Section "Bankruptcy Law"...................................... 6.01 "Business Day"........................................ 10.07 ["Common Stock"........................................ 12.01] ["Conversion Agent..................................... 2.03] "Custodian"........................................... 6.01 "Event of Default".................................... 6.01 "Indebtedness"........................................ 11.02 "Legal Holiday"....................................... 10.07 "Officer"............................................. 10.10 "Paying Agent"........................................ 2.03 ["Preferred Stock"..................................... 12.01] ["Quoted Price"........................................ 12.03] "Registrar"........................................... 2.03 "Representative"...................................... 11.02 "Restricted Payments"................................. 4.05 "Senior Indebtedness"................................. 11.02 "United States Government Obligations"................ 8.01 4 13 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC; "indenture securities" means the Securities; "indenture security holder" means a Securityholder or Holder; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the Securities means the Company or any other obligor on the Securities. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect at the date hereof; (3) references to "generally accepted accounting principles" shall mean generally accepted accounting principles as in effect at the date hereof; (4) "or" is not exclusive; (5) words in the singular include the plural, and in the plural include the singular; and 5 14 (6) the male, female and neuter genders include one another. ARTICLE 2 THE SECURITIES SECTION 2.01. FORM AND DATING. The Securities and the Trustee's certificate of authentication relating thereto shall be substantially in the form set forth in Exhibit A, which is part of this Indenture, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, provided that the Securities may be Global Securities and as such may be issued in either registered or bearer form. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. The Company shall approve the forms of the Securities and any notation, legend or endorsement on them. Each Security shall be dated the date of its authentication. The terms and provisions contained in the Securities shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign the Securities for the Company by manual or facsimile signature. The Company's seal shall be reproduced on the Securities. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Upon a written order of the Company signed by an Officer of the Company, the Trustee shall authenticate Securities for original issue up to $________ in aggregate principal amount. The aggregate principal amount of Securities outstanding at any time may not exceed that amount except as provided in Section 2.07. 6 15 The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 or any integral multiple thereof. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same right as an Agent to deal with the Company or an Affiliate. SECTION 2.03 REGISTRAR AND PAYING AGENT. The Company shall maintain or cause to be maintained in the Borough of Manhattan, City of New York (the "New York Office"), State of New York, and in such other locations as it shall determine: (i) an office or agency where securities may be presented for registration of transfer or for exchange ("Registrar"); [and] (ii) an office or agency where Securities may be presented for payment ("Paying Agent")[; and (iii) an office or agency where Securities may be presented for conversion ("Conversion Agent")]. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may appoint one or more co-registrars[, and] one or more additional paying agents [and one or more additional conversion agents]. The term "Paying Agent" includes any additional paying agent[; and the term "Conversion Agent" includes any additional conversion agent]. The Company may change any Paying Agent, Registrar[, or] co-registrar [or Conversion Agent] without prior notice. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture and shall enter into an appropriate agency agreement with any Registrar, Paying Agent[, or] co-registrar [or Conversion Agent] not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company or any of its subsidiaries may act as Paying Agent, Registrar[, or] co-registrar [or Conversion Agent]. If the Company fails to appoint or maintain another entity as Registrar[, or] Paying Agent[, or Conversion Agent], the Trustee shall act as such, and the Trustee shall initially act as such. The Trustee shall cause to be maintained the New York Office as long as it acts as Registrar[, or] Paying Agent [or Conversion Agent]. SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall require each Paying Agent (other than the Trustee, who hereby so agrees), to agree in writing that the Paying Agent will hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of principal or interest on the Securities, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require 7 16 a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a subsidiary) shall have no further liability for the money. If the Company or a subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Securityholders all money held by it as Paying Agent. SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee on or before each interest payment date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. SECTION 2.06. TRANSFER AND EXCHANGE. Where Securities are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Company shall issue and the Trustee shall authenticate Securities at the Registrar's request. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06[, or] 9.05 [or 12.02]). The Company shall not be required (i) to issue, register the transfer of or exchange Securities during a period beginning at the opening of business 15 days before the day of any selection of Securities for redemption under Section 3.02 and ending at the close of business on the day of selection, or (ii) to register the transfer or exchange of any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. SECTION 2.07. REPLACEMENT SECURITIES. If the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the Trustee's requirements are 8 17 met. If required by the Trustee or the Company as a condition of receiving a replacement Security, the Holder must provide an indemnity bond sufficient, in the judgment of both the Company and the Trustee, to fully protect the Company, the Trustee, any Agent and any authenticating agent from any loss which any of them may suffer if the Security is replaced. The Company may charge for its expenses in replacing any Security. Every replacement Security is an additional obligation of the Company. SECTION 2.08. OUTSTANDING SECURITIES. The Securities outstanding at any time are all the Securities properly authenticated by the Trustee except for those canceled by the Trustee, those delivered to it for cancellation, and those described in this Section as not outstanding. If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If Securities are considered paid under Section 4.01, they cease to be outstanding and interest on them ceases to accrue. A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. SECTION 2.09. WHEN TREASURY SECURITIES DISREGARDED. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or an Affiliate of the Company shall be considered as though they are not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. SECTION 2.10. TEMPORARY SECURITIES. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. 9 18 SECTION 2.11. CANCELLATION. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of canceled Securities as the Company directs, provided that the Trustee shall not be required to destroy such canceled securities. The Company may not issue new Securities to replace Securities that it has paid or that have been delivered to the Trustee for cancellation. SECTION 2.12. DEFAULTED INTEREST. If the Company fails to make a payment of interest on the Securities, it shall pay such defaulted interest plus any interest payable on the defaulted interest in any lawful manner. It may pay such defaulted interest, plus any such interest payable on it, to the persons who are Securityholders on a subsequent special record date. The Company shall fix any such record date and payment date. At least 15 days before any such record date, the Company shall mail to Securityholders a notice that states the record date, payment date and amount of such interest to be paid. SECTION 2.13. CUSIP NUMBER. The Company in issuing the Securities may use a "CUSIP" number, and if so, such CUSIP number shall be included in notices of redemption or exchange as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Securities and that reliance may be placed only on the other identification numbers printed on the Securities. The Company will promptly notify the Trustee of any change in the CUSIP number. ARTICLE 3 REDEMPTION SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem Securities pursuant to the optional redemption provisions of paragraph 5 of the Securities, it shall notify the Trustee of the redemption date and the principal amount of Securities to be redeemed. 10 19 The Company shall give each notice provided for in this Section at least 60 days before the redemption date (unless a shorter notice period shall be satisfactory to the Trustee). SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed pro rata or by lot, if lawful, or if required by another method that complies with the requirements of any exchange on which the Securities are listed and that the Trustee considers fair and appropriate. The Trustee shall make the selection not more than 75 days and not less than 45 days before the redemption date from Securities outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $1,000. Securities and portions of them it selects shall be in amounts of $1,000 or integral multiples of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be called for redemption. SECTION 3.03. NOTICE OF REDEMPTION. Except as provided in Section 4.11, at least 30 days but not more than 60 days before a redemption date, the Company shall mail a notice of redemption to each Holder whose Securities are to be redeemed. The notice shall identify the Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) if any Security is being redeemed in part, the portion of the principal amount of such Security to be redeemed and that, after the redemption date, upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion will be issued; (4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (5) that interest on Securities called for redemption ceases to accrue on and after the redemption date; 11 20 (6) the paragraph of the Securities pursuant to which the Securities are being redeemed; (7) the aggregate principal amount of Securities that are being redeemed; (8) the CUSIP number of the Securities (provided that the disclaimer permitted by Section 2.13 may be made); [and] (9) the name and address of the Paying Agent [and Conversion Agent][.][;] [(10) that Securities called for redemption may be converted at any time before the close of business on the redemption date; (11) that Holders who want to convert Securities must satisfy the requirements in paragraph 17 of the Securities; and (12) the current conversion price.] At the Company's request, the Trustee shall give notice of redemption in the Company's name and at its expense. SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date at the price set forth in the Security. SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or before the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money in immediately available funds sufficient to pay the redemption price of and accrued interest on all Securities to be redeemed on that date. The Trustee or the Paying Agent shall return to the Company any money not required for that purpose. SECTION 3.06 SECURITIES REDEEMED IN PART. Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Security equal in principal amount to the unredeemed portion of the Security surrendered. 12 21 [SECTION 3.07. MANDATORY REDEMPTION. To the extent lawful, the Company shall redeem ___ percent of the [initial] principal amount of the Securities [outstanding] as set forth in paragraph 5B of the Securities, which amount shall be rounded to the next highest integral multiple of $1,000, annually on each of the dates, upon the terms and subject to the conditions set forth in paragraph 6 of the Securities.] ARTICLE 4 COVENANTS SECTION 4.01. PAYMENT OF SECURITIES. The Company shall pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities. Principal and interest shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company or a subsidiary) holds on that date money designated for and sufficient to pay all principal and interest then due; provided, however, that money held by the Paying Agent for the benefit of holders of Senior Indebtedness pursuant to the provisions of Article 11 hereof shall not be considered paid within the meaning of this Section 4.01. To the extent lawful, the Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on (i) overdue principal, at the rate borne by the Securities, compounded semiannually; and (ii) overdue installments of interest (without regard to any applicable grace period) at the same rate, compounded semiannually. SECTION 4.02. SEC REPORTS. The Company shall deliver to the Trustee, within 15 days after it files them with the SEC, 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 SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company also shall comply with the other provisions of TIA Section 314(a). The Company shall timely comply with its reporting and filing obligations under the applicable federal securities law. If the Company is at any time not required to file annual or quarterly reports pursuant to Section 13 or 15(d) of the Exchange Act, the Company will file with the Trustee, within 15 days after the last date on which it would have been required to make such a filing with the SEC, and will upon 13 22 request of a Holder mail to that Holder (as soon as practical after receipt of such request) at his or her address as it appears on the register of Securities kept by the Registrar, audited annual financial statements prepared in accordance with generally accepted accounting principles and unaudited quarterly financial statements. Such financial statements shall be accompanied by a Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company for the period reported upon in substantially the form required under the rules and regulations of the SEC, or any successor form of similar disclosure then required under the rules and regulations of the SEC. SECTION 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, an Officers' Certificate, one of the signatories to which shall be the principal executive officer, principal financial officer or principal accounting officer of the Company, stating that a review of the activities of the Company and its subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has fully performed its obligations under this Indenture and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms and conditions hereof (or, if a Default or Events of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Securities are prohibited. The Company will, so long as any of the Securities are outstanding, deliver to the Trustee, forthwith upon becoming aware of (i) any Default, Event of Default or default in the performance of any term or condition in this Indenture or (ii) any event of default under any other mortgage, indenture or instrument as that term is used in Section 6.01(4), an Officers' Certificate specifying such Default, Event of Default or default. So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, at the time the Officers' Certificate described in the second preceding paragraph is filed, the Company also will file with the Trustee a letter or statement of the independent accountants who shall have certified the financial statements of the Company for its preceding fiscal year in connection with the annual report of the Company to its stockholders for such year to the effect that, in making the examination necessary for certification of such financial statements, nothing came to their attention that would lead them to believe 14 23 that the Company has violated any of the terms or conditions contained in this Indenture, which Default remains uncured at the date of such letter or statement or, if they shall have obtained knowledge of any such uncured Default, specifying in such letter or statement such Default or Defaults and the nature thereof, it being understood that such accountants shall not be liable directly or indirectly for failure to obtain knowledge of any such Default or Defaults and that their examination was not directed primarily toward obtaining knowledge of such noncompliance. SECTION 4.04. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain or cause to be maintained in the City of New York an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not maintained by the Trustee. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 10.10. The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain or cause to be maintained an office or agency in the City of New York for such purpose. SECTION 4.05. RESTRICTIONS ON DIVIDENDS AND OTHER PAYMENTS. The Company shall not, directly or indirectly: (1) declare or pay any dividend on, or make any distribution to the holders (as such) of, any shares of its capital stock (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company (other than any such Equity Interests owned by any subsidiary); or 15 24 (3) permit any subsidiary to purchase, redeem or otherwise retire for value any Equity Interests of the Company (other than any such Equity Interests owned by any subsidiary) (such dividends, distributions, purchases, redemptions or other acquisitions or retirements referred to in clauses (1), (2) or (3) being collectively referred to as "Restricted Payments"), if at the time of such Restricted Payment: (i) a Default or an Event of Default shall have occurred and be continuing, or would occur as a consequence thereof, or (ii) if, upon giving effect to such Restricted Payment, the aggregate amount expended (determined as set forth below) for all such Restricted Payments subsequent to the date hereof, shall exceed the sum of: (a) a percentage of the aggregate Consolidated Net Earnings of the Company (or, in the case such aggregate shall be a loss, 100% of such loss) accrued during fiscal quarters ending subsequent to a specified date, which percentage and date will be set forth in a supplemental indenture; (b) the aggregate net proceeds, including cash, the fair market value of property other than cash (as determined by the Board of Directors as evidenced by a Board resolution) and the amount of any Indebtedness (including principal, premium and interest), received by the Company from or in exchange for the issue or sale (other than to a subsidiary), subsequent to the date hereof, of capital stock of the Company (other than Disqualified Stock), other than in connection with the exchange of the Securities; (c) the amount expended for the purchase, redemption or other acquisition or retirement for value of any preferred stock of the Company; and (d) [$_________] [or] [the amount set forth in a supplemental indenture]. For purposes of any calculation pursuant to the preceding sentence which is required to be made within 60 days after the declaration of a dividend by the Company, such dividend shall be deemed to be paid at the date of 16 25 declaration, and the subsequent payment of such dividend during such 60-day period shall not be treated as an additional Restricted Payment. For purposes of determining under clause (ii) above the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value as determined by the Board of Directors as evidenced by a Board resolution. Notwithstanding the foregoing, the provisions of this Section 4.05 will not prevent: (i) the purchase of Securities by the Company; (ii) the payment of any dividend within 60 days after the date of declaration when the payment complied with the foregoing provisions on the date of declaration; (iii) the purchase, redemption or any acquisition or retirement for value of the Preferred Stock; (iv) the retirement of any shares of the Company's capital stock by exchange for, or out of the proceeds of the substantially concurrent sale (other than to a subsidiary) of, other shares of its capital stock (other than any Disqualified Stock), and neither such retirement nor the proceeds of any such sale or exchange, to the extent used for such retirement, shall be included in any computation made under this Section 4.05; and (v) the purchase at a price of not more than $.05 per right of any rights issued or issuable pursuant to any future rights plan of the Company. SECTION 4.06. CONTINUED EXISTENCE. Subject to Article 5, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a corporation and will refrain from taking any action that would cause its existence as a corporation to cease, including without limitation any action that would result in its liquidation, winding up or dissolution. SECTION 4.07. TAXES. The Company shall, and shall cause each of its Material Subsidiaries to, pay prior to delinquency all taxes, assessments and governmental levies, except as contested in good faith and by appropriate proceedings or where the failure to do so would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. SECTION 4.08. MAINTENANCE OF PROPERTIES. The Company shall, and shall cause each of its subsidiaries to, take reasonable action to maintain in appropriate condition each of its principal properties which in the judgment of management is essential to the business operations of the Company and its subsidiaries, taken as a whole, and the loss of which would have a material adverse effect on the financial condition of the Company and its subsidiaries, taken as a whole. Nothing contained in this Section 4.08 shall prevent or restrict the sale, abandonment 17 26 or other disposition of any property which management shall deem advisable. SECTION 4.09. INSURANCE. The Company shall, and shall cause each of its subsidiaries to, take reasonable action to maintain insurance, with financially sound and reputable insurers, to the extent and against such hazards as may be deemed appropriate by management (giving effect to self-insurance), on each of its principal properties the loss of which, in the judgment of management, would have a material adverse effect on the financial condition of the Company and its subsidiaries, taken as a whole. SECTION 4.10. INVESTMENT COMPANY ACT. The Company shall not become an investment company subject to registration under the Investment Company Act of 1940, as amended. SECTION 4.11. CHANGE OF CONTROL. Following the occurrence of any Change of Control, the Company shall offer (a "Change of Control Offer") to purchase all outstanding Securities at a purchase price equal to [101%] of the aggregate principal amount of the Securities, plus accrued and unpaid interest to the date of purchase. The Change of Control Offer shall be deemed to have commenced upon mailing of the notice described in the next succeeding paragraph and shall terminate 20 Business Days after its commencement, unless a longer offering period is required by law. Promptly after the termination of the Change of Control Offer (the "Change of Control Payment Date"), the Company shall purchase and mail or deliver payment for all Securities tendered in response to the Change of Control Offer. If the Change of Control Payment Date is on or after an interest payment record date and on or before the related interest payment date, any accrued interest will be paid to the person in whose name a Security is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Securities pursuant to the Change of Control Offer. Within 30 days after any Change of Control, the Company (with notice to the Trustee), or the Trustee upon reasonable notice and at the Company's request (and at the expense of the Company), will mail or cause to be mailed to all Holders on the date of the Change of Control a notice of the occurrence of such Change of Control and of the Holders' rights arising as a result thereof. Such notice will contain all instructions and materials necessary to enable Holders to tender their Securities to the Company. Such notice, which shall govern the terms of the Change of Control Offer, shall state: 18 27 (1) that the Change of Control Offer is being made pursuant to this Section 4.11 and the length of time the Change of Control Offer will remain open; (2) the purchase price and the Change of Control Payment Date; (3) that any Security not tendered will continue to accrue interest; (4) that any Security accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on the Change of Control Payment Date; (5) that any Security accepted for payment pursuant to any Change of Control Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice prior to termination of the Change of Control Offer; (6) that Holders will be entitled to withdraw their election if the Company, depositary or Paying Agent, as the case may be, receives, not later than the expiration of the Change of Control Offer, or such longer period as may be required by law, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Holder is withdrawing his or her election to have the Security purchased; and (7) that Holders whose Securities are purchased only in part will be issued Securities equal in principal amount to the unpurchased portion of the Securities surrendered. On or before a Change of Control Payment Date, the Company shall, to the extent lawful, (i) if the Company appoints a depositary or Paying Agent, deposit with such depositary or Paying Agent money sufficient to pay the purchase price of all Securities tendered, (ii) deliver or cause the depositary or Paying Agent to deliver to the Trustee Securities so tendered and (iii) deliver an Officers' Certificate identifying the Securities accepted for payment by the Company in accordance with the terms of this Section 4.11. The depositary, the Paying Agent or the Company, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Securities tendered by such Holder and accepted by the Company for purchase. The Company will publicly announce the 19 28 results of the Change of Control Offer on the Change of Control Payment Date. Any Change of Control Offer will be conducted in compliance with applicable tender offer rules, including Section 14(e) of the Exchange Act and Rule 14e-1 thereunder.* SECTION 4.12. LIMITATION IN RANKING OF FUTURE INDEBTEDNESS. The Company will not incur any Indebtedness which is subordinated by the terms of the instrument creating such Indebtedness in right of payment to any Senior Indebtedness of the Company and which is not expressly by the terms of the instrument creating such Indebtedness made pari passu with, or subordinate and junior in right of payment to, the Securities. ARTICLE 5 SUCCESSORS SECTION 5.01 WHEN THE COMPANY MAY MERGE, ETC. The Company shall not consolidate or merge with or into, or sell, lease, convey or otherwise dispose of all or substantially all of its assets to, any person unless: (1) the corporation formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, lease, conveyance or other disposition shall have been made, is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia; (2) the corporation formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, lease, conveyance or other disposition shall have been made, assumes by supplemental indenture all the obligations of the Company under the Securities and this Indenture; and (3) immediately after the transaction no Default or Event of Default exists. - -------- * Additional substantive covenants may be added. 20 29 The Company shall deliver to the Trustee prior to the consummation of the proposed transaction an Officers' Certificate to the foregoing effect and an Opinion of Counsel stating that the proposed transaction and such supplemental indenture comply with this Indenture. SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01, the successor entity formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor entity had been named as the Company herein; provided, however, that the predecessor Company in the case of a sale, lease, conveyance or other disposition shall not be released from the obligation to pay the principal of and interest on the Securities. SECTION 5.03. PURCHASE OPTION ON CHANGE OF CONTROL. This Article 5 does not affect the obligations of the Company (including without limitation any successor to the Company) under this Indenture. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" with respect to any Securities occurs if: (1) the Company defaults in the payment of interest on any Security when the same becomes due and payable and the Default continues for a period of 30 days; (2) the Company defaults in the payment of the principal of and premium, if any, on any Security when the same becomes due and payable at maturity, upon redemption or otherwise; (3) the Company fails to comply with any of its other agreements or covenants in, or provisions of, the Securities or this Indenture and the Default continues for the period and after the notice specified below; 21 30 (4) an event of default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any Material Subsidiary (or the payment of which is guaranteed by the Company or a Material Subsidiary), whether such Indebtedness or guarantee now exists or shall be created hereafter, other than Indebtedness which is or will be non-recourse to the Company or a Material Subsidiary, if (a) either (i) such event of default results from the failure to pay any such Indebtedness at maturity or (ii) as a result of such event of default the maturity of such Indebtedness has been accelerated prior to its expressed maturity and (b) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at maturity or the maturity of which has been so accelerated, aggregates [$_______] [the amount set forth in a supplemental indenture] or more; provided, however, that if such event of default shall be remedied, cured or waived, then the Event of Default hereunder by reason of such event of default shall be deemed likewise to have been remedied, cured or waived without further action by the Trustee or any of the Securityholders; or (5) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any Material Subsidiary which remains undischarged for a period (during which execution shall not be effectively stayed) of 60 days, provided that the aggregate of all such judgments exceeds [$__________] [the amount set forth in a supplemental indenture]; (6) the Company or any Material Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, (D) makes a general assignment for the benefit of its creditors, or (E) generally is unable to pay its debts as the same become due; 22 31 (7) a court of competent jurisdiction enters a judgment, order or decree under any Bankruptcy Law that: (A) is for relief against the Company or any Material Subsidiary in an involuntary case, (B) appoints a Custodian of the Company or any Material Subsidiary or for all or substantially all of their respective properties, or (C) orders the liquidation of the Company or any Material Subsidiary, and the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means title 11, U.S. Code or any similar federal or state Law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. A Default under clause (3) (other than Defaults under Section 4.05, 4.06[, or] 5.01 [or, with respect to the right to convert Securities, Article XII], which Defaults shall be Events of Default with the notice but without the passage of time specified in this paragraph), (4) or (5) is not an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the then outstanding Securities notify the Company of the Default and the Company does not cure the Default within 60 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of Default specified in clauses (6) and (7) of Section 6.01) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the then outstanding Securities by notice to the Company and the Trustee, may declare the unpaid principal of and accrued interest on all the Securities to be due and payable. Upon such declaration the principal and interest shall be due and payable immediately. If an Event of Default specified in clause (6) or (7) of Section 6.01 occurs, such an amount shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of a majority in principal amount of the then outstanding Securities by notice to the Trustee may rescind an acceleration and its consequences, except nonpayment of principal or interest on the Securities, if the rescission would not conflict with any judgment or decree. 23 32 SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in principal amount of the then outstanding Securities by notice to the Trustee may waive an existing Default or Event of Default and its consequences except a continuing Default or Event of Default in the payment of the principal of or interest on any Security. When a Default is waived, it is cured and stops continuing. SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in principal amount of the then outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability. SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not pursue any remedy with respect to this Indenture or the Securities unless: (1) the Holder gives to the Trustee notice of a continuing Event of Default; (2) the Holders of at least 25% in principal amount of the then outstanding Securities make a request to the Trustee to pursue the remedy; 24 33 (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) during such 60-day period the Holders of a majority in principal amount of the then outstanding Securities do not give the Trustee a direction inconsistent with the request. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT [AND TO CONVERT SECURITIES]. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal and interest on the Security, on or after the respective due dates expressed in the Security[, to convert the Security as and to the extent permitted by this Indenture and the terms of the Security] or to bring suit for the enforcement of any such payment [or of the right to convert the Security] on or after such respective dates, shall not be impaired or affected without the consent of the Holder. SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and interest remaining unpaid on the Securities and interest on overdue principal and interest and such further amount as shall be sufficient to cover the costs and, to the extent lawful, expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Company, its creditors or its property. Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, 25 34 arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding. SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; Second: to holders of Senior Indebtedness to the extent required by Article 11; Third: to Securityholders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and Fourth: to the Company. The Trustee may fix a record date and payment date for any payment to Securityholders. SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the then outstanding Securities. ARTICLE 7 THE TRUSTEE The Trustee hereby accepts the trust imposed upon it by this Indenture and covenants and agrees to perform the same, as herein expressed. 26 35 SECTION 7.01. DUTIES OF THE TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) Except during the continuance of an Event of Default: (1) The Trustee need perform only those duties that are specifically set forth in this Indenture and no others; and (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) of this Section; (2) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. 27 36 (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.02. RIGHTS OF THE TRUSTEE. (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in such a document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate, an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (e) The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of 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 reliance thereon. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. SECTION 7.03. INDIVIDUAL RIGHTS OF THE TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11. 28 37 SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities and it shall not be responsible for any statement in the Indenture or any statement in the Securities other than its authentication. SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Securityholder a notice of the Default within 90 days after it occurs. Except in the case of a Default in payment on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders. SECTION 7.06. REPORTS BY THE TRUSTEE TO HOLDERS. Within 60 days after the reporting date stated in Section 10.10, the Trustee shall mail to Securityholders a brief report dated as of such reporting date that complies with TIA Section 313(a), if such report is required by TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c). A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange on which the Securities are listed. The Company shall promptly notify the Trustee when the Securities are listed on any stock exchange. SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the Trustee from time to time such compensation as shall be agreed in writing between the Company and the Trustee for its services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses may include the reasonable compensation and out-of-pocket expenses of the Trustee's agents and counsel. The Company shall indemnify each of the Trustee and any successor Trustee against any loss, damage, claims, liability or out-of-pocket expenses, including taxes (other than taxes based on the income, revenues or receipts of the Trustee) incurred by it in connection with the acceptance (with respect to legal fees and other out-of-pocket expenses of the Trustee 29 38 in connection with the acceptance of the trust or trusts hereunder, to the extent provided in the writing provided for in this Section 7.07) or administration of the trust or trusts hereunder, except as set forth in the next paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim with counsel, who may be outside counsel to the Company but shall in all events be reasonably satisfactory to the Trustee, and the Trustee shall cooperate in the defense. In addition, if the Company does not so defend the Trustee or if at any time the counsel so selected is ethically prohibited from representing the Trustee (whether because of a conflict of interest or the provisions of the TIA), then the Trustee may retain one separate counsel and the Company shall pay the reasonable fees and expenses of such separate counsel. The indemnification herein extends to any settlement, provided that the Company will not be liable for any settlement made without its consent, provided further that such consent will not be unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith. To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on Securities. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(6) or (7) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. The provisions of this Section 7.07 shall survive the termination of this Indenture. SECTION 7.08. REPLACEMENT OF THE TRUSTEE. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Securities may remove the Trustee by so notifying the removed Trustee and the Company and may appoint a successor Trustee with the Company's consent. The Company may remove the Trustee if: 30 39 (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (3) a Custodian or public officer takes charge of the Trustee or its property; or (4) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the then outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The removed or retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee with respect to expenses and liabilities incurred by it prior to such replacement. SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. 31 40 SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1). The Trustee shall always have a combined capital and surplus as stated in Section 10.10. The Trustee is subject to TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9). SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship set forth in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS. (a) This Indenture shall cease to be of further effect (except that the Company's obligations under Section 7.07 and 8.03 shall survive) when all outstanding Securities theretofore authenticated and issued have been delivered (other than destroyed, lost or stolen Securities that have been replaced or paid) to the Trustee for cancellation and the Company has paid all sums payable hereunder. In addition, the Company may elect to have either paragraph (b) or paragraph (c) below be applied to the outstanding Securities upon compliance with the conditions set forth in paragraph (d). (b) Upon the Company's exercise under paragraph (a) of the option applicable to this paragraph (b), the Company shall be deemed to have been released and discharged from its obligations with respect to the outstanding Securities on the date the conditions set forth below are satisfied ("legal defeasance"). For this purpose, legal defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the outstanding Securities, which shall thereafter be deemed to be "outstanding" only for the purposes of the Sections of and matters under this Indenture referred to in (i) and (ii) below, and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following, which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of outstanding Securities to receive solely from the trust fund described in paragraph (d) below and as more fully set forth in such paragraph, payments in respect of the principal of, 32 41 premium, if any, and interest on such Securities when such payments are due, (ii) the Company's obligations with respect to such Securities under Sections 2.06, 2.07 and 4.04, and, with respect to the Trustee, under Section 7.07, (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (iv) this Section 8.01. Subject to compliance with this Section 8.01, the Company may exercise its option under this paragraph (b) notwithstanding the prior exercise of its option under paragraph (c) below with respect to the Securities. (c) Upon the Company's exercise under paragraph (a) of the option applicable to this paragraph (c), the Company shall be released and discharged from its obligations under any covenant contained in Article 5 and in Sections 4.02 through 4.12 with respect to the outstanding Securities on and after the date the conditions set forth below are satisfied ("covenant defeasance"), and the Securities shall thereafter be deemed to be not "outstanding" for the purpose of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to the outstanding Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby. (d) The following shall be the conditions to the application of either paragraph (b) or (c) above to the outstanding Securities: (1) the Company has irrevocably deposited in trust with the Trustee or, at the option of the Trustee, with a trustee, satisfactory to the Trustee and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, money or United States Government Obligations (defined below in this Section 8.01) sufficient to pay principal and interest on the Securities to maturity and all other sums payable by it hereunder; provided that (i) the trustee of the irrevocable trust shall have been irrevocably instructed to pay such money or the proceeds of such United States Government Obligations to the Trustee and (ii) the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such United States Government Obligations to the payment of said principal and interest with respect to the Securities; 33 42 (2) the Company has delivered to the Trustee an Officers' Certificate stating that (A) all conditions precedent provided for relating to either the legal defeasance under paragraph (b) above or the covenant defeasance under paragraph (c) above, as the case may be, have been complied with and (B) if any other Indebtedness of the Company shall then be outstanding or committed, such legal defeasance or covenant defeasance will not violate the provisions of the agreements or instruments evidencing such Indebtedness; (3) no Default or Event of Default shall have occurred and be continuing on the date of such deposit; (4) such legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a Default or Event of Default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (5) in the case of an election under paragraph (b) above, the Company shall have delivered to the Trustee an Opinion of Counsel from nationally recognized counsel acceptable to the Trustee stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that the Holders of the outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such legal defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same time as would have been the case if such legal defeasance had not occurred; and (6) in the case of an election under paragraph (c) above, the Company shall have delivered to the Trustee an Opinion of Counsel from nationally recognized counsel acceptable to the Trustee (i) to the effect that the Holders of the outstanding Securities will not recognize income, gain or loss for federal income tax on the same amount and in the same manner and at the same time as would have been the case if such covenant defeasance had not occurred or (ii) that the Company has received from, or there has been published by, the Internal Revenue Service a ruling to the foregoing effect. After such irrevocable deposit made pursuant to this Section 8.01 and satisfaction of the other conditions set forth herein, the Trustee upon request 34 43 shall acknowledge in writing the discharge of the Company's obligations under this Indenture except for those surviving obligations specified above. As used herein, "United States Government Obligations" means direct obligations of the United States of America for the payment of which the full faith and credit of the United States of America is pledged. In order to have money available on a payment date to pay principal or interest on the Securities, the United States Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. United States Government Obligations shall not be callable at the issuer's option. SECTION 8.02. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust money or United States Government Obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from United States Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal and interest on the Securities. Money and securities so held in trust are not subject to Article 11. SECTION 8.03. REPAYMENT TO COMPANY. Subject to Section 8.01(d), the Trustee and the Paying Agent shall promptly pay to the Company upon written request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years after the date upon which such payment shall have become due; provided, however, that the Company shall have first caused notice of such payment to the Company to be mailed to each Securityholder entitled thereto no less than 30 days prior to such payment. After payment to the Company, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person. SECTION 8.04. REINSTATEMENT. If (i) the Trustee or Paying Agent is unable to apply any money in accordance with Section 8.02 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application and (ii) the Holders of at least a majority in principal amount of the then outstanding Securities so request by written notice to the Trustee, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had 35 44 occurred pursuant to Section 8.01 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02; provided, however, that if the Company makes any payment of interest on or principal of any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE 9 AMENDMENTS SECTION 9.01. WITHOUT THE CONSENT OF HOLDERS. The Company and the Trustee may amend this Indenture or the Securities without notice to or the consent of any Securityholder: (1) to cure any ambiguity, defect or inconsistency; (2) to comply with Section[s] 5.01 [and 12.18]; (3) to provide for uncertificated Securities in addition to certificated Securities; (4) to make any change that does not adversely affect the legal rights hereunder of any Securityholder; (5) to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as the Company and the Trustee shall consider to be for the protection of the Securityholders, 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 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 Securityholders to waive such an Event of Default; (6) to surrender any right or power herein conferred upon the Company; 36 45 (7) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of the Indenture under the TIA, or under any similar federal statute hereafter enacted; or (8) before any Securities are issued, to make any other change in this Indenture not prohibited by the TIA. SECTION 9.02. WITH THE CONSENT OF HOLDERS. Subject to Section 6.07, the Company and the Trustee may amend this Indenture or the Securities with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities. Subject to Sections 6.04 and 6.07, the Holders of a majority in principal amount of the Securities then outstanding may also waive compliance in a particular instance by the Company with any provision of this Indenture or the Securities. However, without the consent of each Securityholder affected, an amendment or waiver under this Section may not: (1) reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver; (2) reduce the rate of or change the time for payment of interest on any Security; (3) reduce the principal of or change the fixed maturity of any Security or alter the redemption provisions with respect thereto; (4) make any Security payable in money other than that stated in the Security; (5) make any change in Section 6.04, 6.07 or 9.02 (this sentence); [or] (6) waive a default in the payment of the principal of, or interest on, any Security [or any default under Article 12; or] (7) make any change that adversely affects the right to convert any Security]. To secure a consent of the Holders under this Section, it shall not be necessary for the Holders to approve the particular form of any proposed 37 46 amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment or waiver under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing the amendment or waiver. After the issuance of any Securities, an amendment under this Section or under Section 9.01 may not make any change that adversely affects in any material respect the rights under Article 11 of the holders of Senior Indebtedness, unless such holders consent to the change. SECTION 9.03. COMPLIANCE WITH THE TRUST INDENTURE ACT. Every amendment to this Indenture or the Securities shall be set forth in a supplemental indenture that complies with the TIA as then in effect. SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his or her Security or portion of a Security if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers' Certificate certifying that the Holders of the requisite principal amount of Securities have consented to the amendment or waiver. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment or waiver. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those persons who were Holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment or waiver or to revoke any consent previously given, whether or not such persons continue to be Holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period. After an amendment or waiver becomes effective it shall bind every Securityholder, unless it is of the type described in any of clauses (1) 38 47 through (7) of Section 9.02. In such case, the amendment or waiver shall bind each Holder of a Security who has consented to it. SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. The Trustee may place an appropriate notation about an amendment or waiver on any Security thereafter authenticated. The Company in exchange for all Securities may issue and the Trustee shall authenticate new Securities that reflect the amendment or waiver. SECTION 9.06. THE TRUSTEE PROTECTED. The Trustee shall sign all supplemental indentures, except that the Trustee need not sign any supplemental indenture that adversely affects its rights. The Company may not sign an amendment or supplement until the Board of Directors approves it. The Trustee, subject to Sections 7.01 and 7.02, shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that any amendment, supplement or waiver is authorized or permitted by this Indenture and complies with the provisions of this Article 9. ARTICLE 10 GENERAL PROVISIONS SECTION 10.01. TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA as in effect at the date hereof or, to the extent required by law, as amended after the date hereof, the required provision shall control. SECTION 10.02. NOTICES. Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail to the other's address stated in Section 10.10. The Company or the Trustee by notice to the other may designate an additional or different address for subsequent notices or communications. Any notice or communication to a Securityholder shall be mailed by first class mail to his or her address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. 39 48 If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Securityholders, it shall mail a copy to the Trustee and each Agent at the same time. All other notices or communications shall be in writing. SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Securityholders may communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officers' Certificate stating that, in the opinion of the Company, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of the Company, such person has made such examination or investigation as is necessary to enable him or her to express an informed opinion as 40 49 to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of the Company, such condition or covenant has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers' Certificate. SECTION 10.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or a meeting of Securityholders. The Registrar [, or] Paying Agent [or Conversion Agent] may make reasonable rules and set reasonable requirements for its functions. SECTION 10.07. LEGAL HOLIDAYS; BUSINESS DAYS. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in the City of New York or in the city in which the principal office of the Trustee is located are not required to be open, and a "Business Day" is any day that is not a Legal Holiday. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 10.08. NO RECOURSE AGAINST OTHERS. No director, officer, employee or shareholder, as such, of the Company shall have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the Securities. SECTION 10.09. COUNTERPARTS. This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. SECTION 10.10. OTHER PROVISIONS. "Officer" means Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Accounting Officer, 41 50 any Executive Vice President, Senior Vice President, any Vice President, the Treasurer, any other Executive Officer, the Secretary, any Assistant Treasurer or any Assistant Secretary of the Company. The Company initially appoints the Trustee as Paying Agent, Registrar and authenticating agent. The first certificate pursuant to Section 4.03 shall be for the fiscal year ending on the first June 30 following the issuance of Securities hereunder, but in no event later than one year after the date hereof. The reporting date for Section 7.06 is September 15 of each year. The first reporting date is the first September 15 following the issuance of Securities hereunder. The Trustee shall always have a combined capital and surplus of at least $10,000,000 as set forth in its most recent published annual report of condition. The Company's address is: Del Webb Corporation 6001 24th Street Phoenix, AZ 85016 Attention: General Counsel The Trustee's address [for purposes of Sections 2.03 and 4.04] is: [Bank of Montreal Trust Company 88 Pine Street, 19th Floor New York, New York 10005 and for all other purposes hereunder is: ------------------------------------ ------------------------------------ ------------------------------------ Attn.: Corporate Trust Department.] SECTION 10.11. GOVERNING LAW. The internal laws of the State of New York shall govern this Indenture, the Securities, and all disputes arising under or related to either of them, without regard to the choice or conflicts of laws provisions thereof. If any action or proceeding shall be brought by a Holder of any of the Securities or by the Trustee in order to enforce any right or remedy under this Indenture 42 51 or under the Securities, the Company hereby consents and will submit to the jurisdiction of the courts of the State of New York sitting in the City of New York or any federal court sitting in the City of New York. The Company hereby agrees to accept service of process by notice given to it pursuant to the provisions of Section 10.02. SECTION 10.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a subsidiary. Any such other indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 10.13. SUCCESSORS. All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. SECTION 10.14. SEVERABILITY. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.15. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. ARTICLE 11 SUBORDINATION SECTION 11.01. AGREEMENT TO SUBORDINATE. The Company agrees, and each Securityholder by accepting a Security agrees, that the indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner provided in this Article, to the prior payment in full of all Senior Indebtedness and that the subordination is for the benefit of the holders of Senior Indebtedness. 43 52 SECTION 11.02. CERTAIN DEFINITIONS. "Indebtedness" of any person, means any indebtedness, contingent or otherwise, in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such person or only to a portion thereof), evidenced by bonds, notes, debentures or similar instruments or letters of credit or representing the balance deferred and unpaid of the purchase price of any property or interest therein (except any such balance that constitutes a trade payable), all capitalized lease obligations and all direct or indirect obligations which arise as a result of claims under or drawings pursuant to surety, performance, completion or maintenance bonds. "Representative" means the indenture trustee or other trustee, agent or representative for an issue of Senior Indebtedness. "Senior Indebtedness" means all Indebtedness (present or future) created, incurred, assumed or guaranteed by the Company (and all renewals, extensions or refundings thereof), unless the instrument under which such Indebtedness is created, incurred, assumed or guaranteed provides that such Indebtedness is not senior or superior in right of payment to the Securities. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness shall not include (i) any Indebtedness of the Company to any of its subsidiaries, (ii) any trade payables of the Company or (iii) guarantees by the Company of Indebtedness (a) outstanding at the date hereof or (b) which may be outstanding in the future, except that Senior Indebtedness shall include any guarantees as may be listed in a supplemental indenture and any other present and future guarantees that provide by their terms that they constitute Senior Indebtedness. SECTION 11.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property: (1) holders of Senior Indebtedness shall be entitled to receive payment in full in cash of the principal of and interest (including interest accruing after the commencement of any such proceeding) to the date of payment on the Senior Indebtedness before Securityholders shall be entitled to receive any payment of principal of or interest on Securities; and (2) until the Senior Indebtedness is paid in full in cash, any distribution to which Securityholders would be entitled but for this Article shall be made to holders of Senior Indebtedness 44 53 as their interests may appear, except that Securityholders may receive securities that are subordinated to Senior Indebtedness to at least the same extent as the Securities. For purposes of this Article 11, a distribution may consist of cash, securities or other property, by set-off or otherwise. SECTION 11.04. DEFAULT ON SENIOR INDEBTEDNESS. Upon the final maturity of any Senior Indebtedness by lapse of time, acceleration or otherwise, all such Senior Indebtedness shall first be paid in full, or such payment duly provided for in cash or in a manner satisfactory to the holders of such Senior Indebtedness, before any payment is made by the Company or any person acting on behalf of the Company on account of the principal or interest of the Securities. The Company may not pay principal of or interest on the Securities and may not acquire any Securities for cash or property (other than capital stock of the Company or other securities of the Company that are subordinated to Senior Indebtedness to at least the same extent as the Securities) if: (1) a default on Senior Indebtedness occurs and is continuing that permits holders of such Senior Indebtedness to accelerate its maturity, and (2) the default is the subject of judicial proceedings or the Company receives a notice of the default from a person who may give it pursuant to Section 11.12, provided that, if the Company receives any such notice, a subsequent notice received within nine months thereafter shall not be effective for purposes of this Section. The Company shall resume payments on the Securities and may acquire them when: (a) the default is cured or waived, or (b) 180 days pass after the notice is given if the default is not the subject of judicial proceedings, if this Article otherwise permits the payment or acquisition at that time. SECTION 11.05. ACCELERATION OF SECURITIES. If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Indebtedness 45 54 of the acceleration. The Company shall pay the Securities when 180 days pass after the acceleration occurs if this Article permits the payment at that time; provided, however, that if no Senior Indebtedness is outstanding at the time of such acceleration, the Company shall pay the Securities in accordance with the provisions of Article 6. SECTION 11.06. WHEN DISTRIBUTIONS MUST BE PAID OVER. In the event that the Company shall make any payment to the Trustee on account of the principal or interest on the Securities at a time when such payment is prohibited by Section 11.03 or 11.04, such payment shall be held by the Trustee in trust for the benefit of, and shall forthwith be paid over and delivered to, the holders of Senior Indebtedness (pro rata as to each of such holders on the basis of the respective amounts of Senior Indebtedness held by them) or their Representative under the indenture or other agreement (if any) pursuant to which Senior Indebtedness may have been issued, as their respective interests may appear, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness. If a distribution is made to Securityholders that because of this Article should not have been made to them, the Securityholders who receive the distribution shall hold it in trust for holders of Senior Indebtedness and pay it over to them as their interests may appear. SECTION 11.07. NOTICE BY THE COMPANY. The Company shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of principal of or interest on the Securities to violate this Article, but failure to give such notice shall not affect the subordination of the Securities to the Senior Indebtedness provided in this Article. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07. SECTION 11.08. SUBROGATION. After all Senior Indebtedness is paid in full and until the Securities are paid in full, Securityholders shall be subrogated to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the Securityholders have been applied to the payment of Senior Indebtedness. A distribution made under this Article to holders of Senior Indebtedness which otherwise would have been made to Securityholders is not, as 46 55 between the Company and Securityholders, a payment by the Company on Senior Indebtedness. SECTION 11.09. RELATIVE RIGHTS. This Article defines the relative rights of Securityholders and holders of Senior Indebtedness. Nothing in this Indenture shall: (1) impair, as between the Company and Securityholders, the obligation of the Company, which is absolute and unconditional, to pay principal of and interest on the Securities in accordance with their terms; (2) affect the relative rights of Securityholders and creditors of the Company, other than holders of Senior Indebtedness; or (3) prevent the Trustee or any Securityholder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders of Senior Indebtedness to receive distributions otherwise payable to Securityholders. If the Company fails because of this Article to pay principal of or interest on Security on the due date, the failure is still a Default or Event of Default. SECTION 11.10. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY. No right of any holder of Senior Indebtedness to enforce the subordination of the indebtedness evidenced by the Securities shall be impaired by any act or failure to act by the Company or by its failure to comply with this Indenture. SECTION 11.11. DISTRIBUTION OR NOTICE TO THE REPRESENTATIVE. Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representative. SECTION 11.12. RIGHTS OF THE TRUSTEE AND PAYING AGENT. Notwithstanding any provision of this Article 11 or any other provision of this Indenture, the Trustee and Paying Agent 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 or a Paying Agent or the 47 56 taking of any other action (pursuant to this Article 11) by the Trustee or a Paying Agent unless and until the Trustee or such Paying Agent, as the case may be, shall have received at its office specified in Section 10.10 written notice thereof from the Company, a Representative or a holder of Senior Indebtedness and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Sections 7.01 and 7.02, and such Paying Agent, shall be entitled in all respects conclusively to assume that no such fact exists. The Trustee or Paying Agent may continue to make payments on the Securities unless it receives such a notice at least three business days prior to the date upon which payment is due. The Trustee shall be entitled to reasonably rely in good faith on the delivery to it of a written notice by a person representing himself, herself or itself to be a Representative or a holder of Senior Indebtedness to establish that such notice has been given by a Representative or a holder of such Senior Indebtedness. Only the Company, a Representative or a holder of Senior Indebtedness that has no Representative may give the notice. 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 Indebtedness to participate in any payment or distribution pursuant to this Article 11, 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, 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 11, and if such evidence is not furnished, the Trustee may defer any payment which it may be required to make for the benefit of such person pursuant to the terms of this Indenture pending judicial determination as to the rights of such person to receive such payment. Upon any payment or distribution of assets of the Company referred to in this Article 11, the Trustee and the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, liquidating trustee, Custodian, receiver, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining the persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 11. 48 57 The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. SECTION 11.13 NO FIDUCIARY DUTY TO HOLDERS OF SENIOR INDEBTEDNESS. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 11, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against the Trustee or Paying Agent. Neither the Trustee nor the Paying Agent shall be deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and, subject to the provisions of Section 7.02, the Trustee shall not be liable to any holder of such Senior Indebtedness if it shall, in the absence of bad faith, pay over or deliver to holders of Securities, the Company or any other person monies or assets to which any holder of such Senior Indebtedness shall be entitled by virtue of this Article 11 or otherwise. [ARTICLE 12 CONVERSION SECTION 12.01. CONVERSION PRIVILEGE. For the purpose of this Article XII and paragraph 17 of the Securities, ["Common Stock" means the common stock of the Company as it exists on the date of this Indenture or as it may be constituted from time to time.] [and] ["Preferred Stock" means the Series __ Preferred Stock of the Company]. A Holder of a Security may convert it into [Preferred] [Common] Stock at any time during the period stated in paragraph 17 of the Securities. The number of shares issuable upon conversion of a Security is determined as follows: (i) divide the principal amount to be converted by the conversion price in effect on the conversion date; then (ii) round the result to the nearest 1/100th of a share. The initial conversion price is stated in paragraph 17 of the Securities. The conversion price is subject to adjustment. A Holder may convert a portion of a Security if the portion is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to conversion of all of a Security also apply to conversion of a portion of it. 49 58 SECTION 12.02. CONVERSION PROCEDURE. To convert a Security a Holder must satisfy the requirements in paragraph 17 of the Securities. The date on which the Holder satisfies all those requirements is the conversion date. As soon as practical, the Company shall deliver through the Conversion Agent a certificate for the number of full shares of [Preferred] [Common] Stock issuable upon the conversion and a check for any fractional share. The person in whose name the certificate is registered shall be treated as a stockholder of record on and after the conversion date. No payment or adjustment will be made for accrued interest on a converted Security or dividends on any [Preferred] [Common] Stock issued. However, interest will be paid on any interest payment date with respect to Securities surrendered for conversion after a record date for the payment of interest to the registered Holder on such record date. If a Holder converts more than one Security at the same time, the number of full shares issuable upon the conversion shall be based on the total principal amount of the Securities converted. Upon a surrender of a Security that is converted in part, the Company shall issue and the Trustee shall authenticate for the Holder a new Security equal in principal amount to the unconverted portion of the Security surrendered. If the last day on which a Security may be converted is a Legal Holiday in a place where a Conversion Agent is located, the Security may be surrendered to that Conversion Agent on the next succeeding day that is not a Legal Holiday. SECTION 12.03. FRACTIONAL SHARES. The Company will not issue a fractional share of [Preferred] [Common] Stock upon conversion of a Security. Instead the Company will deliver its check for the current market value of the fractional share. The current market value of a fraction of a share is determined as follows: (i) multiply the current market price of a full share by the fraction; then (ii) round the result to the nearest cent. The current market price of a share of [Preferred] [Common] Stock is the Quoted Price of the [Preferred] [Common] Stock on the last trading day prior to the conversion date. As used in Sections 12.03 and 12.11, the "Quoted Price" of the Common Stock is the last reported sales price of the [Preferred] [Common] Stock on the New York Stock Exchange or such other securities exchange on which the [Preferred] [Common] Stock may 50 59 then be listed, or if the Common Stock is not listed on a securities exchange, the last reported sales price of the [Preferred] [Common] Stock as reported by NASDAQ, National Market System or if neither so reported or listed, the last reported bid price of the [Preferred] [Common] Stock. In the absence of such a quotation, the Company shall determine the current market price on the basis of such quotations or other information as it considers appropriate. SECTION 12.04. TAXES ON CONVERSION. If a Holder of a Security converts it, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of [Preferred] [Common] Stock upon the conversion. However, the Holder shall pay any such tax which is due because the shares are issued in a name other than the Holder's name. SECTION 12.05. COMPANY TO PROVIDE STOCK. The Company has reserved and shall continue to reserve out of its authorized but unissued [Preferred] [Common] Stock or its [Preferred] [Common] Stock held in treasury enough shares of [Preferred] [Common] Stock to permit the conversion of the Securities in full. All shares of [Preferred] [Common] Stock which may be issued upon conversion of the Securities shall be fully paid and non-assessable. The Company will endeavor to comply with all securities laws regulating the offer and delivery of shares of [Preferred] [Common] Stock upon conversion of Securities and will endeavor to list such shares on each national securities exchange on which the [Preferred] [Common] Stock is listed. SECTION 12.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. Subject to Section 12.18, if the Company: (1) pays a dividend or makes a distribution on its [Preferred] [Common] Stock in shares of its [Preferred] [Common] Stock; (2) subdivides its outstanding shares of [Preferred] [Common] Stock into a greater number of shares; (3) combines its outstanding shares of [Preferred] [Common] Stock into a smaller number of shares; 51 60 (4) makes a distribution on its [Preferred] [Common] Stock in shares of its capital stock other than [Preferred] [Common] Stock; or (5) issues by reclassification of its [Preferred] [Common] Stock any shares of its capital stock; then the conversion privilege and the conversion price in effect immediately prior to such action shall be adjusted so that the Holder of a Security thereafter converted may receive the number of shares of capital stock of the Company which he would have owned immediately following such action if he had converted the Security immediately prior to such action. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment a Holder of a Security upon conversion of it may receive shares of two or more classes of capital stock of the Company, the Company shall determine the allocation of the adjusted conversion price between the classes of capital stock. After such allocation, the conversion privilege and the conversion price of each class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to [Preferred] [Common] Stock in this Article. SECTION 12.07. ADJUSTMENT FOR RIGHTS ISSUE. If the Company distributes any rights or warrants [other than the Warrants (the "Warrants") which are issued as part of unit consisting of Warrants and the Securities] to all holders of its [Preferred] [Common] Stock entitling them for a period expiring within 60 days after the record date mentioned below to purchase shares of [Preferred] [Common] Stock at a price per share less than the current market price per share on that record date, the conversion price shall be adjusted in accordance with the formula set forth below and the paragraph following such formula: N x P ------ C' = C x O + M ------------------ O + N where: C' = the adjusted conversion price. C = the current conversion price. 52 61 O = the number of shares of [Preferred] [Common] Stock outstanding on the record date. N = the number of additional shares of [Preferred] [Common] Stock offered. P = the offering price per share of the additional shares. M = the current market price per share of [Preferred] [Common] Stock on the record date. The adjustment shall be made successively whenever any such rights become exercisable or such warrants are issued and shall become effective immediately after the rights become exercisable or after the record date for the determination of stockholders entitled to receive the warrants. If at the end of the period during which such warrants or rights are exercisable, not all warrants or rights shall have been exercised, the conversion price shall be immediately readjusted to what it would have been if "N" in the above formula had been the number of shares actually issued. SECTION 12.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company distributes to all holders of its [Preferred] [Common] Stock (as such) any of its assets or debt securities or any rights or warrants to purchase assets, debt securities or other securities of the Company, the conversion price shall be adjusted in accordance with the formula set forth below and the paragraph following such formula: C' = C x M - F ----- M where: C' = the adjusted conversion price. C = the current conversion price. M = the current market price per share of [Preferred] [Common] Stock on the record date mentioned below. F = the fair market value on the record date of the assets, securities, rights or warrants applicable to one share of [Preferred] [Common] Stock. The Board of Directors shall determine the fair market value. 53 62 The adjustment shall be made successively whenever any such rights become exercisable or any such distribution (other than of such rights) is made and shall become effective immediately after any such rights become exercisable (as to rights) or after the record date for the determination of stockholders entitled to receive the distribution (as to other distributions). Notwithstanding the foregoing, no adjustment shall be made in the event that rights become exercisable if and to the extent Holders of Securities have received or are entitled to receive such rights upon conversion. In addition, to the extent the rights or warrants expire unexercised, then the conversion price shall be promptly readjusted to the conversion price which would then be in effect had the adjustment been made based on the number of rights or warrants exercised. This Section does not apply to regular cash dividends or cash distributions paid out of consolidated current earnings as shown on the books of the Company. Also, this Section does not apply to rights or warrants referred to in Section 12.07, including the Warrants. SECTION 12.09. ADJUSTMENT FOR [PREFERRED] [COMMON] STOCK ISSUE. If the Company issues shares of [Preferred] [Common] Stock for a consideration per share less than the current market price per share on the date the Company fixes the offering price of such additional shares, the conversion price shall be adjusted in accordance with the formula: O + P --- M C' = C x ------- A where: C' = the adjusted conversion price. C = the then current conversion price. O = the number of shares outstanding immediately prior to the issuance of such additional shares. P = the aggregate consideration received for the issuance of such additional shares. M = the current market price per share on the date of issuance of such additional shares. A = the number of shares outstanding immediately after the issuance of such additional shares. 54 63 The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance. This Section does not apply to (i) any of the transactions described in Sections 12.07, 12.08 and 12.10, (ii) the conversion of Securities, or the conversion, exchange or exercise of other securities convertible or exchangeable for [Preferred] [Common] Stock, (iii) [Preferred] [Common] Stock issued to the Company's employees under bona fide employee plans adopted by the Board of Directors and approved by the holders of [Preferred] [Common] Stock when required by law, if such [Preferred] [Common] Stock would otherwise be covered by this Section (but only to the extent that the aggregate number of shares excluded hereby and issued after the date of this Indenture shall not exceed [5%] of the [Preferred] [Common] Stock outstanding at the time of the adoption of each such plan, exclusive of antidilution adjustments thereunder), (iv) [Preferred] [Common] Stock issued to acquire, or in the acquisition of, all or any portion of a business as a going concern or of developed, undeveloped or mixed real property, in an arms-length transaction between the Company and an unaffiliated third party, whether such acquisition shall be effected by purchase of assets, exchange of securities, merger, consolidation or otherwise, (v) [Preferred] [Common] Stock issued in a bona fide public offering pursuant to a firm commitment underwriting or (vi) [Preferred] [Common] Stock issued on exercise of rights if and to the extent Holders of Securities have received or are entitled to receive such rights upon conversion. SECTION 12.10. ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE. If the Company issues any securities convertible into or exchangeable or exercisable for [Preferred] [Common] Stock (other than the Securities or securities issued in transactions described in Sections 12.07 and 12.08) for a consideration per share of [Preferred] [Common] Stock initially deliverable upon conversion, exchange or exercise of such securities less than the current market price per share on the date of issuance of such securities, the conversion price shall be adjusted in accordance with this formula: O + P - C' = C x M ----- O + D where: C' = the adjusted conversion price. C = the then current conversion price. 55 64 O = the number of shares outstanding immediately prior to the issuance of such securities. P = the aggregate consideration received for the issuance of such securities (including as determined in Section 12.12(3)). M = the current market price per share on the date of issuance of such securities. D = the maximum number of shares deliverable upon conversion or in exchange for or upon exercise of such securities at the initial conversion, exchange or exercise rate. The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance. If all of the [Preferred] [Common] Stock deliverable upon conversion, exchange or exercise of such securities have not been issued when such securities are no longer convertible, exchangeable or exercisable, then the conversion price shall promptly be readjusted to the conversion price which would then be in effect had the adjustment upon the issuance of such securities been made on the basis of the actual number of shares of [Preferred] [Common] Stock issued upon conversion, exchange or exercise of such securities. This Section does not apply to (1) convertible securities issued to acquire, or in the acquisition of, all or any portion of a business as a going concern or of developed, undeveloped or mixed real property, in an arms-length transaction between the Company and an unaffiliated third party, whether such acquisition shall be effected by purchase of assets, exchange of securities, merger, consolidation or otherwise, or (ii) convertible securities issued in a bona fide public offering pursuant to a firm commitment underwriting. SECTION 12.10A. SPECIAL PROVISION REGARDING PREFERRED STOCK. In addition to the foregoing adjustments and without duplication, if (x) prior to the exercise of a Security an event ("Event") occurs which, under the Certificate of Designations with respect to the Preferred Stock, would have required an adjustment in the number of share(s) of Common Stock into which the shares of Preferred Stock acquired on conversion of the Securities would have been convertible if such Security had previously been converted into Preferred Stock (but such Preferred Stock acquired on conversion had not been converted into Common Stock), then (y) after the Event, such share of Preferred Stock shall, when acquired on conversion of the Security, be convertible into the same number of share(s) of Common Stock into which it would have been convertible if such Security had been converted into Preferred Stock (but such Preferred Stock acquired on conversion had not been converted into Common Stock) prior to the Event. 56 65 The adjustment required by the foregoing sentence shall be made each time there is an Event, provided that no adjustment shall be made under this Section 12.10A unless that adjustment results in a change of 1%, provided further that all adjustments not made by virtue of the preceding "provided" clause shall be carried forward and made when the aggregate of all such adjustments results in a change of at least 1%.]* SECTION 12.11. CURRENT MARKET PRICE. In Sections 12.07, 12.08, 12.09 and 12.10, the current market price per share of [Preferred] [Common] Stock on any date is the average of the Quoted Prices (as defined in Section 12.03) of the [Preferred] [Common] Stock for 20 consecutive trading days commencing 30 trading days before the date in question. In the absence of one or more such quotations, the Company shall determine the current market price on the basis of such quotations or other information as it considers appropriate. SECTION 12.12. CONSIDERATION RECEIVED. For purposes of any computation respecting consideration received pursuant to Sections 12.09 and 12.10, the following shall apply: (1) in the case of the issuance of shares of [Preferred] [Common] Stock for cash, the consideration shall be the amount of such cash, provided that in no case shall any deduction be made for any commissions, discounts or, without limitation, other expenses incurred by the Company for any underwriting of the issue or otherwise in connection therewith, (2) in the case of the issuance of shares of [Preferred] [Common] Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof as determined in good faith by the Board of Directors (irrespective of the accounting treatment thereof), whose determination shall be conclusive, and described in a Board resolution which shall be filed with the Trustee; and (3) in the case of the issuance of securities convertible into or exchangeable or exercisable for shares, the aggregate ________________ * This provision will be used, if at all, if the Securities are exercisable for Preferred Stock which is convertible into Common Stock. 57 66 consideration received therefor shall be deemed to be the consideration received by the Company for the issuance of such securities plus the additional minimum consideration, if any, to be received by the Company upon the conversion or exchange thereof (the consideration in each case to be determined in the same manner as provided in clauses (1) and (2) of this Section). SECTION 12.13. WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the conversion price need be made unless the adjustment would require an increase or decrease of at least 1% in the conversion price. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Article shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. SECTION 12.14. WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made for a transaction referred to in Sections 12.06, 12.07, 12.08, 12.09 or 12.10 if all Securityholders are entitled to participate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis and notice on which holders of [Preferred] [Common] Stock participate in the transaction. No adjustment need be made for rights to purchase [Preferred] [Common] Stock pursuant to a Company plan for reinvestment of dividends or interest. No adjustment need be made for a change in the par value or no par value of the [Preferred] [Common] Stock. To the extent the Securities become convertible into cash, no adjustment need be made thereafter as to the cash. Interest will not accrue or be deemed to accrue on the cash for this purpose. In any case in which this Article 12 or the Securities shall require that an adjustment in the conversion price be made effective as of a record date for a specified event and notwithstanding anything to the contrary in this Article 12 of the Securities, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Security converted after such record date, the [Preferred] [Common] Stock or other capital stock of the Company, if any, issuable upon such conversion over and above the [Preferred] [Common] Stock or other capital stock of the Company, if any, issuable upon such conversion on the basis of the 58 67 conversion price in effect prior to such adjustment; provided, however, [that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing, subject to the following proviso, such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment and, provided further,] to the extent such event does not occur, the adjustment made in respect of such non-occurrence shall be retroactive and affect each conversion security converted between such Record Date and the date of such non-occurrence. SECTION 12.15. NOTICE OF ADJUSTMENT. Whenever the conversion price is adjusted, the Company shall promptly mail to Securityholders a notice of the adjustment. The Company shall file with the Trustee a certificate from the Company's independent public accountants briefly stating the facts requiring the adjustment and the manner of computing it. The certificate shall be conclusive evidence that the adjustment is correct, absent manifest error. SECTION 12.16. VOLUNTARY REDUCTION. The Company from time to time may reduce the conversion price by any amount for any period of time if the period is at least [20] days and if the reduction is irrevocable during the period; provided that in no event may the conversion price be less than the then par value of a share of [Preferred] [Common] Stock, if any. Whenever the conversion price is reduced, the Company shall mail to Securityholders a notice of the reduction. The Company shall mail the notice at least 15 days before the date the reduced conversion price takes effect. The notice shall state the reduced conversion price and the period it will be in effect. A reduction of the conversion price does not change or adjust the conversion price otherwise in effect for purposes of Sections 12.06, 12.07, 12.08, 12.09 and 12.10. SECTION 12.17. NOTICE OF CERTAIN TRANSACTIONS. If: (1) the Company takes any action that would require an adjustment in the conversion price pursuant to Sections 12.06, 12.07, 12.08, 12.09 or 12.10 and if the Company does not let Securityholders participate pursuant to Section 12.14 [or which is referred to in Section 12.10A]; 59 68 (2) the Company takes any action that would require a supplemental indenture pursuant to Section 12.18; or (3) there is a liquidation or dissolution of the Company, the Company shall mail to Securityholders and to the Trustee a notice stating the proposed record date, proposed effective date or other relevant proposed date of the act in question. The Company shall mail the notice at least [15] days before such date. Failure to mail the notice or any defect in it shall not affect the validity of the transaction. SECTION 12.18. REORGANIZATION OF COMPANY. If the Company is a party to a transaction subject to Section 5.01, or a transaction which reclassifies or changes its outstanding [Preferred] [Common] Stock, upon consummation of such transaction the Securities shall automatically become convertible into the kind and amount of securities, cash or other assets which the Holder of a Security would have owned immediately after the transaction if the Holder had converted the Security immediately before the effective date of the transaction. Concurrently with the consummation of such transaction, the person obligated to issue securities or deliver cash or other assets upon conversion of the Securities shall enter into a supplemental indenture so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Article. The Company or, if applicable, the other person shall mail to Securityholders a notice describing the transaction and supplemental indenture. If securities deliverable upon conversion of Securities, as provided above, are themselves convertible into the securities of an Affiliate of the other person, that Affiliate shall join in the supplemental indenture and the supplemental indenture shall so provide. If this Section applies, Section 12.06 does not apply. SECTION 12.19. COMPANY DETERMINATION FINAL. Any determination that the Company or the Board of Directors must make pursuant to Section 12.03, 12.06, 12.08, 12.09, 12.10, 12.11, 12.12 or 12.14 is conclusive. SECTION 12.20. TRUSTEE'S DISCLAIMER. The Trustee has no duty to determine when an adjustment under this Article should be made, how it should be made or what it should be. The Trustee has no duty to determine whether any provisions of a supplemental 60 69 indenture under Section 12.18 are correct. The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities. The Trustee shall not be responsible for the Company's failure to comply with this Article. Each Conversion Agent other than the Company shall have the same protection under this Section as the Trustee.] The parties have caused this Indenture to be duly executed and attested, all as of the date first above written, in _____________, _____________, signifying their agreements contained in this Indenture. SIGNATURES DEL WEBB CORPORATION By:___________________________ Attest: - ------------------------- [Bank of Montreal Trust Company,] as Trustee ----------------------------- Attest: - ------------------------- 61 70 EXHIBIT A (FACE OF SECURITY)* No. $ CUSIP No. ____ DEL WEBB CORPORATION promises to pay to or registered assigns, the principal sum of Dollars on ________________________ _____% [CONVERTIBLE] SENIOR SUBORDINATED [DEBENTURE] [NOTE] DUE ________ Interest Payment Dates: _______________ and _______________ Record Dates: _______________ and _______________ This is one of the Securities Dated: mentioned in the Indenture referred to below: [Bank of Montreal Trust Company,] DEL WEBB CORPORATION as Trustee By:_________________________ By:_________________________ Authorized Signatory By:_________________________ ____________________________ * Global securities will have any appropriate modifications and will bear essentially the following legend: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO BELOW AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES. A-1 71 (BACK OF SECURITY) ________________ ___% [Convertible] Senior Subordinated [Debenture] [Note] Due __________ 1. Interest. Del Webb Corporation, a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest semiannually on _________ and _________ of each year. Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from _________, 199_. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. Method of Payment. The Company will pay interest on the Securities (except defaulted interest) to the persons who are registered holders of Securities at the close of business on the record date for the next interest payment date even though Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal and interest by check payable in such money. It may mail an interest check to a holder's registered address. 3. Paying Agent [, and] Registrar [and Conversion Agent]. [Bank of Montreal Trust Company] (the "Trustee") will act as Paying Agent [,and] Registrar [and Conversion Agent]. The Company may change the Paying Agent, Registrar or co-registrar without prior notice. The Company or any of its subsidiaries may act in any such capacity. 4. Indenture. The Company issued the Securities under an Indenture dated as of ___________, 199_ [as modified by a Supplemental Indenture dated as of ______ __________________, 199_] ([collectively, ]the "Indenture") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of the Indenture. The Securities are subject to, and qualified by, all such terms, certain of which are summarized hereon, and Securityholders are referred to the Indenture and such Act for a statement of such terms. The Securities are unsecured general obligations of the Company limited to $__________ in aggregate principal amount [of which $___________ may only be issued as 'Additional Securities' on or before the 30th day after the date of, and pursuant to the terms of, that certain Underwriting Agreement dated _________, 199_ by and between the Company and _________________. The Company will not originally issue any Additional A-2 72 Securities except pursuant to the Underwriting Agreement. If no Additional Securities are issued the Securities will be limited to $____________ in aggregate principal amount.] Capitalized terms not defined below have the same meaning as is given to them in the Indenture. 5[A]. Optional Redemption. The Company may not redeem the Securities prior to ____________. Thereafter, the Company may redeem all the Securities at any time or some of them from time to time at the redemption prices (expressed in percentages of principal amount) set forth below plus accrued interest to the redemption date, if redeemed during the 12-month period beginning _________ of the years starting with _____ indicated below. Year Percentage Year Percentage and thereafter 100.000 [5B. Mandatory Redemption. The Company will redeem ___% of the [initial] principal amount of Securities [(including any Additional Securities)] [then outstanding] on ____________, and on each _________ thereafter through ___________ at a redemption price of 100% of principal amount, plus accrued interest to the redemption date. The Company may reduce the principal amount of Securities to be redeemed pursuant to this paragraph 6 by subtracting 100% of the principal amount (excluding premium) of any Securities that [Securityholders have converted,] the Company has delivered to the Trustee for cancellation or the Company has previously purchased, redeemed, retired or acquired other than pursuant to this paragraph 6, provided that the Company may so subtract the same Security only once.] 6. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of Securities to be redeemed at his or her registered address. Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. In the event of a redemption of less than all of the Securities, the Securities will be chosen for redemption by the Trustee, generally pro rata or by lot. On and after the redemption date interest ceases to accrue on Securities or portions of them called for redemption. If this Security is redeemed subsequent to a record date with respect to any interest payment A-3 73 date specified above and on or prior to such interest payment date, then any accrued interest will be paid to the person in whose name this Security is registered at the close of business on such record date. 7. Change of Control. Upon a Change of Control, the Company shall make a Change of Control Offer to purchase all outstanding securities at a price equal to 101% of the aggregate principal amount of the Securities, plus accrued and unpaid interest to the date of purchase. To accept the Change of Control Offer, the Holder hereof must comply with the terms thereof, including surrendering this Security, with the "Option of Holder to Elect Purchase" portion hereof completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent, at the address specified in the notice of the Change of Control Offer mailed to Holders as provided in the Indenture, prior to termination of the Change of Control Offer. 8. Subordination. To the extent set forth in Article 11 of the Indenture, the Securities are subordinated to Senior Indebtedness, which generally is any Indebtedness outstanding on the date of the Indenture or Indebtedness thereafter created, incurred, assumed or guaranteed by the Company and all renewals, extensions and refundings thereof except Indebtedness that expressly provides that it is not senior to or superior in right of payment to the Securities. Senior Indebtedness does not include Indebtedness of the Company to any of its subsidiaries, trade payables of the Company and certain Indebtedness of others guaranteed by the Company. Indebtedness, for any specified person, is any indebtedness, contingent or otherwise, in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of the person or only to a portion thereof) evidenced by bonds, notes, debentures or similar instruments or letters of credit or representing the balance deferred and unpaid of the purchase price of any property or interest therein (except any such balance that constitutes a trade payable), all capitalized leases and all direct or indirect obligations which arise as a result of claims under or drawings pursuant to surety, performance, completion or maintenance bonds. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Securities may be paid. The Company agrees, and each Securityholder by accepting a Security agrees, to the subordination and authorizes the Trustee to give it effect. 9. Denominations, Transfer, Exchange. The Securities are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. As a condition of transfer, the Registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Security or portion of a Security selected for redemption. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before a selection of Securities to be redeemed. A-4 74 10. Persons Deemed Owners. The registered holder of a Security may be treated as its owner for all purposes. 11. Amendments and Waivers. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the holders of at least a majority in principal amount of the then outstanding Securities and any existing default may be waived with the consent of the holders of a majority in principal amount of the then outstanding Securities. Without the consent of any Securityholder, the Indenture or the Securities may be amended: to cure any ambiguity, defect or inconsistency; to provide for assumption of the Company's obligations to Securityholders; to make any change that does not adversely affect the rights of any Securityholder; to add to the covenants of the Company, for the benefit of the Securityholders; or to modify the Indenture to effect its qualification under the TIA. 12. Defaults and Remedies. An Event of Default is: default for 30 days in payment of interest on the Securities; default in payment of principal of and premium, if any, on the Securities; failure by the Company for 60 days after notice to it to comply with any of its other agreements in the Indenture or the Securities or, in the case of failure by the Company to maintain its corporate existence or to comply with the restrictions on payments of dividends and other distributions, the restrictions on consolidation, merger or transfer or lease of substantially all its assets [or the provisions regarding conversion of the Securities], with such notice but without such passage of time; certain defaults under and accelerations prior to maturity of certain Indebtedness; certain final judgments which remain undischarged; and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the then outstanding Securities may declare all the Securities to be due and payable immediately, except that in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Securities become due and payable without further action or notice. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, holders of a majority in principal amount of the then outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company must furnish an annual compliance certificate to the Trustee. 13. Trustee Dealings with the Company. [Bank of Montreal Trust Company], the Trustee under the Indenture, or any of its Affiliates, in their individual or any other capacities, may make or continue loans to or guaranteed by, accept deposits from and perform services for the Company or its Affiliates and may otherwise deal with the Company or its Affiliates as if [Bank of Montreal Trust Company] were not Trustee. A-5 75 14. No Recourse Against Others. No director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the Securities. 15. Authentication. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants by the entireties, JT TEN = joint tenants with right of survivorship and not as tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to Minors Act. The Company will furnish to any Securityholder upon written request and without charge a copy of the Indenture, which has in it the text of this Security in larger type. Requests may be made to: Treasurer, Del Webb Corporation, 2231 East Camelback Road, P.O. Box 29040, Phoenix, AZ 85016. [17. Conversion. A holder of a Security may convert it into [Preferred] [Common] Stock of the Company at any time before the close of business on ________,_____. If the Security is called for redemption, the holder may convert it at any time before the close of business on the redemption date (unless the Company shall default in payment due upon redemption thereof). The initial conversion price of $__ per share is subject to adjustment in certain events. To determine the number of shares issuable upon conversion of a Security, divide the principal amount to be converted by the conversion price in effect on the conversion date. On conversion, no payment or adjustment for interest will be made. However, interest will be paid on any interest payment date with respect to Securities surrendered for conversion after a record date for the payment of interest to the registered holder on such record date. The Company will deliver a check for any fractional share. To convert a Security a holder must (1) complete and sign the conversion notice on the back of the Security, (2) surrender the Security to a Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Registrar or Conversion Agent and (4) pay any transfer or similar tax if required by the Indenture or applicable law. A holder may convert a portion of a Security if the portion is $1,000 or an integral multiple of $1,000. The conversion price is subject to adjustment as set forth in the Indenture in certain events. No adjustment in the conversion price will be required unless such adjustment would require a change of at least 1% in the price then in effect; but any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. A-6 76 The Company from time to time may voluntarily reduce the conversion price for a period of time. If the Company is a party to a consolidation or merger or a transfer or lease of all or substantially all of its assets, the Securities automatically become convertible into the kind and amount of securities, cash or other assets which the Holder of a Security would have owned immediately after such transaction if the Holder had converted the Security immediately before the effective date of the transaction.] A-7 77 ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to: - -------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint: - -------------------------------------------------------------------------- agent to transfer this Security on the books of the Company. The agent may substitute another to act for him or her. Date: - -------------------------------------------------------------------------- Signature Guarantee: [CONVERSION NOTICE To convert this Security into [Preferred] [Common] Stock of the Company, check the box: [ ] To convert only part of this Security, state the amount: $------------------------------------------------------------------------- If you want the stock certificate made out in another person's name, fill in the form below: - -------------------------------------------------------------------------- (insert other person's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- (Print or type other person's name, address and zip code.) Your signature: - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- (Sign exactly as your name appears on the other side of this Security)] A-8 78 [OPTION OF HOLDER TO ELECT PURCHASE] If you want to elect to have this Security purchased by the Company pursuant to Section 4.11 of the Indenture and paragraph 7 of this Security, check the box: [ ] If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.11 of the Indenture and paragraph 7 of this Security, state the amount: $_________ Date: ________________ Your Signature:___________________________ (Sign exactly as your name appears on the other side of this Security) Signature Guarantee: A-9 EX-4.3 4 EX-4.3 1 EXHIBIT 4.3 SCHEDULE OF MATERIAL DETAILS IN WHICH THE FORM OF SUBORDINATED DEBT INDENTURE (INCLUDING FORM OF SUBORDINATED DEBENTURE/ NOTE) DIFFERS FROM EXHIBIT 4.2, THE FORM OF SENIOR SUBORDINATED DEBT INDENTURE (INCLUDING FORM OF SENIOR SUBORDINATED DEBENTURE/NOTE) The form of Subordinated Debt Indenture (including the form of Subordinated Debenture/Note) (the "Subordinated Debt Indenture") differs from Exhibit 4.2, the form of Senior Subordinated Debt Indenture (including the form of Senior Subordinated Debenture/Note) (the "Senior Subordinated Debt Indenture"), in the following respects: (1) The words "Senior Subordinated" in the Senior Subordinated Debt Indenture are changed to the word "Subordinated" in the Subordinated Debt Indenture, and there are references to Junior Subordinated Debt in the Subordinated Debt Indenture, but not in the Senior Subordinated Debt Indenture; (2) Section 4.12 of the form of Senior Subordinated Debt Indenture and the reference to Section 4.12 in the Table of Contents to the Senior Subordinated Debt Indenture are deleted in the form of Subordinated Debt Indenture; and (3) Provision for the possible right of the Registrant to defer interest are included in the Subordinated Debt Indenture, but not in the Senior Subordinated Debt Indenture. 2 EXHIBIT 4.3 DEL WEBB CORPORATION AND [BANK OF MONTREAL TRUST COMPANY] AS TRUSTEE _____________ $____________ ___% [Convertible] [Junior] Subordinated [Debentures] [Notes]* _____________ INDENTURE Dated as of _____, 199_ ___________________ * Language in brackets indicates alternative language or provisions to be supplied. As appropriate, disclosure will be made in the relevant Prospectus Supplement as to which alternative has been chosen or provisions added and a copy of the final Indenture will be filed as an Exhibit to a Form 8-K, or other appropriate periodic report. 3 CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section 310 (a)(1)....................................................... 7.10 (a)(2)....................................................... 7.10 (a)(3)....................................................... N.A. (a)(4)....................................................... N.A. (b).......................................................... 7.08; 7.10; 10.02 (c).......................................................... N.A. 311 (a).......................................................... 7.11 (b).......................................................... 7.12 (c).......................................................... N.A. 312 (a).......................................................... 2.05 (b).......................................................... 10.03 (c).......................................................... 10.03 313 (a).......................................................... 7.06 (b)(1)....................................................... N.A. (b)(2)....................................................... 7.06 (c).......................................................... 7.06; 10.02 (d).......................................................... 7.06 314 (a).......................................................... 4.01; 10.02 (b).......................................................... N.A. (c)(1)....................................................... 10.04 (c)(2)....................................................... 10.04 (c)(3)....................................................... N.A. (d).......................................................... N.A. (e).......................................................... 10.05 (f).......................................................... N.A. 315 (a).......................................................... 7.01(b) (b).......................................................... 7.05; 10.02 (c).......................................................... 7.01(a) (d).......................................................... 7.01(c) (e).......................................................... 6.11 316 (a)(last sentence)........................................... 2.09 (a)(1)(A).................................................... 6.05 (a)(1)(B).................................................... 6.04 (a)(2)....................................................... N.A. (b).......................................................... 6.07 317 (a)(1)....................................................... 6.08 (a)(2)....................................................... 6.09 (b).......................................................... 2.04 318(a)............................................................ 10.01
N.A. means not applicable. ___________________ *This Cross-Reference Table is not part of the Indenture. 4 TABLE OF CONTENTS
Page ---- ARTICLE 1 Definitions Section 1.01. Definitions......................................................... 1 "Affiliate".................................................... 1 "Agent"........................................................ 1 "Board of Directors"........................................... 1 "capital stock"................................................ 1 "Change of Control"............................................ 1 "Company"...................................................... 2 "Consolidated Net Earnings".................................... 2 "Default"...................................................... 2 "Disqualified Stock"........................................... 3 "Equity Interests"............................................. 3 "Exchange Act"................................................. 3 "Holder" or "Securityholder"................................... 3 "Indenture".................................................... 3 "Material Subsidiary".......................................... 3 "Officers' Certificate"........................................ 3 "Opinion of Counsel"........................................... 3 "person"....................................................... 3 "principal".................................................... 3 "redemption date".............................................. 3 "redemption price"............................................. 3 "SEC".......................................................... 4 "Securities"................................................... 4 "subsidiary"................................................... 4 "TIA".......................................................... 4 "Trustee"...................................................... 4 "Trust Officer"................................................ 4 Section 1.02. Other Definitions................................................... 4 Section 1.03. Incorporation by Reference of Trust Indenture Act................... 5 Section 1.04. Rules of Construction............................................... 5 ARTICLE 2 The Securities Section 2.01. Form and Dating..................................................... 6 Section 2.02. Execution and Authentication........................................ 6
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Page ---- Section 2.03 Registrar and Paying Agent.......................................... 7 Section 2.04. Paying Agent to Hold Money in Trust................................. 7 Section 2.05. Securityholder Lists................................................ 8 Section 2.06. Transfer and Exchange............................................... 8 Section 2.07. Replacement Securities.............................................. 8 Section 2.08. Outstanding Securities.............................................. 9 Section 2.09. When Treasury Securities Disregarded................................ 9 Section 2.10. Temporary Securities................................................ 9 Section 2.11. Cancellation........................................................ 10 Section 2.12. Defaulted Interest.................................................. 10 Section 2.13. CUSIP Number........................................................ 10 ARTICLE 3 Redemption Section 3.01. Notices to Trustee.................................................. 10 Section 3.02. Selection of Securities to be Redeemed.............................. 11 Section 3.03. Notice of Redemption................................................ 11 Section 3.04. Effect of Notice of Redemption...................................... 12 Section 3.05. Deposit of Redemption Price......................................... 12 Section 3.06 Securities Redeemed in Part......................................... 12 Section 3.07. Mandatory Redemption................................................ 13 ARTICLE 4 Covenants Section 4.01. Payment of Securities............................................... 13 Section 4.02. SEC Reports......................................................... 13 Section 4.03. Compliance Certificate.............................................. 14 Section 4.04. Maintenance of Office or Agency..................................... 15 Section 4.05. Restrictions on Dividends and Other Payments........................ 15 Section 4.06. Continued Existence................................................. 17 Section 4.07. Taxes............................................................... 17 Section 4.08. Maintenance of Properties........................................... 17 Section 4.09. Insurance........................................................... 18 Section 4.10. Investment Company Act.............................................. 18 Section 4.11. Change of Control................................................... 18 ARTICLE 5 Successors Section 5.01 When the Company May Merge, etc..................................... 20 Section 5.02. Successor Corporation Substituted................................... 20 Section 5.03. Purchase Option on Change of Control................................ 21
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Page ---- ARTICLE 6 Defaults And Remedies Section 6.01. Events of Default................................................... 21 Section 6.02. Acceleration........................................................ 23 Section 6.03. Other Remedies...................................................... 23 Section 6.04. Waiver of Past Defaults............................................. 24 Section 6.05. Control by Majority................................................. 24 Section 6.06. Limitation on Suits................................................. 24 Section 6.07. Rights of Holders to Receive Payment [and to Convert Securities]....................................... 25 Section 6.08. Collection Suit by Trustee.......................................... 25 Section 6.09. Trustee May File Proofs of Claim.................................... 25 Section 6.10. Priorities.......................................................... 26 Section 6.11. Undertaking for Costs............................................... 26 ARTICLE 7 The Trustee Section 7.01. Duties of the Trustee............................................... 26 Section 7.02. Rights of the Trustee............................................... 28 Section 7.03. Individual Rights of the Trustee.................................... 28 Section 7.04. Trustee's Disclaimer................................................ 28 Section 7.05. Notice of Defaults.................................................. 29 Section 7.06. Reports by the Trustee to Holders................................... 29 Section 7.07. Compensation and Indemnity.......................................... 29 Section 7.08. Replacement of the Trustee.......................................... 30 Section 7.09. Successor Trustee by Merger, etc.................................... 31 Section 7.10. Eligibility; Disqualification....................................... 31 Section 7.11. Preferential Collection of Claims Against Company................... 32 ARTICLE 8 Satisfaction And Discharge Of Indenture Section 8.01. Termination of Company's Obligations................................ 32 Section 8.02. Application of Trust Money.......................................... 35 Section 8.03. Repayment to Company................................................ 35 Section 8.04. Reinstatement....................................................... 35
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Page ---- ARTICLE 9 Amendments Section 9.01. Without the Consent of Holders...................................... 36 Section 9.02. With the Consent of Holders......................................... 37 Section 9.03. Compliance with the Trust Indenture Act............................. 38 Section 9.04. Revocation and Effect of Consents................................... 38 Section 9.05. Notation on or Exchange of Securities............................... 38 Section 9.06. The Trustee Protected............................................... 39 ARTICLE 10 General Provisions Section 10.01. Trust Indenture Act Controls........................................ 39 Section 10.02. Notices............................................................. 39 Section 10.03. Communication by Holders with Other Holders......................... 40 Section 10.04. Certificate and Opinion as to Conditions Precedent.................. 40 Section 10.05. Statements Required in Certificate or Opinion....................... 40 Section 10.06. Rules by Trustee and Agents......................................... 41 Section 10.07. Legal Holidays; Business Days....................................... 41 Section 10.08. No Recourse Against Others.......................................... 41 Section 10.09. Counterparts........................................................ 41 Section 10.10. Other Provisions.................................................... 41 Section 10.11. Governing Law....................................................... 42 Section 10.12. No Adverse Interpretation of Other Agreements....................... 43 Section 10.13. Successors.......................................................... 43 Section 10.14. Severability........................................................ 43 Section 10.15. Table of Contents, Headings, Etc.................................... 43 ARTICLE 11 Subordination Section 11.01. Agreement to Subordinate............................................ 43 Section 11.02. Certain Definitions................................................. 43 Section 11.03. Liquidation; Dissolution; Bankruptcy................................ 44 Section 11.04. Default on Senior Indebtedness...................................... 45 Section 11.05. Acceleration of Securities.......................................... 45 Section 11.06. When Distributions Must Be Paid Over................................ 46 Section 11.07. Notice by the Company............................................... 46 Section 11.08. Subrogation......................................................... 46 Section 11.09. Relative Rights..................................................... 46 Section 11.10. Subordination May Not Be Impaired by the Company.................... 47 Section 11.11. Distribution or Notice to the Representative........................ 47
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Page ---- Section 11.12. Rights of the Trustee and Paying Agent.............................. 47 Section 11.13 No Fiduciary Duty to Holders of Senior Indebtedness................. 48 ARTICLE 12 Conversion Section 12.01. Conversion Privilege................................................ 49 Section 12.02. Conversion Procedure................................................ 49 Section 12.03. Fractional Shares................................................... 50 Section 12.04. Taxes on Conversion................................................. 51 Section 12.05. Company to Provide Stock............................................ 51 Section 12.06. Adjustment for Change in Capital Stock.............................. 51 Section 12.07. Adjustment for Rights Issue......................................... 52 Section 12.08. Adjustment for Other Distributions.................................. 53 Section 12.09. Adjustment for [Preferred] [Common] Stock Issue..................... 54 Section 12.10. Adjustment for Convertible Securities Issue......................... 55 Section 12.10A. Special Provision Regarding Preferred Stock......................... 56 Section 12.11. Current Market Price................................................ 57 Section 12.12. Consideration Received.............................................. 57 Section 12.13. When Adjustment May Be Deferred..................................... 58 Section 12.14. When No Adjustment Required......................................... 58 Section 12.15. Notice of Adjustment................................................ 59 Section 12.16. Voluntary Reduction................................................. 59 Section 12.17. Notice of Certain Transactions...................................... 59 Section 12.18. Reorganization of Company........................................... 60 Section 12.19. Company Determination Final......................................... 60 Section 12.20. Trustee's Disclaimer................................................ 60 SIGNATURES .................................................................... 61 EXHIBIT A Form of Security.................................................... A-1
v 9 This Indenture, dated as of ________, 199_, is between Del Webb Corporation, a Delaware corporation (the "Company"), and [Bank of Montreal Trust Company] (the "Trustee"). The Company has duly authorized the issuance of its ___% [Convertible] [Junior] Subordinated [Debentures] [Notes] (the "Securities") and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Securities. ARTICLE 1 DEFINITIONS SECTION 1.01. DEFINITIONS. "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" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement or otherwise. "Agent" means any Registrar, Paying Agent or co-registrar. "Board of Directors" means the Board of Directors of the Company or any authorized committee of the Board of Directors. "capital stock" means any and all shares, interests, participations or other equivalents (however designated) of corporate stock. "Change of Control" means any of the following: (i) all or substantially all of the Company's assets are sold as an entirety to any person or related group of persons or the Company engages in any merger, consolidation, sale of capital stock, sale of beneficial ownership interests or any other transactions with any other person or related group of persons, with the effect that after such transactions the shareholders of the Company immediately prior to such transactions own, directly or indirectly, in the aggregate less than 50% of the total voting power entitled to vote in the election (a) of directors of the Company, if the Company is the surviving entity, or (b) of directors, managers or trustees (1) of such other person, if the Company is not the surviving entity, or (2) of such other person that 1 10 purchases all or substantially all of the Company's assets; (ii) any person or related group of persons acquires more than 50% of the total voting power entitled to vote for directors of the Company; or (iii) any person or related group of persons acquires more than 50% of the total voting power entitled to vote for directors, managers or trustees (a) of such other person surviving the transaction or (b) of such other person that purchases all or substantially all of the Company's assets. "Company" means the party named as such above until a successor replaces it in accordance with Article 5 and thereafter means the successor. "Consolidated Net Earnings" with respect to any person means, for any period, the aggregate of the Net Earnings of such person and its subsidiaries for such period, on a consolidated basis, determined in accordance with generally accepted accounting principles consistently applied; provided that the Net Earnings of any person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded. "Net Earnings" of any person for any period shall mean the net earnings (loss) of such person for such period, determined in accordance with generally accepted accounting principles consistently applied, (i) excluding (a) extraordinary items recognized in such period, (b) any gain (but including any loss except as reduced to the extent aggregate gains exceed aggregate losses, with gains in excess of losses for one period being carried forward to subsequent periods and back to prior periods for this purpose) realized upon the sale or other disposition (including, without limitation, dispositions pursuant to leaseback transactions) of any real property or equipment of such person which is not sold or otherwise disposed of in the ordinary course of business and (c) any gain (but including any loss except as reduced to the extent aggregate gains exceed aggregate losses, with gains in excess of losses for one period being carried forward to subsequent periods and back to prior periods for this purpose) realized upon the sale or other disposition of any capital stock of such person or a subsidiary of such person except when the sale of capital stock is in substance the sale of the assets of the person whose capital stock is being sold, provided that, with respect to (b) and (c) above, gains from sales of developed or undeveloped real property (including without limitation developed residential lots) from the Company's community, conventional housing and land development businesses will be deemed ordinary course and (ii) excluding any write-up in the carrying value of any asset made after ______________, provided that the application of the equity method of accounting and the translation into United States dollars of assets or liabilities in foreign currencies in accordance with generally accepted accounting principles shall not be deemed to involve any such write-up. "Default" means any event which is, or after notice or passage of time would be, an Event of Default. 2 11 "Disqualified Stock" means any capital stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the maturity date of the Securities. "Equity Interests" means capital stock or warrants, options or other rights to acquire capital stock (but excluding any debt security which is convertible into, or exchangeable for, capital stock). "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute. "Holder" or "Securityholder" means a person in whose name a Security is registered in the Registrar's books. "Indenture" means this Indenture as amended or supplemented from time to time. "Material Subsidiary" means (i) Del Webb Communities, Inc., (ii) Del Webb California Corp. and (iii) any other subsidiary of the Company, if any, named [in the final Indenture] [or] [in a supplemental indenture.] "Officers' Certificate" means a certificate signed by two Officers, one of whom must be the Chairman of the Board, the President, the Treasurer or an Executive Vice President, Senior Vice President or other Vice President of the Company. "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "principal" of a debt security, including the Securities, means the principal of the security plus the premium, if any, on the security. "redemption date" when used with respect to any of the Securities to be redeemed, means the date fixed by the Company for such redemption pursuant to this Indenture and the Securities. "redemption price" when used with respect to any of the Securities to be redeemed, means the price fixed for such redemption pursuant to this Indenture and the Securities. 3 12 "SEC" means the Securities and Exchange Commission. "Securities" means the Securities described above issued under this Indenture. "subsidiary" of any specified person means (i) a corporation a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such person or by such person and a subsidiary or subsidiaries of such person or (ii) any other person (other than a corporation) in which such person or such person and a subsidiary or subsidiaries of such person, directly or indirectly, at the date of determination thereof has at least majority ownership interest or over which it exercises control. "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77-bbbb) as in effect on the date of execution of this Indenture. "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor. "Trust Officer" means [the Chairman of the Board, the President or] any [other] officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. SECTION 1.02. OTHER DEFINITIONS.
Defined in Term Section ---- ------- "Bankruptcy Law"................................................... 6.01 "Business Day"..................................................... 10.07 ["Common Stock"..................................................... 12.01] ["Conversion Agent.................................................. 2.03] "Custodian"........................................................ 6.01 "Event of Default"................................................. 6.01 "Indebtedness"..................................................... 11.02 "Legal Holiday".................................................... 10.07 "Officer".......................................................... 10.10 "Paying Agent"..................................................... 2.03 ["Preferred Stock".................................................. 12.01] ["Quoted Price"..................................................... 12.03] "Registrar"........................................................ 2.03 "Representative"................................................... 11.02 "Restricted Payments".............................................. 4.05 "Senior Indebtedness".............................................. 11.02 "United States Government Obligations"............................. 8.01
4 13 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC; "indenture securities" means the Securities; "indenture security holder" means a Securityholder or Holder; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the Securities means the Company or any other obligor on the Securities. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect at the date hereof; (3) references to "generally accepted accounting principles" shall mean generally accepted accounting principles as in effect at the date hereof; (4) "or" is not exclusive; (5) words in the singular include the plural, and in the plural include the singular; and 5 14 (6) the male, female and neuter genders include one another. ARTICLE 2 THE SECURITIES SECTION 2.01. FORM AND DATING. The Securities and the Trustee's certificate of authentication relating thereto shall be substantially in the form set forth in Exhibit A, which is part of this Indenture, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, provided that the Securities may be Global Securities and as such may be issued in either registered or bearer form. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. The Company shall approve the forms of the Securities and any notation, legend or endorsement on them. Each Security shall be dated the date of its authentication. The terms and provisions contained in the Securities shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign the Securities for the Company by manual or facsimile signature. The Company's seal shall be reproduced on the Securities. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Upon a written order of the Company signed by an Officer of the Company, the Trustee shall authenticate Securities for original issue up to $ in aggregate principal amount. The aggregate principal amount of Securities outstanding at any time may not exceed that amount except as provided in Section 2.07. 6 15 The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 or any integral multiple thereof. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same right as an Agent to deal with the Company or an Affiliate. SECTION 2.03 REGISTRAR AND PAYING AGENT. The Company shall maintain or cause to be maintained in the Borough of Manhattan, City of New York (the "New York Office"), State of New York, and in such other locations as it shall determine: (i) an office or agency where securities may be presented for registration of transfer or for exchange ("Registrar"); [and] (ii) an office or agency where Securities may be presented for payment ("Paying Agent")[; and (iii) an office or agency where Securities may be presented for conversion ("Conversion Agent")]. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may appoint one or more co-registrars[, and] one or more additional paying agents [and one or more additional conversion agents]. The term "Paying Agent" includes any additional paying agent[; and the term "Conversion Agent" includes any additional conversion agent]. The Company may change any Paying Agent, Registrar[, or] co-registrar [or Conversion Agent] without prior notice. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture and shall enter into an appropriate agency agreement with any Registrar, Paying Agent[, or] co-registrar [or Conversion Agent] not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company or any of its subsidiaries may act as Paying Agent, Registrar[, or] co-registrar [or Conversion Agent]. If the Company fails to appoint or maintain another entity as Registrar[, or] Paying Agent[, or Conversion Agent], the Trustee shall act as such, and the Trustee shall initially act as such. The Trustee shall cause to be maintained the New York Office as long as it acts as Registrar[, or] Paying Agent [or Conversion Agent]. SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall require each Paying Agent (other than the Trustee, who hereby so agrees), to agree in writing that the Paying Agent will hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of principal or interest on the Securities, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require 7 16 a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a subsidiary) shall have no further liability for the money. If the Company or a subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Securityholders all money held by it as Paying Agent. SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee on or before each interest payment date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. SECTION 2.06. TRANSFER AND EXCHANGE. Where Securities are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Company shall issue and the Trustee shall authenticate Securities at the Registrar's request. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.10, 3.06[, or] 9.05 [or 12.02]). The Company shall not be required (i) to issue, register the transfer of or exchange Securities during a period beginning at the opening of business 15 days before the day of any selection of Securities for redemption under Section 3.02 and ending at the close of business on the day of selection, or (ii) to register the transfer or exchange of any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. SECTION 2.07. REPLACEMENT SECURITIES. If the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the Trustee's requirements are 8 17 met. If required by the Trustee or the Company as a condition of receiving a replacement Security, the Holder must provide an indemnity bond sufficient, in the judgment of both the Company and the Trustee, to fully protect the Company, the Trustee, any Agent and any authenticating agent from any loss which any of them may suffer if the Security is replaced. The Company may charge for its expenses in replacing any Security. Every replacement Security is an additional obligation of the Company. SECTION 2.08. OUTSTANDING SECURITIES. The Securities outstanding at any time are all the Securities properly authenticated by the Trustee except for those canceled by the Trustee, those delivered to it for cancellation, and those described in this Section as not outstanding. If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If Securities are considered paid under Section 4.01, they cease to be outstanding and interest on them ceases to accrue. A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. SECTION 2.09. WHEN TREASURY SECURITIES DISREGARDED. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or an Affiliate of the Company shall be considered as though they are not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. SECTION 2.10. TEMPORARY SECURITIES. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. 9 18 SECTION 2.11. CANCELLATION. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of canceled Securities as the Company directs, provided that the Trustee shall not be required to destroy such canceled securities. The Company may not issue new Securities to replace Securities that it has paid or that have been delivered to the Trustee for cancellation. SECTION 2.12. DEFAULTED INTEREST. If the Company fails to make a payment of interest on the Securities, it shall pay such defaulted interest plus any interest payable on the defaulted interest in any lawful manner. It may pay such defaulted interest, plus any such interest payable on it, to the persons who are Securityholders on a subsequent special record date. The Company shall fix any such record date and payment date. At least 15 days before any such record date, the Company shall mail to Securityholders a notice that states the record date, payment date and amount of such interest to be paid. SECTION 2.13. CUSIP NUMBER. The Company in issuing the Securities may use a "CUSIP" number, and if so, such CUSIP number shall be included in notices of redemption or exchange as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed in the notice or on the Securities and that reliance may be placed only on the other identification numbers printed on the Securities. The Company will promptly notify the Trustee of any change in the CUSIP number. ARTICLE 3 REDEMPTION SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem Securities pursuant to the optional redemption provisions of paragraph 5 of the Securities, it shall notify the Trustee of the redemption date and the principal amount of Securities to be redeemed. 10 19 The Company shall give each notice provided for in this Section at least 60 days before the redemption date (unless a shorter notice period shall be satisfactory to the Trustee). SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed pro rata or by lot, if lawful, or if required by another method that complies with the requirements of any exchange on which the Securities are listed and that the Trustee considers fair and appropriate. The Trustee shall make the selection not more than 75 days and not less than 45 days before the redemption date from Securities outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $1,000. Securities and portions of them it selects shall be in amounts of $1,000 or integral multiples of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be called for redemption. SECTION 3.03. NOTICE OF REDEMPTION. Except as provided in Section 4.11, at least 30 days but not more than 60 days before a redemption date, the Company shall mail a notice of redemption to each Holder whose Securities are to be redeemed. The notice shall identify the Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) if any Security is being redeemed in part, the portion of the principal amount of such Security to be redeemed and that, after the redemption date, upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion will be issued; (4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (5) that interest on Securities called for redemption ceases to accrue on and after the redemption date; 11 20 (6) the paragraph of the Securities pursuant to which the Securities are being redeemed; (7) the aggregate principal amount of Securities that are being redeemed; (8) the CUSIP number of the Securities (provided that the disclaimer permitted by Section 2.13 may be made); [and] (9) the name and address of the Paying Agent [and Conversion Agent][.][;] [(10) that Securities called for redemption may be converted at any time before the close of business on the redemption date; (11) that Holders who want to convert Securities must satisfy the requirements in paragraph 17 of the Securities; and (12) the current conversion price.] At the Company's request, the Trustee shall give notice of redemption in the Company's name and at its expense. SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date at the price set forth in the Security. SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or before the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money in immediately available funds sufficient to pay the redemption price of and accrued interest on all Securities to be redeemed on that date. The Trustee or the Paying Agent shall return to the Company any money not required for that purpose. SECTION 3.06 SECURITIES REDEEMED IN PART. Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Security equal in principal amount to the unredeemed portion of the Security surrendered. 12 21 [SECTION 3.07. MANDATORY REDEMPTION. To the extent lawful, the Company shall redeem ___ percent of the [initial] principal amount of the Securities [outstanding] as set forth in paragraph 5B of the Securities, which amount shall be rounded to the next highest integral multiple of $1,000, annually on each of the dates, upon the terms and subject to the conditions set forth in paragraph 6 of the Securities.] ARTICLE 4 COVENANTS SECTION 4.01. PAYMENT OF SECURITIES. The Company shall pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities. Principal and interest shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company or a subsidiary) holds on that date money designated for and sufficient to pay all principal and interest then due; provided, however, that money held by the Paying Agent for the benefit of holders of Senior Indebtedness pursuant to the provisions of Article 11 hereof shall not be considered paid within the meaning of this Section 4.01. To the extent lawful, the Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on (i) overdue principal, at the rate borne by the Securities, compounded semiannually; and (ii) overdue installments of interest (without regard to any applicable grace period) at the same rate, compounded semiannually. SECTION 4.02. SEC REPORTS. The Company shall deliver to the Trustee, within 15 days after it files them with the SEC, 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 SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company also shall comply with the other provisions of TIA Section 314(a). The Company shall timely comply with its reporting and filing obligations under the applicable federal securities law. If the Company is at any time not required to file annual or quarterly reports pursuant to Section 13 or 15(d) of the Exchange Act, the Company will file with the Trustee, within 15 days after the last date on which it would have been required to make such a filing with the SEC, and will upon 13 22 request of a Holder mail to that Holder (as soon as practical after receipt of such request) at his or her address as it appears on the register of Securities kept by the Registrar, audited annual financial statements prepared in accordance with generally accepted accounting principles and unaudited quarterly financial statements. Such financial statements shall be accompanied by a Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company for the period reported upon in substantially the form required under the rules and regulations of the SEC, or any successor form of similar disclosure then required under the rules and regulations of the SEC. SECTION 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, an Officers' Certificate, one of the signatories to which shall be the principal executive officer, principal financial officer or principal accounting officer of the Company, stating that a review of the activities of the Company and its subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has fully performed its obligations under this Indenture and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms and conditions hereof (or, if a Default or Events of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Securities are prohibited. The Company will, so long as any of the Securities are outstanding, deliver to the Trustee, forthwith upon becoming aware of (i) any Default, Event of Default or default in the performance of any term or condition in this Indenture or (ii) any event of default under any other mortgage, indenture or instrument as that term is used in Section 6.01(4), an Officers' Certificate specifying such Default, Event of Default or default. So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, at the time the Officers' Certificate described in the second preceding paragraph is filed, the Company also will file with the Trustee a letter or statement of the independent accountants who shall have certified the financial statements of the Company for its preceding fiscal year in connection with the annual report of the Company to its stockholders for such year to the effect that, in making the examination necessary for certification of such financial statements, nothing came to their attention that would lead them to believe 14 23 that the Company has violated any of the terms or conditions contained in this Indenture, which Default remains uncured at the date of such letter or statement or, if they shall have obtained knowledge of any such uncured Default, specifying in such letter or statement such Default or Defaults and the nature thereof, it being understood that such accountants shall not be liable directly or indirectly for failure to obtain knowledge of any such Default or Defaults and that their examination was not directed primarily toward obtaining knowledge of such noncompliance. SECTION 4.04. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain or cause to be maintained in the City of New York an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not maintained by the Trustee. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 10.10. The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain or cause to be maintained an office or agency in the City of New York for such purpose. SECTION 4.05. RESTRICTIONS ON DIVIDENDS AND OTHER PAYMENTS. The Company shall not, directly or indirectly: (1) declare or pay any dividend on, or make any distribution to the holders (as such) of, any shares of its capital stock (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company (other than any such Equity Interests owned by any subsidiary); or 15 24 (3) permit any subsidiary to purchase, redeem or otherwise retire for value any Equity Interests of the Company (other than any such Equity Interests owned by any subsidiary) (such dividends, distributions, purchases, redemptions or other acquisitions or retirements referred to in clauses (1), (2) or (3) being collectively referred to as "Restricted Payments"), if at the time of such Restricted Payment: (i) a Default or an Event of Default shall have occurred and be continuing, or would occur as a consequence thereof, or (ii) if, upon giving effect to such Restricted Payment, the aggregate amount expended (determined as set forth below) for all such Restricted Payments subsequent to the date hereof, shall exceed the sum of: (a) a percentage of the aggregate Consolidated Net Earnings of the Company (or, in the case such aggregate shall be a loss, 100% of such loss) accrued during fiscal quarters ending subsequent to a specified date, which percentage and date will be set forth in a supplemental indenture; (b) the aggregate net proceeds, including cash, the fair market value of property other than cash (as determined by the Board of Directors as evidenced by a Board resolution) and the amount of any Indebtedness (including principal, premium and interest), received by the Company from or in exchange for the issue or sale (other than to a subsidiary), subsequent to the date hereof, of capital stock of the Company (other than Disqualified Stock), other than in connection with the exchange of the Securities; (c) the amount expended for the purchase, redemption or other acquisition or retirement for value of any preferred stock of the Company; and (d) [$_________] [or] [the amount set forth in a supplemental indenture]. For purposes of any calculation pursuant to the preceding sentence which is required to be made within 60 days after the declaration of a dividend by the Company, such dividend shall be deemed to be paid at the date of 16 25 declaration, and the subsequent payment of such dividend during such 60-day period shall not be treated as an additional Restricted Payment. For purposes of determining under clause (ii) above the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value as determined by the Board of Directors as evidenced by a Board resolution. Notwithstanding the foregoing, the provisions of this Section 4.05 will not prevent: (i) the purchase of Securities by the Company; (ii) the payment of any dividend within 60 days after the date of declaration when the payment complied with the foregoing provisions on the date of declaration; (iii) the purchase, redemption or any acquisition or retirement for value of the Preferred Stock; (iv) the retirement of any shares of the Company's capital stock by exchange for, or out of the proceeds of the substantially concurrent sale (other than to a subsidiary) of, other shares of its capital stock (other than any Disqualified Stock), and neither such retirement nor the proceeds of any such sale or exchange, to the extent used for such retirement, shall be included in any computation made under this Section 4.05; and (v) the purchase at a price of not more than $.05 per right of any rights issued or issuable pursuant to any future rights plan of the Company. SECTION 4.06. CONTINUED EXISTENCE. Subject to Article 5, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a corporation and will refrain from taking any action that would cause its existence as a corporation to cease, including without limitation any action that would result in its liquidation, winding up or dissolution. SECTION 4.07. TAXES. The Company shall, and shall cause each of its Material Subsidiaries to, pay prior to delinquency all taxes, assessments and governmental levies, except as contested in good faith and by appropriate proceedings or where the failure to do so would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. SECTION 4.08. MAINTENANCE OF PROPERTIES. The Company shall, and shall cause each of its subsidiaries to, take reasonable action to maintain in appropriate condition each of its principal properties which in the judgment of management is essential to the business operations of the Company and its subsidiaries, taken as a whole, and the loss of which would have a material adverse effect on the financial condition of the Company and its subsidiaries, taken as a whole. Nothing contained in this Section 4.08 shall prevent or restrict the sale, abandonment 17 26 or other disposition of any property which management shall deem advisable. SECTION 4.09. INSURANCE. The Company shall, and shall cause each of its subsidiaries to, take reasonable action to maintain insurance, with financially sound and reputable insurers, to the extent and against such hazards as may be deemed appropriate by management (giving effect to self-insurance), on each of its principal properties the loss of which, in the judgment of management, would have a material adverse effect on the financial condition of the Company and its subsidiaries, taken as a whole. SECTION 4.10. INVESTMENT COMPANY ACT. The Company shall not become an investment company subject to registration under the Investment Company Act of 1940, as amended. SECTION 4.11. CHANGE OF CONTROL. Following the occurrence of any Change of Control, the Company shall offer (a "Change of Control Offer") to purchase all outstanding Securities at a purchase price equal to [101%] of the aggregate principal amount of the Securities, plus accrued and unpaid interest to the date of purchase. The Change of Control Offer shall be deemed to have commenced upon mailing of the notice described in the next succeeding paragraph and shall terminate 20 Business Days after its commencement, unless a longer offering period is required by law. Promptly after the termination of the Change of Control Offer (the "Change of Control Payment Date"), the Company shall purchase and mail or deliver payment for all Securities tendered in response to the Change of Control Offer. If the Change of Control Payment Date is on or after an interest payment record date and on or before the related interest payment date, any accrued interest will be paid to the person in whose name a Security is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Securities pursuant to the Change of Control Offer. Within 30 days after any Change of Control, the Company (with notice to the Trustee), or the Trustee upon reasonable notice and at the Company's request (and at the expense of the Company), will mail or cause to be mailed to all Holders on the date of the Change of Control a notice of the occurrence of such Change of Control and of the Holders' rights arising as a result thereof. Such notice will contain all instructions and materials necessary to enable Holders to tender their Securities to the Company. Such notice, which shall govern the terms of the Change of Control Offer, shall state: 18 27 (1) that the Change of Control Offer is being made pursuant to this Section 4.11 and the length of time the Change of Control Offer will remain open; (2) the purchase price and the Change of Control Payment Date; (3) that any Security not tendered will continue to accrue interest; (4) that any Security accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on the Change of Control Payment Date; (5) that any Security accepted for payment pursuant to any Change of Control Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice prior to termination of the Change of Control Offer; (6) that Holders will be entitled to withdraw their election if the Company, depositary or Paying Agent, as the case may be, receives, not later than the expiration of the Change of Control Offer, or such longer period as may be required by law, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Holder is withdrawing his or her election to have the Security purchased; and (7) that Holders whose Securities are purchased only in part will be issued Securities equal in principal amount to the unpurchased portion of the Securities surrendered. On or before a Change of Control Payment Date, the Company shall, to the extent lawful, (i) if the Company appoints a depositary or Paying Agent, deposit with such depositary or Paying Agent money sufficient to pay the purchase price of all Securities tendered, (ii) deliver or cause the depositary or Paying Agent to deliver to the Trustee Securities so tendered and (iii) deliver an Officers' Certificate identifying the Securities accepted for payment by the Company in accordance with the terms of this Section 4.11. The depositary, the Paying Agent or the Company, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Securities tendered by such Holder and accepted by the Company for purchase. The Company will publicly announce the 19 28 results of the Change of Control Offer on the Change of Control Payment Date. Any Change of Control Offer will be conducted in compliance with applicable tender offer rules, including Section 14(e) of the Exchange Act and Rule 14e-1 thereunder.* ARTICLE 5 SUCCESSORS SECTION 5.01 WHEN THE COMPANY MAY MERGE, ETC. The Company shall not consolidate or merge with or into, or sell, lease, convey or otherwise dispose of all or substantially all of its assets to, any person unless: (1) the corporation formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, lease, conveyance or other disposition shall have been made, is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia; (2) the corporation formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, lease, conveyance or other disposition shall have been made, assumes by supplemental indenture all the obligations of the Company under the Securities and this Indenture; and (3) immediately after the transaction no Default or Event of Default exists. The Company shall deliver to the Trustee prior to the consummation of the proposed transaction an Officers' Certificate to the foregoing effect and an Opinion of Counsel stating that the proposed transaction and such supplemental indenture comply with this Indenture. SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company in * Additional substantive covenants may be added. 20 29 accordance with Section 5.01, the successor entity formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor entity had been named as the Company herein; provided, however, that the predecessor Company in the case of a sale, lease, conveyance or other disposition shall not be released from the obligation to pay the principal of and interest on the Securities. SECTION 5.03. PURCHASE OPTION ON CHANGE OF CONTROL. This Article 5 does not affect the obligations of the Company (including without limitation any successor to the Company) under this Indenture. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" with respect to any Securities occurs if: (1) the Company defaults in the payment of interest on any Security when the same becomes due and payable and the Default continues for a period of 30 days; (2) the Company defaults in the payment of the principal of and premium, if any, on any Security when the same becomes due and payable at maturity, upon redemption or otherwise; (3) the Company fails to comply with any of its other agreements or covenants in, or provisions of, the Securities or this Indenture and the Default continues for the period and after the notice specified below; (4) an event of default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any Material Subsidiary (or the payment of which is guaranteed by the Company or a Material Subsidiary), whether such Indebtedness or guarantee now exists or shall be created hereafter, other than Indebtedness which is or will be non-recourse to the Company or a Material Subsidiary, if (a) either (i) such event of default results from the 21 30 failure to pay any such Indebtedness at maturity or (ii) as a result of such event of default the maturity of such Indebtedness has been accelerated prior to its expressed maturity and (b) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at maturity or the maturity of which has been so accelerated, aggregates [$_______] [the amount set forth in a supplemental indenture] or more; provided, however, that if such event of default shall be remedied, cured or waived, then the Event of Default hereunder by reason of such event of default shall be deemed likewise to have been remedied, cured or waived without further action by the Trustee or any of the Securityholders; or (5) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any Material Subsidiary which remains undischarged for a period (during which execution shall not be effectively stayed) of 60 days, provided that the aggregate of all such judgments exceeds [$__________] [the amount set forth in a supplemental indenture]; (6) the Company or any Material Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, (D) makes a general assignment for the benefit of its creditors, or (E) generally is unable to pay its debts as the same become due; (7) a court of competent jurisdiction enters a judgment, order or decree under any Bankruptcy Law that: (A) is for relief against the Company or any Material Subsidiary in an involuntary case, 22 31 (B) appoints a Custodian of the Company or any Material Subsidiary or for all or substantially all of their respective properties, or (C) orders the liquidation of the Company or any Material Subsidiary, and the order or decree remains unstayed and in effect for 60 days. The term "Bankruptcy Law" means title 11, U.S. Code or any similar federal or state Law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. A Default under clause (3) (other than Defaults under Section 4.05, 4.06[, or] 5.01 [or, with respect to the right to convert Securities, Article XII], which Defaults shall be Events of Default with the notice but without the passage of time specified in this paragraph), (4) or (5) is not an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the then outstanding Securities notify the Company of the Default and the Company does not cure the Default within 60 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of Default specified in clauses (6) and (7) of Section 6.01) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the then outstanding Securities by notice to the Company and the Trustee, may declare the unpaid principal of and accrued interest on all the Securities to be due and payable. Upon such declaration the principal and interest shall be due and payable immediately. If an Event of Default specified in clause (6) or (7) of Section 6.01 occurs, such an amount shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of a majority in principal amount of the then outstanding Securities by notice to the Trustee may rescind an acceleration and its consequences, except nonpayment of principal or interest on the Securities, if the rescission would not conflict with any judgment or decree. SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the 23 32 payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in principal amount of the then outstanding Securities by notice to the Trustee may waive an existing Default or Event of Default and its consequences except a continuing Default or Event of Default in the payment of the principal of or interest on any Security. When a Default is waived, it is cured and stops continuing. SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in principal amount of the then outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability. SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not pursue any remedy with respect to this Indenture or the Securities unless: (1) the Holder gives to the Trustee notice of a continuing Event of Default; (2) the Holders of at least 25% in principal amount of the then outstanding Securities make a request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; 24 33 (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) during such 60-day period the Holders of a majority in principal amount of the then outstanding Securities do not give the Trustee a direction inconsistent with the request. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT [AND TO CONVERT SECURITIES]. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal and interest on the Security, on or after the respective due dates expressed in the Security[, to convert the Security as and to the extent permitted by this Indenture and the terms of the Security] or to bring suit for the enforcement of any such payment [or of the right to convert the Security] on or after such respective dates, shall not be impaired or affected without the consent of the Holder. SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and interest remaining unpaid on the Securities and interest on overdue principal and interest and such further amount as shall be sufficient to cover the costs and, to the extent lawful, expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Company, its creditors or its property. Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding. 25 34 SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; Second: to holders of Senior Indebtedness to the extent required by Article 11; Third: to Securityholders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and Fourth: to the Company. The Trustee may fix a record date and payment date for any payment to Securityholders. SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the then outstanding Securities. ARTICLE 7 THE TRUSTEE The Trustee hereby accepts the trust imposed upon it by this Indenture and covenants and agrees to perform the same, as herein expressed. SECTION 7.01. DUTIES OF THE TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture 26 35 and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) Except during the continuance of an Event of Default: (1) The Trustee need perform only those duties that are specifically set forth in this Indenture and no others; and (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) of this Section; (2) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. 27 36 SECTION 7.02. RIGHTS OF THE TRUSTEE. (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in such a document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate, an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (e) The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of 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 reliance thereon. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. SECTION 7.03. INDIVIDUAL RIGHTS OF THE TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11. SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities and it shall not be responsible for any statement in the Indenture or any statement in the Securities other than its authentication. 28 37 SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Securityholder a notice of the Default within 90 days after it occurs. Except in the case of a Default in payment on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders. SECTION 7.06. REPORTS BY THE TRUSTEE TO HOLDERS. Within 60 days after the reporting date stated in Section 10.10, the Trustee shall mail to Securityholders a brief report dated as of such reporting date that complies with TIA Section 313(a), if such report is required by TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c). A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange on which the Securities are listed. The Company shall promptly notify the Trustee when the Securities are listed on any stock exchange. SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the Trustee from time to time such compensation as shall be agreed in writing between the Company and the Trustee for its services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses may include the reasonable compensation and out-of-pocket expenses of the Trustee's agents and counsel. The Company shall indemnify each of the Trustee and any successor Trustee against any loss, damage, claims, liability or out-of-pocket expenses, including taxes (other than taxes based on the income, revenues or receipts of the Trustee) incurred by it in connection with the acceptance (with respect to legal fees and other out-of-pocket expenses of the Trustee in connection with the acceptance of the trust or trusts hereunder, to the extent provided in the writing provided for in this Section 7.07) or administration of the trust or trusts hereunder, except as set forth in the next paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim with counsel, who may be outside counsel to the Company but shall in all events be reasonably satisfactory to the Trustee, and the Trustee shall cooperate in the defense. In addition, if the Company does not so defend the Trustee or 29 38 if at any time the counsel so selected is ethically prohibited from representing the Trustee (whether because of a conflict of interest or the provisions of the TIA), then the Trustee may retain one separate counsel and the Company shall pay the reasonable fees and expenses of such separate counsel. The indemnification herein extends to any settlement, provided that the Company will not be liable for any settlement made without its consent, provided further that such consent will not be unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith. To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on Securities. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(6) or (7) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. The provisions of this Section 7.07 shall survive the termination of this Indenture. SECTION 7.08. REPLACEMENT OF THE TRUSTEE. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Securities may remove the Trustee by so notifying the removed Trustee and the Company and may appoint a successor Trustee with the Company's consent. The Company may remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (3) a Custodian or public officer takes charge of the Trustee or its property; or (4) the Trustee becomes incapable of acting. 30 39 If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the then outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The removed or retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee with respect to expenses and liabilities incurred by it prior to such replacement. SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1). The Trustee shall always have a combined capital and surplus as stated in Section 10.10. The Trustee is subject to TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9). 31 40 SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship set forth in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS. (a) This Indenture shall cease to be of further effect (except that the Company's obligations under Section 7.07 and 8.03 shall survive) when all outstanding Securities theretofore authenticated and issued have been delivered (other than destroyed, lost or stolen Securities that have been replaced or paid) to the Trustee for cancellation and the Company has paid all sums payable hereunder. In addition, the Company may elect to have either paragraph (b) or paragraph (c) below be applied to the outstanding Securities upon compliance with the conditions set forth in paragraph (d). (b) Upon the Company's exercise under paragraph (a) of the option applicable to this paragraph (b), the Company shall be deemed to have been released and discharged from its obligations with respect to the outstanding Securities on the date the conditions set forth below are satisfied ("legal defeasance"). For this purpose, legal defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the outstanding Securities, which shall thereafter be deemed to be "outstanding" only for the purposes of the Sections of and matters under this Indenture referred to in (i) and (ii) below, and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following, which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of outstanding Securities to receive solely from the trust fund described in paragraph (d) below and as more fully set forth in such paragraph, payments in respect of the principal of, premium, if any, and interest on such Securities when such payments are due, (ii) the Company's obligations with respect to such Securities under Sections 2.06, 2.07 and 4.04, and, with respect to the Trustee, under Section 7.07, (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (iv) this Section 8.01. Subject to compliance with this Section 8.01, the Company may exercise its option under this paragraph (b) notwithstanding the prior exercise of its option under paragraph (c) below with respect to the Securities. 32 41 (c) Upon the Company's exercise under paragraph (a) of the option applicable to this paragraph (c), the Company shall be released and discharged from its obligations under any covenant contained in Article 5 and in Sections 4.02 through 4.12 with respect to the outstanding Securities on and after the date the conditions set forth below are satisfied ("covenant defeasance"), and the Securities shall thereafter be deemed to be not "outstanding" for the purpose of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to the outstanding Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby. (d) The following shall be the conditions to the application of either paragraph (b) or (c) above to the outstanding Securities: (1) the Company has irrevocably deposited in trust with the Trustee or, at the option of the Trustee, with a trustee, satisfactory to the Trustee and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, money or United States Government Obligations (defined below in this Section 8.01) sufficient to pay principal and interest on the Securities to maturity and all other sums payable by it hereunder; provided that (i) the trustee of the irrevocable trust shall have been irrevocably instructed to pay such money or the proceeds of such United States Government Obligations to the Trustee and (ii) the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such United States Government Obligations to the payment of said principal and interest with respect to the Securities; (2) the Company has delivered to the Trustee an Officers' Certificate stating that (A) all conditions precedent provided for relating to either the legal defeasance under paragraph (b) above or the covenant defeasance under paragraph (c) above, as the case may be, have been complied with and (B) if any other Indebtedness of the Company shall then be outstanding or committed, such legal defeasance or covenant defeasance will not violate the provisions of the agreements or instruments evidencing such Indebtedness; 33 42 (3) no Default or Event of Default shall have occurred and be continuing on the date of such deposit; (4) such legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a Default or Event of Default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (5) in the case of an election under paragraph (b) above, the Company shall have delivered to the Trustee an Opinion of Counsel from nationally recognized counsel acceptable to the Trustee stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that the Holders of the outstanding Securities will not recognize income, gain or loss for federal income tax purposes as a result of such legal defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same time as would have been the case if such legal defeasance had not occurred; and (6) in the case of an election under paragraph (c) above, the Company shall have delivered to the Trustee an Opinion of Counsel from nationally recognized counsel acceptable to the Trustee (i) to the effect that the Holders of the outstanding Securities will not recognize income, gain or loss for federal income tax on the same amount and in the same manner and at the same time as would have been the case if such covenant defeasance had not occurred or (ii) that the Company has received from, or there has been published by, the Internal Revenue Service a ruling to the foregoing effect. After such irrevocable deposit made pursuant to this Section 8.01 and satisfaction of the other conditions set forth herein, the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under this Indenture except for those surviving obligations specified above. As used herein, "United States Government Obligations" means direct obligations of the United States of America for the payment of which the full faith and credit of the United States of America is pledged. In order to have money available on a payment date to pay principal or interest on the Securities, the United States Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. United States Government Obligations shall not be callable at the issuer's option. 34 43 SECTION 8.02. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust money or United States Government Obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from United States Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal and interest on the Securities. Money and securities so held in trust are not subject to Article 11. SECTION 8.03. REPAYMENT TO COMPANY. Subject to Section 8.01(d), the Trustee and the Paying Agent shall promptly pay to the Company upon written request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years after the date upon which such payment shall have become due; provided, however, that the Company shall have first caused notice of such payment to the Company to be mailed to each Securityholder entitled thereto no less than 30 days prior to such payment. After payment to the Company, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person. SECTION 8.04. REINSTATEMENT. If (i) the Trustee or Paying Agent is unable to apply any money in accordance with Section 8.02 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application and (ii) the Holders of at least a majority in principal amount of the then outstanding Securities so request by written notice to the Trustee, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02; provided, however, that if the Company makes any payment of interest on or principal of any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent. 35 44 ARTICLE 9 AMENDMENTS SECTION 9.01. WITHOUT THE CONSENT OF HOLDERS. The Company and the Trustee may amend this Indenture or the Securities without notice to or the consent of any Securityholder: (1) to cure any ambiguity, defect or inconsistency; (2) to comply with Section[s] 5.01 [and 12.18]; (3) to provide for uncertificated Securities in addition to certificated Securities; (4) to make any change that does not adversely affect the legal rights hereunder of any Securityholder; (5) to add to the covenants of the Company such further covenants, restrictions, conditions or provisions as the Company and the Trustee shall consider to be for the protection of the Securityholders, 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 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 Securityholders to waive such an Event of Default; (6) to surrender any right or power herein conferred upon the Company; (7) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of the Indenture under the TIA, or under any similar federal statute hereafter enacted; or (8) before any Securities are issued, to make any other change in this Indenture not prohibited by the TIA. 36 45 SECTION 9.02. WITH THE CONSENT OF HOLDERS. Subject to Section 6.07, the Company and the Trustee may amend this Indenture or the Securities with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities. Subject to Sections 6.04 and 6.07, the Holders of a majority in principal amount of the Securities then outstanding may also waive compliance in a particular instance by the Company with any provision of this Indenture or the Securities. However, without the consent of each Securityholder affected, an amendment or waiver under this Section may not: (1) reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver; (2) reduce the rate of or change the time for payment of interest on any Security; (3) reduce the principal of or change the fixed maturity of any Security or alter the redemption provisions with respect thereto; (4) make any Security payable in money other than that stated in the Security; (5) make any change in Section 6.04, 6.07 or 9.02 (this sentence); [or] (6) waive a default in the payment of the principal of, or interest on, any Security [or any default under Article 12; or] (7) make any change that adversely affects the right to convert any Security]. To secure a consent of the Holders under this Section, it shall not be necessary for the Holders to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment or waiver under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing the amendment or waiver. After the issuance of any Securities, an amendment under this Section or under Section 9.01 may not make any change that adversely affects in any 37 46 material respect the rights under Article 11 of the holders of Senior Indebtedness, unless such holders consent to the change. SECTION 9.03. COMPLIANCE WITH THE TRUST INDENTURE ACT. Every amendment to this Indenture or the Securities shall be set forth in a supplemental indenture that complies with the TIA as then in effect. SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his or her Security or portion of a Security if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers' Certificate certifying that the Holders of the requisite principal amount of Securities have consented to the amendment or waiver. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment or waiver. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those persons who were Holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment or waiver or to revoke any consent previously given, whether or not such persons continue to be Holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period. After an amendment or waiver becomes effective it shall bind every Securityholder, unless it is of the type described in any of clauses (1) through (7) of Section 9.02. In such case, the amendment or waiver shall bind each Holder of a Security who has consented to it. SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. The Trustee may place an appropriate notation about an amendment or waiver on any Security thereafter authenticated. The Company in exchange for all Securities may issue and the Trustee shall authenticate new Securities that reflect the amendment or waiver. 38 47 SECTION 9.06. THE TRUSTEE PROTECTED. The Trustee shall sign all supplemental indentures, except that the Trustee need not sign any supplemental indenture that adversely affects its rights. The Company may not sign an amendment or supplement until the Board of Directors approves it. The Trustee, subject to Sections 7.01 and 7.02, shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that any amendment, supplement or waiver is authorized or permitted by this Indenture and complies with the provisions of this Article 9. ARTICLE 10 GENERAL PROVISIONS SECTION 10.01. TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA as in effect at the date hereof or, to the extent required by law, as amended after the date hereof, the required provision shall control. SECTION 10.02. NOTICES. Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail to the other's address stated in Section 10.10. The Company or the Trustee by notice to the other may designate an additional or different address for subsequent notices or communications. Any notice or communication to a Securityholder shall be mailed by first class mail to his or her address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Securityholders, it shall mail a copy to the Trustee and each Agent at the same time. All other notices or communications shall be in writing. 39 48 SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Securityholders may communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officers' Certificate stating that, in the opinion of the Company, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of the Company, such person has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of the Company, such condition or covenant has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers' Certificate. 40 49 SECTION 10.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or a meeting of Securityholders. The Registrar [, or] Paying Agent [or Conversion Agent] may make reasonable rules and set reasonable requirements for its functions. SECTION 10.07. LEGAL HOLIDAYS; BUSINESS DAYS. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in the City of New York or in the city in which the principal office of the Trustee is located are not required to be open, and a "Business Day" is any day that is not a Legal Holiday. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 10.08. NO RECOURSE AGAINST OTHERS. No director, officer, employee or shareholder, as such, of the Company shall have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the Securities. SECTION 10.09. COUNTERPARTS. This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. SECTION 10.10. OTHER PROVISIONS. "Officer" means Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Accounting Officer, any Executive Vice President, Senior Vice President, any Vice President, the Treasurer, any other Executive Officer, the Secretary, any Assistant Treasurer or any Assistant Secretary of the Company. The Company initially appoints the Trustee as Paying Agent, Registrar and authenticating agent. 41 50 The first certificate pursuant to Section 4.03 shall be for the fiscal year ending on the first June 30 following the issuance of Securities hereunder, but in no event later than one year after the date hereof. The reporting date for Section 7.06 is September 15 of each year. The first reporting date is the first September 15 following the issuance of Securities hereunder. The Trustee shall always have a combined capital and surplus of at least $10,000,000 as set forth in its most recent published annual report of condition. The Company's address [for purposes of Sections 2.03 and 4.04] is: Del Webb Corporation 6001 24th Street Phoenix, AZ 85016 Attention: General Counsel The Trustee's address is: [Bank of Montreal Trust Company 88 Pine Street, 19th Floor New York, New York 10005 and for all other purposes hereunder is: ---------------------------------- ---------------------------------- ---------------------------------- Attn: Corporate Trust Department.] SECTION 10.11. GOVERNING LAW. The internal laws of the State of New York shall govern this Indenture, the Securities, and all disputes arising under or related to either of them, without regard to the choice or conflicts of laws provisions thereof. If any action or proceeding shall be brought by a Holder of any of the Securities or by the Trustee in order to enforce any right or remedy under this Indenture or under the Securities, the Company hereby consents and will submit to the jurisdiction of the courts of the State of New York sitting in the City of New York or any federal court sitting in the City of New York. The Company hereby agrees to accept service of process by notice given to it pursuant to the provisions of Section 10.02. 42 51 SECTION 10.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a subsidiary. Any such other indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 10.13. SUCCESSORS. All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. SECTION 10.14. SEVERABILITY. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.15. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. ARTICLE 11 SUBORDINATION SECTION 11.01. AGREEMENT TO SUBORDINATE. The Company agrees, and each Securityholder by accepting a Security agrees, that the indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner provided in this Article, to the prior payment in full of all Senior Indebtedness and that the subordination is for the benefit of the holders of Senior Indebtedness. SECTION 11.02. CERTAIN DEFINITIONS. "Indebtedness" of any person, means any indebtedness, contingent or otherwise, in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such person or only to a portion thereof), evidenced by bonds, notes, debentures or similar instruments or letters of credit or representing the balance deferred and unpaid of the 43 52 purchase price of any property or interest therein (except any such balance that constitutes a trade payable), all capitalized lease obligations and all direct or indirect obligations which arise as a result of claims under or drawings pursuant to surety, performance, completion or maintenance bonds. "Representative" means the indenture trustee or other trustee, agent or representative for an issue of Senior Indebtedness. "Senior Indebtedness" means all Indebtedness (present or future) created, incurred, assumed or guaranteed by the Company (and all renewals, extensions or refundings thereof), unless the instrument under which such Indebtedness is created, incurred, assumed or guaranteed provides that such Indebtedness is not senior or superior in right of payment to the Securities. Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness shall not include (i) any Indebtedness of the Company to any of its subsidiaries, (ii) any trade payables of the Company or (iii) guarantees by the Company of Indebtedness (a) outstanding at the date hereof or (b) which may be outstanding in the future, except that Senior Indebtedness shall include any guarantees as may be listed in a supplemental indenture and any other present and future guarantees that provide by their terms that they constitute Senior Indebtedness. SECTION 11.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property: (1) holders of Senior Indebtedness shall be entitled to receive payment in full in cash of the principal of and interest (including interest accruing after the commencement of any such proceeding) to the date of payment on the Senior Indebtedness before Securityholders shall be entitled to receive any payment of principal of or interest on Securities; and (2) until the Senior Indebtedness is paid in full in cash, any distribution to which Securityholders would be entitled but for this Article shall be made to holders of Senior Indebtedness as their interests may appear, except that Securityholders may receive securities that are subordinated to Senior Indebtedness to at least the same extent as the Securities. For purposes of this Article 11, a distribution may consist of cash, securities or other property, by set-off or otherwise. 44 53 SECTION 11.04. DEFAULT ON SENIOR INDEBTEDNESS. Upon the final maturity of any Senior Indebtedness by lapse of time, acceleration or otherwise, all such Senior Indebtedness shall first be paid in full, or such payment duly provided for in cash or in a manner satisfactory to the holders of such Senior Indebtedness, before any payment is made by the Company or any person acting on behalf of the Company on account of the principal or interest of the Securities. The Company may not pay principal of or interest on the Securities and may not acquire any Securities for cash or property (other than capital stock of the Company or other securities of the Company that are subordinated to Senior Indebtedness to at least the same extent as the Securities) if: (1) a default on Senior Indebtedness occurs and is continuing that permits holders of such Senior Indebtedness to accelerate its maturity, and (2) the default is the subject of judicial proceedings or the Company receives a notice of the default from a person who may give it pursuant to Section 11.12, provided that, if the Company receives any such notice, a subsequent notice received within nine months thereafter shall not be effective for purposes of this Section. The Company shall resume payments on the Securities and may acquire them when: (a) the default is cured or waived, or (b) 180 days pass after the notice is given if the default is not the subject of judicial proceedings, if this Article otherwise permits the payment or acquisition at that time. SECTION 11.05. ACCELERATION OF SECURITIES. If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Indebtedness of the acceleration. The Company shall pay the Securities when 180 days pass after the acceleration occurs if this Article permits the payment at that time; provided, however, that if no Senior Indebtedness is outstanding at the time of such acceleration, the Company shall pay the Securities in accordance with the provisions of Article 6. 45 54 SECTION 11.06. WHEN DISTRIBUTIONS MUST BE PAID OVER. In the event that the Company shall make any payment to the Trustee on account of the principal or interest on the Securities at a time when such payment is prohibited by Section 11.03 or 11.04, such payment shall be held by the Trustee in trust for the benefit of, and shall forthwith be paid over and delivered to, the holders of Senior Indebtedness (pro rata as to each of such holders on the basis of the respective amounts of Senior Indebtedness held by them) or their Representative under the indenture or other agreement (if any) pursuant to which Senior Indebtedness may have been issued, as their respective interests may appear, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness. If a distribution is made to Securityholders that because of this Article should not have been made to them, the Securityholders who receive the distribution shall hold it in trust for holders of Senior Indebtedness and pay it over to them as their interests may appear. SECTION 11.07. NOTICE BY THE COMPANY. The Company shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of principal of or interest on the Securities to violate this Article, but failure to give such notice shall not affect the subordination of the Securities to the Senior Indebtedness provided in this Article. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07. SECTION 11.08. SUBROGATION. After all Senior Indebtedness is paid in full and until the Securities are paid in full, Securityholders shall be subrogated to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the Securityholders have been applied to the payment of Senior Indebtedness. A distribution made under this Article to holders of Senior Indebtedness which otherwise would have been made to Securityholders is not, as between the Company and Securityholders, a payment by the Company on Senior Indebtedness. SECTION 11.09. RELATIVE RIGHTS. This Article defines the relative rights of Securityholders and holders of Senior Indebtedness. Nothing in this Indenture shall: 46 55 (1) impair, as between the Company and Securityholders, the obligation of the Company, which is absolute and unconditional, to pay principal of and interest on the Securities in accordance with their terms; (2) affect the relative rights of Securityholders and creditors of the Company, other than holders of Senior Indebtedness; or (3) prevent the Trustee or any Securityholder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders of Senior Indebtedness to receive distributions otherwise payable to Securityholders. If the Company fails because of this Article to pay principal of or interest on Security on the due date, the failure is still a Default or Event of Default. SECTION 11.10. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY. No right of any holder of Senior Indebtedness to enforce the subordination of the indebtedness evidenced by the Securities shall be impaired by any act or failure to act by the Company or by its failure to comply with this Indenture. SECTION 11.11. DISTRIBUTION OR NOTICE TO THE REPRESENTATIVE. Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representative. SECTION 11.12. RIGHTS OF THE TRUSTEE AND PAYING AGENT. Notwithstanding any provision of this Article 11 or any other provision of this Indenture, the Trustee and Paying Agent 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 or a Paying Agent or the taking of any other action (pursuant to this Article 11) by the Trustee or a Paying Agent unless and until the Trustee or such Paying Agent, as the case may be, shall have received at its office specified in Section 10.10 written notice thereof from the Company, a Representative or a holder of Senior Indebtedness and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Sections 7.01 and 7.02, and such Paying Agent, shall be entitled in all respects conclusively to assume that no such fact exists. The Trustee or Paying Agent may continue to make 47 56 payments on the Securities unless it receives such a notice at least three business days prior to the date upon which payment is due. The Trustee shall be entitled to reasonably rely in good faith on the delivery to it of a written notice by a person representing himself, herself or itself to be a Representative or a holder of Senior Indebtedness to establish that such notice has been given by a Representative or a holder of such Senior Indebtedness. Only the Company, a Representative or a holder of Senior Indebtedness that has no Representative may give the notice. 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 Indebtedness to participate in any payment or distribution pursuant to this Article 11, 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, 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 11, and if such evidence is not furnished, the Trustee may defer any payment which it may be required to make for the benefit of such person pursuant to the terms of this Indenture pending judicial determination as to the rights of such person to receive such payment. Upon any payment or distribution of assets of the Company referred to in this Article 11, the Trustee and the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, liquidating trustee, Custodian, receiver, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining the persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 11. The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. SECTION 11.13 NO FIDUCIARY DUTY TO HOLDERS OF SENIOR INDEBTEDNESS. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 11, and no implied covenants or obligations with respect to the holders of Senior Indebtedness 48 57 shall be read into this Indenture against the Trustee or Paying Agent. Neither the Trustee nor the Paying Agent shall be deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and, subject to the provisions of Section 7.02, the Trustee shall not be liable to any holder of such Senior Indebtedness if it shall, in the absence of bad faith, pay over or deliver to holders of Securities, the Company or any other person monies or assets to which any holder of such Senior Indebtedness shall be entitled by virtue of this Article 11 or otherwise. [ARTICLE 12 CONVERSION SECTION 12.01. CONVERSION PRIVILEGE. For the purpose of this Article XII and paragraph 17 of the Securities, ["Common Stock" means the common stock of the Company as it exists on the date of this Indenture or as it may be constituted from time to time.] [and] ["Preferred Stock" means the Series __ Preferred Stock of the Company]. A Holder of a Security may convert it into [Preferred] [Common] Stock at any time during the period stated in paragraph 17 of the Securities. The number of shares issuable upon conversion of a Security is determined as follows: (i) divide the principal amount to be converted by the conversion price in effect on the conversion date; then (ii) round the result to the nearest 1/100th of a share. The initial conversion price is stated in paragraph 17 of the Securities. The conversion price is subject to adjustment. A Holder may convert a portion of a Security if the portion is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to conversion of all of a Security also apply to conversion of a portion of it. SECTION 12.02. CONVERSION PROCEDURE. To convert a Security a Holder must satisfy the requirements in paragraph 17 of the Securities. The date on which the Holder satisfies all those requirements is the conversion date. As soon as practical, the Company shall deliver through the Conversion Agent a certificate for the number of full shares of [Preferred] [Common] Stock issuable upon the conversion and a check for any fractional share. The person in whose name the certificate is registered shall be treated as a stockholder of record on and after the conversion date. 49 58 No payment or adjustment will be made for accrued interest on a converted Security or dividends on any [Preferred] [Common] Stock issued. However, interest will be paid on any interest payment date with respect to Securities surrendered for conversion after a record date for the payment of interest to the registered Holder on such record date. If a Holder converts more than one Security at the same time, the number of full shares issuable upon the conversion shall be based on the total principal amount of the Securities converted. Upon a surrender of a Security that is converted in part, the Company shall issue and the Trustee shall authenticate for the Holder a new Security equal in principal amount to the unconverted portion of the Security surrendered. If the last day on which a Security may be converted is a Legal Holiday in a place where a Conversion Agent is located, the Security may be surrendered to that Conversion Agent on the next succeeding day that is not a Legal Holiday. SECTION 12.03. FRACTIONAL SHARES. The Company will not issue a fractional share of [Preferred] [Common] Stock upon conversion of a Security. Instead the Company will deliver its check for the current market value of the fractional share. The current market value of a fraction of a share is determined as follows: (i) multiply the current market price of a full share by the fraction; then (ii) round the result to the nearest cent. The current market price of a share of [Preferred] [Common] Stock is the Quoted Price of the [Preferred] [Common] Stock on the last trading day prior to the conversion date. As used in Sections 12.03 and 12.11, the "Quoted Price" of the Common Stock is the last reported sales price of the [Preferred] [Common] Stock on the New York Stock Exchange or such other securities exchange on which the [Preferred] [Common] Stock may then be listed, or if the Common Stock is not listed on a securities exchange, the last reported sales price of the [Preferred] [Common] Stock as reported by NASDAQ, National Market System or if neither so reported or listed, the last reported bid price of the [Preferred] [Common] Stock. In the absence of such a quotation, the Company shall determine the current market price on the basis of such quotations or other information as it considers appropriate. 50 59 SECTION 12.04. TAXES ON CONVERSION. If a Holder of a Security converts it, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of [Preferred] [Common] Stock upon the conversion. However, the Holder shall pay any such tax which is due because the shares are issued in a name other than the Holder's name. SECTION 12.05. COMPANY TO PROVIDE STOCK. The Company has reserved and shall continue to reserve out of its authorized but unissued [Preferred] [Common] Stock or its [Preferred] [Common] Stock held in treasury enough shares of [Preferred] [Common] Stock to permit the conversion of the Securities in full. All shares of [Preferred] [Common] Stock which may be issued upon conversion of the Securities shall be fully paid and non-assessable. The Company will endeavor to comply with all securities laws regulating the offer and delivery of shares of [Preferred] [Common] Stock upon conversion of Securities and will endeavor to list such shares on each national securities exchange on which the [Preferred] [Common] Stock is listed. SECTION 12.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. Subject to Section 12.18, if the Company: (1) pays a dividend or makes a distribution on its [Preferred] [Common] Stock in shares of its [Preferred] [Common] Stock; (2) subdivides its outstanding shares of [Preferred] [Common] Stock into a greater number of shares; (3) combines its outstanding shares of [Preferred] [Common] Stock into a smaller number of shares; (4) makes a distribution on its [Preferred] [Common] Stock in shares of its capital stock other than [Preferred] [Common] Stock; or (5) issues by reclassification of its [Preferred] [Common] Stock any shares of its capital stock; 51 60 then the conversion privilege and the conversion price in effect immediately prior to such action shall be adjusted so that the Holder of a Security thereafter converted may receive the number of shares of capital stock of the Company which he would have owned immediately following such action if he had converted the Security immediately prior to such action. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment a Holder of a Security upon conversion of it may receive shares of two or more classes of capital stock of the Company, the Company shall determine the allocation of the adjusted conversion price between the classes of capital stock. After such allocation, the conversion privilege and the conversion price of each class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to [Preferred] [Common] Stock in this Article. SECTION 12.07. ADJUSTMENT FOR RIGHTS ISSUE. If the Company distributes any rights or warrants [other than the Warrants (the "Warrants") which are issued as part of unit consisting of Warrants and the Securities] to all holders of its [Preferred] [Common] Stock entitling them for a period expiring within 60 days after the record date mentioned below to purchase shares of [Preferred] [Common] Stock at a price per share less than the current market price per share on that record date, the conversion price shall be adjusted in accordance with the formula set forth below and the paragraph following such formula: N x P ------ C' = C x O + M ----------- O + N where: C' = the adjusted conversion price. C = the current conversion price. O = the number of shares of [Preferred] [Common] Stock outstanding on the record date. N = the number of additional shares of [Preferred] [Common] Stock offered. P = the offering price per share of the additional shares. 52 61 M = the current market price per share of [Preferred] [Common] Stock on the record date. The adjustment shall be made successively whenever any such rights become exercisable or such warrants are issued and shall become effective immediately after the rights become exercisable or after the record date for the determination of stockholders entitled to receive the warrants. If at the end of the period during which such warrants or rights are exercisable, not all warrants or rights shall have been exercised, the conversion price shall be immediately readjusted to what it would have been if "N" in the above formula had been the number of shares actually issued. SECTION 12.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company distributes to all holders of its [Preferred] [Common] Stock (as such) any of its assets or debt securities or any rights or warrants to purchase assets, debt securities or other securities of the Company, the conversion price shall be adjusted in accordance with the formula set forth below and the paragraph following such formula: C' = C x M - F ----- M where: C' = the adjusted conversion price. C = the current conversion price. M = the current market price per share of [Preferred] [Common] Stock on the record date mentioned below. F = the fair market value on the record date of the assets, securities, rights or warrants applicable to one share of [Preferred] [Common] Stock. The Board of Directors shall determine the fair market value. The adjustment shall be made successively whenever any such rights become exercisable or any such distribution (other than of such rights) is made and shall become effective immediately after any such rights become exercisable (as to rights) or after the record date for the determination of stockholders entitled to receive the distribution (as to other distributions). Notwithstanding the foregoing, no adjustment shall be made in the event that rights become exercisable if and to the extent Holders of Securities have received or are entitled to receive such rights upon conversion. In 53 62 addition, to the extent the rights or warrants expire unexercised, then the conversion price shall be promptly readjusted to the conversion price which would then be in effect had the adjustment been made based on the number of rights or warrants exercised. This Section does not apply to regular cash dividends or cash distributions paid out of consolidated current earnings as shown on the books of the Company. Also, this Section does not apply to rights or warrants referred to in Section 12.07, including the Warrants. SECTION 12.09. ADJUSTMENT FOR [PREFERRED] [COMMON] STOCK ISSUE. If the Company issues shares of [Preferred] [Common] Stock for a consideration per share less than the current market price per share on the date the Company fixes the offering price of such additional shares, the conversion price shall be adjusted in accordance with the formula: O + P - C' = C x M ----- A where: C' = the adjusted conversion price. C = the then current conversion price. O = the number of shares outstanding immediately prior to the issuance of such additional shares. P = the aggregate consideration received for the issuance of such additional shares. M = the current market price per share on the date of issuance of such additional shares. A = the number of shares outstanding immediately after the issuance of such additional shares. The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance. This Section does not apply to (i) any of the transactions described in Sections 12.07, 12.08 and 12.10, (ii) the conversion of Securities, or the conversion, exchange or exercise of other securities convertible or exchangeable for [Preferred] [Common] Stock, (iii) [Preferred] [Common] Stock issued to the Company's employees under bona fide employee plans 54 63 adopted by the Board of Directors and approved by the holders of [Preferred] [Common] Stock when required by law, if such [Preferred] [Common] Stock would otherwise be covered by this Section (but only to the extent that the aggregate number of shares excluded hereby and issued after the date of this Indenture shall not exceed [5%] of the [Preferred] [Common] Stock outstanding at the time of the adoption of each such plan, exclusive of antidilution adjustments thereunder), (iv) [Preferred] [Common] Stock issued to acquire, or in the acquisition of, all or any portion of a business as a going concern or of developed, undeveloped or mixed real property, in an arms-length transaction between the Company and an unaffiliated third party, whether such acquisition shall be effected by purchase of assets, exchange of securities, merger, consolidation or otherwise, (v) [Preferred] [Common] Stock issued in a bona fide public offering pursuant to a firm commitment underwriting or (vi) [Preferred] [Common] Stock issued on exercise of rights if and to the extent Holders of Securities have received or are entitled to receive such rights upon conversion. SECTION 12.10. ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE. If the Company issues any securities convertible into or exchangeable or exercisable for [Preferred] [Common] Stock (other than the Securities or securities issued in transactions described in Sections 12.07 and 12.08) for a consideration per share of [Preferred] [Common] Stock initially deliverable upon conversion, exchange or exercise of such securities less than the current market price per share on the date of issuance of such securities, the conversion price shall be adjusted in accordance with this formula: O + P - C' = C x M ----- O + D where: C' = the adjusted conversion price. C = the then current conversion price. O = the number of shares outstanding immediately prior to the issuance of such securities. P = the aggregate consideration received for the issuance of such securities (including as determined in Section 12.12(3)). M = the current market price per share on the date of issuance of such securities. 55 64 D = the maximum number of shares deliverable upon conversion or in exchange for or upon exercise of such securities at the initial conversion, exchange or exercise rate. The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance. If all of the [Preferred] [Common] Stock deliverable upon conversion, exchange or exercise of such securities have not been issued when such securities are no longer convertible, exchangeable or exercisable, then the conversion price shall promptly be readjusted to the conversion price which would then be in effect had the adjustment upon the issuance of such securities been made on the basis of the actual number of shares of [Preferred] [Common] Stock issued upon conversion, exchange or exercise of such securities. This Section does not apply to (1) convertible securities issued to acquire, or in the acquisition of, all or any portion of a business as a going concern or of developed, undeveloped or mixed real property, in an arms-length transaction between the Company and an unaffiliated third party, whether such acquisition shall be effected by purchase of assets, exchange of securities, merger, consolidation or otherwise, or (ii) convertible securities issued in a bona fide public offering pursuant to a firm commitment underwriting. SECTION 12.10A. SPECIAL PROVISION REGARDING PREFERRED STOCK. In addition to the foregoing adjustments and without duplication, if (x) prior to the exercise of a Security an event ("Event") occurs which, under the Certificate of Designations with respect to the Preferred Stock, would have required an adjustment in the number of share(s) of Common Stock into which the shares of Preferred Stock acquired on conversion of the Securities would have been convertible if such Security had previously been converted into Preferred Stock (but such Preferred Stock acquired on conversion had not been converted into Common Stock), then (y) after the Event, such share of Preferred Stock shall, when acquired on conversion of the Security, be convertible into the same number of share(s) of Common Stock into which it would have been convertible if such Security had been converted into Preferred Stock (but such Preferred Stock acquired on conversion had not been converted into Common Stock) prior to the Event. The adjustment required by the foregoing sentence shall be made each time there is an Event, provided that no adjustment shall be made under this Section 12.10A unless that adjustment results in a change of 1%, provided further that all adjustments not made by virtue of the preceding "provided" 56 65 clause shall be carried forward and made when the aggregate of all such adjustments results in a change of at least 1%.]* SECTION 12.11. CURRENT MARKET PRICE. In Sections 12.07, 12.08, 12.09 and 12.10, the current market price per share of [Preferred] [Common] Stock on any date is the average of the Quoted Prices (as defined in Section 12.03) of the [Preferred] [Common] Stock for 20 consecutive trading days commencing 30 trading days before the date in question. In the absence of one or more such quotations, the Company shall determine the current market price on the basis of such quotations or other information as it considers appropriate. SECTION 12.12. CONSIDERATION RECEIVED. For purposes of any computation respecting consideration received pursuant to Sections 12.09 and 12.10, the following shall apply: (1) in the case of the issuance of shares of [Preferred] [Common] Stock for cash, the consideration shall be the amount of such cash, provided that in no case shall any deduction be made for any commissions, discounts or, without limitation, other expenses incurred by the Company for any underwriting of the issue or otherwise in connection therewith, (2) in the case of the issuance of shares of [Preferred] [Common] Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof as determined in good faith by the Board of Directors (irrespective of the accounting treatment thereof), whose determination shall be conclusive, and described in a Board resolution which shall be filed with the Trustee; and (3) in the case of the issuance of securities convertible into or exchangeable or exercisable for shares, the aggregate consideration received therefor shall be deemed to be the consideration received by the Company for the issuance of such securities plus the additional minimum consideration, if any, to be * This provision will be used, if at all, if the Securities are exercisable for Preferred Stock which is convertible into Common Stock. 57 66 received by the Company upon the conversion or exchange thereof (the consideration in each case to be determined in the same manner as provided in clauses (1) and (2) of this Section). SECTION 12.13. WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the conversion price need be made unless the adjustment would require an increase or decrease of at least 1% in the conversion price. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Article shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. SECTION 12.14. WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made for a transaction referred to in Sections 12.06, 12.07, 12.08, 12.09 or 12.10 if all Securityholders are entitled to participate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis and notice on which holders of [Preferred] [Common] Stock participate in the transaction. No adjustment need be made for rights to purchase [Preferred] [Common] Stock pursuant to a Company plan for reinvestment of dividends or interest. No adjustment need be made for a change in the par value or no par value of the [Preferred] [Common] Stock. To the extent the Securities become convertible into cash, no adjustment need be made thereafter as to the cash. Interest will not accrue or be deemed to accrue on the cash for this purpose. In any case in which this Article 12 or the Securities shall require that an adjustment in the conversion price be made effective as of a record date for a specified event and notwithstanding anything to the contrary in this Article 12 of the Securities, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Security converted after such record date, the [Preferred] [Common] Stock or other capital stock of the Company, if any, issuable upon such conversion over and above the [Preferred] [Common] Stock or other capital stock of the Company, if any, issuable upon such conversion on the basis of the conversion price in effect prior to such adjustment; provided, however, [that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing, subject to the following proviso, such holder's right 58 67 to receive such additional shares upon the occurrence of the event requiring such adjustment and, provided further,] to the extent such event does not occur, the adjustment made in respect of such non-occurrence shall be retroactive and affect each conversion security converted between such Record Date and the date of such non-occurrence. SECTION 12.15. NOTICE OF ADJUSTMENT. Whenever the conversion price is adjusted, the Company shall promptly mail to Securityholders a notice of the adjustment. The Company shall file with the Trustee a certificate from the Company's independent public accountants briefly stating the facts requiring the adjustment and the manner of computing it. The certificate shall be conclusive evidence that the adjustment is correct, absent manifest error. SECTION 12.16. VOLUNTARY REDUCTION. The Company from time to time may reduce the conversion price by any amount for any period of time if the period is at least [20] days and if the reduction is irrevocable during the period; provided that in no event may the conversion price be less than the then par value of a share of [Preferred] [Common] Stock, if any. Whenever the conversion price is reduced, the Company shall mail to Securityholders a notice of the reduction. The Company shall mail the notice at least 15 days before the date the reduced conversion price takes effect. The notice shall state the reduced conversion price and the period it will be in effect. A reduction of the conversion price does not change or adjust the conversion price otherwise in effect for purposes of Sections 12.06, 12.07, 12.08, 12.09 and 12.10. SECTION 12.17. NOTICE OF CERTAIN TRANSACTIONS. If: (1) the Company takes any action that would require an adjustment in the conversion price pursuant to Sections 12.06, 12.07, 12.08, 12.09 or 12.10 and if the Company does not let Securityholders participate pursuant to Section 12.14 [or which is referred to in Section 12.10A]; (2) the Company takes any action that would require a supplemental indenture pursuant to Section 12.18; or 59 68 (3) there is a liquidation or dissolution of the Company, the Company shall mail to Securityholders and to the Trustee a notice stating the proposed record date, proposed effective date or other relevant proposed date of the act in question. The Company shall mail the notice at least [15] days before such date. Failure to mail the notice or any defect in it shall not affect the validity of the transaction. SECTION 12.18. REORGANIZATION OF COMPANY. If the Company is a party to a transaction subject to Section 5.01, or a transaction which reclassifies or changes its outstanding [Preferred] [Common] Stock, upon consummation of such transaction the Securities shall automatically become convertible into the kind and amount of securities, cash or other assets which the Holder of a Security would have owned immediately after the transaction if the Holder had converted the Security immediately before the effective date of the transaction. Concurrently with the consummation of such transaction, the person obligated to issue securities or deliver cash or other assets upon conversion of the Securities shall enter into a supplemental indenture so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Article. The Company or, if applicable, the other person shall mail to Securityholders a notice describing the transaction and supplemental indenture. If securities deliverable upon conversion of Securities, as provided above, are themselves convertible into the securities of an Affiliate of the other person, that Affiliate shall join in the supplemental indenture and the supplemental indenture shall so provide. If this Section applies, Section 12.06 does not apply. SECTION 12.19. COMPANY DETERMINATION FINAL. Any determination that the Company or the Board of Directors must make pursuant to Section 12.03, 12.06, 12.08, 12.09, 12.10, 12.11, 12.12 or 12.14 is conclusive. SECTION 12.20. TRUSTEE'S DISCLAIMER. The Trustee has no duty to determine when an adjustment under this Article should be made, how it should be made or what it should be. The Trustee has no duty to determine whether any provisions of a supplemental indenture under Section 12.18 are correct. The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities. The Trustee shall not be responsible for the 60 69 Company's failure to comply with this Article. Each Conversion Agent other than the Company shall have the same protection under this Section as the Trustee.] The parties have caused this Indenture to be duly executed and attested, all as of the date first above written, in _____________, _____________, signifying their agreements contained in this Indenture. SIGNATURES DEL WEBB CORPORATION By:___________________________ Attest: ______________________________ [Bank of Montreal Trust Company,] as Trustee ______________________________ Attest: ______________________________ 61 70 EXHIBIT A (FACE OF SECURITY)* No. $ CUSIP No. ____ DEL WEBB CORPORATION promises to pay to or registered assigns, the principal sum of Dollars on ________________________ _____% [CONVERTIBLE] [JUNIOR] SUBORDINATED [DEBENTURE] [NOTE] DUE ________ Interest Payment Dates: _______________ and _______________ Record Dates: _______________ and _______________ This is one of the Securities Dated: mentioned in the Indenture referred to below: [Bank of Montreal Trust Company,] DEL WEBB CORPORATION as Trustee By:__________________________ By:_________________________ Authorized Signatory By:_________________________ _____________________________ * Global securities will have any appropriate modifications and will bear essentially the following legend: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO BELOW AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES. A-1 71 (BACK OF SECURITY) ___% [Convertible][Junior] Subordinated [Debenture] [Note] Due __________ 1. Interest. Del Webb Corporation, a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest semiannually on _________ and _________ of each year. Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from _________, 199_. Interest will be computed on the basis of a 360-day year of twelve 30-day months. [Provisions as to the right of the Company to defer interest, if any, may be set forth here.] 2. Method of Payment. The Company will pay interest on the Securities (except defaulted interest) to the persons who are registered holders of Securities at the close of business on the record date for the next interest payment date even though Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal and interest by check payable in such money. It may mail an interest check to a holder's registered address. 3. Paying Agent [, and] Registrar [and Conversion Agent]. [Bank of Montreal Trust Company] (the "Trustee") will act as Paying Agent [, and] Registrar [and Conversion Agent]. The Company may change the Paying Agent, Registrar or co-registrar without prior notice. The Company or any of its subsidiaries may act in any such capacity. 4. Indenture. The Company issued the Securities under an Indenture dated as of ___________, 199_ [as modified by a Supplemental Indenture dated as of ____________, 199_] ([collectively, ]the "Indenture") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of the Indenture. The Securities are subject to, and qualified by, all such terms, certain of which are summarized hereon, and Securityholders are referred to the Indenture and such Act for a statement of such terms. The Securities are unsecured general obligations of the Company limited to $__________ in aggregate principal amount [of which $___________ may only be issued as 'Additional Securities' on or before the 30th day after the date of, and pursuant to the terms of, that certain Underwriting Agreement dated _________, 199_ by and between the Company A-2 72 and _________________. The Company will not originally issue any Additional Securities except pursuant to the Underwriting Agreement. If no Additional Securities are issued the Securities will be limited to $____________ in aggregate principal amount.] Capitalized terms not defined below have the same meaning as is given to them in the Indenture. 5[A]. Optional Redemption. The Company may not redeem the Securities prior to ____________. Thereafter, the Company may redeem all the Securities at any time or some of them from time to time at the redemption prices (expressed in percentages of principal amount) set forth below plus accrued interest to the redemption date, if redeemed during the 12-month period beginning _________ of the years starting with _____ indicated below. Year Percentage Year Percentage and thereafter 100.000 [5B. Mandatory Redemption. The Company will redeem ___% of the [initial] principal amount of Securities [(including any Additional Securities)] [then outstanding] on ____________, and on each _________ thereafter through ___________ at a redemption price of 100% of principal amount, plus accrued interest to the redemption date. The Company may reduce the principal amount of Securities to be redeemed pursuant to this paragraph 6 by subtracting 100% of the principal amount (excluding premium) of any Securities that [Securityholders have converted,] the Company has delivered to the Trustee for cancellation or the Company has previously purchased, redeemed, retired or acquired other than pursuant to this paragraph 6, provided that the Company may so subtract the same Security only once.] 6. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of Securities to be redeemed at his or her registered address. Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. In the event of a redemption of less than all of the Securities, the Securities will be chosen for redemption by the Trustee, generally pro rata or by lot. On and after the redemption date interest ceases to accrue on Securities or portions of them called for redemption. A-3 73 If this Security is redeemed subsequent to a record date with respect to any interest payment date specified above and on or prior to such interest payment date, then any accrued interest will be paid to the person in whose name this Security is registered at the close of business on such record date. 7. Change of Control. Upon a Change of Control, the Company shall make a Change of Control Offer to purchase all outstanding securities at a price equal to 101% of the aggregate principal amount of the Securities, plus accrued and unpaid interest to the date of purchase. To accept the Change of Control Offer, the Holder hereof must comply with the terms thereof, including surrendering this Security, with the "Option of Holder to Elect Purchase" portion hereof completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent, at the address specified in the notice of the Change of Control Offer mailed to Holders as provided in the Indenture, prior to termination of the Change of Control Offer. 8. Subordination. To the extent set forth in Article 11 of the Indenture, the Securities are subordinated to Senior Indebtedness, which generally is any Indebtedness outstanding on the date of the Indenture or Indebtedness thereafter created, incurred, assumed or guaranteed by the Company and all renewals, extensions and refundings thereof except Indebtedness that expressly provides that it is not senior to or superior in right of payment to the Securities. Senior Indebtedness does not include Indebtedness of the Company to any of its subsidiaries, trade payables of the Company and certain Indebtedness of others guaranteed by the Company. Indebtedness, for any specified person, is any indebtedness, contingent or otherwise, in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of the person or only to a portion thereof) evidenced by bonds, notes, debentures or similar instruments or letters of credit or representing the balance deferred and unpaid of the purchase price of any property or interest therein (except any such balance that constitutes a trade payable), all capitalized leases and all direct or indirect obligations which arise as a result of claims under or drawings pursuant to surety, performance, completion or maintenance bonds. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Securities may be paid. The Company agrees, and each Securityholder by accepting a Security agrees, to the subordination and authorizes the Trustee to give it effect. 9. Denominations, Transfer, Exchange. The Securities are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. As a condition of transfer, the Registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Security or portion of a Security selected for redemption. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before a selection of Securities to be redeemed. A-4 74 10. Persons Deemed Owners. The registered holder of a Security may be treated as its owner for all purposes. 11. Amendments and Waivers. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the holders of at least a majority in principal amount of the then outstanding Securities and any existing default may be waived with the consent of the holders of a majority in principal amount of the then outstanding Securities. Without the consent of any Securityholder, the Indenture or the Securities may be amended: to cure any ambiguity, defect or inconsistency; to provide for assumption of the Company's obligations to Securityholders; to make any change that does not adversely affect the rights of any Securityholder; to add to the covenants of the Company, for the benefit of the Securityholders; or to modify the Indenture to effect its qualification under the TIA. 12. Defaults and Remedies. An Event of Default is: default for 30 days in payment of interest on the Securities; default in payment of principal of and premium, if any, on the Securities; failure by the Company for 60 days after notice to it to comply with any of its other agreements in the Indenture or the Securities or, in the case of failure by the Company to maintain its corporate existence or to comply with the restrictions on payments of dividends and other distributions, the restrictions on consolidation, merger or transfer or lease of substantially all its assets [or the provisions regarding conversion of the Securities], with such notice but without such passage of time; certain defaults under and accelerations prior to maturity of certain Indebtedness; certain final judgments which remain undischarged; and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the then outstanding Securities may declare all the Securities to be due and payable immediately, except that in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Securities become due and payable without further action or notice. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, holders of a majority in principal amount of the then outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company must furnish an annual compliance certificate to the Trustee. 13. Trustee Dealings with the Company. [Bank of Montreal Trust Company], the Trustee under the Indenture, or any of its Affiliates, in their individual or any other capacities, may make or continue loans to or guaranteed by, accept deposits from and perform services for the Company or its Affiliates and may otherwise deal with the Company or its Affiliates as if [Bank of Montreal Trust Company] were not Trustee. A-5 75 14. No Recourse Against Others. No director, officer, employee or stockholder, as such, of the Company shall have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the Securities. 15. Authentication. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants by the entireties, JT TEN = joint tenants with right of survivorship and not as tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to Minors Act. The Company will furnish to any Securityholder upon written request and without charge a copy of the Indenture, which has in it the text of this Security in larger type. Requests may be made to: Treasurer, Del Webb Corporation, 2231 East Camelback Road, P.O. Box 29040, Phoenix, AZ 85016. [17. Conversion. A holder of a Security may convert it into [Preferred] [Common] Stock of the Company at any time before the close of business on ________,_____. If the Security is called for redemption, the holder may convert it at any time before the close of business on the redemption date (unless the Company shall default in payment due upon redemption thereof). The initial conversion price of $__ per share is subject to adjustment in certain events. To determine the number of shares issuable upon conversion of a Security, divide the principal amount to be converted by the conversion price in effect on the conversion date. On conversion, no payment or adjustment for interest will be made. However, interest will be paid on any interest payment date with respect to Securities surrendered for conversion after a record date for the payment of interest to the registered holder on such record date. The Company will deliver a check for any fractional share. To convert a Security a holder must (1) complete and sign the conversion notice on the back of the Security, (2) surrender the Security to a Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Registrar or Conversion Agent and (4) pay any transfer or similar tax if required by the Indenture or applicable law. A holder may convert a portion of a Security if the portion is $1,000 or an integral multiple of $1,000. The conversion price is subject to adjustment as set forth in the Indenture in certain events. No adjustment in the conversion price will be required unless such adjustment would require a change of at least 1% in the price then in effect; but any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. A-6 76 The Company from time to time may voluntarily reduce the conversion price for a period of time. If the Company is a party to a consolidation or merger or a transfer or lease of all or substantially all of its assets, the Securities automatically become convertible into the kind and amount of securities, cash or other assets which the Holder of a Security would have owned immediately after such transaction if the Holder had converted the Security immediately before the effective date of the transaction.] A-7 77 ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to: [ ] (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint: - -------------------------------------------------------------------------------- agent to transfer this Security on the books of the Company. The agent may substitute another to act for him or her. Date: --------------------------------------------------------------------------- [CONVERSION NOTICE To convert this Security into [Preferred] [Common] Stock of -------------------- the Company, check the box: [ ] To convert only part of this Security, state the amount: [$ ] If you want the stock certificate made out in another person's name, fill in the form below: [ ] (insert other person's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type other person's name, address and zip code.) Your signature: ----------------------------------------------------------------- - -------------------------------------------------------------------------------- (Sign exactly as your name appears on the other side of this Security)] Signature Guarantee: A-8 78 [OPTION OF HOLDER TO ELECT PURCHASE] If you want to elect to have this Security purchased by the Company pursuant to Section 4.11 of the Indenture and paragraph 7 of this Security, check the box: [ ] If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.11 of the Indenture and paragraph 7 of this Security, state the amount: $______ Date:____________________ Your Signature:__________________________ (Sign exactly as your name appears on the other side of this Security) Signature Guarantee: A-9 EX-4.4 5 EX-4.4 1 EXHIBIT 4.4 WARRANT AGREEMENT DATED AS OF ___________, 199_ BETWEEN DEL WEBB CORPORATION AND ________________________________, WARRANT AGENT 2 TABLE OF CONTENTS
Page ---- Section 1. Appointment of Warrant Agent............................... 1 Section 2. The Warrant Certificates................................... 1 Section 3. Execution and Countersignature of Warrant Certificates..... 1 Section 4. Registration; Transfers and Exchanges...................... 2 Section 5. Duration and Exercise of Warrants; Extension and Acceleration of Expiration Date............................ 2 Section 6. Call of the Warrants....................................... 4 Section 7. Optional Reduction of Exercise Price....................... 4 Section 8. Payment of Taxes........................................... 4 Section 9. Mutilated or Missing Warrant Certificates.................. 4 Section 10. Reservation of Shares...................................... 5 Section 11. Obtaining of Governmental Approvals and Stock Exchange Listings................................................... 5 Section 12. Adjustment of Exercise Price, Number of Shares Purchasable and Number of Warrants..................................... 5 Section 13. Fractional Warrants and Fractional Shares.................. 9 Section 14. Board of Director Action; No Liability of Directors, Officers, Employees or Shareholders........................ 10 Section 15. Notices to Warrant Holders; Warrant Holders Not Shareholders............................................... 10 Section 16. Merger, Consolidation or Change of Name of Warrant Agent... 12 Section 17. Warrant Agent.............................................. 12 Section 18. Change of Warrant Agent.................................... 14 Section 19. Issuance of New Warrant Certificates....................... 14 Section 20. Notices to Company and Warrant Agent....................... 14 Section 21. Identity of Transfer Agent................................. 15 Section 22. Supplements and Amendments................................. 15 Section 23. Successors................................................. 15 Section 24. Termination................................................ 15
i 3 Section 25. Governing Law.............................................. 15 Section 26. Benefits of this Agreement................................. 15 Section 27. Counterparts............................................... 15 Section 28. Conversion of Warrants at Expiration of Exercise Period.... 16
ii 4 This Warrant Agreement (this "Agreement") is entered into as of _________, 199_ between Del Webb Corporation, a Delaware corporation (the "Company"), and ________________________________(the "Warrant Agent"). The Company proposes to offer and issue from time to time [in one or more series its debt securities (the "Debt Securities") with an aggregate initial offering price not to exceed $___________, which Debt Securities may be offered as part of units (the "Units") consisting of Debt Securities and] Stock Purchase Warrants (the "Warrants"). An aggregate of _____ Warrants may be offered and issued and each Warrant will entitle the holder thereof to purchase one share of [Series __ Preferred] [Common]* Stock of the Company (as used below the term "Shares" refers to shares of such [Preferred] [Common] Stock and of any stock of any other class into which such shares may, after the date of this Agreement, be changed); and The Company desires that the Warrant Agent act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance of certificates evidencing the Warrants (the "Warrant Certificates") and the other matters provided in this Agreement. The parties hereto agree as set forth below. SECTION 1. APPOINTMENT OF WARRANT AGENT. The Company appoints the Warrant Agent to act as agent for the Company in accordance with the instructions set forth in this Agreement, and the Warrant Agent accepts such appointment and agrees to so act. SECTION 2. THE WARRANT CERTIFICATES. The Warrant Certificates (and the Forms of Exercise and Assignment to be set forth on the reverse thereof) shall be substantially in the form set forth in Exhibit A attached hereto. The Warrant Certificates shall be printed, lithographed or engraved and may have such letters, numbers or other marks of identification and such legends printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any rule or regulation of any stock exchange on which the Warrants may be listed, or to conform to usage. SECTION 3. EXECUTION AND COUNTERSIGNATURE OF WARRANT CERTIFICATES. (a) The Warrant Certificates shall be executed on behalf of the Company by its Chairman of the Board, Chief Executive Officer, President, any of its Vice Presidents or its Treasurer. The signature of any of these officers on any Warrant Certificate may be manual or facsimile. Warrant Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company notwithstanding that such individuals, or any of them, ceased to be such officers prior to the countersignature and delivery of such Warrant Certificate or were not such officers at the date of this Agreement. (b) Each Warrant Certificate shall be countersigned by the manual signature of an authorized officer of the Warrant Agent and shall not be valid for any purpose unless so countersigned. The Warrant Agent is hereby authorized to countersign Warrant Certificates for issuance pursuant to any provision of this Agreement. (c) Each Warrant Certificate shall be dated the date of its countersignature by the Warrant Agent. _________________ * Language in brackets in this form of Warrant Agreement may or may not be included in the final Warrant Agreement. Appropriate disclosure will be made in the Prospectus Supplement of which alternate terms have been selected. 5 SECTION 4. REGISTRATION; TRANSFERS AND EXCHANGES. (a) The Company shall maintain an office or agency in the State of New York (the "Register Office"), at which there shall be maintained a register for the registration of the Warrant Certificates and of their transfer from time to time (the "Warrant Register"). The Register Office shall initially be the corporate trust office of the Warrant Agent at _______________, New York, New York. Additional offices or agencies, within or outside of the State of New York, may be maintained by the registration of the Warrant Certificates and their transfer from time to time. (b) The Company and the Warrant Agent may deem and treat the registered holder of each Warrant Certificate as the absolute owner thereof (notwithstanding any notation of ownership or other writing thereon made by anyone) for the purposes of any exercise or conversion thereof and any distribution to the holder thereof and, without limitation, for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. (c) Subject to Section 5(a), each Warrant Certificate shall be transferable, in whole or in part, on the Warrant Register, upon surrender of the Warrant Certificate at the Register Office, together with a written assignment of the Warrant Certificate, on the Form of Assignment set forth on the reverse thereof or in another form satisfactory to the Warrant Agent, duly executed by the registered holder thereof or his, her or its duly appointed legal representative, together with funds to pay any transfer taxes payable in connection with such transfer as provided in Section 8. Upon such surrender and payment, a new Warrant Certificate, in the name of the assignee and in the denomination or denominations specified in such instrument of assignment, shall be issued and delivered. If less than all of the Warrant Certificate is being transferred, a new Warrant Certificate or Certificates shall be issued for the portion of the Warrant Certificate not being transferred. The Warrant Certificate surrendered shall be canceled by the Warrant Agent. (d) Subject to Section 5(b), a Warrant Certificate may be divided or combined with other Warrant Certificates upon surrender thereof at the Register Office, together with a written notice specifying the names and denominations in which new Warrant Certificates are to be issued, signed by the registered holder thereof or his, her or its duly appointed legal representative, together with the funds to pay any transfer taxes payable in connection with such transfer. Upon such surrender and payment, a new Warrant Certificate or Certificates shall be issued and delivered in accordance with such notice. The Warrant Certificate surrendered shall be canceled by the Warrant Agent. (e) Except as provided in Section 8, the Company shall make no service or other charge in connection with any such transfer or exchange of Warrant Certificates, except for any transfer taxes payable in connection therewith. Warrant Certificates canceled by the Warrant Agent pursuant to any provision of this Agreement shall be destroyed by it unless the Company directs their return to the Company. The Warrant Agent shall furnish to the Company written confirmation of the destruction of the Warrant Certificates so canceled. SECTION 5. DURATION AND EXERCISE OF WARRANTS; EXTENSION AND ACCELERATION OF EXPIRATION DATE. (a) The Warrants shall expire at the close of business on ____,__ or (i) such later date as may be established from time to time by the Company in its sole discretion and specified in a notice given to the Warrant Agent and to the registered holders of the Warrant Certificates as provided in Sections 20 and 15, respectively, or (ii) such earlier date as may be established by 2 6 the Company in accordance with Section 6 (the date of expiration is referred to below as the "Expiration Date"). Each Warrant may be exercised on any business day on or prior to the close of business on the Expiration Date or on the fifth New York Stock Exchange ("NYSE") trading day prior to the Warrant Call Date (as defined below); provided, however, that until ____,__ [or such earlier date as may be determined by the Company with the consent of the underwriter(s) of the offering of the Units,] the Warrants and Debt Securities constituting each Unit may not be separately transferred and transfers or exchanges of the Debt Securities shall constitute transfers and exchanges of the Warrants included in the Units of which the transferred or exchanged Debt Securities are a part. After the close of business on the Expiration Date, unexercised Warrants will become wholly void and of no value [except for the conversion thereof as provided in Section 28]. (b) Subject to the provisions of this Agreement, the holder of each Warrant shall have the right to purchase from the Company (and the Company shall issue and sell to such holder) one fully paid and nonassessable Share at the exercise price (the "Exercise Price") at the time in effect hereunder, upon surrender to the Register Office, of the Warrant Certificate evidencing such Warrant, with the Form of Exercise on the reverse thereof duly filled in and signed, and payment of the Exercise Price in lawful money of the United States of America by cashier's check payable to the order of the Company [or by delivery of Debt Securities as provided in Section 5(c), or any combination thereof]. The Exercise Price, as of the initial issuance of the Warrants, shall be $___ per one Share. The Exercise Price and the number of Shares purchasable upon exercise of a Warrant shall be subject to adjustment as provided in Section 12. No adjustments shall be made for any cash dividends on Shares issuable on the exercise of a Warrant. [(c) Payment of the Exercise Price of Warrants may be made by delivering Debt Securities to the Warrant Agent, together with the Warrant Certificate. Debt Securities so delivered will be applied to the payment of the Exercise Price at 100% of original principal amount, [plus] [without] any accrued interest. Any increment of the Exercise Price remaining unpaid after application of the Debt Securities shall be payable by the holder in lawful money of the United States of America as provided in Section 5(c). The Warrant Agent shall surrender Debt Securities so delivered to it to the Trustee for the Debt Securities for cancellation in accordance with the terms of the Indenture pursuant to which the Debt Securities were issued. If the principal amount of Debt Securities delivered by any holder exceeds the principal amount applicable to payment of the Exercise Price, the Warrant Agent shall also deliver to the Trustee such instructions as the holder shall have given on the reverse of the Warrant Certificate to enable the Trustee to issue one or more new Debt Securities representing such excess of principal amount over the Exercise Price. In no case shall the Company, through either the Warrant Agent or the Trustee, be required to make any payment, other than payment in lieu of fractional shares as provided in Section 13, in connection with the exercise of any Warrant where all or any part of the Exercise Price therefor is paid by delivery of Debt Securities.] [(d)] Subject to Section 8, (i) upon such surrender of a Warrant Certificate and payment of the Exercise Price at the time in effect hereunder, the Warrant Agent shall cause to be issued and shall deliver to or upon the written order of the registered holder of such Warrant Certificate and in such name or names as such registered holder may designate, a certificate for the Share or Shares issuable upon the exercise of the Warrant or Warrants evidenced by such Warrant Certificate and (ii) such certificate shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become the holder of record of such Share or Shares as of the date of the surrender of such Warrant Certificate and payment of the Exercise Price, as provided above in this Section 5. [(e)] The Warrant evidenced by a Warrant Certificate shall be exercisable, at the election of the registered holder thereof, either as an entirety or from time to time for part only of the number of Warrants evidenced by the Warrant Certificate. If less than all of the Warrants 3 7 evidenced by a Warrant Certificate surrendered upon the exercise of Warrants are exercised, a new Warrant Certificate or Certificates shall be issued for the remaining number of Warrants evidenced by the Warrant Certificate so surrendered. All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Warrant Agent. [(f)] The Warrant Agent shall deposit to the account of the Company all monies received by the Warrant Agent in payment of the Exercise Price of any Warrant. The Warrant Agent shall account promptly to the Company with respect to the exercise of Warrants. SECTION 6. CALL OF THE WARRANTS. If the closing price per share for the Shares (determined as provided in the second sentence of Section 12(d)) is greater than % of the Exercise Price (as defined below) then in effect for any New York Stock Exchange ("NYSE") trading days within a period of consecutive NYSE trading days, the Company may elect, by written notice given within days after the end of such -day period, to redeem the Warrants, at a price of $__ per Warrant, on a date not less than days after the giving of such notice (which date shall not be prior to , ) (such date is referred to below as the "Warrant Call Date"). The notice of the Warrant Call Date shall be given to the Warrant Agent as provided in Section 20 and copies of such notice shall be mailed to the registered holders of the Warrant Certificates as provided in Section 15. If there is not at any relevant time a NYSE, then business days rather than trading days on the NYSE will be used in the foregoing provisions. SECTION 7. OPTIONAL REDUCTION OF EXERCISE PRICE. The Company shall have the right, at any time or from time to time, voluntarily to reduce the then current Exercise Price to such amount (the "Reduced Exercise Price") and for such period or periods of time, which may be through the close of business on the Expiration Date (the "Reduced Exercise Price Period"), as the Board of Directors of the Company may determine, approve or ratify. Notice of any such Reduced Exercise Price and Reduced Exercise Price Period shall be given to the registered holders of Warrants in the manner provided in Section 15 and to the Warrant Agent in the manner provided in Section 20. After the termination of the Reduced Exercise Price Period, the Exercise Price shall be such Exercise Price as would have been in effect, as adjusted pursuant to Section 12, had there been no reduction in the Exercise Price pursuant to the provisions of this Section 7. Any adjustment in the Exercise Price pursuant to Section 12 during the Reduced Exercise Price Period shall not be made in the Reduced Exercise Price in the manner specified in Section 12 except to the extent that such reduction in the Exercise Price (before reduction to the Reduced Exercise Period) pursuant to Section 12 would result in an Exercise Price lower than the then current Reduced Exercise Price. No reduction of the then current Exercise Price pursuant to the provisions of this Section 7 shall be deemed for the purposes of Section 12 hereof to require any adjustment in the Exercise Price. SECTION 8. PAYMENT OF TAXES. The Company shall pay all documentary stamp taxes, if any, attributable to the issuance of Shares or other securities upon the exercise of any Warrant; provided, however, that the Company shall not be required to pay any tax or taxes that may be payable in respect of any transfer involved in the issuance of any Warrant Certificates or certificates for Shares in a name other than that of the registered holder of a Warrant Certificate surrendered upon the exercise or transfer of a Warrant, and the Company shall not be required to issue or deliver any such certificates unless and until the persons requesting the issuance thereof have paid to the Company the amount of such tax or have established to the satisfaction of the Company that such tax has been paid. SECTION 9. MUTILATED OR MISSING WARRANT CERTIFICATES. If any Warrant Certificate is mutilated, lost, stolen or destroyed, the Company may in its discretion issue, and the Warrant Agent may countersign, in exchange and substitution for and upon cancellation of the mutilated, lost, stolen or destroyed Warrant Certificate, a new Warrant Certificate of like tenor and representing an equivalent number of Warrants, but only upon receipt of evidence satisfactory to 4 8 the Company and the Warrant Agent of such mutilation, loss, theft or destruction and indemnity, if requested, also satisfactory to them, in the sole discretion of each. Applicants for such substitute Warrant Certificates shall also comply with such other reasonable regulations and pay such other charges as the Company may in its sole discretion prescribe. SECTION 10. RESERVATION OF SHARES. (a) The Company will at times reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued Shares and its authorized and issued Shares held in its Treasury, for the purpose of enabling it to satisfy its obligation to issue Shares upon exercise of Warrants or upon conversion of Warrants at the expiration of the period during which the Warrants are exercisable, the full number of Shares deliverable upon the exercise of all outstanding Warrants. (b) Before taking any action that would cause an adjustment pursuant to Section 12 reducing the Exercise Price below the then par value (if any) of the Shares issuable upon exercise of the Warrants, the Company will take any corporate action that may, in the opinion of its counsel (which may be counsel employed by the Company), be necessary in order that the Company may validly and legally issue fully paid and nonassessable Shares at the Exercise Price as so adjusted. (c) The Company covenants that all Shares that may be issued upon the exercise or conversion of Warrants will, upon issuance against payment in full of the Warrant Exercise Price, be fully paid and nonassessable and free from all taxes, liens, charges and security interests created by the Company with respect to the issuance thereof. (d) The Warrant Agent is authorized to requisition from time to time from a transfer agent for the Shares (including the Company if then acting as a transfer agent), stock certificates required to honor exercises of outstanding Warrants. The Company hereby authorizes its present and any future such transfer agent to comply with all such requests. The Company will supply such transfer agent(s) with duly executed stock certificates for such purpose and will itself provide or otherwise make available any cash that may be payable as provided in Section 13 of this Agreement. SECTION 11. OBTAINING OF GOVERNMENTAL APPROVALS AND STOCK EXCHANGE LISTINGS. The Company will in good faith and as expeditiously as possible take all action that may be necessary to obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities, and will make any and all filings under federal and state securities laws, necessary in connection with the issuance, distribution and transfer of Warrant Certificates, the exercise of the Warrants and the issuance, sale, transfer and delivery of Shares upon exercise or conversion of Warrants. The Company will use its best efforts to have the Shares that are issuable upon the exercise or conversion of the Warrants listed on the securities exchange or exchanges, if any, on which the then outstanding Shares are listed. SECTION 12. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES PURCHASABLE AND NUMBER OF WARRANTS. The Exercise Price and either the number of Shares purchasable upon the exercise of each Warrant or the number of Warrants outstanding are subject to adjustment from time to time as provided in this Section 12. (a) If the Company at any time after the date of this Agreement (i) declares a stock dividend or other distribution on the Shares payable in Shares, (ii) subdivides the outstanding Shares or (iii) combines the outstanding Shares into a smaller number of Shares, the Exercise Price to be in effect after the time of the record date for such dividend or distribution or of the effective date of such subdivision or combination shall be determined by multiplying the Exercise Price in effect immediately prior to such time by a fraction, the numerator of which 5 9 shall be the number of Shares outstanding immediately prior to such time and the denominator of which shall be the number of Shares to be outstanding immediately after giving effect to such dividend, distribution, subdivision or combination, in each case excluding Treasury Shares. Such an adjustment shall be made successively whenever any event listed above occurs. (b) If the Company fixes a record date for the issuance of rights or warrants to all holders of Shares entitling them (for a period expiring within __ days after such record date) to subscribe for or purchase Shares (or securities convertible into Shares) at a price per Share (or having a conversion price per Share, if a security convertible into Shares) less than the current market price per Share (as defined in Section 12(d)) on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Shares outstanding on such record date plus the number of Shares which the aggregate offering price of the total number of Shares so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price (as defined in Section 12(d)) and the denominator of which shall be the number of Shares outstanding on such record date plus the number of additional Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). If such subscription price may be paid in consideration, part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company. Shares owned by or held for the account of the Company or any majority-owned subsidiary of the Company shall not be deemed outstanding for the purpose of any such computation. Such an 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 and to the extent they are issued but expire unexercised, the Exercise Price shall again be adjusted to be the Exercise Price that would then be in effect if such record date had not been fixed. (c) If the Company fixes a record date for the making of a distribution to all holders of Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of shares of its stock (other than Shares), evidences of its indebtedness or assets (other than dividends or distributions in cash payable out of consolidated earnings or earned surplus) or subscription rights or warrants (excluding those referred to in Section 12(b)), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price per Share (as defined in Section 12(d)) on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company) of the portion of such shares, evidences of indebtedness, assets, subscription rights or warrants applicable to one Share, and the denominator of which shall be such current market price per Share. Such an adjustment shall be made successively whenever such a record date is fixed; and if such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed. (d) For the purpose of any computation under Sections 12(b) or (c), the current market price per Share on any record date shall be deemed to be the average of the daily closing prices per Share for the 30 consecutive NYSE trading days commencing 45 NYSE trading days before such record date. For the purpose of all relevant provisions of this Agreement, the closing price for each day shall be the last sale price regular way or, in case no such sale takes place on such day, the average of the closing bid and asked prices regular way, in either case on the NYSE, or, if the Shares are not listed or admitted to trading on the NYSE, on the principal national securities exchange on which the Shares are listed or admitted to trading or, if the Shares are not listed or admitted to trading on any national securities exchange, the average of the highest reported bid and lowest reported asked prices as furnished by the National Association of Securities Dealers, Inc. (the "NASD") through NASDAQ or a similar organization if NASDAQ is no longer reporting such information (such reported last sale price of, or such average of such 6 10 bid and asked prices for, the Shares or any other securities is referred to herein as the "Market Value" of the Shares or such securities). If on any such trading day the Shares are not quoted by any such organization, the current market price of such Shares on such day, as determined by the Board of Directors of the Company, shall be used. (e) Not withstanding the foregoing, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one percent in such price; provided, however, that any adjustments which by reason of this subsection (e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 12 shall be made to the nearest cent or to the nearest one-hundredth of a Share, as the case may be. (f) If at any time, as a result of an adjustment made pursuant to this Section 12, the holder of any Warrant thereafter exercised becomes entitled to receive any shares of the Company other than Shares, 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 this Section 12, and the provisions of this Section 12 and Sections 5, 6, 7, 8, 10, 11, 13 and 14 with respect to the Shares shall apply on like terms to any such other shares. (g) In any case in which this Section 12 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Warrant exercised after such record date, the Shares and other capital stock of the Company, if any, issuable upon such exercise over and above the Shares and other capital stock of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing, subject to the following proviso, such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment and, provided further, to the extent such event does not occur, the adjustment made in respect of such non-occurrence shall be retroactive to such Record Date and affect all Warrants exercised between such Record Date and the date of such non-occurrence. (h) Upon each adjustment of the Exercise Price pursuant to this Section 12, each Warrant outstanding immediately prior to such adjustment shall thereafter constitute the right to purchase, at the adjusted Exercise Price per share, an adjusted number of Shares determined (to the nearest hundredth) by multiplying the number of Shares purchasable upon exercise of a Warrant immediately prior to such adjustment by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment and the denominator of which shall be the Exercise Price in effect immediately after such adjustment; provided, however, that the Company may elect, in substitution for the adjustment in the number of Shares pursuant to this subsection (h), to adjust the number of Warrants pursuant to Section 12(i). (i) In substitution for any adjustment in the number of Shares purchasable upon the exercise of a Warrant as provided in Section 12(h), the Company may elect to adjust the number of Warrants so that each Warrant outstanding after such adjustment in number of Warrants shall be exercisable for one Share. Each Warrant held of record immediately prior to such adjustment of the number of Warrants shall become that number of Warrants determined (to the nearest hundredth) by multiplying the number of Shares purchasable upon exercise of a Warrant immediately prior to such adjustment by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment and the denominator of which shall be the Exercise Price in effect immediately after such adjustment. The Company shall make a public announcement (by news release and by notice to any securities exchange on which the Warrants are then listed) 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 in the number of 7 11 Warrants. This record date may be the date on which the Exercise 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 (i) 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 13, 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 in its sole discretion, new Warrant Certificates evidencing all the Warrants to which such holders shall be entitled after such adjustment. Warrant Certificates to be so distributed may, at the option of the Company, bear the adjusted Exercise 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. (j) In the case of any reclassification or change of outstanding Shares (other than a change in par value, if any, as a result of a subdivision or combination), or in case of any consolidation of the Company with any other corporation or any merger of the Company into another corporation or of another corporation into the Company (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any such reclassification or change of outstanding Shares, but including a consolidation or merger in which the Company is the continuing corporation and in which all or a majority of the Shares outstanding immediately prior to such consolidation (excluding Treasury Shares) or merger are converted into, or converted into the right to receive, consideration other than capital stock), or in case of any sale of the properties and assets of the Company as, or substantially as, an entirety to any other person or entity, each Warrant shall, after such reclassification or change of Shares, consolidation, merger or sale, be exercisable at the then Exercise Price and upon the other terms and conditions specified in this Agreement for the number of shares of stock or other securities or assets (which may be cash) to which a holder of the number of Shares purchasable (at the time of such reclassification or change of Shares, consolidation, merger or sale) upon the exercise of such Warrant would have been entitled (other than pursuant to any applicable dissenters rights of appraisal) upon such reclassification or change of Shares, consolidation, merger or sale; and in any such case, the provisions set forth in this Section 12 with respect to the rights and interests thereafter of the holders of the Warrants shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of stock, other securities or property thereafter deliverable on the exercise of the Warrants. The Company shall not effect any such consolidation, merger or sale unless, prior to or simultaneously with the consummation thereof, the successor person or entity (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets or other appropriate person or entity shall assume, by written instrument executed and delivered to the Warrant Agent, the obligation to deliver to the holder of each Warrant such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holders are entitled to receive and to assume the other obligations of the Company under this Warrant Agreement. [Notwithstanding the foregoing, in the event of any such consolidation, merger or sale in which holders of the Company's Common Stock within two years of the date of this Agreement receive any consideration other than common stock or rights, options or warrants to acquire common stock, the holder of each Warrant so electing in a writing filed with the Company prior thereto, shall be entitled to receive cash, simultaneously with the consummation of such transaction, in an amount equal to the average closing price of the Warrant (as determined in the same manner as the average closing price per Share is determined in the second and third sentences of Section 12(d)) for the 20 NYSE trading days immediately preceding the public announcement of such merger, consolidation or sale.] (k) Except as provided in this Section 12, no adjustment in respect of any dividends on the Shares shall be made during the term of a Warrant or upon the exercise of a Warrant. 8 12 (l) Irrespective of any adjustments in the Exercise Price or the number or kind of shares purchasable upon the exercise of the Warrants, Warrant Certificates theretofore or thereafter issued may continue to express the same Exercise Price per share and number and kind of shares as are stated on the Warrant Certificates initially issuable pursuant to this Agreement. (m) Anything in this Section 12 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Exercise Price or increase in the number of Shares purchasable upon the exercise of each Warrant, in addition to those adjustments required by this Section 12, as it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision of the Shares, or any issuance wholly for cash of any Shares at less than the current market price, or any issuance wholly for cash of Shares or securities which by their terms are convertible into or exchangeable for Shares, or any stock dividend, or any issuance of rights, options or warrants referred to above in this Section 12, made by the Company to its common shareholders shall not be taxable to them. (n) Anything in this Section 12 to the contrary notwithstanding, granting of options to purchase Shares by the Company or its subsidiaries to any of their employees, issuance of Shares on the exercise of such options and subscriptions for purchases of Shares under any dividend reinvestment plan of the Company are not to be taken into consideration for adjustments under this Section 12. [(o) In addition to the foregoing adjustments and without duplication, if (x) prior to the exercise of a Warrant an event ("Event") occurs which, under the Certificate of Determination with respect to the Shares, would require an adjustment in the number of share(s) of Common Stock into which the one Share purchasable on exercise of such Warrant would have been convertible if such Warrant had then been exercised, then (y) after the Event such one Share shall, when acquired on exercise of the Warrant, be convertible into the same number of share(s) of Common Stock into which it would have been convertible if such Warrant had been exercised prior to the Event. The adjustment required by the foregoing sentence shall be made each time there is an Event, provided that no adjustment shall be made under this Section 12(o) unless that adjustment results in a change of one percent, provided further that all adjustments not made by virtue of the preceding "provided" clause shall be carried forward and made when the aggregate of all such adjustments results in a change of at least one percent.]* SECTION 13. FRACTIONAL WARRANTS AND FRACTIONAL SHARES. (a) The Company shall not be required to issue fractions of Warrants on any distribution of Warrants to holders of Warrant Certificates pursuant to Section 12(i) or to distribute Warrant Certificates that evidence fractional Warrants. In lieu of such fractional Warrants, there shall be paid to the registered holders of Warrant Certificates with regard to which such fractional Warrants would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Warrant on the trading day immediately prior to the date on which such fractional Warrant would have been otherwise issuable. For purposes of this Section 13(a), the current market value of a Warrant shall be the closing price of the Warrant for the trading day immediately prior to the date on which such fractional Warrant would have been - --------------------------- * This provision will be used, if at all, if the Warrants are exercisable for Preferred Stock which is convertible into Common Stock. 9 13 otherwise issuable. The closing price for any day shall be the last sale price regular way or, in case no such sale takes place on such day, the average of the closing bid and asked prices regular way, in either case on the principal national securities exchange on which the Warrants are listed or admitted to trading or, if the Warrants are not listed or admitted to trading on any national securities exchange, the average of the highest reported bid and lowest reported asked prices as furnished by the NASD through NASDAQ or a similar organization if NASDAQ is no longer reporting such information. If on any such date the Warrants are not quoted by any such organization, the fair value of the Warrants on such date, as determined in good faith by the Board of Directors of the Company, shall be used. (b) The Company shall not be required to issue fractions of Shares upon exercise or conversion of the Warrants or to distribute Share certificates that evidence fractional Shares. In lieu of fractional Shares, there shall be paid to the registered holders of Warrant Certificates at the time such Warrants are exercised or converted an amount in cash equal to the same fraction of the Market Value of the Shares on the trading day immediately prior to the date of such exercise or conversion; provided that if on such trading day there is no Market Value of the Shares, the Market Value shall be the fair value per Share on such trading day as computed by a method determined in good faith by the Board of Directors of the Company. SECTION 14. BOARD OF DIRECTOR ACTION; NO LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES OR SHAREHOLDERS. (a) Any determination that may be made by the Board of Directors of the Company under this Agreement may be made by a duly authorized committee of the Board. (b) No director, officer, employee or shareholder of the Company, as such, shall have any liability under this Agreement or the Warrants. By accepting the Warrants, each holder of Warrants agrees to the foregoing. SECTION 15. NOTICES TO WARRANT HOLDERS; WARRANT HOLDERS NOT SHAREHOLDERS. (a) Upon any adjustment of the Exercise Price or of the number of Warrants outstanding pursuant to Section 12, or a tender offer to purchase all or substantially all of the Shares including any consideration other than common stock or warrants, rights or options to acquire common stock, the Company within 20 days thereafter shall (i) cause to be filed with the Warrant Agent a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors of the Company (who may be the regular auditors of the Company) setting forth the Exercise Price after such adjustment and either the adjusted number of Shares (or fraction thereof) purchasable upon exercise of a Warrant or the adjusted number of Warrants to be outstanding and setting forth in reasonable detail the method of calculation and the facts upon which the calculations are based, which certificate shall be conclusive evidence of the correctness of the matters set forth therein, and (ii) cause notice of such adjustment to be mailed by first-class mail, postage prepaid, to each registered holder of a Warrant Certificate at his, her or its address appearing on the Warrant Register. (b) Upon the fixing of a later Expiration Date or a Warrant Call Date as provided in Section 5, or the fixing of a Reduced Exercise Price and Reduced Exercise Price Period as provided in Section 7, the Company shall cause notice of such later Expiration Date, Warrant Call Date or Reduced Exercise Price and Reduced Exercise Price Period, as the case may be, to be mailed by first-class mail, postage prepaid, to each registered holder of a Warrant Certificate at his, her or its address appearing on the Warrant Register. 10 14 (c) If: (i) the Company shall authorize the issuance to all holders of Shares of rights or warrants to subscribe for or purchase Shares or of any other subscription rights or warrants; or (ii) the Company shall authorize the distribution to all holders of Shares of shares of its stock (other than Shares), evidences of its indebtedness or assets (other than dividends or distributions in cash payable out of consolidated earnings or earned surplus); or (iii) of any consolidation or merger to which the Company is a party and for which approval by holders of the Shares is required, or of the conveyance or transfer of the properties and assets of the Company substantially as an entirety, or of any reclassification or change of Shares (other than a change in par value, if any, or as a result of a subdivision or combination); or (iv) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or (v) the Company proposes to take any other action (other than actions of the character described in Section 12(a)) that would require an adjustment of the Exercise Price pursuant to Section 12; then the Company shall cause to be filed with the Warrant Agent and shall cause to be mailed to each registered holder of a Warrant Certificate at his, her or its address appearing on the Warrant Register, at least 20 days (or 10 days in any case specified in clause (i) or (ii) above) prior to the applicable record date hereinafter specified, by first-class mail, postage prepaid, a written notice stating (i) the date as of which the holders of record of Shares to be entitled to receive any such rights, warrants or distribution are to be determined or (ii) the date on which any such consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up or other action is expected to become effective and the date as of which it is expected that holders of record of Shares shall be entitled to exchange their Shares for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up. If any action referred to in this Section 15(c) requires the approval of holders of Shares, the Company shall cause notice of the proposed action and the record date for the determination of holders of Shares entitled to vote on such matter to be mailed to each registered holder of a Warrant Certificate at his, her or its address appearing on the Warrant Register, at least 20 days prior to such record date, by first-class mail, postage prepaid. (d) The failure to give any notice required by Section 15(c) or any defect therein shall not affect the legality of any such reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up referred to therein, or the vote upon any action. (e) The failure to give any other notice required by this Agreement to be given to any of the Warrant holders shall not affect the validity of any notice given to any other Warrant holders, give rights to any of such Warrant holders or affect the validity of the action referred to in such notice. (f) Notices to Warrant holders shall be effective upon mailing. (g) Nothing contained in this Agreement or in any of the Warrant Certificates shall be construed as conferring upon the holders thereof, as such, the right to vote or receive dividends or to be deemed for any purpose the holder of Shares or of any other securities of the Company 11 15 that may at any time be issuable on the exercise or conversion of the Warrant Certificates, nor shall anything contained herein or in the Warrant Certificates be construed to confer upon the holders thereof, as such, any of the other rights of a shareholder of the Company. SECTION 16. MERGER, CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT. (a) Any corporation into which the Warrant 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 the Warrant Agent shall be a party, or any corporation succeeding to the corporate trust business of the Warrant Agent, shall be the successor to the Warrant Agent hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Warrant Agent under the provisions of Section 18. If such successor to the Warrant Agent shall succeed to the agency created by this Agreement, and if at the time of such succession any of the Warrant Certificates have been countersigned but not delivered, any such successor to the Warrant Agent may adopt the countersignature of the original Warrant Agent; and if at the time of such succession any of the Warrant Certificates have been countersigned, any successor to the Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant Certificates shall have full force and effect, as provided in the Warrant Certificates and in this Agreement. (b) If at any time the name of the Warrant Agent shall be changed and at that time any of the Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name, and if at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name, and in all such cases such Warrant Certificates shall have full force and effect, as provided in the Warrant Certificates and in this Agreement. SECTION 17. WARRANT AGENT. The Warrant Agent undertakes the duties and obligations imposed on it by this Agreement, upon the following terms and conditions, by all of which the Company and the holders of Warrants, by their acceptance thereof, shall be bound: (a) The statements contained herein and in the Warrant Certificates shall be taken as statements of the Company, and the Warrant Agent assumes no responsibility for the correctness of any of the same except those which describe the Warrant Agent or action taken or to be taken by it. The Warrant Agent assumes no responsibility with respect to the distribution of the Warrant Certificates except as provided herein. (b) The Warrant Agent shall not be responsible for any failure of the Company to comply with any of its covenants contained in this Agreement or in the Warrant Certificates. (c) The Warrant Agent may consult at any time with counsel satisfactory to it (who may be counsel for the Company) and the Warrant Agent shall incur no liability or responsibility to the Company or to any holder of any Warrant Certificate in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion or the advice of such counsel. (d) The Warrant Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, Chief Executive Officer, President, any Vice President or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with the Warrant Agent's duties, and the 12 16 Warrant Agent shall not be liable for any action taken or suffered or omitted by it in good faith in accordance with instructions of any such officer. (e) Whenever in the performance of its duties under this Agreement the Warrant Agent deems it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof is herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, Chief Executive Officer, President, any Vice President or the Treasurer of the Company and delivered to the Warrant Agent; and such certificate shall be full authorization to the Warrant Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. (f) The Warrant Agent shall incur no liability or responsibility to the Company or to any holder of any Warrant Certificate for any action taken in reliance on any Warrant Certificate, certificate of shares, notice, resolution, waiver, consent, order, certificate or other paper, document or instrument believed by it to be genuine and to have been signed, sent or presented by the proper party or parties. (g) The Company agrees to pay to the Warrant Agent reasonable compensation for all services rendered by the Warrant Agent in the performance of this Agreement, to reimburse the Warrant Agent for all expenses and other charges incurred by the Warrant Agent in the execution of this Agreement and to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and counsel fees, for anything done or omitted by the Warrant Agent in the performance of this Agreement except as a result of its negligence or bad faith. (h) The Warrant Agent shall be under no obligation to institute any action, suit or legal proceeding or to take any other action likely to involve expense unless the Company furnishes the Warrant Agent with reasonable security and indemnity for any costs and expenses that may be incurred, but this provision shall not affect the power of the Warrant Agent to take such action as it may consider proper, whether with or without any such security or indemnity. (i) Except as otherwise required by law, the Warrant Agent, and any stockholder, director, officer or employee of the Warrant Agent, may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though they were not the Warrant Agent under this Agreement, or a stockholder, director, officer or employee of the Warrant Agent, as the case may be. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other person or entity. (j) The Warrant Agent shall act hereunder solely as Agent for the Company and its duties shall be determined solely by the provisions hereof. The Warrant Agent shall not be liable for anything that it may do or refrain from doing in connection with this Agreement except for its own negligence or bad faith. (k) The Warrant Agent shall not at any time be under any duty or responsibility to any holder of any Warrant Certificate to make or cause to be made any adjustment of the Exercise Price, the number of the Shares or other securities or property deliverable as provided in this Agreement or the number of Warrants, to determine whether any facts exist that may require any of such adjustments, with respect to the nature or extent of any such adjustment, when made, or with respect to the method employed in making the same. The Warrant Agent shall not be accountable with respect to the validity or value or the kind or amount of any Shares or of any 13 17 securities or property that may at any time be issued or delivered upon the exercise of any Warrant or at the expiration of the period during which the Warrants are exercisable for any unexercised Warrant or with respect to whether any such Shares or other securities will when issued be validly issued and fully paid and nonassessable, and it makes no representation with respect thereto. SECTION 18. CHANGE OF WARRANT AGENT. If the Warrant Agent becomes incapable of acting as Warrant Agent, or if the Warrant Agent resigns as Warrant Agent (which it may do only upon 30 days prior written notice to the Company), the Company shall appoint a successor to the Warrant Agent. If the Company fails to make such an appointment within a period of 30 days after it has been notified in writing of the incapacity or resignation by the Warrant Agent or by the registered holder of a Warrant Certificate, then the registered holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of a successor to the Warrant Agent. Pending appointment of a successor to the Warrant Agent, either by the Company or by such a court, the duties of the Warrant Agent shall be carried out by the Company. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a bank or trust company, in good standing, incorporated under the laws of a State or of the United States of America and having an office in the State of New York, and must have at the time of its appointment as Warrant Agent a combined capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the former Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose of such succession. The Company shall cause notice of the appointment of any successor Warrant Agent to be mailed by first-class mail, postage prepaid, to each registered holder of a Warrant Certificate at his, her or its address appearing on the Warrant Register. Failure to give any notice provided for in this Section 18, or any defect therein, shall not, however, affect the legality or validity of the appointment of a successor Warrant Agent. SECTION 19. ISSUANCE OF NEW WARRANT CERTIFICATES. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the Company may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price and the number or kind or class of shares of stock or other securities or property purchasable under the Warrant Certificates made in accordance with the provisions of this Agreement. SECTION 20. NOTICES TO COMPANY AND WARRANT AGENT. (a) Any notice pursuant to this Agreement to be given by the Warrant Agent or by the registered holder of any Warrant Certificate to the Company shall be sufficiently given if sent by first-class mail, postage prepaid, and by facsimile transmission addressed to the Company as follows: Del Webb Corporation 6001 24th Street Phoenix, Arizona 85016 Fax: (602) 808-8097 Attention: General Counsel (or to such other address and facsimile number as the Company may have furnished in writing to the Warrant Agent for this purpose). 14 18 (b) Any notice pursuant to this Agreement to be given by the Company or by any registered holder of any Warrant Certificate to the Warrant Agent shall be sufficiently given if sent by first-class mail, postage prepaid, and by facsimile transmission addressed to the Warrant Agent as follows: ______________________________ ______________________________ New York, New York____________ Fax: (212)___________________ Attention:____________________ (or to such other address and facsimile number as the Warrant Agent may have furnished in writing to the Company for this purpose). (c) No notice to the Company or the Warrant Agent shall be effective until received. SECTION 21. IDENTITY OF TRANSFER AGENT. Forthwith upon the appointment of any subsequent transfer agent for the Shares, or any other shares of the Company's capital stock issuable upon the exercise of the Warrants, the Company will file with the Warrant Agent a statement setting forth the name and address of such subsequent transfer agent. SECTION 22. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any holders of Warrant Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any provisions herein or to make any other provisions in regard to matters or questions arising hereunder that the Company and the Warrant Agent may deem necessary or desirable and that shall not adversely affect the interests of the holders of Warrant Certificates. SECTION 23. SUCCESSORS. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. SECTION 24. TERMINATION. This Agreement shall terminate at the close of business 30 days after the Expiration Date. Notwithstanding the foregoing, this Agreement will terminate on any earlier date when all Warrants have been exercised or redeemed or otherwise acquired by the Company. The provisions of Sections 14 and 17 shall survive such termination. SECTION 25. GOVERNING LAW. This Agreement and each Warrant Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of New York, other than its laws pertaining to choice or conflict of laws, and for all purposes shall be construed in accordance with the laws of said State. SECTION 26. BENEFITS OF THIS AGREEMENT. Except as provided in Section 14(b), nothing in this Agreement shall be construed to give to any person or corporation other than the Company, the Warrant Agent and the registered holders of the Warrant Certificates any legal or equitable right, remedy or claim under this Agreement; and this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the registered holders of the Warrant Certificates. SECTION 27. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of such counterparts shall for all purposes be deemed to be an original and all such counterparts shall together constitute but one and the same agreement. 15 19 [SECTION 28. CONVERSION OF WARRANTS AT EXPIRATION OF EXERCISE PERIOD. (a) At the expiration of the period during which the Warrants are exercisable, unexercised Warrants which immediately prior to such expiration were exercisable for Shares shall be converted into Shares as follows: the Company shall issue and cause to be distributed to the registered holders of record of the Warrant Certificates evidencing such Warrants, against receipt of the Warrant Certificates in question, certificates for one Share for each of such unexercised Warrants. Each time, if any, that the number of Shares purchasable upon the exercise of Warrants is adjusted pursuant to Section 12(b), the rate at which Shares will be issued upon such conversion shall be adjusted in order that the total number of Shares to be issued for each such unexercised Warrant shall equal 1/__th of the number of Shares (determined without regard to subsection (b) of Section 13) purchasable upon the exercise of a Warrant immediately after such adjustment. (b) Notwithstanding Section 28(a), the Company shall not be required to issue fractional Shares or to distribute Share certificates that evidence fractional Shares. In lieu of issuing fractional Shares, the number of Shares to which a registered holder of Warrant Certificates shall be entitled upon conversion of the Warrants shall be rounded to the nearest whole Share. (c) The issuance of Shares pursuant to this Section 28 shall be subject to the provisions of this Agreement and Shares issued upon the expiration of Warrants shall be entitled to vote, to receive dividends and to have other rights of shares of [Series __ Preferred] [Common] Stock of the Company.] The parties have caused this Agreement to be duly executed, confirming their agreements set forth above. DEL WEBB CORPORATION By:________________________________ Name: Title: Attest: ______________________ Name: Title: [Warrant Agent] ________________________________ By:________________________________ Name: Title: [SEAL] Attest: _____________________ Name: Title: 16 20 EXHIBIT A [FORM OF WARRANT CERTIFICATE] [FACE] EXERCISABLE ONLY ON OR BEFORE _, _ (OR SUCH EARLIER OR LATER DATE AS MAY BE FIXED UPON NOTICE AS PROVIDED IN THE WARRANT AGREEMENT REFERRED TO BELOW) THE WARRANTS EVIDENCED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN UNITS WITH __% [SENIOR] SUBORDINATED [CONVERTIBLE] [DEBENTURES] [NOTES] OF THE COMPANY ("UNITS"). EACH UNIT CONSISTS OF $1,000 PRINCIPAL AMOUNT OF SUCH [DEBENTURES] [NOTES] AND __ WARRANTS (EACH TO PURCHASE ONE SHARE OF [SERIES ___ PREFERRED] [COMMON] STOCK OF THE COMPANY). UNTIL _______ 199 . OR SUCH EARLIER DATE AS MAY BE DETERMINED BY THE COMPANY WITH THE CONSENT OF ____________, THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED WITHOUT THE SIMULTANEOUS TRANSFER TO THE TRANSFEREE OF $1,000 PRINCIPAL AMOUNT OF SUCH [DEBENTURES] [NOTES] FOR _____ WARRANTS SO TRANSFERRED. NO. _____ _____ WARRANTS WARRANT CERTIFICATE DEL WEBB CORPORATION This Warrant Certificate certifies that _________, or registered assigns, is the registered holder of ___ Warrants (the "Warrants") expiring ____,__ (or such earlier or later date as may be fixed under the circumstances set forth in the Warrant Agreement and described on the reverse hereof) to purchase Common Stock of Del Webb Corporation, a Delaware corporation (the "Company"). Each Warrant entitles the holder to purchase from the Company on or before the close of business on ____,__ (or such earlier or later date as may be fixed under the circumstances set forth in the Warrant Agreement and described on the reverse hereof), one fully paid and nonassessable share of [Series ___ Preferred] [Common] Stock of the Company at the exercise price (the "Exercise Price") in effect at the time under the Warrant Agreement ($___ per share at the time of the initial issuance of the Warrants), payable in lawful money of the United States of America, [by delivery of __% [Senior] Subordinated [Convertible] [Debentures] [Notes] of the Company or by a combination thereof,] upon surrender of this Warrant Certificate and payment of such Exercise Price at the corporate trust office of the Warrant Agent in the State of New York, but subject to the conditions set forth herein and in the Warrant Agreement; provided, however, that the number or kind of shares (or in certain events other property) purchasable upon exercise of the Warrants and the Exercise Price may as of the date of this Warrant Certificate have been, or may after such date be, adjusted as a result of the occurrence of certain events, as more fully provided in the Warrant Agreement. Payment of the [portion of the] Exercise Price [payable in cash] shall be made by cashier's check payable to the order of the Company. A-1 21 No Warrant may be exercised after the close of business on ____,__ or such earlier or later date as may be fixed under the circumstances set forth in the Warrant Agreement and described on the reverse hereof (the "Expiration Date"). [At the expiration of the period during which this Warrant is exercisable, this Warrant, if immediately prior to such expiration it is exercisable for shares of [Series ___ Preferred] [Common] Stock of the Company or of any other class into which such Stock may hereafter be changed, shall be converted into such shares at the rate of one share for each ___ Warrants, subject to adjustment, as more fully provided in the Warrant Agreement.] Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place. This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent by the manual signature of one of its authorized officers. Del Webb Corporation and the Warrant Agent have caused this Warrant Certificate to be duly executed as of the date first above written, in the State of New York. DEL WEBB CORPORATION Dated: By:_____________________________ Attest: _______________________ Countersigned: _______________________ as Warrant Agent By_______________________ Authorized Officer Void after ____,__ or such earlier or later date as may be fixed under the circumstances set forth in the Warrant Agreement and described on the reverse hereof. A-2 22 [FORM OF WARRANT CERTIFICATE] [REVERSE] DEL WEBB CORPORATION The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants issued pursuant to a Warrant Agreement dated as of ____, 199_ (the "Warrant Agreement"), between the Company and __________________, Warrant Agent (the "Warrant Agent"), which Warrant Agreement is hereby incorporated by reference in and made a part of this Warrant Certificate and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders of the Warrants. None of the directors, officers, employees or shareholders of the Company, as such, have any liability in respect of the Warrant Agreement, the Warrants or this Warrant Certificate. By accepting the Warrants and this Warrant Certificate, the holder hereof agrees to the foregoing. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering the Warrant Certificate, with the Form of Exercise set forth hereon properly completed and executed, together with payment of the Exercise Price at the time in effect, at the principal corporate trust office of the Warrant Agent in the State of New York. If upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee a new Warrant Certificate evidencing the number of Warrants not exercised. No adjustment will be made for any dividends on any Shares issuable upon exercise of this Warrant. If the closing price per share for the shares of [Series ___ Preferred] [Common] Stock of the Company (the "Shares") (determined as provided in the Warrant Agreement) is greater than __% of the Exercise Price as then in effect for any __ New York Stock Exchange trading days within a period of __ consecutive New York Stock Exchange trading days, the Company may elect, by written notice given as provided in the Warrant Agreement, within ___ days after the end of such __ -day period, to redeem the Warrant on a date not less than days after the giving of such notice, but in no event earlier than _______, ___ (the "Warrant Call Date"). The notice of such Warrant Call Date shall be given to the Warrant Agent as provided in Section 20 of the Warrant Agreement and copies of such notice shall be mailed to the registered holders of the Warrant Certificates as provided in Section 15 of the Warrant Agreement. Neither the Company nor the Warrant Agent is required to pay any tax or taxes that may be payable in respect of any transfer involved in the issuance of any Warrant Certificates or certificates for other securities of the Company, in any name other than that of the registered holder of this Warrant Certificate, upon the exercise or transfer (or partial exercise or transfer) of the Warrants represented hereby, and neither the Company nor the Warrant Agent shall be required to issue or deliver any such certificates unless and until the persons requesting the issuance thereof have paid to the Company the amount of such tax or have established to the satisfaction of the Company that such tax has been paid. The Expiration Date may be extended by the Company in its sole discretion from time to time by a notice given to the Warrant Agent and mailed to the registered holders of the Warrant Certificates. The Warrant Agreement provides that upon the occurrence of certain events the Exercise Price may, subject to certain conditions, be adjusted and under certain circumstances the Warrant may become exercisable for securities or other assets other than the Shares referred to on the face hereof. If the Exercise Price is adjusted, the Warrant Agreement provides that, at the A-3 23 election of the Company, either (i) the number of Shares purchasable upon the exercise of each Warrant shall be adjusted or (ii) each outstanding Warrant shall be adjusted to become a different number of Warrants. In the case of (i), the rate at which Shares are to be issued upon conversion of Warrants at the expiration of the period during which the Warrants are exercisable shall also be adjusted. In the case of (ii), the Company will cause to be distributed to registered holders of Warrant Certificates either Warrant Certificates representing the additional Warrants issuable pursuant to the adjustment or substitute Warrant Certificates to replace all outstanding Warrant Certificates upon surrender thereof. The Warrant Certificate is transferable, in whole or in part (but not prior to ______, __ except as part of the transfer of the Units of [Debt Securities] and Warrants in which they were issued ("Units")), on the register maintained by the Warrant Agent for such purpose, upon surrender of this Warrant Certificate at the principal corporate trust office of the Warrant Agent, together with a written assignment of the Warrant Certificate, on the Form of Assignment set forth hereon or in other form satisfactory to the Warrant Agent, duly executed by the holder or his, her or its duly appointed legal representative, together with funds to pay any transfer taxes payable in connection with such transfer. Upon such surrender and payment, a new Warrant Certificate shall be issued and delivered, in the name of the assignee and in the denomination or denominations specified in such instrument of assignment. If less than all of this Warrant Certificate is being transferred, a new Warrant Certificate or Certificates shall be issued for the portion of this Warrant Certificate not being transferred. This Warrant Certificate may be divided or combined with other Warrant Certificates (but not prior to ______, __ except as part of the division or combination of Units) upon surrender hereof at the principal corporate trust office of the Warrant Agent, together with a written notice specifying the names and denominations in which new Warrant Certificates are to be issued, signed by the holder hereof or his, her or its duly appointed legal representative, together with the funds to pay any transfer taxes payable in connection with such transfer. Upon such surrender and payment, a new Warrant Certificate or Certificates shall be issued and delivered in accordance with such notice. The Company shall make no service or other charge in connection with any such transfer or exchange of this Warrant Certificate, except for any transfer taxes payable in connection therewith. The Company and the Warrant Agent may deem and treat the registered holder hereof as the absolute owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone) for the purpose of any exercise or conversion hereof, any distribution to the holder hereof and, without limitation, for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Time is of the essence in this Warrant. Signatures on exercises and assignments of this Warrant must, unless waived by the Company, be guaranteed. A-4 24 [FORM OF EXERCISE] (TO BE EXECUTED UPON EXERCISE OF WARRANT) The undersigned hereby irrevocably exercises the right, represented by this Warrant Certificate, to purchase __ Shares, and herewith tenders payment for such Shares to the order of Del Webb Corporation (the "Company") in the amount of $________ [by cashier's check] [and] [delivers $_____ principal amount of the __% [Senior] Subordinated [Debentures] [Notes] (the "Debt Securities") of the Company issued pursuant to an Indenture dated as of_____, 199_ between the Company and _________________, Trustee, in accordance with the terms thereof]. The undersigned requests that a certificate for such Shares be registered in the name of ___________________, whose address is _____________________. If that number of Shares is less than all of the Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of the Shares be registered in the name of _____________________, whose address is ______________________, and that such Warrant Certificate be delivered to ___________________, whose address is _____________________. [If the principal amount of Debt Securities delivered herewith is in excess of the amount of the payment tendered herewith, rounded down to the nearest multiple of $1,000, the undersigned requests that the Warrant Agent instruct the Trustee to issue Debt Securities representing such excess principal amount of the Debt Securities delivered herewith, registered in the name of ______________________, whose address is _____________________, and that such new Debt Securities be delivered to _____________________, whose address is _____________________.] Any cash payments to be paid in lieu of fractional Shares should be made to _____________________, whose address is _____________________ and the check representing payment thereof should be delivered to _____________________, whose address is _____________________. Dated: Signature: _____________________________________ (Signature must conform in all respects to name in which the certificate for the shares is to be registered.) _______________________________ (Insert Social Security or Taxpayer Identification Number of Holder) Signature Guaranteed: _______________________________ A-5 25 [FORM OF ASSIGNMENT] (TO BE EXECUTED TO TRANSFER THE WARRANT CERTIFICATE.) For value received, __________ hereby sells, assigns and transfers unto __ ________________________________________________________________________________ (Please print name and address of transferee) this Warrant Certificate, together with all right, title and interest therein, and hereby irrevocably constitutes and appoints the Warrant Agent and the Company, and each of them, with full power of substitution, as his, her or its attorneys-in-fact, with full power of substitution to transfer the within Warrant Certificate on the books of the Company. Dated: Signature:______________________________________ (Signature must conform in all respects to name in which the certificate for the shares is to be registered.) _________________________________ (Insert Social Security or Taxpayer Identification Number of Holder) Signature Guaranteed: __________________________________ A-6 EX-4.5 6 EX-4.5 1 EXHIBIT 4.5 CERTIFICATE OF DESIGNATION[, POWERS, PREFERENCES AND RELATIVE PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS] OF THE ___% [NONCUMULATIVE] [CUMULATIVE] [REDEEMABLE] [NON-REDEEMABLE] [CONVERTIBLE] [EXCHANGEABLE] PREFERRED STOCK, SERIES ___ ($.001 Par Value) * OF DEL WEBB CORPORATION _____________ Pursuant to Section 151 of the General Corporation Law of the State of Delaware _____________ The undersigned hereby certify that the following resolution was duly adopted by the Board of Directors of Del Webb Corporation, a Delaware corporation (the "Company"), with respect to the [name of series of Preferred Stock]: RESOLVED, That pursuant to the authority conferred upon the Board of Directors by the Amended and Restated Certificate of Incorporation of the Company (the "Certificate of Incorporation"), the Board of Directors (the "Board") of the Company on _____, 199__ approved the creation and the voting powers of the following series of Preferred Stock, $.001 par value [, and on _____, 199_ a duly authorized committee of the Board adopted the following resolution creating a series of ______ shares of Preferred Stock, $.001 par value] (the "Series _______ Preferred Stock"), with the powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the shares of such series (in addition to the powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, set forth in the Certificate of Incorporation that may be applicable to the Preferred Stock), as follows: 1. Designation and Rank. The designation of such series of the Preferred Stock authorized by this resolution shall be the ___% [Noncumulative] [Cumulative] [Redeemable] [Non-Redeemable] [Convertible] Preferred Stock, Series __ (the "Series ___ Preferred Stock"). The maximum number of shares of Series ____ Preferred Stock shall be _____. Shares of the Series ___ Preferred Stock shall have a liquidation preference of $___ per share. The Series ___ Preferred Stock shall rank prior to the Company's Common Stock and to all other classes and series of equity securities of the Company now or hereafter authorized, issued or outstanding (the Common Stock and such other classes and series of equity securities collectively may be referred to herein as the "Junior Stock"), other than any classes or series of equity securities of the Company ranking on a parity with (the "Parity Stock") or senior to (the "Senior Stock") the Series ___ Preferred Stock as to dividend rights and rights upon liquidation, winding up or dissolution of the Company as have been [or may in the future] be designated by the Board. The _________________ * Language in brackets in this form of Certificate of Designations may or may not be included in the final Certificate of Designations. Appropriate disclosure will be made in the Prospectus Supplement of which alternate terms have been selected and the final Certificate of Designations will be filed as an Exhibit to an 8-K or other periodic report. 2 Series ___ Preferred Stock shall be junior to all outstanding debt of the Company. The Series ___ Preferred Stock shall be subject to creation of Senior Stock, Parity Stock and Junior Stock, to the extent not expressly prohibited by the Company's Certificate of Incorporation, with respect to the payment of dividends and upon liquidation, and shall be initially issued at a price (payable by the underwriter(s) thereof) of $___ per share. 2. [Noncumulative] [Cumulative] Dividends; Priority. (a) Payment of Dividends. The holders of record of shares of Series ___ Preferred Stock shall be entitled to receive, when, as and if declared by the Board out of funds legally available therefor, [noncumulative] [cumulative] cash dividends at the rate per annum per share of ____% ($___ per annum) (the "Dividend Rate"), which shall accrue from ____, 19__ and be payable _______ [in arrears] on the __ day of ____, _____, ____ and ____ in each year (or if such day is a non-business day, on the next business day), commencing on ____________, 19__ (each of such dates a "Dividend Payment Date"). Each declared dividend shall be payable to holders of record as they appear on the stock books of the Company at the close of business on such record dates, not more than 60 calendar days preceding the payment dates therefor, as are determined by the Board (each of such dates a "Record Date"). ____ dividend periods (each a "Dividend Period") shall commence on and include the __ day of __, ____,__ and ____ of each year and shall end on and include the date next preceding the next following Dividend Payment Date. [If cumulative, insert -- Dividends on the Shares of Series ____ Preferred Stock shall be fully cumulative, shall accrue (whether or not declared) from the first day of each Dividend Period and shall be payable on the Dividend Payment Date first succeeding the end of each Dividend Period, except that with respect to the first dividend, such dividend shall accrue from the date of issue of the Series ____ Preferred Stock. For any Dividend Period in which dividends are not paid in cash at the Dividend Rate on the Dividend Payment Date first succeeding the end of such Dividend Period, such accrued dividends shall be added (solely for the purpose of calculating dividends payable on the Series ___ Preferred Stock) to the Liquidation Preference (as defined below) of the Series ___ Preferred Stock effective at the beginning of the Dividend Period succeeding the Dividend Period as to which such dividends were not paid and shall thereafter accrue additional dividends in respect thereof ("Additional Dividends") at the Dividend Rate applicable from time to time until such unpaid dividends have been paid in full.] [If Noncumulative, insert -- Dividends on the shares of Series ___ Preferred Stock shall be noncumulative, so that if a dividend on the shares of Series ___ Preferred Stock with respect to any Dividend Period is not declared by the Board of the Company, then the Company shall have no obligation at any time to pay a dividend on the shares of Series ___ Preferred Stock in respect of such Dividend Period. Holders of the shares of the Series ___ Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of the noncumulative dividends declared by the Board, as set forth herein.] The amount of dividends payable per share for each full Dividend Period shall be computed by dividing by ____ the $____ annual amount. Dividends on the Series ___ Preferred Stock shall accrue day by day, and all shares issued within 45 days of the first day on which such shares are issued shall accrue dividends from such date of first issuance. The initial __ dividend payable on ______, 19__ and the amount of any dividend payable for any other period shorter than a full Dividend Period shall be computed on the basis of a 360-day year composed of twelve 30-day months and the actual number of days elapsed in the Period. (b) Priority as to Dividends. No full dividends shall be declared or paid or set apart for payment on Preferred Stock of any series ranking, as to dividends, on a parity with the Series ___ Preferred Stock for any period unless full dividends on the Series ___ Preferred Stock for the immediately preceding Dividend Period have been or contemporaneously are declared and paid (or declared and a sum sufficient for the payment thereof set apart for such payment). 2 3 When dividends are not paid in full (or declared and a sum sufficient for such full payment so set apart) upon the Series ___ Preferred Stock and any other Preferred Stock ranking on a parity as to dividends with the Series ___ Preferred Stock, all dividends declared upon shares of Series ___ Preferred Stock and any other Preferred Stock ranking on a parity as to dividends shall be declared pro rata with respect thereto, so that in all cases the amount of dividends declared per share on the Series ___ Preferred Stock and such other Preferred Stock shall bear to each other the same ratio that accrued dividends for the then-current Dividend Period per share on the shares of Series ___ Preferred Stock (which shall not include any accumulation in respect of unpaid dividends for prior Dividend Periods) and for dividends, including accumulations, if any, of such other Preferred Stock, bear to each other. Except as provided in the preceding sentence, full dividends on the Series ___ Preferred Stock must be declared and paid or set apart for payment for the immediately preceding Dividend Period before (i) any cash dividend or other distribution (other than in Common Stock or other Junior Stock) shall be declared or paid or set aside for payment upon the Common Stock of the Company or any other Junior Stock or (ii) any Common Stock or any other Junior Stock is redeemed, purchased or otherwise acquired by the Company for any consideration (or any moneys are paid to or made available for a sinking fund for the redemption of any shares of any such stock) except by conversion into or exchange for Junior Stock or (iii) any Series ___ Preferred Stock or Parity Stock is redeemed, purchased or otherwise acquired by the Company for any consideration (or any moneys are paid to or made available for a sinking fund for the redemption of any shares of any such stock) otherwise than pursuant to a pro rata offer to purchase or a concurrent redemption of all, or a pro rata portion, of the outstanding shares of Series ___ Preferred Stock and Parity Stock (except by conversion into or exchange for Junior Stock). The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company if, under the preceding paragraph, the Company would be prohibited from purchasing or otherwise acquiring such shares at such time and in such manner. 3. [[Optional] [Mandatory] Redemption] [Non-Redeemability]. (a) General. [If Optional Redemption, insert -- The shares of the Series ___ Preferred Stock will not be redeemable before _______________, ____. Thereafter, subject to the applicable restrictions in this Section 3 and applicable law, the shares of Series ___ Preferred Stock may be redeemed, in whole or in part, at the election of the Company, upon notice as provided in Section 3(b), by resolution of its Board, at any time or from time to time, at the following redemption prices plus, in each case, an amount equal to all accrued and unpaid dividends for the then-current Dividend Period to the date fixed for redemption:
If Redeemed During the Per Share If Redeemed During the Per Share 12-Month Period Redemption 12-Month Period Ending Redemption Ending on , Price on , Price ___________ ___________ _____________________ __________ 199__ $ 200__ $ 199__ 200__ 200__ 200__ 200__ and thereafter
3 4 If less than all the outstanding shares of Series ___ Preferred Stock are to be redeemed, the Company shall select those to be redeemed pro rata, by lot or by a substantially equivalent method. On and after the redemption date, dividends shall cease to accrue on the shares, and they shall be deemed to cease to be outstanding, provided that the redemption price (including any accrued and unpaid dividends to the date fixed for redemption) has been duly paid or provided for.] [If mandatory redemption, insert -- As a mandatory redemption for the retirement of the shares of Series Preferred Stock, the Company shall redeem, out of funds legally available therefor, on _____________ (if such shares remain outstanding) __% of all shares issued [then outstanding], in each case at the redemption price of $____ per share. Immediately prior to authorizing or making such redemption with respect to the Series ____ Preferred Stock, the Company, by resolution of the Board shall, to the extent funds are legally available therefor, declare a mandatory dividend on the Series ____ Preferred Stock payable on the redemption date in the amount equal to any accrued and unpaid dividends on the Series ____ Preferred Stock as of such date and, if the Company does not have sufficient funds legally available to declare and pay all dividends accrued at the time of such redemption, any remaining accrued and unpaid dividends shall be added to the redemption price. If the Company shall fail to discharge its obligation to redeem all of the outstanding shares of Series ____ Preferred Stock required to be redeemed pursuant to this Section 3(a) of this Certificate (the "Mandatory Redemption Obligation"), the Mandatory Redemption Obligation shall be discharged as soon as the Company is able to discharge such Mandatory Redemption Obligation. If and so long as the Mandatory Redemption Obligation shall not fully be discharged, (i) dividends on the Series ____ Preferred Stock shall continue to accrue and be added to the dividend payable pursuant to the second preceding sentence and (ii) the Company shall not declare or pay any dividend or make any distribution on its securities not otherwise permitted by this Certificate. [If Non-Redeemable, insert -- The shares of the Series ___ Preferred Stock shall not be redeemed by the Company.] [If optional or mandatory redemption, insert -- (b) Notice of Redemption. Notice of any redemption, setting forth (i) the date and place fixed for the redemption, (ii) the redemption price[,] [and] (iii) a statement that dividends on the shares to be redeemed will cease to accrue on such redemption date [and (iv) a statement of or reference to the conversion right set forth in Section 5 hereof (including that the right to give a notice of conversion in respect of any shares to be redeemed shall terminate at the close of business on the redemption date)], shall be mailed, postage prepaid, at least __ days but not more than __ days prior to the redemption date to each holder of record of the Series ___ Preferred Stock to be redeemed at his, her or its address as the same shall appear on the books of the Company. If less than all the shares of the Series ___ Preferred Stock owned by such holder are then to be redeemed, the notice shall specify the number of shares thereof that are to be redeemed and the numbers of the certificates representing such shares. If such notice of redemption shall have been so mailed, and if on or before the redemption date specified in such notice all funds necessary for such redemption shall have been set aside by the Company separate and apart from its other funds, in trust for the account of the holders of the shares so to be redeemed, so as to be and continue to be available therefor, then, on and after the redemption date, notwithstanding that any certificate for shares of the Series ___ Preferred Stock so called for redemption shall not have been surrendered for cancellation, the shares represented thereby so called for redemption shall be deemed to be no longer outstanding, the dividends thereon shall cease to accrue and all rights with respect to such shares of the Series ___ Preferred Stock so called for redemption shall forthwith cease and terminate, [including the right to convert such shares pursuant to Section 5 below,] except only the right of the holders thereof to receive out of the funds so set aside in trust the amount payable on redemption 4 5 thereof, but without interest, upon surrender (and endorsement or assignment for transfer, if required by the Company) of their certificates. However, if the notice of redemption shall have been so mailed, and if prior to the date of redemption specified in the notice all funds necessary for the redemption have been irrevocably deposited in trust, for the account of the holders of the shares of the Series ___ Preferred Stock to be redeemed (and so as to be and continue to be available therefor), with a bank or trust company named in such notice doing business in the States of _________ or _________ and having capital surplus and undivided profits of at least [$50,000,000], thereupon and without awaiting the redemption date, all shares of the Series ___ Preferred Stock with respect to which such notice shall have been so mailed and such deposit shall have been so made shall be deemed to be no longer outstanding and all rights with respect to such shares of the Series ___ Preferred Stock shall forthwith upon such deposit in trust cease and terminate, [except only the right of the holders thereof to convert such shares in accordance with the provisions of Section 5 hereof at any time prior to the close of business on the redemption date,] and the right of the holders thereof on or after the redemption date to receive from such deposit the amount payable upon the redemption, but without interest, upon surrender (and endorsement or assignment to transfer, if required by the Company) of their certificates. In case the holders of shares of the Series ___ Preferred Stock that shall have been redeemed shall not within [two] years (or any longer period if required by law) after the redemption date claim any amount so deposited in trust for the redemption of such shares, such bank or trust company shall, upon demand and if permitted by applicable law, pay over to the Company any such unclaimed amount so deposited with it, and shall thereupon be relieved of all responsibility in respect thereof, and thereafter the holders of such shares shall, subject to applicable escheat laws, look only to the Company for payment of the redemption price thereof, but without interest. (c) Status of Shares Redeemed [or Converted]. Shares of Series ___ Preferred Stock redeemed, purchased or otherwise acquired for value by the Company, [including by conversion in accordance with Section 5 hereof,] shall, after such acquisition, have the status of [authorized and unissued shares of Preferred Stock] [Treasury Stock] [and may be reissued by the Company at any time as shares of any series of Preferred Stock other than as shares of Series ___ Preferred Stock]. 4. Voting Rights. (a) General. Except as expressly provided hereinafter in this Section 4, or as otherwise from time to time required by applicable law, the Series ___ Preferred Stock shall have no voting rights. (b) Voting Rights Upon Dividend Arrearages. (i) Right to Elect Directors. If [an amount equal to] [six] [consecutive] quarterly dividend payments on the Series ___ Preferred Stock have accrued and are unpaid, the holders of the Series ___ Preferred Stock shall have the right, voting separately as a class together with holders of shares of any Parity Stock upon which like voting rights have been conferred and are exercisable ("Voting Parity Stock"), to elect [two] members of the Board, each member to be in addition to the then authorized number of directors, at the next annual meeting of stockholders or at a special meeting called as described below and thereafter until dividends on the Series ___ Preferred Stock have been paid in full for ____ [consecutive] Dividend Periods, including the last preceding Dividend Period. (ii) Special Meeting. Whenever such right shall vest, it may be exercised initially by the vote of the holders of a [plurality] [majority] of the shares of Series ___ Preferred Stock and Voting Parity Stock present and voting, in person or by proxy, at a special meeting of 5 6 holders of the Series ___ Preferred Stock and Voting Parity Stock or at the next annual meeting of stockholders. A special meeting for the exercise of such right shall be called by the Secretary of the Company as promptly as possible, and in any event within l0 days after receipt of a written request signed by the holders of record of at least 25% of the outstanding shares of the Series ___ Preferred Stock, subject to any applicable notice requirements imposed by law or regulation. Notwithstanding the provisions of this paragraph, no such special meeting shall be required to be held during the [90]-day period preceding the date fixed for the annual meeting of stockholders. (iii) Term of Office of Directors. Any director who has been elected by holders of the Series ___ Preferred Stock and Voting Parity Stock entitled to vote in accordance with this subparagraph (b) shall hold office for a term expiring (subject to the earlier payment, or declaration and setting aside for payment, of dividends on the Series ___ Preferred Stock for __ consecutive Dividend Periods as described below) at the next annual meeting of stockholders and during such term may be removed at any time, either for or without cause, by, and only by, the affirmative vote of the holders of record of a majority of the shares of the Series ___ Preferred Stock and Voting Parity Stock present and voting, in person or by proxy, at a special meeting of such stockholders called for such purpose, and any vacancy created by such removal may also be filled at that meeting. A meeting for the removal of a director elected by the holders of the Series ___ Preferred Stock and Voting Parity Stock and the filling of the vacancy created thereby shall be called by the Secretary of the Company as promptly as possible and in any event within 10 days after receipt of a request therefor signed by the holders of not less than 25% of the outstanding shares of the Series ___ Preferred Stock, subject to any applicable notice requirements imposed by law or regulation. Such meeting shall be held at the earliest practicable date thereafter, provided that no such meeting shall be required to be held during the [90]-day period preceding the date fixed for the annual meeting of stockholders. Upon payment, or declaration and setting aside for payment, of dividends on the Series ___ Preferred Stock so that dividends are not then in arrears (or upon payment of the funds so set aside will not be in arrears) for [six] [consecutive] Dividend Periods the terms of office of all directors elected by the holders of the shares of Series ___ Preferred Stock and the Voting Parity Stock pursuant thereto then in office shall, without further action, thereupon terminate unless otherwise required by law. Upon such termination the number of directors constituting the Board of the Company shall, without further action, be reduced by two, subject always to the increase of the number of directors pursuant to the foregoing provisions in the case of the future right of holders of the shares of Series ___ Preferred Stock and Voting Parity Stock to elect directors as provided above. (iv) Vacancies. Any vacancy caused by the death or resignation of a director who has been elected in accordance with this subparagraph (b) may be filled by the remaining director so elected or, if not so filled, by a vote of holders of a [plurality] [majority] of the shares of the Series ___ Preferred Stock and Voting Parity Stock present and voting, in person or by proxy, at a meeting called for such purpose. Unless such vacancy shall have been so filled by the remaining director, such meeting shall be called by the Secretary of the Company at the earliest practicable date after such death or resignation, and in any event within l0 days after receipt of a written request signed by the holders of record of at least 25% of the outstanding shares of the Series ___ Preferred Stock, subject to any applicable notice requirements imposed by law or regulation. Notwithstanding the provisions of this paragraph, no such special meeting shall be required to be held during the [90]-day period preceding the date fixed for the annual meeting of stockholders. (v) Stockholders' Right to Call Meeting. If any meeting of the holders of the Series ___ Preferred Stock and Voting Parity Stock required by this subparagraph (b) to be called shall not have been called within 30 days after personal service of a written request therefor upon the Secretary of the Company or within 30 days after mailing the same within the 6 7 United States of America by registered mail, return receipt requested, addressed to the Secretary of the Company at its principal executive offices, subject to any applicable notice requirements imposed by law or regulation, then the holders of record of at least 25% of the outstanding shares of the Series ___ Preferred Stock may designate in writing one of their number to call such meeting at the expense of the Company, and such meeting may be called by such person so designated upon the notice required for annual meetings of stockholders or such shorter notice (but in no event shorter than permitted by law or regulation) as may be acceptable to the holders of a majority of the total number of shares of the Series ___ Preferred Stock. Any holder of Series ___ Preferred Stock so designated shall have access to the Series ___ Preferred Stock books of the Company for the purpose of causing such meeting to be called pursuant to these provisions. (vi) Quorum. At any meeting of the holders of the Series ___ Preferred Stock called in accordance with the provisions of this subparagraph (b) for the election or removal of directors, the presence in person or by proxy of the holders of a majority of the total number of shares of the Series ___ Preferred Stock and Voting Parity Stock shall be required to constitute a quorum; in the absence of a quorum, a majority of the holders present in person or by proxy shall have power to adjourn the meeting from time to time without notice other than an announcement at the meeting, until a quorum is present. (c) Voting Rights on Extraordinary Matters. So long as any shares of Series ___ Preferred Stock is outstanding and unless the consent or approval of a greater number of shares is then required by law, without first obtaining the approval of the holders of at least two-thirds of the number of shares of the Series ___ Preferred Stock at the time outstanding (voting separately as a class together with the holders of shares (on a one vote per share basis) of Voting Parity Stock) given in person or by proxy at a meeting at which the holders of such shares shall be entitled to vote separately as a class, the Company shall not either directly or indirectly or through merger or consolidation with any other company[, (i) authorize, create or issue, or increase the authorized or issued amount, of any class or series of capital stock ranking prior to the shares of the Series ___ Preferred Stock in rights and preferences or (ii)] approve any amendment to (or otherwise alter or repeal) its Certificate of Incorporation (or this resolution) that would materially and adversely change the specific terms of the Series ___ Preferred Stock. [An amendment that increases the number of authorized shares of any class or series of Preferred Stock or authorizes the creation or issuance of other classes or series of Preferred Stock, in each case ranking junior to the Series ___ Preferred Stock with respect to the payment of dividends and distribution of assets upon liquidation, dissolution or winding up, or substitutes the surviving entity in a merger or consolidation for the Company, shall not be considered to be such an adverse change.] (d) One Vote Per Share. In connection with any matter on which holders of the Series ___ Preferred Stock are entitled to vote as provided in subparagraphs (b) and (c) above, or any matter on which the holders of the Series ___ Preferred Stock are entitled to vote as one class or otherwise pursuant to law or the provisions of the Certificate of Incorporation, each holder of Series ___ Preferred Stock shall be entitled to one vote for each share of Series ___ Preferred Stock held by such holder. [5. Conversion. Shares of the Series ___ Preferred Stock shall be convertible into Common Stock on the following terms and conditions: (a) Conversion Right. Subject to and upon compliance with the provisions of this Section 5, the holder of any shares of Series ___ Preferred Stock may at such holder's option, at any time or from time to time, convert any such shares into fully paid and non-assessable shares (calculated to the nearest 1/100 of a share) of Common Stock at the conversion rate, determined as provided below, in effect on the conversion date. The rate at which shares of Common Stock 7 8 shall be delivered upon conversion (the "Conversion Rate") shall be initially _____ shares of Common Stock for each share of Series ___ Preferred Stock. The Conversion Rate is subject to adjustment as set forth in paragraph (d) of this Section 5. [If any shares of Series ___ Preferred Stock shall be called for redemption under Section 3(a) hereof, the right to convert such shares shall terminate and expire at the close of business on the redemption date.] (b) Dividends Upon Conversion. No payment or adjustment shall be made by the Company to any holder of shares of Series ___ Preferred Stock surrendered for conversion in respect of dividends accrued since the last preceding Dividend Payment Date on the shares of Series ___ Preferred Stock surrendered for conversion; provided, however, that if shares of Series ___ Preferred Stock shall be converted subsequent to any record date with respect to any Dividend Payment Date and prior to the next such succeeding Dividend Payment Date, the dividend falling due on such Dividend Payment Date shall be payable on such Dividend Payment Date notwithstanding such conversion, and such dividend (whether or not punctually paid or duly provided for) shall be paid to the person in whose name such shares are registered at the close of business on such record date [(unless such shares shall have been called for redemption and the redemption date is prior to such Dividend Payment Date)]. In such event [(unless the immediately preceding parenthetical phrase is applicable)], the shares of Series ___ Preferred Stock surrendered for conversion during such period must be accompanied by payment by the holder of an amount equal to the dividend thereon which the holder of record is to receive on such Dividend Payment Date. (c) Method of Conversion. (i) The surrender of any shares of Series ___ Preferred Stock for conversion shall be made by the holder thereof by delivering the certificate or certificates evidencing ownership of such shares with proper endorsement or instruments of transfer to the Company at the office or agency in the State of ________ to be maintained by the Company for that purpose, and such holder shall give written notice to the Company at that office or agency that he, she or it elects to convert such shares of Series ___ Preferred Stock in accordance with the provisions thereof and of this Section 5. That notice must also state the number of whole shares of Series ___ Preferred Stock and the name or names (with addresses) in which the certificate or certificates evidencing ownership of Common Stock to be issued on such conversion shall be issued. In the case of lost or destroyed certificates evidencing ownership of shares of Series ___ Preferred Stock to be surrendered for conversion, the holder shall submit proof of loss or destruction and such indemnity and bond as shall be required by the Company. (ii) Subject to the provisions of Section 5(f) hereof, every such notice of election to convert shall constitute a contract between the holder of such shares of Series ___ Preferred Stock and the Company, whereby such holder shall be deemed to agree to the conversion on the terms set forth herein. (iii) As soon as practicable after its receipt of such notice and the certificate or certificates evidencing ownership of such shares of Series ___ Preferred Stock (and the payment contemplated by the last sentence of Section 5(b), if applicable), the Company shall issue and shall deliver, at the office or agency referred to above and to the person for whose account such shares of Series ___ Preferred Stock were so surrendered, or on his, her or its written order, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such shares of Series ___ Preferred Stock and a check or cash payment (if any) to which such holder is entitled with respect to fractional shares as determined by the Company, in accordance with Section 5(e) hereof, at the close of business on the date of conversion. (iv) The conversion shall be deemed to have been effected on the date on which the Company has received both such notice and the certificate or certificates for such shares of 8 9 Series ___ Preferred Stock (and the payment contemplated by the last sentence of Section 5(b), if applicable); and the person or persons in whose name or names any certificate or certificates for Common Stock are issuable upon the conversion shall be deemed to have become on that date the holder or holders of record of the shares represented thereby; provided, however, that any such surrender on any date when the stock transfer books of the Company shall be closed shall become effective for all purposes on the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Rate in effect on the date upon which such surrender occurs. (d) Adjustments to Conversion Rate. The Conversion Rate shall be subject to adjustment from time to time as follows: (i) In case the Company shall at any time (A) declare a dividend on the Common Stock in shares of its capital stock, (B) subdivide its outstanding Common Stock, (C) combine the outstanding Common Stock into a smaller number of shares or (D) issue any shares of its capital stock by reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the surviving company), the Conversion Rate in effect on the record date for such dividend or on the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that the holder of any Series ___ Preferred Stock converted after such time shall be entitled to receive the aggregate number and kind of shares that, if such Series ___ Preferred Stock had been converted immediately prior to such time, the holder would have owned upon such conversion and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (ii) In case the Company shall issue rights or warrants to all holders of its Common Stock (which rights or warrants are not available on an equivalent basis to holders of the Series ___ Preferred Stock on conversion) entitling them to subscribe for or purchase Common Stock at a price per share less than the current market price per share (as defined in subparagraph (iv) of this paragraph (d)), at the record date for the determination of stockholders entitled to receive such rights or warrants, the Conversion Rate shall be adjusted (subject to the limitations contained in subparagraph (vii) of this paragraph (d)) by multiplying the Conversion Rate in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such date of issue plus the number of additional shares of Common Stock to be offered for subscription or purchase and the denominator of which shall be the number of shares of Common Stock outstanding on the date of issue plus the number of shares of Common Stock that the aggregate offering price of the total number of shares of Common Stock so to be offered would purchase at such current market price. Such adjustment shall become effective at the close of business on such record date; provided, however, to the extent that Common Stock is not delivered after the expiration of such rights or warrants, the Conversion Rate shall be readjusted (but only with respect to Series ___ Preferred Stock converted after such expiration) to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made upon the basis of delivery of only the number of shares of Common Stock actually issued and, provided, further, that, in the case of rights or warrants exercisable for [__] days or less, the Company may delay delivering any shares of Common Stock based on the adjusted conversion rate until the expiration of the rights or warrants and, if it does so, it shall as soon as practical after such expiration make whatever retroactive delivery is appropriate in light of the number of actual shares of Common Stock so actually delivered on exercise of such rights or warrants.* (iii) In case the Company shall distribute to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the surviving entity) evidences of its indebtedness or assets (including securities but excluding cash dividends or distributions paid out of retained earnings and dividends payable in 9 10 Common Stock) or subscription rights or warrants (excluding those referred to in subparagraph (ii) of this paragraph (d)), the Conversion Rate shall be adjusted (subject to the limitations contained in subparagraph (vii) of this paragraph (d)) by multiplying the Conversion Rate in effect immediately prior to the record date for determination of stockholders entitled to receive such distribution by a fraction, the numerator of which shall be the current market price per share of Common Stock (as defined in subparagraph (iv) of this paragraph (d)) on such record date and the denominator of which shall be such current market price per share of Common Stock, less the fair market value (as determined by the Board, whose determination shall be conclusive) of the portion of the evidences of indebtedness or assets or subscription rights or warrants so to be distributed that are applicable to one share of Common Stock. Such adjustment shall become effective at the close of business on such record date. If after the distribution date (the "Distribution Date") for purposes of distributing to holders of the Common Stock any stockholder protection, "poison pill" or other similar rights to subscribe for securities of the Company or any other entity ("Shareholder Rights"), converting holders of the Series ___ Preferred Stock are not entitled to receive the Shareholder Rights that would otherwise be attributable (but for the date of conversion) to the shares of Common Stock received upon such conversion, then adjustment of the Conversion Rate shall be made under this subparagraph (iii) as if the Shareholder Rights were then being distributed to holders of the Company's Common Stock. If such an adjustment is made and the Shareholder Rights are later [redeemed,] invalidated or terminated, then a corresponding reversing adjustment shall be made to the Conversion Rate, on an equitable basis, to take account of such event. However, the Company may elect to make provision with respect to the Shareholder Rights so that each share of Common Stock issuable upon conversion of the Series ___ Preferred Stock, whether or not issued after the Distribution Date for such Shareholder Rights, will be accompanied by the Shareholder Rights that would otherwise be attributable (but for the date of conversion) to such shares of Common Stock, in which event the preceding two sentences will not apply. The foregoing provisions shall be applicable to all such rights plan(s) of the Company. (iv) For the purpose of any computation under subparagraphs (ii) and (iii) of this paragraph (d), the current market price per share of Common Stock on any record date shall be deemed to be the average of the daily closing prices for the five consecutive business days selected by the Board commencing not more than 20 trading days before, and ending not later than, the earlier of the day in question and the day before the "ex" date with respect to the issuance or distribution requiring such computation. For this purpose, the term "ex" date, when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the applicable exchange or in the applicable market without the right to receive such issuance or distribution. The closing price for each date shall be the reported last sale price regular way or, in case no such reported sale takes place on such day, the average of the high and low bid prices on such date and, in case there are no such bid prices, the price determined by the Company on the laws of such quotations or other information it considers appropriate. (v) In the case of any (a) consolidation or merger of the Company with or into any entity (other than a consolidation or merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company), *Any other or alternative anti-dilution provisions as are agreed to (whether current quotient, market price or other (see Sections 12.06 - 12.10 of the form of Senior Subordinated Indenture, which is Exhibit 4.1 to this Registration Statement)) may be added here and the subparagraphs in this Section renumbered, as appropriate. 10 11 (b) sale, transfer, lease or conveyance of all or substantially all of the assets of the Company or (c) reclassification, capital reorganization or change of the Common Stock (other than solely a change in par value, or from par value to no par value), each holder of a share of Series ___ Preferred Stock then outstanding shall have the right thereafter to convert such share only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale, transfer, capital reorganization or reclassification by a holder of the number of shares of Common Stock of the Company into which such shares of Series ___ Preferred Stock would have been converted immediately prior to such consolidation, merger, sale, transfer, capital reorganization or reclassification, assuming (x) such holder of Common Stock of the Company is not an entity with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be ("constituent entity"), or an affiliate of a constituent entity, and (y) such holder of Common Stock failed to exercise his, her or its rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer (provided that if the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer is not the same for each share of Common Stock of the Company held immediately prior to such consolidation, merger, sale or transfer by other than a constituent entity or an affiliate thereof ("non-electing share"), then, for the purpose of this subsection (v), the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). If necessary, appropriate adjustment shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the holders of shares of Series ___ Preferred Stock, to the end that the provisions set forth herein shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of stock or other securities or property thereafter deliverable on the conversion of the shares. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers, capital reorganizations and reclassifications. The Company shall not effect any such consolidation, merger, sale or transfer, unless prior to or simultaneously with the consummation thereof the successor company or entity (if other than the Company) resulting from such consolidation, merger, sale or transfer shall assume, by written instrument, the obligation to deliver to the holder of each share of Series ___ Preferred Stock such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to receive under this Section 5(d). (vi) The Company may make such increases in the Conversion Rate, in addition to those required by subparagraphs (i) through (v) of this Section 5(d), as it considers to be advisable in order that any event treated for federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the recipients. (vii) No adjustment in the Conversion Rate will be made for the issuance of shares of capital stock to employees pursuant to the Company's or any of its subsidiaries' stock option, stock ownership or other benefit plans. No adjustment will be required to be made in the Conversion Rate until cumulative adjustments require an adjustment of at least 1% of such Conversion Rate, but rather such cumulative adjustment shall be carried forward and made when such 1% threshold is reached or exceeded. (e) Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of any shares of Series ___ Preferred Stock, but the holder thereof will receive in cash an amount equal to the value of such fractional share of Common Stock based on the current market price (as defined in subparagraph (iv) of Section 5(d)). If more than one share of Series ___ Preferred Stock is surrendered for conversion at one time by the same holder, the number of full shares issuable upon conversion thereof shall be computed on the basis of the aggregate number of such shares so surrendered. 11 12 (f) Payment of Taxes. The Company shall pay any tax in respect of the issuance of stock certificates on conversion of shares of Series __ Preferred Stock. The Company shall not, however, be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of stock in any name other than that of the holder of the shares converted, and the Company shall not be required to issue or deliver any such stock certificate unless and until the person or persons requesting the issuance hereof shall have paid to the Company the amount of any such tax or shall have established to the satisfaction of the Company that such tax has been paid. (g) Common Stock Reserved for Conversion. The Company shall at all times reserve and keep available out of its authorized and unissued Common Stock the full number of shares of Common Stock deliverable upon the conversion of all outstanding shares of Series ___ Preferred Stock and shall take all such action as may be required from time to time in order that it may validly and legally issue fully paid and non-assessable shares of Common Stock upon conversion of the Series ___ Preferred Stock. (h) Notice. If: (w) the Company shall declare a dividend (or any other distribution) on its Common Stock (other than a cash dividend payable out of retained earnings); or (x) the Company shall authorize the issuance to holders of its Common Stock of rights or warrants to subscribe for or purchase Common Stock; or (y) of any reclassification of the Common Stock of the Company (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value) or of any consolidation or merger to which the Company is a party or of the sale or transfer of all or substantially all of the assets of the Company and for which approval of any stockholders of the Company is required; or (z) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; then, and in each event, the Company shall cause to be mailed to each holder of Series ___ Preferred Stock, at his, her or its address as the same shall appear on the books of the Company, as promptly as possible but in any event at least [15] days prior to the applicable date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such dividend, distribution, rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, and the nature and amount of such dividend, distribution, rights or warrants or (B) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. (i) "Common Stock". For the purposes of this Section 5, "Common Stock" means stock of the Company of any class, whether now or hereafter authorized, that has the right to participate in the distribution of either earnings or assets of the Company without limit as to the amount or percentage, including, without limitation, the Common Stock. In case by reason of the operation of paragraph (d) of this Section 5, the shares of Series ___ Preferred Stock shall be convertible into any other shares of stock or other securities or property of the Company or of 12 13 any other company, any reference herein to the conversion of shares of Series ___ Preferred Stock pursuant to this Section 5 shall be deemed to refer to and include the conversion of shares of Series ___ Preferred Stock into such other shares of stock or other securities or property.] 6. [Exchange. (a) Subject to the other provisions set forth in this Section 6, the Series __ Preferred Stock shall be exchangeable [in whole, but not] in part, at the option of the Company, [on any Dividend Payment Date] beginning ____, 199_, for the [identify Debt Securities of the Company] as set forth below. [Holders of outstanding shares of Series __ Preferred Stock will be entitled to receive $__ principal amount of [identify Debt Securities] in exchange for each share of Preferred Stock held by them at the time of exchange; provided that the [identify Debt Securities] will be issuable in denominations of $1,000 and integral multiples thereof. If the exchange results in an amount of [identify Debt Securities] that is not an integral multiple of $1,000, the amount in excess of the closest integral multiple of $1,000 will be paid in cash by the Company. (b) The Company will mail to each record holder of the Series __ Preferred Stock [whose Preferred Stock is to be Exchanged] written notice of its intention to exchange the Preferred Stock for the [identify Debt Securities] no less than 30 nor more than 60 days prior to the date of the exchange (the "Exchange Date"). The notice shall specify the effective date of the exchange and the place where certificates for shares of Series __ Preferred Stock are to be surrendered for [identify Debt Securities] and shall state that dividends on [such] Series __ Preferred Stock will cease to accrue on the Exchange Date. Prior to giving notice of intention to exchange, the Company shall have executed and delivered to a bank or trust company selected by the Company to act as Trustee with respect to the [identify Debt Securities], which Trustee shall meet the eligibility requirements of the Section 310(a) of the Trust Indenture Act of 1939 as then in effect, and which Trustee shall have executed and delivered to the Company an Indenture [substantially in the form filed as an exhibit to the [identify Registration Statement]]; with such changes as may be required by law, stock exchange rule, NASDAQ National Market System rule or customary usage]. (c) If the Company has caused [identify Debt Securities] to be authenticated on or prior to the Exchange Date and has complied with the other provisions of this Section 6, then, notwithstanding that any certificates for shares of Series __ Preferred Stock called for Exchange have not been surrendered for exchange, on the Exchange Date dividends shall cease to accrue on [the] [such] Series __ Preferred Stock and at the close of business on the Exchange Date the holders of [the] [such] Series __ Preferred Stock shall cease to be stockholders with respect to [the] [such] [Series __] Preferred Stock and shall have no interest in or other claims against the Company by virtue thereof and shall have no voting or other rights with respect to [the] [such] Series __ Preferred Stock, except the right to receive the [identify Debt Securities] issuable upon such exchange and the right to accrued and unpaid dividends to and including the Exchange Date, without interest thereon, upon surrender (and endorsement, if required by the Company) of their certificates, and the shares evidenced thereby shall no longer be deemed outstanding for any purpose. The Company will cause the [identify Debt Securities] to be authenticated on or before the Exchange Date. [(d) Notwithstanding the foregoing, if notice of exchange has been given pursuant to this Section 6 and any holder of shares of Preferred Stock has, prior to the close of business on the Exchange Date, give written notice to the Company pursuant to Section 5 of the conversion of any or all of the shares held by the holder (accompanied by a certificate or certificates for 13 14 such shares, duly endorsed or assigned to the Company), then the exchange shall not become effective as to the shares to be converted and the conversion shall become effective as provided in Section 5.] (e) The [identify Debt Securities] will be delivered to the persons entitled thereto upon surrender to the Company or its agent appointed for that purpose of the certificates for the shares of Series __ Preferred Stock being exchanged therefor. (f) Notwithstanding the other provisions of this Section 6, if on the Exchange Date the Company has not paid in full all accrued and unpaid dividends on the Series __ Preferred Stock (or set aside a sum therefor), the Company may not exchange [the] [any] Series __ Preferred Stock for [identify Debt Securities] and any notice previously given pursuant to this Section 6 shall be of no effect. (g) Prior to the Exchange Date, the Company will comply with any applicable securities and blue sky laws with respect to the exchange of the Series __ Preferred Stock for [identify Debt Securities]. 7. [No] Sinking Fund. [No sinking fund will be established for the retirement or redemption of shares of Series ___ Preferred Stock.] [If sinking fund provisions are to be included, they will be inserted here.] 8. Liquidation Rights; Priority. (a) In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Company, the holders of shares of the Series ___ Preferred Stock shall be entitled to receive, out of the assets of the Company, whether such assets are capital or surplus and whether or not any dividends as such are declared, $____ per share [plus an amount equal to all accrued and unpaid dividends for the [then-current] [plus all prior] dividend period[s], and no more], before any distribution shall be made to the holders of the Common Stock or any other class of stock or series thereof ranking junior to the Series ___ Preferred Stock with respect to the distribution of assets. Unless specifically designated as junior or senior to the Series ___ Preferred Stock with respect to the distribution of assets, all other series or classes of Preferred Stock of the Company shall rank on a parity with the Series ___ Preferred Stock with respect to the distribution of assets. (b) [Nothing contained in this Section 8 shall be deemed to prevent redemption of shares of the Series ___ Preferred Stock by the Company in the manner provided in Section 3.] Neither the merger nor consolidation of the Company into or with any other company, nor the merger or consolidation of any other company into or with the Company, nor a sale, transfer or lease of all or any part of the assets of the Company, shall be deemed to be a liquidation, dissolution or winding up of the Company within the meaning of this Section 8. (c) Written notice of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, stating a payment date and the place where the distributable amounts shall be payable and containing a statement of or reference to the conversion right set forth in Section 5 hereof, shall be given by mail, postage prepaid, no less than 30 days prior to the payment date stated therein, to the holders of record of the Series ___ Preferred Stock at their respective addresses as the same shall appear on the books of the Company. (d) If the amounts available for distribution with respect to the Series ___ Preferred Stock and all other outstanding stock of the Company ranking on a parity with the Series ___ Preferred Stock upon liquidation are not sufficient to satisfy the full liquidation rights of all the 14 15 outstanding Series ___ Preferred Stock and stock ranking on a parity therewith, then the holders of each series of such stock will share ratably in any such distribution of assets in proportion to the full respective preferential amount (which in the case of the Series __ Preferred Stock shall mean the amounts specified in Section 8(a) and in the case of any other series of preferred stock may include accumulated dividends if contemplated by such series) to which they are entitled. 9. Record Holders. The Company and the Transfer Agent may deem and treat the record holder of any shares of Series __ Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Company nor the Transfer Agent shall be affected by any notice to the contrary. 10. Notices. Except as may otherwise by provided for herein, all notices referred to herein shall be in writing, and all notices hereunder shall be deemed to have been given upon receipt, in the case of a notice of conversion given to the Company as contemplated in Section 5(c) hereof, or, in all other cases, upon the earlier of receipt of such notice or three Business Days after the mailing of such notice if sent by registered mail (unless first-class mail shall be specifically permitted for such notice under the terms of this Certificate) with postage prepaid, addressed: if to the Company, to its offices at 6001 24th Street, Phoenix, Arizona 85016, Attention: General Counsel or to an agent of the Company designated as permitted by this Certificate, or, if to any holder of the Series __ Preferred Stock, to such holder at the address of such holder of the Series __ Preferred Stock as listed in the stock record books of the Company (which may include the records of any transfer agent for the Series __ Preferred Stock); or to such other address as the Company or holder, as the case may be, shall have designated by notice similarly given.] In witness whereof, Del Webb Corporation has caused this Certificate of Designations [complete title of certificate to be continued] to be executed by _______, its [Vice] President, and by ______, its [Assistant] Secretary, and its corporate seal to be affixed hereto, this _____ day of ____________, 199_. DEL WEBB CORPORATION By:___________________________ Name:____________________ Title: [Vice] President (Corporate Seal) ATTEST: By:___________________________ Name:____________________ Title: [Assistant] Secretary 15 EX-4.6 7 EX-4.6 1 EXHIBIT 4.6 DEL WEBB CORPORATION _____________, AS DEPOSITARY AND THE HOLDERS FROM TIME TO TIME OF THE DEPOSITARY RECEIPTS DESCRIBED HEREIN _________________ DEPOSIT AGREEMENT _________________ DATED AS OF __________, 199 2 Table of Contents
Page ---- ARTICLE I DEFINITIONS............................................................ 1 Certificate...................................................... 1 Company.......................................................... 1 Deposit Agreement................................................ 1 Depositary....................................................... 1 Depositary Shares................................................ 1 Depositary's Agent............................................... 1 Depositary's Office.............................................. 1 Receipt.......................................................... 2 Record Holder.................................................... 2 Registrar........................................................ 2 Stock............................................................ 2 ARTICLE II FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS................................... 2 SECTION 2.01. Form and Transfer of Receipts..................... 2 SECTION 2.02. Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof....................... 3 SECTION 2.03. Redemption of Stock............................... 3 SECTION 2.04. Registration of Transfer of Receipts.............. 4 SECTION 2.05. Split-ups and Combinations of Receipts[; Surrender of Depositary Shares and Withdrawal of Stock]......................................... 4 SECTION 2.06. Limitations on Execution and Delivery, Transfer, Surrender and Exchange of Receipts...... 5 SECTION 2.07. Lost Receipts, etc................................ 6
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Page ---- SECTION 2.08. Cancellation and Destruction of Surrendered Receipts.......................................... 6 ARTICLE III CERTAIN OBLIGATIONS OF THE HOLDERS OF RECEIPTS AND THE COMPANY......... 6 SECTION 3.01. Filing Proofs, Certificates and Other Information....................................... 6 SECTION 3.02. Payment of Taxes or Other Governmental Charges.... 6 SECTION 3.03. Warranty as to Stock.............................. 6 ARTICLE IV THE DEPOSITED SECURITIES; NOTICES...................................... 6 SECTION 4.01. Cash Distributions................................ 6 SECTION 4.02. Distributions Other than Cash..................... 7 SECTION 4.03. Subscription Rights, Preferences or Privileges.... 7 SECTION 4.04. Notice of Dividends, etc.; Fixing of Record Date for Holders of Depositary Shares............. 8 SECTION 4.05. Voting Rights..................................... 8 SECTION 4.06. Changes Affecting Deposited Securities and Reclassifications, Recapitalizations, etc......... 9 SECTION 4.07. Delivery of Reports............................... 9 SECTION 4.08. List of Holders................................... 9 ARTICLE V THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY............................................................ 9 SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books by the Depositary; Registrar................ 9 SECTION 5.02. Prevention of or Delay in Performance by the Depositary, the Depositary's Agents, any Registrar or the Company.......................... 10 SECTION 5.03. Obligations of the Depositary, the Depositary's Agents, any Registrar and the Company............. 10 SECTION 5.04. Resignation and Removal of the Depositary; Appointment of Successor Depositary............... 11
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Page ---- SECTION 5.05. Corporate Notices and Reports..................... 11 SECTION 5.06. Indemnification by the Company.................... 12 SECTION 5.07. Charges and Expenses.............................. 12 ARTICLE VI AMENDMENT AND TERMINATION.............................................. 12 SECTION 6.01. Amendment......................................... 12 SECTION 6.02. Termination....................................... 12 ARTICLE VII GENERAL PROVISIONS..................................................... 13 SECTION 7.01. Counterparts...................................... 13 SECTION 7.02. Exclusive Benefit of Parties...................... 13 SECTION 7.03. Invalidity of Provisions.......................... 13 SECTION 7.04. Notices........................................... 13 SECTION 7.05. Depositary's Agents............................... 13 SECTION 7.06. Holders of Receipts Are Parties................... 13 SECTION 7.07. Governing Law..................................... 14 SECTION 7.08. Inspection of Deposit Agreement................... 14 SECTION 7.09. Headings.......................................... 14
iii 5 DEPOSIT AGREEMENT* DATED AS OF ______, 19__ AMONG DEL WEBB CORPORATION _____________________, a _______________, AND THE HOLDERS FROM TIME TO TIME OF THE DEPOSITARY RECEIPTS DESCRIBED HEREIN It is desired to provide, as set forth below in this Deposit Agreement, for the deposit of shares of [insert designation of preferred stock], par value $___ per share, of DEL WEBB CORPORATION with the Depositary (defined below) for the purposes set forth in this Deposit Agreement and for the issuance hereunder of Receipts (defined below) evidencing Depositary Shares, [insert designation], in respect of the Stock (defined below) so deposited. The parties hereto agree as set forth below. ARTICLE I DEFINITIONS Unless otherwise indicated below, the definitions set forth below apply in this Deposit Agreement and the Receipts. "Certificate" means the certificate of designations filed with the Secretary of State of Arizona establishing the Stock as a series of preferred stock of the Company. "Company" means Del Webb Corporation, a Delaware corporation, and its successors. "Deposit Agreement" means this Deposit Agreement, as amended or supplemented from time to time. "Depositary" means [insert name], and any successor as Depositary hereunder. "Depositary Shares" means [insert designation], each representing a [insert fraction] interest in a share of Stock and evidenced by a Receipt. "Depositary's Agent" means an agent appointed by the Depositary pursuant to Section 7.05. "Depositary's Office" means the office of the Depositary [insert address] in [insert city/state], at which its depositary receipt business shall be administered. - ------------- * Language in brackets in this Deposit Agreement may or may not be included in any final Deposit Agreement. 6 "Receipt" means one of the depositary receipts issued under this Deposit Agreement, whether in definitive or temporary form. "Record Holder" as applied with respect to a Depositary Share means the person in whose name a Receipt evidencing such Depositary Share is registered on the books of the Depositary maintained for such purpose. "Registrar" means any bank or trust company that is appointed to register ownership and transfers of Receipts as provided in this Deposit Agreement. "Stock" means shares of the Company's [insert designation of preferred stock], par value per share $___. ARTICLE II FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS SECTION 2.01. FORM AND TRANSFER OF RECEIPTS. Definitive Receipts shall be engraved or printed or lithographed and shall be substantially in the form set forth in Exhibit A to this Deposit Agreement, with appropriate insertions, modifications and omissions, as provided below. Pending the preparation of definitive Receipts, the Depositary, upon the written order of the Company delivered in compliance with Section 2.02, shall execute and deliver temporary Receipts that are printed, lithographed, typewritten, mimeographed or otherwise substantially of the tenor of the definitive Receipts in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the persons executing such Receipts may determine, as evidenced by their execution of such Receipts. If temporary Receipts are issued, the Company and the Depositary will cause definitive Receipts to be prepared without unreasonable delay. After the preparation of definitive Receipts, the temporary Receipts will be exchangeable for definitive Receipts upon surrender of the temporary Receipts at an office designated by the Depositary as contemplated by the third paragraph of Section 2.02, without charge to the holder. Upon surrender for cancellation of any one or more temporary Receipts, the Depositary shall execute and deliver in exchange therefor definitive Receipts representing the same number of Depositary Shares as represented by the surrendered temporary Receipt or Receipts. Such exchange shall be made at the Company's expense and without any charge therefor. Until so exchanged, the temporary Receipts shall in all respects be entitled to the same benefits under this Deposit Agreement, and with respect to the Stock, as definitive Receipts. Receipts shall be executed by the Depositary by the manual signature of a duly authorized officer of the Depositary; provided, however, that such signature may be a facsimile if a Registrar for the Receipts (other than the Depositary) has been appointed and such Receipts are countersigned by manual signature of a duly authorized officer of the Registrar. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it has been executed either (i) manually by a duly authorized officer of the Depositary or (ii) alternatively, but only if a Registrar for the Receipts (other than the Depositary) has been appointed, by facsimile signature of a duly authorized officer of the Depositary and countersigned manually by a duly authorized officer of such Registrar. The Depositary shall record on its books each Receipt so signed and delivered as hereinafter provided. Receipts shall be in denominations of any number of whole Depositary Shares. Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Company or the Depositary or required to comply with any applicable law or any 2 7 regulation thereunder or with the rules and regulations of any securities exchange upon which the Stock, the Depositary Shares or the Receipts may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject. Title to Depositary Shares evidenced by a Receipt that is properly endorsed, or accompanied by a properly executed instrument of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that until transfer of a Depositary Share is registered on the books of the Depositary as provided in Section 2.04, the Depositary may, notwithstanding any notice to the contrary, treat the Record Holder thereof at such time as the absolute owner thereof for the purpose of determining the person entitled to distributions of dividends or other distributions or to any notice provided for in this Deposit Agreement and for all other purposes. SECTION 2.02. DEPOSIT OF STOCK; EXECUTION AND DELIVERY OF RECEIPTS IN RESPECT THEREOF. Subject to the terms and conditions of this Deposit Agreement, the Company may from time to time deposit shares of Stock under this Deposit Agreement by delivery to the Depositary of a certificate or certificates for the Stock to be deposited, properly endorsed or accompanied, if required by the Depositary, by a duly executed instrument of transfer or endorsement, in form reasonably satisfactory to the Depositary, together with all such certifications as may be reasonably required by the Depositary in accordance with the provisions of this Deposit Agreement, and together with a written order of the Company directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in such order a Receipt or Receipts for the number of Depositary Shares relating to such deposited Stock. Deposited Stock shall be held by the Depositary at the Depositary's Office or at such other place or places in the state of _______ as the Depositary shall determine. Upon receipt by the Depositary of a certificate or certificates for Stock deposited in accordance with the provisions of this Section, together with the other documents required as specified above, and upon recordation of the Stock so deposited on the books of the Company in the name of the Depositary or its nominee, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver to or upon the order of the person or persons named in the written order delivered to the Depositary, a Receipt or Receipts for the number of Depositary Shares relating to the Stock so deposited and registered in such name or names as may be requested by such person or persons. The Depositary shall execute and deliver such Receipt or Receipts at the Depositary's Office or such other offices, if any, as the Depositary may designate if requested by any such person or persons. Delivery at other offices shall be at the risk and expense of the person requesting such delivery. Other than in the case of splits, combinations or other reclassifications affecting the Stock, or in the case of dividends or other distributions of Stock, if any, there shall be deposited hereunder not more than ______shares of Stock. SECTION 2.03. REDEMPTION OF STOCK. Whenever the Company elects to redeem shares of Stock in accordance with the provisions of the Certificate, it shall (unless otherwise agreed in writing with the Depositary) give notice to the Depositary of such proposed redemption, as provided in Section 7.04, not less than ___ nor more than ____ days prior to the date fixed for redemption of such shares of Stock in accordance with Section ___ of the Certificate. On the date of such redemption, provided that the Company shall then have paid in full to the Depositary the redemption price of the Stock to be redeemed plus any accrued and unpaid dividends thereon, the Depositary shall redeem the Depositary Shares relating to such Stock and deliver such Stock, together with appropriate instruments of transfer, to the Company or its order. The Depositary shall mail notice of such redemption and the proposed simultaneous redemption of the number of 3 8 Depositary Shares relating to the Stock to be redeemed, by first class mail, postage prepaid, not less than 30 and not more than 60 days prior to the date fixed for redemption of such Stock and Depositary Shares (the "Redemption Date"), to the Record Holders of the Depositary Shares to be so redeemed, at the addresses of such holders as they appear on the records of the Depositary, but neither failure to mail any such notice to one or more such holders nor any defect in any notice to one or more such holders shall affect the sufficiency of the proceedings for redemption as to other holders. Each such notice shall state: (i) the Redemption Date; (ii) the number of Depositary Shares to be redeemed and, if less than all the Depositary Shares held by any such holder are to be redeemed, the number of such Depositary Shares held by such holder to be so redeemed; (iii) the redemption price; (iv) the place or places where Receipts evidencing Depositary Shares are to be surrendered for payment of the redemption price; and (v) when dividends in respect of the Stock underlying the Depositary Shares to be redeemed will cease to accrue. In case less than all the outstanding Depositary Shares are to be redeemed, the Depositary Shares to be so redeemed shall be selected by lot, on a pro rata basis or by such other means as may be determined by the Depositary to be equitable. If notice has been mailed by the Depositary as provided above, from and after the Redemption Date (unless the Company has failed to redeem the shares of Stock to be redeemed by it as set forth in the Company's notice provided for in the preceding paragraph), all dividends in respect of the Depositary Shares so called for redemption shall cease to accrue and accumulate, the Depositary Shares being redeemed from such proceeds shall be deemed no longer to be outstanding, all rights of the holders of Receipts evidencing such Depositary Shares (except the right to receive the redemption price) shall, to the extent of such Depositary Shares, cease and terminate and, upon surrender of the Receipts evidencing any such Depositary Shares (properly endorsed or assigned for transfer, if the Depositary shall so require) in accordance with such notice, such Depositary Shares shall be redeemed by the Depositary at a redemption price per Depositary Share equal to [insert fraction] of the redemption price per share paid in respect of the shares of Stock plus, if applicable, all money and other property, if any, paid with respect to such Depositary Shares (rounded to the next highest whole cent, where appropriate) and including, if applicable' all amounts paid by the Company in respect of dividends that on the Redemption Date have accumulated on the shares of Stock to be so redeemed and have not theretofore been paid. If less than all the Depositary Shares evidenced by a Receipt are called for redemption, the Depositary will deliver to the holder of such Receipt upon its surrender to the Depositary, together with the redemption payment, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption. SECTION 2.04. REGISTRATION OF TRANSFER OF RECEIPTS. Subject to the terms and conditions of this Deposit Agreement, the Depositary shall register on its books from time to time transfers of Depositary Shares upon any surrender of the Receipt or Receipts evidencing such Depositary Shares by the holder in person or by duly authorized attorney, properly endorsed or accompanied by a properly executed instrument of transfer. Thereupon the Depositary shall execute a new Receipt or Receipts evidencing the same aggregate number of Depositary Shares as those evidenced by the Receipt or Receipts surrendered and deliver such new Receipt or Receipts to or upon the order of the person entitled thereto. SECTION 2.05. SPLIT-UPS AND COMBINATIONS OF RECEIPTS[; SURRENDER OF DEPOSITARY SHARES AND WITHDRAWAL OF STOCK]. Upon surrender of a Receipt or Receipts at the Depositary's Office or at such other offices as it may designate for the purpose of effecting a split-up or combination of such Receipt or Receipts, and subject to the terms and conditions of this Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in the denominations requested, evidencing the aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered. 4 9 [Any holder of at least Depositary Shares may withdraw the number of whole shares of Stock underlying such Depositary Shares and all money and other property, if any, underlying such Depositary Shares by surrendering Receipts evidencing such Depositary Shares at the Depositary's Office or at such other offices as the Depositary may designate for such withdrawals. Thereafter, without unreasonable delay, the Depositary shall deliver to such holder, or to the person or persons designated by such holder as hereinafter provided, the number of whole shares of Stock and all money and other property, if any, underlying the Depositary Shares so surrendered for withdrawal, but holders of such whole shares of Stock (other than the Company) will not thereafter be entitled to deposit such Stock hereunder or to receive Receipts evidencing Depositary Shares therefor. If a Receipt delivered by a holder to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares relating to other than a number of whole shares of Stock, the Depositary shall at the same time, in addition to such number of whole shares of Stock and such money and other property, if any, to be so withdrawn, deliver to such holder, or (subject to Section 3.02) upon his or her order, a new Receipt evidencing such excess number of Depositary Shares. Delivery of the Stock and money and other property being withdrawn may be made by delivery of such certificates, documents of title and other instruments as the Depositary may deem appropriate. If the Stock and the money and other property being withdrawn are to be delivered to a person or persons other than the Record Holder of the Depositary Shares evidenced by the Receipts being surrendered for withdrawal of Stock, such holder shall execute and deliver to the Depositary a written order so directing the Depositary, and the Depositary may require that the Receipt or Receipts surrendered by such holder for withdrawal of such shares of Stock be properly endorsed in blank or accompanied by a properly executed instrument of transfer. Delivery of the Stock and money and other property, if any, underlying the Depositary Shares surrendered for withdrawal shall be made by the Depositary at the Depositary's Office, except that, at the request, risk and expense of the holder surrendering such Depositary Shares and for the account of such holder, such delivery may be made at such other place as may be designated by such holder.] SECTION 2.06. LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND EXCHANGE OF RECEIPTS. As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, surrender or exchange of any Receipt, the Depositary, any of the Depositary's Agents or the Company may require payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any charges or expenses payable by the holder of a Receipt pursuant to Section 5.07, may require the production of evidence satisfactory to it as to the identity and genuineness of any signature and may also require compliance with such regulations, if any, as the Depositary or the Company may establish consistent with the provisions of this Deposit Agreement. The [delivery of Receipts against Stock may be suspended, the] registration of transfer of Depositary Shares may be refused and the registration of transfer, surrender or exchange of outstanding Depositary Shares may be suspended (i) during any period when the register of stockholders of the Company is closed or (ii) if any such action is deemed necessary or advisable by the Depositary, any of the Depositary's Agents or the Company at any time from time to time because of any requirement of law or of any government or governmental body or commission or under any provision of this Deposit Agreement. SECTION 2.07. LOST RECEIPTS, ETC. In case any Receipt is mutilated, destroyed, lost or stolen, the Depositary in its discretion may execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt, or in lieu of and in substitution for such destroyed, lost or stolen Receipt, upon (i) the filing by the holder thereof with the Depositary and 5 10 the Company, if the Company so requests, of evidence satisfactory to the Depositary and, if applicable, the Company of such destruction or loss or theft of such Receipt, or the authenticity thereof and of his, her or its ownership thereof and (ii) the furnishing to the Depositary and, if the Company so requests, the Company of reasonable indemnification or a bond satisfactory to the Depositary and, if the Company so requests, the Company. SECTION 2.08. CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS. All Receipts surrendered to the Depositary or any Depositary's Agent shall be canceled by the Depositary. Except as prohibited by applicable law or regulation, the Depositary is authorized to destroy all Receipts so canceled. ARTICLE III CERTAIN OBLIGATIONS OF THE HOLDERS OF RECEIPTS AND THE COMPANY SECTION 3.01. FILING PROOFS, CERTIFICATES AND OTHER INFORMATION. Any holder of a Depositary Share may be required from time to time to file such proof of residence, or other matters or other information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper. The Depositary or the Company may withhold the delivery, or delay the registration of transfer, redemption or exchange, of any Depositary Share [or the withdrawal of any Stock underlying Depositary Shares] or the distribution of any dividend or other distribution or the sale of any rights or of the proceeds thereof until such proof or other information is filed or such certificates are executed or such representations and warranties are made. SECTION 3.02. PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. Holders of Depositary Shares shall be obligated to make payments to the Depositary of certain charges and expenses, as provided in Section 5.07. Registration of transfer of any Depositary Share [or any withdrawal of Stock and delivery of all money or other property, if any, underlying such Depositary Share] may be refused until any such payment due is made, and any dividends or other distributions may be withheld or all or any part of the Stock or other property relating to such Depositary Shares and not theretofore sold may be sold for the account of the holder thereof (after attempting by reasonable means to notify such holder prior to such sale), and such dividends or other distributions or the proceeds of any such sale may be applied to any payment of such charges or expenses, the holder of such Depositary Share remaining liable for any deficiency. SECTION 3.03. WARRANTY AS TO STOCK. The Company hereby represents and warrants that the Stock, when issued against payment in full therefor, will be validly issued, fully paid and nonassessable. Such representation and warranty shall survive the deposit of the Stock and the issuance of the Receipts. ARTICLE IV THE DEPOSITED SECURITIES; NOTICES SECTION 4.01. CASH DISTRIBUTIONS. Whenever the Depositary shall receive any cash dividend or other cash distribution on the Stock, the Depositary shall, subject to Sections 3.01 and 3.02, distribute to the Record Holder of Depositary Shares on the record date fixed pursuant to Section 4.04 such amounts of such dividend or distribution as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares held by such holders; provided, however, that in case the Company or the Depositary shall be required to withhold and shall withhold from any cash dividend or other cash distribution in respect of the Stock an amount on 6 11 account of taxes, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any holder of Depositary Shares a fraction of one cent, and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next sum received by the Depositary for distribution to Record Holders of Depositary Shares then outstanding. SECTION 4.02. DISTRIBUTIONS OTHER THAN CASH. Whenever the Depositary shall receive any distribution other than cash on the Stock, the Depositary shall, subject to Sections 3.01 and 3.02, distribute to the Record Holders of Depositary Shares on the record date fixed pursuant to Section 4.04 such amounts of the securities or property received by it as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares held by such holders, in any manner that the Depositary may deem equitable and practicable for accomplishing such distribution. If in the opinion of the Depositary such distribution cannot be made proportionately among such Record Holders, or if for any other reason (including any requirement that the Company or the Depositary withhold an amount on account of taxes or governmental charges) the Depositary deems, after consultation with the Company, such distribution not to be feasible or lawful, the Depositary may, with the written approval of the Company, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be distributed or made available for distribution, as the case may be, by the Depositary to the Record Holders of Depositary Shares entitled thereto as provided by Section 4.01 in the case of a distribution received in cash. The Company shall not make any distribution of such securities unless the Company shall have provided to the Depositary an opinion of counsel to the effect that such securities have been registered under the Securities Act of 1933 or do not need to be registered. SECTION 4.03. SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. If the Company shall at any time offer or cause to be offered to the persons in whose names Stock is recorded on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences, or privileges shall in each such instance be made available by the Depositary to the Record Holders of Depositary Shares in such manner as may be selected by the Depositary with the written approval of the Company; provided, however, that (i) if at the time of issue or offer of any such rights, preferences or privileges the Depositary determines that it is not lawful or (after consultation with the Company) not feasible to make such rights, preferences or privileges available to holders of Depositary Shares or (ii) if and to the extent so instructed by holders of Depositary Shares who do not desire to exercise such rights, preferences or privileges, then the Depositary, in its discretion (with the approval of the Company, in any case where the Depositary has determined that it is not feasible to make such rights, preferences or privileges available), may, if applicable laws or the terms of such rights, preferences or privileges permit such transfer, sell such rights, preferences or privileges at public or private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be distributed by the Depositary to the Record Holders of Depositary Shares entitled thereto as provided by Section 4.01 in the case of a distribution received in cash. The Company shall not make any distribution of such rights, preferences or privileges unless the Company shall have provided to the Depositary an opinion of counsel to the effect that such rights, preferences or privileges have been registered under the Securities Act of 1933 or do not need to be so registered. [If registration under the Securities Act of 1933 of the securities to which any rights, preferences or privileges relate is required in order for holders of Depositary Shares to be offered 7 12 or sold the securities to which such rights, preferences or privileges relate, the Company agrees with the Depositary that it will file promptly a registration statement pursuant to such Act with respect to such rights, preferences or privileges and securities and use its best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Depositary Shares any right, preference or privilege to subscribe for or to purchase any securities unless and until such a registration statement shall have become effective, or unless the offering and sale of such securities to such holders are exempt from registration under the provisions of such Act.] [If any other action under the laws of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to the holders of Depositary Shares, the Company agrees with the Depositary that the Company will use its best efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges.] SECTION 4.04. NOTICE OF DIVIDENDS, ETC.; FIXING OF RECORD DATE FOR HOLDERS OF DEPOSITARY SHARES. Whenever any cash dividend or other cash distribution shall become payable or any distribution other than cash shall be made, or if rights, preferences or privileges shall at any time be offered, with respect to the Stock, or whenever the Depositary receives notice of any meeting at which holders of Stock are entitled to vote, or of which holders of Stock are entitled to notice, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Stock) for the determination of the holders of Depositary Shares who shall be entitled to receive a distribution in respect of such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or to give instructions for the exercise of voting rights at any such meeting, or who shall be entitled to receive notice of such meeting. SECTION 4.05. VOTING RIGHTS. Upon receipt of notice of any meeting or action to be taken by written consent at which the holders of the Stock are entitled to vote or consent, the Depositary shall, as soon as practicable thereafter, mail to the Record Holders of Depositary Shares a notice that shall contain (i) such information as is contained in such notice of meeting or action and (ii) a statement informing holders of Depositary Shares that they may instruct the Depositary as to the exercise of the voting rights or the giving or refusal of consent, as the case may be, pertaining to the amount of Stock underlying their respective Depositary Shares and a brief statement as to the manner in which such instructions may be given. Upon the written request of the holders of Depositary Shares on the record date established in accordance with Section 4.04, the Depositary shall endeavor insofar as practicable to vote or cause to be voted, or give or withhold consent with respect to such Stock, in accordance with the instructions set forth in such requests, the maximum number of whole shares of Stock underlying the Depositary Shares as to which any particular voting or consent instructions are received. [The Company hereby agrees to take all reasonable action that may reasonably be deemed necessary by the Depositary in order to enable the Depositary to vote such Stock or cause such Stock to be voted or give or withhold consent with respect to such Stock.] In the absence of specific instructions from the holder of a Depositary Share, the Depositary will abstain from voting or giving consents (but, at its discretion, not from appearing at any meeting with respect to such Stock unless directed to the contrary by the holders of all the Depositary Shares) to the extent of the Stock underlying the Depositary Shares. SECTION 4.06. CHANGES AFFECTING DEPOSITED SECURITIES AND RECLASSIFICATIONS, RECAPITALIZATIONS, ETC. Upon any change in par or liquidation value, split-up, combination or any other reclassification of the Stock, or upon any recapitalization, reorganization, merger, 8 13 amalgamation or consolidation affecting the Company or to which it is a party, the Depositary may in its discretion, with the approval of, and shall upon the instructions of, the Company, and (in either case) in such manner as the Depositary may deem equitable, (i) make such adjustments in (a) the fraction of an interest in one share of Stock underlying one Depositary Share and (b) the ratio of the redemption price per Depositary Share to the redemption price of a share of the Stock, in each case as may be necessary fully to reflect the effects of such change in par or liquidation value, split-up, combination or other reclassification of the Stock, or of such recapitalization, reorganization, merger, amalgamation or consolidation and (ii) treat any securities that are received by the Depositary in exchange for or upon conversion of or in respect of the Stock as new deposited securities so received in exchange for or upon conversion of or in respect of such Stock. In any such case the Depositary may in its discretion, with the approval of the Company, execute and deliver additional Receipts, or may call for the surrender of all outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited securities. SECTION 4.07. DELIVERY OF REPORTS. The Depositary will forward to Record Holders of Receipts, at their respective addresses appearing in the Depositary's books, all notices, reports and communications received from the Company that are delivered to the Depositary and that the Company is required to furnish to the holders of Stock or Receipts. SECTION 4.08. LIST OF HOLDERS. Promptly upon each and every request from time to time by the Company, the Depositary shall furnish to it a list, as of a recent date, of the names, addresses and holdings of Depositary Shares of all persons in whose names Depositary Shares are registered on the books of the Depositary or Registrar, as the case may be. ARTICLE V THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND THE COMPANY SECTION 5.01. MAINTENANCE OF OFFICES, AGENCIES AND TRANSFER BOOKS BY THE DEPOSITARY; REGISTRAR. Upon execution of this Deposit Agreement, the Depositary shall maintain at the Depositary's Offices, or at any Registrar's Office, at which the Depositary shall have complete access to all books and records maintained on the Company's behalf, facilities for the execution and delivery, surrender and exchange of Receipts and the registration and registration of transfer of Depositary Shares, and at the offices of the Depositary's Agents, if any, facilities for the delivery, surrender and exchange of Receipts and the registration of transfer of Depositary Shares, all in accordance with the provisions of this Deposit Agreement. The Depositary shall keep books at the Depositary's Office for the registration and registration of transfer of Depositary Shares[, which books [at all reasonable times] shall [not] be open for inspection by the Record Holders of Depositary Shares]; [provided, however, that such inspection shall be for a proper purpose reasonably related to such person's interest as an owner of Depositary Shares and any such holder requesting to exercise such right shall certify such fact in writing to the Depositary and the Company.] The Depositary may close such books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder. If the Receipts or the Depositary Shares evidenced thereby or the Stock underlying such Depositary Shares shall be listed on a stock exchange or the NASDAQ National Market Systems (the "NMS"), the Depositary may, with the approval of the Company, appoint a Registrar for registration of such Receipts or Depositary Shares in accordance with any requirements of such exchange or the NMS, as applicable. Such Registrar (which may be the Depositary if so 9 14 permitted by the requirements of such exchange or the NMS, as applicable) may be removed and a substitute registrar appointed by the Depositary upon the written request or with the written approval of the Company. If the Receipts, such Depositary Shares or such Stock are listed on one or more other stock exchanges, the Depositary will, at the request of the Company, arrange such facilities for the execution, delivery, registration, registration of transfer, surrender and exchange of such Receipts, such Depositary Shares or such Stock as may be required by law or applicable stock exchange regulation. SECTION 5.02. PREVENTION OF OR DELAY IN PERFORMANCE BY THE DEPOSITARY, THE DEPOSITARY'S AGENTS, ANY REGISTRAR OR THE COMPANY. Neither the Depositary nor any Depositary's Agent nor any Registrar nor the Company shall incur any liability to any holder of any Depositary Share if by reason of any provision of any present or future law, or regulation thereunder, of the United States of America or of any other governmental authority or, in the case of the Depositary, any Depositary's Agent or any Registrar, by reason of any provision, present or future, of the Company's Articles or Certificate of Incorporation (including the Certificate) or by reason of any act of God or war or other circumstance beyond the control of the relevant party, the Depositary, any Depositary's Agent, any Registrar or the Company shall be prevented or forbidden from doing or performing any act or thing that the terms of this Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary's Agent, any Registrar or the Company incur any liability to any holder of a Depositary Share (i) by reason of any nonperformance or delay, which is the result of any of the foregoing, in the performance of any act or thing that the terms of this Deposit Agreement provide shall or may be done or performed or (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement except in case of any such exercise or failure to exercise discretion caused by the [negligence, as to the Depositary], gross negligence or willful misconduct of the party charged with such exercise or failure to exercise. SECTION 5.03. OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS, ANY REGISTRAR AND THE COMPANY. Neither the Depositary nor any Depositary's Agent nor any Registrar nor the Company assumes any obligation or shall be subject to any liability under this Deposit Agreement to holders of Depositary Shares other than for such person's own [negligence, as to the Depositary], gross negligence or willful misconduct. [Neither the Depositary nor any Depositary's Agent nor any Registrar nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of the Stock, the Depositary Shares or the Receipts that in its opinion may involve it in expense or liability unless indemnity satisfactory to it against all expense and liability be furnished as often as may be required.] Neither the Depositary nor any Depositary's Agent nor any Registrar nor the Company shall be liable for any action or any failure to act by it in reliance upon the written advice of legal counsel or accountants, or information from any person presenting Stock for deposit, any holder of a Depositary Share or any other person reasonably believed by it in good faith to be competent to give such information. The Depositary, any Depositary's Agent, any Registrar and the Company may each rely and shall each be protected in acting upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Depositary shall not be responsible for any failure to carry out any instruction to vote any of the shares of Stock or for the manner or effect of any such vote, as long as any such action or non-action is in good faith. The Depositary undertakes, and any Registrar shall be required to undertake, to perform such duties and only such duties as are specifically set forth in this Deposit Agreement, and no implied covenants or obligations shall be read into this Deposit Agreement against the Depositary or any Registrar. The Depositary shall indemnify the Company against any 10 15 liability that may arise out of acts performed or omitted by the Depositary or its agents due to its or their [negligence,] gross negligence, bad faith or willful misconduct. The Depositary, the Depositary's agents, any Registrar and the Company may own and deal in any class of securities of the Company and its affiliates and in Depositary Shares. The Depositary may also act as transfer agent or registrar of any of the securities of the Company and its affiliates. SECTION 5.04. RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR DEPOSITARY. The Depositary may at any time resign as Depositary hereunder by written notice of its election so to be delivered to the Company, such resignation to take effect upon the appointment of a successor Depositary and such successor's written acceptance of such appointment as hereinafter provided. The Depositary may at any time be removed by the Company by written notice of such removal delivered to the Depositary, such removal to take effect upon the appointment of a successor Depositary and such successor's written acceptance of such appointment as hereinafter provided. In case the Depositary acting hereunder shall at any time resign or be removed, the Company shall, within 60 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor Depositary, which shall be a bank or trust company having its principal office in the United States of America and having a combined capital and surplus of at least [$50,000,000]. If no successor Depositary shall have been so appointed within 60 days after delivery of such notice, the resigning or removed Depositary may petition any court of competent jurisdiction for the appointment of a successor Depositary. Every successor Depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor Depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon the written request of the Company, shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Stock and any moneys or property held hereunder to such successor and shall deliver to such successor a list of the Record Holders of all outstanding Depositary Shares. Any successor Depositary shall promptly mail notice of its appointment to the Record Holders of Depositary Shares. Thereafter, any predecessor Depositary shall deliver any correspondence received from any holders of Depositary Shares to the successor Depositary. Any corporation into or with which the Depositary may be merged, consolidated or converted shall be the successor of such Depositary without the execution or filing of any document or any further act. Such successor Depositary may authenticate the Receipts in the name of the predecessor Depositary or in the name of the successor Depositary. SECTION 5.05. CORPORATE NOTICES AND REPORTS. The Company agrees that it will transmit to the Depositary all notices, reports and communications (including without limitation financial statements) required by law, the rules of any national securities exchange upon which the Stock, the Depositary Shares or the Receipts are listed or by the Company's Certificate of Incorporation (including the Certificate) to be furnished by the Company to holders of the Stock. SECTION 5.06. INDEMNIFICATION BY THE COMPANY. The Company shall indemnify the Depositary, any Depositary's Agent and any Registrar against, and hold each of them harmless from, any loss, liability or expense (including the costs and expenses of defense) that may arise out of acts performed or omitted in connection with this Deposit Agreement and the Depositary Shares (a) by the Depositary, any Registrar or any of their respective agents (including any Depositary's Agent), except for any liability arising out of [negligence,] gross negligence, willful 11 16 misconduct or bad faith on the respective parts of any such person or persons or (b) by the Company or any of its agents, arising out of the Company's or its agents' [negligence,] gross negligence, willful misconduct or bad faith. The obligations of the Company set forth in this Section 5.06 shall survive any succession of any Depositary, Registrar or Depositary's Agent. SECTION 5.07. CHARGES AND EXPENSES. The Company shall pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. The Company shall pay all charges of the Depositary agreed upon in writing by the Company and the Depositary in connection with the initial deposit of the Stock and the initial issuance of the Receipts, any redemption of the Stock at the option of Company and any withdrawals of Stock by holders of Depositary Shares. All other transfer and other taxes and governmental charges shall be at the expense of holders of [Depositary Shares] [Receipts]. If, at the request of a holder of a Depositary Share, the Depositary incurs charges or expenses for which it is not otherwise liable hereunder, such holder will be liable for such charges and expenses. The Depositary shall present its statement for charges and expenses to the Company once every three months or at such other intervals as the Company and the Depositary may agree. ARTICLE VI AMENDMENT AND TERMINATION SECTION 6.01. AMENDMENT. The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect that they may deem necessary or desirable; provided, however, that no such amendment that shall materially and adversely alter the rights of the existing holders of Depositary Shares shall be effective unless such amendment shall have been approved by the holders of at least a majority of the Depositary Shares then outstanding. Every holder of an outstanding Depositary Share at the time any such amendment becomes effective shall be deemed, by continuing to hold such Depositary Share, to consent and agree to such amendment and to be bound by this Deposit Agreement as amended thereby. SECTION 6.02. TERMINATION. This Deposit Agreement may be terminated by the Company or the Depositary only after (i) all outstanding Depositary Shares have been redeemed and any accumulated and unpaid dividends on the Stock represented by the Depositary Shares, together with all other moneys and property, if any, to which holders of the related Receipts are entitled under the terms of such Receipts or this Deposit Agreement, have been paid or distributed as provided in this Deposit Agreement or provision therefor has been duly made pursuant to Section 2.03 or (ii) there shall have been made a final distribution in respect of the Stock in connection with any liquidation, dissolution or winding up of the Company and such distribution shall have been distributed to the holders of Receipts pursuant to Section 4.01 or 4.02, as applicable. Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary, any Depositary's Agents and any Registrar under Sections 5.06 and 5.07. ARTICLE VII GENERAL PROVISIONS SECTION 7.01. COUNTERPARTS. This Deposit Agreement may be executed in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. 12 17 SECTION 7.02. EXCLUSIVE BENEFIT OF PARTIES. This Deposit Agreement is for the exclusive benefit of the parties hereto [and the holders from time to time of the Receipts], and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. SECTION 7.03. INVALIDITY OF PROVISIONS. In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby. SECTION 7.04. NOTICES. Any and all notices to be given to the Company hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or telegram or telex confirmed by letter, addressed to the Company at 6001 24th Street, Phoenix, Arizona 85016, to the attention of General Counsel, or at any other address of which the Company shall have notified the Depositary in writing. Any and all notices to be given to the Depositary hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or by telegram or telex confirmed by letter, addressed to the Depositary at the Depositary's Office, at ________________ , or at any other address of which the Depositary shall have notified the Company in writing. Any and all notices to be given to any Record Holder of a Depositary Share hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or by telegram or telex confirmed by letter, addressed to such Record Holder at the address of such Record Holder as it appears on the books of the Depositary, or if such holder shall have filed with the Depositary a written request that notices intended for such holder be mailed to some other address, at the address designated in such request. [Delivery of a notice sent by mail or by telegram or telex shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a telegram or telex message) is deposited, postage prepaid, in a post office letter box.] The Depositary or Company may, however, act upon any telegram or telex message received by it from the other or from any holder of a Depositary Share, notwithstanding that such telegram or telex message shall not subsequently be confirmed by letter or as aforesaid. SECTION 7.05. DEPOSITARY'S AGENTS. The Depositary may from time to time, upon written notice to, and with the prior approval of, the Company, appoint Depositary's Agents to act in any respect for the Depositary for the purposes of this Deposit Agreement and may terminate the appointment of such Depositary's Agents. The Depositary will notify the Company of any such termination. SECTION 7.06. HOLDERS OF RECEIPTS ARE PARTIES. The holders of Depositary Shares from time to time shall be parties to this Deposit Agreement shall be bound by all of the terms and conditions hereof and of the Receipts evidencing such Depositary Shares by acceptance of delivery thereof. SECTION 7.07. GOVERNING LAW. THIS DEPOSIT AGREEMENT AND THE RECEIPTS AND ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ____________ WITHOUT REFERENCE TO CHOICE OR CONFLICT OF LAW PRINCIPLES. 13 18 SECTION 7.08. INSPECTION OF DEPOSIT AGREEMENT. Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary's Agents and shall be open to inspection during business hours at the Depositary's Office and the respective offices of the Depositary's Agents, if any, by any holder of a Depository Share. SECTION 7.09. HEADINGS. The headings of articles and sections in this Deposit Agreement and in the form of Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as part of this Deposit Agreement or the Receipts or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts. The Company and the Depositary have duly executed this Deposit Agreement as of the day and year first above set forth, and all holders of Depositary Shares shall become parties hereto by and upon acceptance by them of delivery of Receipts evidencing such Depositary Shares and issued in accordance with the terms hereof. DEL WEBB CORPORATION By:__________________________________ Authorized Officer [DEPOSITARY] By:_________________________________ Authorized Officer 14 19 EXHIBIT A FORM OF DEPOSITARY RECEIPT FOR DEPOSITARY SHARES (GENERAL FORM OF FACE OF RECEIPT) NUMBER DEPOSITARY SHARES DEPOSITARY RECEIPT FOR DEPOSITARY SHARES, REPRESENTING ___________ PREFERRED STOCK DEL WEBB CORPORATION Incorporated under the laws of the State of Delaware This Depositary Receipt is transferable in the City of ________________, State of ____________ ______________________ , as Depositary, (the "Depositary"), hereby certifies that _______________________ is the registered owner of ________________ Depositary Shares ("Depositary Shares"), each Depositary Share representing ____ (_____) of one share of _____________ Preferred Stock, par value $ _____ per share (the "Stock"), of Del Webb Corporation, a Delaware corporation (the "Company"), on deposit with the Depositary, subject to the terms and entitled to the benefits of the Deposit Agreement dated as of ________________, 199__ (the "Deposit Agreement"), between the Company, the Depositary and all holders from time to time of Depositary Receipts. By accepting this Depositary Receipt the holder hereof becomes a party to and agrees to be bound by all the terms and conditions of the Deposit Agreement. This Depositary Receipt shall not be valid or obligatory for any purpose or entitled to any benefits under the Deposit Agreement unless it shall have been executed by the Depositary by the manual signature of a duly authorized officer or, if executed in facsimile by the Depositary, countersigned by a Registrar in respect of the Depositary Receipts by the manual signature of a duly authorized officer thereof. Dated: Depositary By: __________________________ Authorized Officer Registrar By: __________________________ Authorized Officer A-1 20 [GENERAL FORM OF REVERSE OF RECEIPT] DEL WEBB CORPORATION Del Webb Corporation will furnish without charge to each receiptholder who so requests, a copy of the Deposit Agreement and a statement or summary of the powers, designations, preferences and relative, participating, optional or other special rights of the Preferred Stock. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT - ________________ Custodian ________________ under the Uniform Gifts to Minors Act ___________ (State) Additional abbreviations may also be used though not in the above list. For value received, ______________ hereby sell(s), assign(s) and transfer(s) unto ________________________________________________________________________________ (Please print or typewrite name, address including postal zip code and social security or other identifying number of Assignee) ________________ Depositary Shares represented by the within Receipt and all rights thereunder, and do hereby irrevocably constitute and appoint ________________ attorney to transfer those Depositary Shares on the books of the within-named Depositary with full power of substitution in the premises. Dated:_________ _______________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of this instrument in every particular, without alteration or enlargement or any charge whatever. A-2 EX-5 8 EX-5 1 [GIBSON, DUNN & CRUTCHER LLP LETTERHEAD] September 13, 1998 EXHIBIT 5 C 95181-00129 Del Webb Corporation 6001 24th Street Phoenix, Arizona 85016 Re: Public Offering of $250 million of Debt Securities, Warrants, Preferred Shares and Common Shares Ladies and Gentlemen: We have acted as special counsel to Del Webb Corporation, a Delaware corporation (the "Company"), in connection with the registration under the Securities Act of 1933, as amended, pursuant to the Registration Statement to which this opinion is an Exhibit (the "Registration Statement"), of $250 million of (i) the Company's Senior, Subordinated and/or Senior Subordinated Debt Securities, issued separately or in exchange for the Preferred Shares referred to below (the "Debt Securities"), (ii) the Warrants (the "Warrants") to purchase shares of Common Stock and/or Preferred Stock of the Company, (iii) the shares of Preferred Stock (the "Preferred Shares") and the shares of Common Stock (the "Common Shares") issuable separately, on conversion of any Debt Securities issued that are convertible into Common Shares or Preferred Shares and upon exercise of any Warrants so issued and (iv) the Common Shares issuable upon conversion of any Preferred Shares so issued that are convertible into Common Shares. The Debt Securities, Warrants, Preferred Shares and Common Shares may also be issued as part of units consisting of any combination of such securities. We are familiar with the corporate action taken and proposed to be taken by the Company in connection with the authorization, issuance and sale of the Debt Securities, the 2 Del Webb Corporation September 13, 1998 Page 2 Warrants, the Preferred Shares and the Common Shares and have made such other legal and factual inquiries as we deem necessary for purposes of rendering this opinion. Based on the foregoing and in reliance thereon, and subject to completion of the corporate action proposed to be taken by the Company referred to above (including without limitation the due reservation of the Common Shares and Preferred Shares for issuance and, with respect to the Preferred Shares, the due authorization, approval and filing of the Certificate of Designations referred to below), the effectiveness of the Registration Statement, the due execution and delivery of the Indenture(s) pursuant to which the Debt Securities will be issued (together, the "Indenture") and the Warrant Agreement relating to the Warrants (the "Warrant Agreement"), each in materially the form filed as an Exhibit to the Registration Statement, and the qualifications and limitations set forth below, we are of the opinion that: (a) the Debt Securities and Warrants, upon the issuance thereof and timely payment in full therefor in the manner described in the Registration Statement and the Prospectus Supplement describing the terms of the Debt Securities and Warrants as issued, will be validly issued, fully paid and nonassessable; (b) the Debt Securities so issued will be legally binding obligations of the Company, entitled to the benefits provided under the Indenture pursuant to which they are issued; (c) any Warrants so issued will be legally binding obligations of the Company, entitled to the benefits provided under the applicable Warrant Agreement; and (d) the Preferred Shares and Common Shares issued separately or upon the conversion of any Debt Securities so issued that are convertible and upon the exercise of any Warrants so issued (as to the Preferred Shares, when issued pursuant to the Certificate of Designations pursuant to Section 151 of the Delaware General Corporation Law in materially the form filed as an Exhibit to the Registration Statement (the "Certificate of Designations")), and the Common Shares issued upon conversion or exchange of any such Preferred Shares so issued that are convertible or exchangeable into Common Shares (i) will have been duly authorized 3 Del Webb Corporation September 13, 1998 Page 3 and reserved for issuance separately, upon conversion of such Debt Securities, exercise of any such Warrants and conversion or exchange of any such convertible Preferred Shares, upon the respective issuance of each, as the case may be, and (ii) upon the issuance of such Preferred Shares and Common Shares separately against payment in full therefor or pursuant to (x) the Indenture upon valid conversion of such Debt Securities, (y) exercise of such Warrants and payment in full of the exercise price provided for therein or (z) valid conversion of any such Preferred Shares so issued that are convertible into Common Shares in accordance with the Certificate of Designations, as the case may be, will be validly issued, fully paid and nonassessable. Our opinions set forth above are subject to the effect of (a) applicable bankruptcy, reorganization, insolvency, moratorium and other similar laws and court decisions of general application (including without limitation statutory or other laws regarding fraudulent or preferential transfers) relating to, limiting or affecting the enforcement of creditors' rights generally, (b) general principles of equity that may limit the enforceability of any of the remedies, covenants or other provisions of the Debt Securities, the Indenture, the Warrants, the Warrant Agreement and the Certificate of Designations and the availability of injunctive relief or other equitable remedies and (c) the application of principles of equity (regardless of whether enforcement is considered in proceedings at law or in equity) as such principles relate to, limit or affect the enforcement of creditors' rights generally. In addition, we express no opinion as to: (a) any provisions of the Debt Securities, the Indenture, the Warrant Agreement, the Warrants or the Certificate of Designations regarding the remedies available to any person (1) to take action that is arbitrary, unreasonable or capricious or is not taken in good faith or in a commercially reasonable manner, whether or not such action is permitted under the Debt Securities, the Indenture, the Warrant Agreement, the Warrants or the Certificate of Designations or (2) for violations or breaches that are determined by a court to be non-material or without substantially adverse effect upon the ability of the Company to perform its material obligations under the Debt Securities, the Indenture, the Warrant Agreement, the Warrants or the Certificate of Designations; or (b) the provisions of the Debt Securities or the Indenture that may provide for interest on interest or penalty interest. 4 Del Webb Corporation September 13, 1998 Page 4 The Company is a Delaware corporation. We are not admitted to practice in Delaware. However, we are generally familiar with the Delaware General Corporation Law and have made such review thereof as we consider necessary for the purpose of this opinion. Subject to the foregoing, this opinion is limited to Delaware, New York and federal law. This opinion may not be quoted in whole or in part without the prior written consent of this Firm. You have informed us that you intend to issue the one or more of the Common Shares, Preferred Shares, Debt Securities and Warrants from time to time on a delayed or continuous basis, and this opinion is limited to the laws referred to above as in effect on the date hereof. We understand that prior to issuing any Common Shares, Preferred Shares, Debt Securities or Warrants you will advise us in writing of the terms thereof, will afford us an opportunity to review the operative documents pursuant to which such Common Shares, Preferred Shares, Debt Securities and Warrants are to be issued (including the applicable Prospectus Supplement) and will file such supplement or amendment to this opinion (if any) as we may reasonably consider necessary or appropriate by reason of the terms of such Debt Securities. We hereby consent to the use of our name under the caption "Certain Legal Matters" in the Prospectus forming a part of the Registration Statement and to the filing of this opinion as Exhibit 5 to the Registration Statement. Very truly yours, GIBSON, DUNN & CRUTCHER LLP SAM:ST LC923650.038 EX-12 9 EX-12 1 EXHIBIT 12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (IN THOUSANDS, EXCEPT RATIOS)
Year Ended June 30, ------------------- 1998 1997 1996 1995 1994 ---- ---- ---- ---- ---- Earnings: Earnings (loss) from continuing operations before income taxes $ 66,458 $ 62,009 ($ 11,924) $ 43,832 $ 26,186 Add: Fixed charges 65,026 54,388 54,292 48,226 34,891 Amortization of capitalized interest in costs and expenses 46,212 49,457 42,354 31,205 18,003 Deduct: Interest incurred (61,546) (51,917) (52,022) (46,641) (33,677) --------- --------- --------- --------- --------- Earnings, as adjusted $ 116,150 $ 113,937 $ 32,700 $ 76,622 $ 45,403 ========= ========= ========= ========= ========= Fixed charges: Interest incurred and amortization of deferred financing costs $ 61,546 $ 51,917 $ 52,022 $ 46,641 $ 33,677 Interest expense component of rent expense 3,480 2,471 2,270 1,585 1,214 --------- --------- --------- --------- --------- Total fixed charges $ 65,026 $ 54,388 $ 54,292 $ 48,226 $ 34,891 ========= ========= ========= ========= ========= Ratio of earnings to fixed charges 1.79x 2.09x (1) 1.59x 1.30x ========= ========= ========= ========= =========
(1) Earnings were inadequate to cover fixed charges by $21.6 million. EX-23.1 10 EX-23.1 1 [KPMG PEAT MARWICK LLP LETTERHEAD] EXHIBIT 23.1 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors Del Webb Corporation: We consent to the use of our report dated August 21, 1998 incorporated herein by reference and to the reference to our firm under the heading "Experts" in the Prospectus. Our report refers to a change in the method of accounting for impairment of long-lived assets. KPMG Peat Marwick LLP Phoenix, Arizona September 18, 1998 EX-25 11 EX-25 1 EXHIBIT 25 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE Check if an Application to Determine Eligibility of a trustee Pursuant to Section 305(b) ____ BANK OF MONTREAL TRUST COMPANY (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) New York 13-4941093 (JURISDICTION OF INCORPORATION OR ORGANIZATION (I.R.S. EMPLOYER IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.) Wall Street Plaza 88 Pine Street New York, New York 10005 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) Mark F. McLaughlin Bank of Montreal Trust Company Wall Street Plaza 88 Pine Street, New York, New York 10005 (212) 701-7602 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) -------------------------------------- Del Webb Corporation. (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) Delaware 13-3993031 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 60001 North 24th Street Phoenix, Arizona 85016 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) -------------------------------------- Debt Securities (TITLE OF THE INDENTURE SECURITIES) 2 - 2 - ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Reserve Bank of New York 33 Liberty Street, New York N.Y. 10045 State of New York Banking Department 2 Rector Street, New York, N.Y. 10006 (b) Whether it is authorized to exercise corporate trust powers. The Trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the trustee, describe each such affiliation. The obligor is not an affiliate of the trustee. ITEM 16. LIST OF EXHIBITS. List below all exhibits filed as part of this statement of eligibility. Exhibit 1 - Copy of Organization Certificate of Bank of Montreal Trust Company to transact business and exercise corporate trust powers; incorporated herein by reference as Exhibit "A" filed with Form T-1 Statement, Registration No. 33-46118. Exhibit 4 - Copy of the existing By-Laws of Bank of Montreal Trust Company; incorporated herein by reference as Exhibit "B" filed with Form T-1 Statement, Registration No. 33-80928. Exhibit 6 - The consent of the Trustee required by Section 321(b) of the Act; incorporated herein by reference as Exhibit "C" with Form T-1 Statement, Registration No. 33-46118. Exhibit 7 - A copy of the latest report of condition of Bank of Montreal Trust Company published pursuant to law or the requirements of its supervising or examining authority, attached hereto as Exhibit "D". SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, Bank of Montreal Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 11th day of September, 1998. BANK OF MONTREAL TRUST COMPANY By: /s/ Peter Morse ------------------- Peter Morse Vice President 3 Exhibit 7 EXHIBIT "D" STATEMENT OF CONDITION BANK OF MONTREAL TRUST COMPANY NEW YORK
ASSETS Due From Banks $ 528,979 ----------- Investment Securities: State & Municipal 17,085,290 Other 100 ----------- TOTAL SECURITIES 17,085,390 Loans and Advances Federal Funds Sold 4,400,000 Overdrafts 10,000 ----------- TOTAL LOANS AND ADVANCES 4 ,410,000 ----------- Investment in Harris Trust, NY 8,509,571 Premises and Equipment 288,644 Other Assets 2,965,076 ----------- 11,763,291 ----------- TOTAL ASSETS $33,787,660 =========== LIABILITIES Trust Deposits $ 8,680,937 Other Liabilities 824,388 ----------- TOTAL LIABILITIES 9,505,325 ----------- CAPITAL ACCOUNTS Capital Stock, Authorized, Issued and Fully Paid - 10,000 Shares of $100 Each 1,000,000 Surplus 4,222,188 Retained Earnings 19,048,815 Equity - Municipal Gain/Loss 11,332 ----------- TOTAL CAPITAL ACCOUNTS 24,282,335 ----------- TOTAL LIABILITIES AND CAPITAL ACCOUNTS $33,787,660 ===========
I, Mark F. McLaughlin, Vice President, of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Mark F. McLaughlin December 31, 1997 We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declared that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. Sanjiv Tandon Kevin O. Healy Steven R. Rothbloom -----END PRIVACY-ENHANCED MESSAGE-----