<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 17, 1999
(Date of earliest event reported)
CENTEX CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 1-6776 75-0778259
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
2728 N. Harwood Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (214) 981-5000
<PAGE> 2
Item 5. Other Events.
Reference is hereby made to the Registrant's Registration Statements on
Form S-3 (File Nos. 33-61223 and 333-65217), filed with the Securities and
Exchange Commission (the "Commission") on July 21, 1995 and October 1, 1998,
respectively, and declared effective thereby on August 3, 1995 and October 8,
1998, respectively (collectively, the "Series A Registration Statements"),
pursuant to which the Registrant registered $200,000,000 aggregate principal
amount of its senior and subordinated debt securities, various series, for offer
and sale in accordance with applicable provisions of the Securities Act of 1933,
as amended.
On October 21, 1998, the Registrant commenced its $200,000,000 Senior
Medium-Term Note Program, Series A, which was amended on November 24, 1998 to
allow the Registrant to offer $125,000,000 (the balance of the program)
aggregate principal amount of senior and/or subordinated fixed and floating rate
Medium-Term Notes, Series A, covered by the Series A Registration Statements. Of
the original $200,000,000 Medium-Term Program, Series A, $192,000,000 aggregate
principal amount of notes have been issued.
Reference is hereby made to the Registrant's Registration Statement on
Form S-3 (File No. 333-72893), filed with the Commission on February 24, 1999
and declared effective thereby on August 9, 1999 (the "Series B Registration
Statement"), pursuant to which the Registrant registered $250,000,000 aggregate
principal amount of its senior and subordinated debt securities, various series,
for offer and sale in accordance with applicable provisions of the Securities
Act of 1933, as amended.
On August 17, 1999, the Registrant entered into a Distribution
Agreement (the "Distribution Agreement") with Banc One Capital Markets, Inc.,
Banc of America Securities LLC, Chase Securities Inc., Credit Suisse First
Boston Corporation, Morgan Stanley & Co. Incorporated and Warburg Dillon Read
LLC (collectively, the "Agents"), in connection with the proposed public
offering by the Agents of $250,000,000 aggregate principal amount of senior
and/or subordinated fixed and floating rate Medium-Term Notes, Series B (the
"Debt Securities"), covered by the Series B Registration Statement. The
Distribution Agreement in the form in which it was executed is filed herewith as
Exhibit 1.1.
The Registrant has previously entered into an Indenture dated as of
October 1, 1998 (the "Senior Indenture"), with Chase Bank of Texas, National
Association, as trustee (the "Trustee"), with respect to the senior debt
securities (the "Senior Debt Securities"). A copy of the Senior Indenture in the
form in which it was executed was filed as Exhibit 4.1 to the Registrant's Form
8-K (Date of Event: October 21, 1998) filed October 30, 1998, and is
incorporated herein by reference.
Pursuant to the Senior Indenture, the Registrant and the Trustee
entered into an Indenture Supplement No. 2 dated as of August 1, 1999 (the
"Senior Indenture Supplement"), providing for the issuance of the Senior Debt
Securities. A copy of the Senior Indenture Supplement in the form in which it
was executed is filed herewith as Exhibit 4.2.
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The Registrant has previously entered into an Indenture dated March 12,
1987 (the "Subordinated Indenture"), with the Trustee, formerly Texas Commerce
Bank National Association, with respect to the subordinated debt securities of
the Registrant (the "Subordinated Debt Securities"). A copy of the Subordinated
Indenture in the form in which it was executed was filed as Exhibit 4.5 to the
Series B Registration Statement, and is incorporated herein by reference.
Pursuant to the Subordinated Indenture, the Registrant and the Trustee
entered into an Indenture Supplement No. 5 dated as of August 1, 1999 (the
"Subordinated Indenture Supplement"), providing for the issuance of the
Subordinated Debt Securities. A copy of the Subordinated Indenture Supplement in
the form in which it was executed is filed herewith as Exhibit 4.4.
Pursuant to the Distribution Agreement, on August 19, 1999, the
Registrant agreed to sell $150,000,000 aggregate principal amount of the
Registrant's Medium-Term Notes, Series B, due August 25, 2000, which bear
interest at a floating rate based on the London Interbank Offered Rate (the
"$150,000,000 Notes"). The $150,000,000 Notes, which were placed by Banc One
Capital Markets Inc., were issued on August 25, 1999. The net proceeds to the
Registrant from the sale of the $150,000,000 Notes were $149,775,000.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
----------- -----------
1.1 Distribution Agreement dated August 17, 1999, between Centex
Corporation and Banc One Capital Markets, Inc., Banc of
America Securities LLC, Chase Securities Inc., Credit Suisse
First Boston Corporation, Morgan Stanley & Co. Incorporated
and Warburg Dillon Read LLC.
4.1 Indenture dated October 1, 1998 between Centex Corporation and
Chase Bank of Texas, National Association (filed as Exhibit
4.1 to the Registrant's Form 8-K dated October 21, 1998 and
incorporated herein by reference)
4.2 Indenture Supplement No. 2 dated as of August 1, 1999 with
respect to the Senior Debt Securities, between Centex
Corporation and Chase Bank of Texas, National Association.
4.3 Indenture dated March 12, 1987 between Centex Corporation and
Chase Bank of Texas, National Association (formerly, Texas
Commerce Bank National Association) (filed as Exhibit 4.5 to
the Registrant's Registration Statement on Form S-3 (SEC File
No. 333-65217) and incorporated herein by reference)
4.4 Indenture Supplement No. 5 dated as of August 1, 1999 with
respect to the Subordinated Debt Securities, between Centex
Corporation and Chase Bank of Texas, National Association
(formerly, Texas Commerce Bank National Association)
12.1 Computation of Ratio of Earnings to Fixed Charges
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTEX CORPORATION
August 24, 1999 By: /s/ Raymond G. Smerge
-------------------------------------------------
Raymond G. Smerge
Executive Vice President, Chief Legal Officer and
Secretary
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
1.1 Distribution Agreement dated August 17, 1999, between Centex
Corporation and Banc One Capital Markets, Inc., Banc of
America Securities LLC, Chase Securities Inc., Credit Suisse
First Boston Corporation, Morgan Stanley & Co. Incorporated
and Warburg Dillon Read LLC.
4.1 Indenture dated October 1, 1998 between Centex Corporation and
Chase Bank of Texas, National Association (filed as Exhibit
4.1 to the Registrant's Form 8-K dated October 21, 1998 and
incorporated herein by reference)
4.2 Indenture Supplement No. 2 dated as of August 1, 1999 with
respect to the Senior Debt Securities, between Centex
Corporation and Chase Bank of Texas, National Association.
4.3 Indenture dated March 12, 1987 between Centex Corporation and
Chase Bank of Texas, National Association (formerly, Texas
Commerce Bank National Association) (filed as Exhibit 4.5 to
the Registrant's Registration Statement on Form S-3 (SEC File
No. 333-65217) and incorporated herein by reference)
4.4 Indenture Supplement No. 5 dated as of August 1, 1999 with
respect to the Subordinated Debt Securities, between Centex
Corporation and Chase Bank of Texas, National Association
(formerly, Texas Commerce Bank National Association)
12.1 Computation of Ratio of Earnings to Fixed Charges
</TABLE>
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EXHIBIT 1.1
FINAL
CENTEX CORPORATION
$250,000,000
Senior Medium-Term Notes, Series B
Subordinated Medium-Term Notes, Series B
Due 9 Months or More from Date of Issue
DISTRIBUTION AGREEMENT
August 17, 1999
Banc One Capital Markets, Inc.
1 First National Plaza
Chicago, IL 60670
Banc of America Securities LLC
100 North Tyron Street
Mail Code NC1-007-07-01
Charlotte, N.C. 28255
Chase Securities Inc.
270 Park Avenue
New York, N.Y. 10017
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, N.Y. 10010
Morgan Stanley & Co. Incorporated
1585 Broadway
2nd Floor
New York, N.Y. 10036
Warburg Dillon Read LLC
677 Washington Blvd.
Stamford, CT 06901
Ladies and Gentlemen:
Centex Corporation, a Nevada corporation (the "Company"), confirms its
agreement with each of you (individually, an "Agent" and collectively, the
"Agents") with respect to the issue
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and sale from time to time by the Company of its Senior Medium-Term Notes,
Series B (the "Senior Notes") and its Subordinated Medium-Term Notes, Series B
(the "Subordinated Notes"), each due 9 months or more from date of issue (the
Senior Notes and the Subordinated Notes are herein collectively referred to as
the "Notes"). The Senior Notes will be issued under a Senior Indenture (the
"Senior Indenture") dated as of October 1, 1998, as supplemented by a second
Supplemental Indenture thereto dated as of August 1, 1999, and the Subordinated
Notes will be issued under a Subordinated Indenture (the "Subordinated
Indenture") dated as of March 12, 1987, as supplemented by a fifth Supplemental
Indenture thereto dated as of August 1, 1999, as each may be amended,
supplemented or modified from time to time. The Senior Indenture and the
Subordinated Indenture are individually referred to herein as an "Indenture" and
collectively referred to herein as the "Indentures". The Indentures are each
between the Company and Chase Bank of Texas, National Association (formerly
Texas Commerce Bank National Association), as Trustee (the "Trustee").
As of the date hereof, the Company has authorized the issuance and sale
of up to $250,000,000 aggregate initial offering price of Notes to the Agents as
principal or through the Agents as agent pursuant to the terms of this
Agreement. It is understood, however, that the Company may from time to time
authorize the issuance and sale of additional Notes and that such additional
Notes may be sold to or through the Agents pursuant to the terms of this
Agreement, all as though the issuance and sale of such Notes were authorized as
of the date hereof.
If Notes are sold by the Company to an Agent as principal, such Agent
may purchase as principal for resale to investors and other purchasers in
accordance with the provisions of Section 2(a) hereof, and, if requested by such
Agent, the Company will enter into a Terms Agreement relating to such sale
(each, a "Terms Agreement"). If Notes are sold by the Company directly to
investors (as may from time to time be agreed to by the Company and an Agent),
such Agent will act as agent of the Company in soliciting purchases of the Notes
in accordance with the provisions of Section 2(b) hereof.
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly on its own
behalf, the Company hereby agrees that the Notes will be sold to or through the
Agents. The Company hereby appoints each Agent as its agent for the purpose of
soliciting and receiving offers to purchase Notes from the Company by others
and, on the basis of the representations and warranties herein contained, but
subject to the terms and conditions herein set forth, each Agent severally and
not jointly agrees to use reasonable best efforts to solicit and receive offers
to purchase Notes upon terms acceptable to the Company at such times and in such
amounts as the Company shall from time to time specify.
For purposes of this Agreement, all references to the Registration
Statement (as hereinafter defined), any preliminary prospectus, the Prospectus
(as hereinafter defined) or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Securities and Exchange
Commission (the "SEC") pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
1. Representations and Warranties. The Company represents and warrants
to and agrees with each Agent as of the date hereof, as of the date of each
acceptance by the Company of an offer to purchase Notes (whether to an Agent as
principal or through an Agent as agent), as
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of the date of each delivery of Notes (whether to an Agent as principal or
through an Agent as agent) (the date of each such delivery being hereinafter
referred to as a "Settlement Date") and as of each date the Registration
Statement (as hereinafter defined) or the Prospectus (as hereinafter defined) is
amended or supplemented (other than by an amendment or supplement providing
solely for a change in the interest rates of Notes or similar changes, and,
unless an Agent shall otherwise specify, other than by an amendment or
supplement which relates exclusively to an offering of debt securities other
than Notes) or there is filed with the SEC any document that is incorporated by
reference into the Registration Statement or the Prospectus (each of the times
referenced above being referred to as a "Representation Date"), as follows (it
being understood that such representations, warranties and agreements shall be
deemed to relate to the Registration Statement and the Prospectus, each as
amended or supplemented to each such date):
(a) The Company has filed with the SEC a registration statement (File
No. 333-72893), as amended by Amendments Nos. 1, 2, 3 and 4, in respect of the
Notes in the form heretofore delivered or to be delivered to each Agent (the
various parts of such registration statement, including Amendments Nos. 1, 2, 3
and 4, the Prospectus, all exhibits thereto (other than the Statements of
Eligibility under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") of a corporation designated to act as Trustee, on Form T-1),
each as amended, at the time such part became effective, being hereinafter
collectively called the "Registration Statement") and the Registration Statement
(and any further registration statements which may be filed by the Company for
the purpose of registering additional Notes, including any registration
statement filed pursuant to Rule 462(b) of the regulations to the Securities
Act) in such form has been declared effective by the SEC and no stop order
suspending the effectiveness of the Registration Statement as amended has been
issued and no proceeding for that purpose has been initiated or threatened by
the SEC, and any requests on the part of the SEC for additional information have
been complied with (any preliminary prospectus included in the Registration
Statement as amended being hereinafter called a "Preliminary Prospectus;" the
prospectus relating to the Notes and the prospectus supplement relating to any
particular issuance of Notes, in the form in which it has most recently been
filed, or transmitted for filing, with the SEC on or prior to the date of this
Agreement, being hereinafter collectively called the "Prospectus", except that
if any revised Prospectus shall be provided to each Agent by the Company for use
in connection with the offering of the Notes which is not required to be filed
by the Company pursuant to Rule 424(b) under the Securities Act, the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to each Agent for such use; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act of 1933, as amended (the "Securities Act"), as of the
date of such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to the Registration Statement or any
part thereof shall be deemed to refer to and include any documents filed after
the date of the Registration Statement or any such part thereof under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such amendment or supplement; and any reference to
the Prospectus, as amended or supplemented, shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable Notes in the
form in which it is first filed, or transmitted for filing, with the SEC
pursuant to Rule 424 under the Securities Act, including any documents
incorporated by reference therein as of the date of such filing or
transmission);
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(b) The documents incorporated by reference in the Registration
Statement, when they were filed or hereafter are filed with the SEC, conformed
or when so filed will conform, in all material respects to the requirements of
the Exchange Act and the rules and regulations of the SEC thereunder; and any
further documents so filed and incorporated by reference in the Prospectus, when
such documents are filed with the SEC, will conform in all material respects to
the requirements of the Exchange Act and the rules and regulations of the SEC
thereunder;
(c) Each part of the Registration Statement and the Prospectus
conformed, and as of the applicable Representation Date will conform, and any
amendments or supplements to the Registration Statement or the Prospectus will
conform, on the date of filing thereof with the SEC, in all material respects to
the requirements of the Securities Act and the Trust Indenture Act, as
applicable, and the rules and regulations of the SEC thereunder; the
Registration Statement and any amendment thereto, as of the applicable effective
date, did not and at each time thereafter at which any amendment to the
Registration Statement becomes effective and any Annual Report on Form 10-K is
filed by the Company with the SEC as of each Representation Date, will not,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; the Prospectus and any supplement thereto, as of the applicable
filing date, did not and as of each Representation Date will not, contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this section shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Agent expressly for use in the
Registration Statement or Prospectus. Each Preliminary Prospectus and the
Prospectus delivered to the Agents for use in connection with the offering of
the Notes was identical to the electronically transmitted versions thereof filed
with the SEC pursuant to EDGAR, except to the extent permitted by Regulation
S-T;
(d) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, resulting in an adverse effect on the business, assets, financial
position or prospects of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, except as otherwise set forth or contemplated in the
Prospectus: (i) there has not been any material change in the capital stock or
long-term debt of the Company or any of its subsidiaries; (ii) there has not
been any material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, assets, financial
position or prospects of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus; (iii) no event
has occurred that would result in a material write-down in assets; (iv) there
have been no material transactions entered into by the Company, other than those
publicly disclosed or in the ordinary course of business; (v) the Company has
not repurchased any of its outstanding capital stock except as set forth in or
contemplated by the Prospectus; and (vi) there have been no dividends or
distributions of any kind declared, paid or made by the Company in respect of
its capital stock except for regular cash dividends paid in the ordinary course
of business;
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(e) The Company and its subsidiaries have indefeasible title in fee
simple to all real property and indefeasible title to all personal property
owned by them, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as are not
material to the business of the Company and its subsidiaries, taken as a whole;
and any real property and buildings held under lease by the Company and its
subsidiaries are held by them under leases that are valid, subsisting and in
full force and effect, with such exceptions as are not material to the business
of the Company and its subsidiaries, taken as a whole;
(f) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada, and each
subsidiary of the Company has been duly incorporated or organized as a limited
liability company, as the case may be, and is validly existing as a corporation
or limited liability company, as the case may be, in good standing under the
laws of its jurisdiction of incorporation or organization, as the case may be;
each of the Company and its subsidiaries has full power and authority (corporate
and other) to own its properties and conduct its business as described, or
incorporated by reference, in the Prospectus, and has been duly qualified as a
foreign corporation, or limited liability company, as the case may be, for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business, so
as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such jurisdiction;
(g) The Company has an authorized capitalization as set forth, or as
incorporated by reference, in the Prospectus, and all of the outstanding shares
of capital stock of the Company have been duly and validly authorized and issued
and are fully paid and nonassessable; and all of the outstanding shares of
capital stock or outstanding interests of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and nonassessable
and (except (i) for directors' qualifying shares, (ii) as set forth on Schedule
I hereto and (iii) as otherwise set forth in the Prospectus) are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims affecting transferability or voting except as set forth in
the Prospectus;
(h) The Notes have been duly authorized, and, when executed,
authenticated, issued and delivered against payment therefor pursuant to this
Agreement, the Indentures and any applicable Terms Agreement with respect to
such Notes, such Notes will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles, and entitled to the benefits provided by each
Indenture, which has been or will be incorporated by reference as an exhibit to
the Registration Statement; each Indenture has been duly authorized, and when
executed and delivered by the Company will constitute a valid and legally
binding instrument, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles; and the Notes and the Indentures are
substantially in the form heretofore delivered to each Agent and will conform in
all material respects to the descriptions thereof in the Prospectus; and each
holder of Notes will be entitled to the benefits of the applicable Indenture;
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(i) The issue and sale of the Notes and the compliance by the Company
with all of the provisions of the Notes, the Remarketing Agreement between the
Company and any remarketing agent (the "Remarketing Agreement"), the Indentures,
this Agreement and any Terms Agreement, and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Articles of Incorporation, as amended
or restated, or the Bylaws of the Company or any statute or order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issuance
and sale of the Notes or the consummation by the Company of the other
transactions contemplated by this Agreement or the Remarketing Agreement or any
Terms Agreement or the Indentures, except such as have been, or will have been
prior to any delivery of the Notes, obtained under the Securities Act and the
Trust Indenture Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the Agents;
(j) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries; and, to the best of
the Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(k) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act and the rules and regulations of
the SEC thereunder;
(l) The Company has no knowledge of any default in any material
obligation to be performed by any party to any agreement to which it or any of
its subsidiaries is a party, which default or defaults in the aggregate would
have a material adverse effect upon the business, assets, financial position, or
prospects of the Company and its subsidiaries, considered as a whole;
(m) The consolidated financial statements of the Company and its
subsidiaries, including accompanying notes, included or incorporated by
reference in the Registration Statement and the Prospectus, comply in all
material respects with the requirements of the Securities Act and fairly present
the consolidated financial position and the consolidated results of the
operations of the Company and its subsidiaries at the respective dates and for
the respective periods to which they apply, and such financial statements have
been prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved except as may be expressly
stated in the notes thereto. The financial
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information and statistical data set forth in the Prospectus under the caption
"Summary of Selected Financial Data" are fairly presented and prepared on a
basis consistent with such consolidated financial statements or the books and
records of the Company, as the case may be, unless otherwise stated in the
Prospectus;
(n) Except as described in the Prospectus, the Company and each of its
subsidiaries have all necessary licenses, certificates, consents, permits,
authorizations, approvals, rights and orders of and from all governmental
agencies or bodies having jurisdiction over the Company or any of its
subsidiaries to own their respective properties and conduct their respective
businesses as described in the Prospectus, the failure to possess or the failure
to operate in compliance with which would have a material adverse effect on the
business of the Company and its subsidiaries, taken as a whole, and the Company
has received no notice of proceedings relating to the revocation or modification
of any such certificate, authority or permit that, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would materially
adversely affect the business, assets, financial position or prospects of the
Company and its subsidiaries, taken as a whole;
(o) This Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding agreement of the Company,
and any Terms Agreement with respect to the Notes, when executed and delivered
by the Company, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject, in each
case, as to enforcement, to bankruptcy, insolvency, reorganization, and other
laws of general applicability relating to or affecting creditors' rights, and to
general equity principles, and except to the extent that rights of
indemnification hereunder may be limited by applicable laws or equity
principles;
(p) Except as described in the Prospectus, each of the Company and its
subsidiaries owns or possesses all of the patents, trademarks, service marks,
trade names, copyrights and licenses and rights with respect to the foregoing,
necessary for the present conduct of its business, without any known conflict
with the rights of others, the result of which conflict would materially and
adversely affect the business, assets, financial position or prospects of the
Company and its subsidiaries, taken as a whole;
(q) There are no contracts, indentures, mortgages, loan agreements,
notes, bonds, debentures, other evidences of indebtedness, leases or other
agreements or instruments of the Company of a character required to be described
or referred to in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or referred to or
filed as required;
(r) No labor disturbance exists with the employees of the Company or
any of its subsidiaries, or, to the best of the Company's knowledge, is
imminent, that would result in a material adverse effect upon the Company and
its subsidiaries, taken as a whole, and the Company has not received notice of
any existing or imminent labor disturbance by the employees of any of its
principal suppliers, that might reasonably be expected to materially adversely
affect the business, assets, financial position or prospects of the Company and
its subsidiaries, taken as a whole; and
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(s) The conditions to the use of a registration statement on Form S-3
under the Securities Act, as set forth in the General Instructions to Form S-3,
have been satisfied with respect to the Company and the Registration Statement
and Prospectus;
(t) The Remarketing Agreement, if applicable, has been duly and validly
authorized, executed and delivered by the Company and, assuming the Remarketing
Agreement has been duly authorized, executed and delivered by the Remarketing
Agent (as defined in the Prospectus), will be a valid and legally binding
agreement of the Company; and
(u) Neither the Company nor any of its subsidiaries is required to be
registered under the Investment Company Act of 1940, as amended.
Any certificate signed by any director or officer of the Company and
delivered to the Agents or their counsel in connection with an offering of Notes
to an Agent as principal or through an Agent as agent shall be deemed a
representation and warranty by the Company to such Agent as to the matters
covered thereby on the date of such certificate and at each Representation Date
subsequent thereto.
2. Purchases as Principal; Solicitations as Agent.
(a) No Agent shall have any obligation to purchase Notes from the
Company as principal, but an Agent may agree from time to time to purchase Notes
as principal. Each sale of Notes to an Agent as principal shall be made in
accordance with the terms of this Agreement, except as otherwise agreed by such
Agent and the Company, and, if requested by such Agent, the Company will enter
into a Terms Agreement that will provide for the sale of such Notes to and the
purchase thereof by such Agent. Each Terms Agreement will be either (i)
substantially in the form of Exhibit A (in the case of Senior Notes) or Exhibit
B (in the case of Subordinated Notes) hereto, (ii) in the form of an exchange of
any form of written telecommunication between an Agent and the Company or (iii)
an oral agreement between an Agent and the Company confirmed in writing by such
Agent to the Company.
Each agreement by an Agent to purchase Notes as principal (whether or
not set forth in a Terms Agreement) shall specify the principal amount of Notes
to be purchased by such Agent pursuant thereto, the maturity date of such Notes,
the price to be paid to the Company for such Notes, the interest rate and
interest rate formula, if any, applicable to such Notes and any other terms of
such Notes. Each such agreement shall also specify any requirement for officers'
certificates, opinions of counsel and letters from the independent public
accountants to the Company pursuant to Sections 5 and 6 hereto.
Each Terms Agreement shall specify the time and place of delivery of
and payment for such Notes. With respect to each sale of Notes to an Agent as
principal that is not made pursuant to a Terms Agreement, the procedural details
relating to the issue and delivery of such Notes and the payment therefor shall
be as set forth in the Administrative Procedures (as hereinafter defined).
Each purchase of Notes by an Agent as principal, unless otherwise
agreed, shall be at a discount from the principal amount of each such Note
equivalent to the applicable commission set forth in Subsection (b) hereof. Each
Agent may engage the services of any other broker or dealer in connection with
the resale of any Notes purchased by such Agent as principal and may
8
<PAGE> 9
allow all or any portion of the discount received in connection with such
purchases from the Company to such brokers and dealers.
(b) If agreed upon by an Agent and the Company, such Agent, acting
solely as agent for the Company and not as principal, will solicit purchasers of
the Notes. In connection with the Agents' actions as agents hereunder, each
Agent agrees to use reasonable best efforts to solicit offers to purchase Notes
from the Company upon the terms and conditions set forth in the Prospectus (and
any supplement thereto) and in the Administrative Procedures. In soliciting
offers to purchase the Notes as agents, each Agent is acting solely as an agent
for the Company, and not as a principal, and does not assume any obligation
toward or relationship of agency or trust with any purchaser of Notes. Each
Agent shall make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes has been solicited
by such Agent and accepted by the Company, but no Agent shall have any liability
to the Company in the event any such purchase is not consummated for any reason.
If the Company shall default in its obligations to deliver Notes to a purchaser
whose offer it has accepted, the Company shall hold each Agent harmless against
any loss, claim, damage or liability arising from or as a result of such default
and shall, in particular, pay to each Agent the commission each Agent would have
received had such sale been consummated.
The Company may appoint additional agents in connection with the
offering of the Notes; provided that (i) the Company promptly notifies each
Agent of such appointment and (ii) the commission paid to any such additional
agent with respect to the sale of Notes by the Company as a result of a
solicitation made by such additional agent is the same as that percentage
specified below of the aggregate principal amount of such Notes sold by the
Company; and provided further that, unless the appointment of such additional
agent is expressly limited to the solicitation of offers to purchase a specified
principal amount of Notes on specified terms, such additional agent enters into
an agreement with the Company making such agent an Agent under this Agreement or
enters into an agreement with the Company on terms which are substantially
similar to those contained in this Agreement, which agreement shall include
appropriate changes to reflect the arrangements between the Company and such
additional agent. The Company may from time to time offer Notes for sale
otherwise than through an Agent.
No Agent is authorized to appoint sub-agents with respect to Notes sold
through an Agent as agent.
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Notes (other than Notes held by the Agents
that were purchased from the Company as principal). As soon as practicable after
receipt of instructions from the Company, each Agent will forthwith suspend
solicitations of offers to purchase Notes from the Company until such time as
the Company has advised the Agents that such solicitation may be resumed. While
such solicitation is suspended, the Company shall not be required to deliver any
certificates, opinion or letter in accordance with Sections 6(a), (b) and (c);
provided, however, that if the Registration Statement or the Prospectus is
amended or supplemented during the period of suspension (other than by an
amendment or supplement providing solely for a change in the interest rates of
the Notes or for a change the Agents deem to be immaterial), no Agent shall be
required to resume soliciting offers to purchase Notes until the Company has
delivered such certificates, opinions and letters an
9
<PAGE> 10
Agent may request. The Company also reserves the right to sell Notes directly to
purchasers in those jurisdictions in which it is authorized to do so.
Except as otherwise agreed, the Company agrees to pay to each Agent, as
consideration for the sale of each Note resulting from a solicitation made or an
offer to purchase received by such Agent, a commission in the form of a discount
from the purchase price of such Note equal to the following percentage of the
principal amount of such Note:
<TABLE>
<CAPTION>
Term* Commission Rate
----- ---------------
<S> <C>
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to 30 years .750%
Greater than 30 years To be agreed to by the Company
and each Agent at time of sale.
</TABLE>
- ---------------
* Or Initial Rate Period, in the case of Remarketed Notes.
Each Agent shall communicate to the Company, orally or in writing, each
offer to purchase Notes received by an Agent as agent that in such Agent's
judgment should be considered by the Company. The Company shall have the sole
right to accept offers to purchase Notes and may reject any offer in whole or in
part. Each Agent shall have the right to reject any offer to purchase Notes that
such Agent considers to be unacceptable, and any such rejection shall not be
deemed a breach of such Agent's agreements contained herein.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser against payment therefor
in immediately available funds. In the event that a purchaser shall fail either
to accept delivery of or to make payment for a Note on the date fixed for
settlement, an Agent shall promptly notify the Company and deliver such Note to
the Company and if such Agent has theretofore paid the Company for such Note,
the Company will promptly return such funds to such Agent. If such failure
occurred for any reason other than default by an Agent in the performance of its
obligations hereunder, the Company will reimburse such Agent on an equitable
basis for its loss of the use of the funds for the period such funds were
credited to the Company's account.
(c) The Company and each Agent agree that any Notes purchased by an
Agent shall be purchased, and any Notes the placement of which an Agent arranges
as agent shall be placed by such Agent, in reliance on the representations,
warranties, agreements and covenants of the Company contained herein and on the
terms and conditions and in the manner provided herein.
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<PAGE> 11
(d) The purchase price, interest rate or formula, maturity date and
other terms of the Notes (as applicable) shall be agreed upon by the Company and
each Agent and specified in a pricing supplement to the Prospectus (each, a
"Pricing Supplement") to be prepared in connection with each sale of Notes.
Except as otherwise specified in the applicable Pricing Supplement, the Notes
will be issued in denominations of U.S. $1,000, except for Remarketed Notes
which will be issued in minimum denominations of $100,000, or any larger amount
that is an integral multiple thereof. Each Agent and the Company agree to
perform the respective duties and obligations specifically provided to be
performed in the Medium-Term Notes Administrative Procedures (attached hereto as
Exhibit C) (the "Administrative Procedures"), as amended from time to time. The
Administrative Procedures may be amended only by written agreement of the
Company, each Agent and the Trustee. The Company will furnish to the Trustee a
copy of the Administrative Procedures as from time to time in effect. The
Company agrees to cause the Trustee to agree to perform the duties and
obligations specifically provided to be performed by the Trustee in such
Administrative Procedures.
3. Agreements. The Company agrees with each Agent that:
(a) The Company will notify each Agent immediately, and confirm such
notice in writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the SEC for filing of any amendment or
supplement to the Prospectus or any document to be filed pursuant to the
Exchange Act which will be incorporated by reference in the Prospectus (other
than any amendment, supplement or document relating solely to securities other
than the Notes), (iii) the receipt of any comments from the SEC with respect to
the Registration Statement or the Prospectus, (iv) any request by the SEC for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (v) the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company will give each Agent notice of its intention to file or
prepare any additional registration statement with respect to the registration
of additional Notes, any amendment to the Registration Statement or any
amendment or supplement to the Prospectus (other than an amendment or supplement
providing solely for a change in the interest rates or formula applicable to the
Notes or relating solely to the issuance and/or offering of securities other
than the Notes), whether by the filing of documents pursuant to the Exchange
Act, the Securities Act or otherwise, and will furnish each Agent with copies of
any such amendment or supplement or other documents proposed to be filed or
prepared a reasonable time in advance of such proposed filing or preparation, as
the case may be, and will not file any such amendment or supplement or other
documents in a form to which an Agent or its counsel shall reasonably object.
(c) The Company will deliver to the Agents as many signed and conformed
copies of the Registration Statement (as originally filed) and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated by reference in the Prospectus) as the Agents may
reasonably request. The Company will furnish to the Agents as many copies of the
Prospectus as the Agents shall reasonably request so long as
11
<PAGE> 12
the Agents are required to deliver a Prospectus in connection with sales or
solicitations of offers to purchase the Notes.
(d) The Company will prepare, with respect to any Notes to be sold to
or through an Agent pursuant to this Agreement, a Pricing Supplement with
respect to such Notes in a form previously approved by such Agent and will file
such Pricing Supplement pursuant to Rule 424(b)(3) under the Securities Act not
later than the close of business of the SEC on the second business day after the
date on which such Pricing Supplement is first used.
(e) Except as otherwise provided in subsection (m) of this Section, if
at any time during the term of this Agreement any event shall occur or condition
exist as a result of which it is necessary, in the reasonable opinion of your
counsel or counsel for the Company, to further amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, or if it shall be
necessary, in the reasonable opinion of either such counsel, to amend or
supplement the Registration Statement or the Prospectus in order to comply with
the requirements of the Securities Act or the regulations to the Securities Act,
immediate notice shall be given, and confirmed in writing, to each Agent to
cease the solicitation of offers to purchase the Notes in such Agent's capacity
as agent and to cease sales of any Notes an Agent may then own as principal
pursuant to an agreement by such Agent to purchase Notes as principal, and the
Company will promptly prepare and file with the SEC such amendment or
supplement, whether by filing documents pursuant to the Exchange Act, the
Securities Act or otherwise, as may be necessary to correct such untrue
statement or omission or to make the Registration Statement and Prospectus
comply with such requirements.
(f) Except as otherwise provided in subsection (m) of this Section, if
reasonably requested by an Agent, on or prior to the date on which there shall
be released to the general public interim financial statement information
related to the Company with respect to each of the first three quarters of any
fiscal year or preliminary financial statement information with respect to any
fiscal year, the Company shall furnish such information to such Agent, confirmed
in writing. The Company shall cause the Prospectus to be amended or supplemented
to include or incorporate by reference financial information with respect
thereto and corresponding information for the comparable period of the preceding
fiscal year, as well as such other information and explanations as shall be
necessary for an understanding thereof or as shall be required by the Securities
Act or the regulations to the Securities Act.
(g) Except as otherwise provided in subsection (m) of this Section, if
reasonably requested by an Agent, on or prior to the date on which there shall
be released to the general public financial information included in or derived
from the audited financial statements of the Company for the preceding fiscal
year, the Company shall furnish such information to such Agent, confirmed in
writing, and shall cause the Registration Statement and the Prospectus to be
amended, whether by the filing of documents pursuant the Exchange Act, the
Securities Act or otherwise, to include or incorporate by reference such audited
financial statements and the report or reports, and consent or consents to such
inclusion or incorporation by reference, of the independent accountants with
respect thereto, as well as such other information and explanations as shall be
necessary for an understanding of such financial statements or as shall be
required by the Securities Act or the Securities Act Regulations.
12
<PAGE> 13
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering each twelve-month period beginning,
in each case, not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in such Rule 158) of the Registration
Statement with respect to each sale of Notes.
(i) The Company will endeavor, in cooperation with the Agents, to
qualify the Notes for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as the Agents may
designate, and will maintain such qualifications in effect for as long as may be
required for the distribution of the Notes; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified. The Company will file such statements and reports as may be required
by the laws of each jurisdiction in which the Notes have been qualified as above
provided. The Company will promptly advise the Agents of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Notes for sale in any such state or jurisdiction or the initiating or
threatening of any proceeding for such purpose.
(j) The Company, during the period when a Prospectus is required to be
delivered under the Securities Act or the Exchange Act, will file promptly all
documents required to be filed with the SEC pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act within the time periods prescribed by the Exchange
Act and the Exchange Act Regulations.
(k) During the term of this Agreement, the Company shall furnish to the
Agents such relevant documents and certificates of officers of the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, any amendments or supplements thereto,
the Indentures, the Notes, this Agreement, any Terms Agreement, the
Administrative Procedures and the performance by the Company of its obligations
hereunder or thereunder as the Agents may from time to time reasonably request
and shall notify the Agents promptly in writing of any change in the rating
accorded any of the Company's debt securities by any "nationally recognized
statistical rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act or the public announcement by any nationally
recognized statistical rating organization that it has under surveillance or
review, with possible negative implications, its rating of any debt securities
of the Company.
(l) Between the date of any agreement by an Agent to purchase Notes as
principal and the Settlement Date with respect to such agreement, the Company
will not, without such Agent's prior consent, offer or sell, or enter into any
agreement to sell, any debt securities of the Company (other than the Notes that
are to be sold pursuant to such agreement and commercial paper in the ordinary
course of business), except as may otherwise be provided in such agreement.
(m) The Company shall not be required to comply with the provisions of
subsection (e), (f) or (g) of this Section during any period from the time (i)
an Agent shall have suspended solicitation of purchases of the Notes in its
capacity as agent pursuant to a request from the Company and (ii) an Agent shall
not then hold any Notes as principal purchased pursuant to an
13
<PAGE> 14
agreement by such Agent to purchase Notes as principal, to the time the Company
shall determine that solicitation of purchases of the Notes should be resumed or
shall subsequently enter into a new agreement with such Agent for such Agent to
purchase Notes as principal.
4. Payment of Expenses. The Company covenants and agrees with the
Agents that the Company will pay or cause to be paid all expenses incident to
the performance of its obligations under this Agreement including:
(i) the preparation and filing of the Registration
Statement and all amendments thereto and the Prospectus and any
amendments or supplements thereto;
(ii) the preparation, filing and reproduction of this
Agreement and any Terms Agreements;
(iii) the preparation, printing, issuance and
delivery of the Notes, including any fees and expenses relating to the
use of book-entry notes;
(iv) the fees and disbursements of the Company's
accountants and counsel, of the Trustee and its counsel, and of any
Calculation Agent;
(v) The reasonable fees and disbursements of your
counsel incurred in connection with the establishment of the program
relating to the Notes and incurred from time to time in connection with
the transactions contemplated hereby;
(vi) the qualification of the Notes under state
securities laws in accordance with the provisions of Section 3(h)
hereof, including filing fees and the reasonable fees and disbursements
of your counsel in connection therewith and in connection with the
preparation of any Blue Sky Survey and any Legal Investment Survey;
(vii) the preparation and delivery to each Agent in
quantities as hereinabove stated of copies of the Registration
Statement and any amendments thereto, and of the Prospectus and any
amendments or supplements thereto, and the delivery by each Agent of
the Prospectus and any amendments or supplements thereto in connection
with solicitations or confirmations of sales of the Notes;
(viii) the preparation, reproducing and delivery to
each Agent of copies of the Indentures and all supplements and
amendments thereto;
(ix) any fees charged by rating agencies for the
rating of the Notes;
(x) the fees and expenses incurred in connection with
the listing of the Notes on any securities exchange if the Company
agrees to list the Notes;
(xi) the fees and expenses, if any, incurred with
respect to any filing with the National Association of Securities
Dealers, Inc.;
(xii) any advertising and other out-of-pocket
expenses an Agent incurs with the approval of the Company; and
14
<PAGE> 15
(xiii) the cost of providing any CUSIP or other
identification numbers for the Notes.
It is understood, however, that, except as provided in this Section and
Section 7 hereof, each Agent will pay all of its own costs and expenses,
transfer taxes on resale of any of the Notes by an Agent, and any advertising
expenses connected with any offers an Agent may make as principal.
5. Conditions of Obligations. The obligation of the Agents to purchase
Notes as principal pursuant to any Terms Agreement or otherwise, the Agents'
obligation to solicit offers to purchase Notes as agent of the Company and the
obligation to purchase Notes of any purchaser of Notes sold through an Agent as
agent will be subject to the accuracy of the representations and warranties on
the part of the Company herein, to the accuracy of the statements of the
Company's officers made in each certificate furnished pursuant to the provisions
hereof and to the performance and observance by the Company of all covenants and
agreements herein contained on its part to be performed and observed (in the
case of an Agent's obligation to solicit offers to purchase Notes, at the time
of such solicitation and, in the case of an Agent's or any other purchaser's
obligation to purchase Notes, at the time the Company accepts the offer to
purchase such Notes and at the time of purchase) and (in each case) to the
following additional conditions precedent:
(a) At the time of such solicitation in the case of (i), (ii) and (v)
below, or the time of such purchase, with respect to (i) to (v), as the case may
be:
(i) There shall not have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations, of the
Company and its subsidiaries, taken as a whole, from that set forth in
the Registration Statement that, in each Agent's reasonable judgment,
is material and adverse and that makes it, in each Agent's reasonable
judgment, impracticable to market the Notes except, in the case of any
purchase of Notes, as disclosed to each Agent in writing by the Company
before an Agent or such other purchaser accepted the offer to purchase
such Notes.
(ii) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the SEC; and
all requests for additional information on the part of the SEC shall
have been complied with to each Agent's reasonable satisfaction.
(iii) There shall not have occurred any (A)
suspension or material limitation of trading generally on or by, as the
case may be, the New York Stock Exchange, the American Stock Exchange,
the National Association of Securities Dealers, Inc., the Chicago Board
Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (B) suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market, (C) declaration of a
general moratorium on commercial banking activities in New York or
Texas by either federal, New York State or Texas authorities or
declaration of a banking moratorium by the relevant authorities in the
country or countries of origin of foreign currency or currencies in
which the Notes are denominated or payable or (D) outbreak or
escalation of hostilities or
15
<PAGE> 16
change in financial markets or any calamity or crisis that, in each
Agent's judgment, is material and adverse and, in the case of any of
the events described in clauses (iii)(A) through (D), such event,
singly or together with any other such event, makes it, in each Agent's
judgment, impracticable to market the Notes or to enforce contracts for
the sale of the Notes except, in the case of any purchase of Notes, for
any such event occurring before the Company accepted the offer to
purchase such Notes.
(iv) The rating assigned by any "nationally
recognized statistical rating organization", as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act, to any debt
securities of the Company shall not have been lowered nor shall any
such rating agency have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any debt securities of the Company.
(v) There shall have not come to an Agent's attention
any facts which would cause such Agent to believe that the Prospectus,
at the time it was required to be delivered to a purchaser of Notes,
included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in
light of the circumstances existing at the time of delivery, not
misleading. As used in this clause, "Prospectus" means the Prospectus
in the form first provided to each Agent for use in confirming sales of
the related Notes.
(b) On the date hereof and, if called for by any agreement by an Agent
to purchase Notes as principal, on the corresponding Settlement Date, each Agent
shall have received:
(A) The opinion, dated as of such date, of Raymond G. Smerge,
Executive Vice President, Chief Legal Officer and Secretary (as to (i)
through (vi) and (ix), (x) and (xiii) below) and Thompson & Knight
L.L.P, special counsel for the Company (as to (vii), (viii), (xi),
(xii) and (xiv) below) to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Nevada, with full corporate power and
authority to own its properties and conduct its business as
described in the Prospectus and to perform its obligations
under this Agreement;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, as amended or supplemented, and
all of the outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully
paid and nonassessable;
(iii) The Company has been duly qualified as a
foreign corporation for the transaction of business and is in
good standing under the laws of each jurisdiction in which the
failure to so qualify would have a material adverse effect
upon the Company and its subsidiaries, taken as a whole (such
counsel being entitled to rely in respect of the opinion in
this clause upon certificates issued by various state
authorities as deemed necessary by such counsel);
(iv) Each subsidiary of the Company has been duly
incorporated or organized as a limited liability company and
is validly existing as a corporation or limited liability
company, as the case may be, in good standing under the laws
of
16
<PAGE> 17
its jurisdiction of incorporation or organization, as the case
may be; each subsidiary of the Company has been duly qualified
as a foreign corporation or limited liability company, as the
case may be, for the transaction of business and is in good
standing under the laws of each jurisdiction in which the
failure to so qualify would have a material adverse effect
upon the Company and its subsidiaries, taken as a whole (such
counsel being entitled to rely in respect of the opinion in
this clause upon certificates issued by various state
authorities as deemed necessary by such counsel); and all of
the outstanding shares of capital stock or outstanding
interests of each such subsidiary have been duly and validly
authorized and issued, are fully paid and nonassessable, and
(except (i) for directors' qualifying shares, (ii) as set
forth in Schedule I hereto, and (iii) as otherwise set forth
in the Prospectus) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities
or claims affecting transferability or voting;
(v) To the best of such counsel's knowledge and other
than as set forth or contemplated, or incorporated by
reference, in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the business, assets, financial
position or prospects of the Company and its subsidiaries,
taken as a whole; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(vi) This Agreement and any applicable Terms
Agreement with respect to the Notes have been duly authorized,
executed and delivered by the Company and each constitutes a
valid and legally binding obligation of the Company,
enforceable against the Company in accordance with their
respective terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles that may limit the availability
of certain remedies (including specific performance), and
except to the extent that rights of indemnification thereunder
may be limited by applicable law or equity principles;
(vii) The Notes, in the form(s) certified by the
Company as of the date hereof, have been duly authorized for
issuance, offer and sale pursuant to this Agreement and, when
issued, authenticated and delivered in accordance with this
Agreement, any applicable Terms Agreement and the applicable
Indenture and duly paid for by the purchasers thereof in
accordance with this Agreement, any applicable Terms Agreement
and the applicable Indenture, will constitute valid and
legally binding obligations of the Company entitled to the
benefits provided by the applicable Indenture and enforceable
against the Company in accordance with their respective terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles that may limit the availability of certain
remedies (including specific performance); and the Notes and
the
17
<PAGE> 18
Indentures conform in all material respects to the
descriptions thereof in the Prospectus;
(viii) Each of the Indentures has been duly
authorized, executed and delivered by the Company and
constitutes a valid and legally binding instrument enforceable
against the Company in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles that may
limit the availability of certain remedies (including specific
performance); and each of the Indentures has been duly
qualified under the Trust Indenture Act;
(ix) The Remarketing Agreement, if applicable, has
been duly and validly authorized, executed and delivered by
the Company and, assuming the Remarketing Agreement has been
duly authorized, executed and delivered by the Remarketing
Agent, will be a valid and legally binding agreement of the
Company.
(x) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the
Notes, any Remarketing Agreement, if applicable, the
Indentures, and this Agreement and any applicable Terms
Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Articles of
Incorporation, as amended or restated, or the Bylaws of the
Company or any statute or order, rule or regulation of any
court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their
properties;
(xi) To the best of such counsel's knowledge, no
consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or
body is required for the performance by the Company of its
obligations under this Agreement, for the issue and sale of
the Notes or the consummation of the other transactions
contemplated by this Agreement, any Terms Agreement, the
Remarketing Agreement or the Indentures, except such as have
been obtained under the Securities Act and the Trust Indenture
Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Notes by each Agent;
(xii) The Registration Statement is effective under
the Securities Act, and, to the best of such counsel's
knowledge, no proceedings for a stop order are pending or
threatened under the Securities Act;
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<PAGE> 19
(xiii) The documents incorporated by reference in the
Prospectus, as amended or supplemented (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion), when they became
effective or were filed with the SEC, as the case may be, and
as of the date this opinion is delivered, complied as to form
in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the SEC thereunder; nothing has come
to the attention of such counsel that would cause such counsel
to believe that any of such documents, when they became
effective or were so filed, as the case may be (other than the
financial statements and related schedules therein, as to
which such counsel need express no belief), and as of the date
this opinion is delivered contained, in the case of a
registration statement that became effective under the
Securities Act, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein not misleading, and, in the case of
other documents that were filed under the Securities Act or
the Exchange Act with the SEC, an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made when such documents
were so filed, not misleading; and such counsel does not know
of any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus
or required to be described in the Registration Statement or
the Prospectus that are not filed or incorporated by reference
or described as required; and
(xiv) such counsel (1) believes that (other than the
financial statements and related schedules therein as to which
such counsel need express no belief and except for that part
of the Registration Statement that constitutes the Form T-l
heretofore referred to) each part of the Registration
Statement, as amended, if applicable, when it became effective
(or if an amendment to the Registration Statement or an Annual
Report on Form 10-K has been filed by the Company with the SEC
subsequent to the effectiveness of the Registration Statement,
then at the time such amendment became effective or at the
time of the most recent such filing, as the case may be) did
not and, as of the date such opinion is delivered, does not
contain any untrue statement of a material fact or did not and
does not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, (2) is of the opinion that the Registration
Statement and the Prospectus, as amended or supplemented, if
applicable (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion), comply as to form in all material respects with the
Securities Act and the rules and regulations of the SEC
thereunder and (3) believes that (other than the financial
statements and related schedules therein as to which such
counsel need express no belief) the Prospectus, as of the date
such letter is delivered (or, if such letter is being
delivered in connection with the purchase of Notes from the
Company by an Agent as principal pursuant to Section 2(a)
hereof, at the date of any agreement by an Agent to purchase
such Notes as principal and at the Settlement Date with
respect thereto, as the case may be) (did not and) does not
include any untrue statement of a material fact or (did not
and) does not omit to state a material fact necessary in
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<PAGE> 20
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(B) The opinion, dated as of such date, of Milbank, Tweed,
Hadley & McCloy LLP, your special counsel, covering the incorporation
of the Company, the validity of the Remarketing Agreement, the
Indentures, the Notes, the Registration Statement, the Prospectus, as
amended or supplemented, and other related matters as the Agents may
reasonably request.
(c) On the date hereof and, if called for by any Terms Agreement, on
the corresponding Settlement Date, each Agent shall have received a certificate,
dated as of the date hereof or the Settlement Date, as the case may be, signed
by (i) the Chairman, Vice Chairman, President or any Vice President and (ii) the
Chief Financial Officer or Treasurer of the Company to the effect that (x) the
representations and warranties of the Company contained herein are true and
correct as of such date and the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or satisfied on
or before such date and (y) none of the conditions referred to in Section 5(a)
exist.
The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
(d) On the date hereof and, if required by any Terms Agreement, on the
corresponding Settlement Date, the Company's independent public accountants
shall have furnished to the Agents a letter or letters, dated as of the date
hereof or such Settlement Date, as the case may be, in form and substance
satisfactory to the Agents containing statements and information of the type
ordinarily included in accountant's "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Registration Statement and the
Prospectus.
(e) On the date hereof and on each Settlement Date, the Company shall
have furnished to the Agents such appropriate further information, certificates,
documents and opinions as the Agents may reasonably request or as the Agents'
counsel may require for purposes of rendering the opinion referred to in Section
5(b)(B) and in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of Notes as herein contemplated shall be satisfactory in
form and substance to each Agent and its counsel.
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, as amended or supplemented, any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, as amended or supplemented, and (ii) since the
respective dates as of which information is given in the Prospectus, as amended
or supplemented, there shall not have been any material change in the capital
stock, outstanding interests (other than through exercise of employee stock
options) or long-term debt of the Company and any of its subsidiaries, taken as
a whole (other than borrowings and repayments made in the ordinary
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<PAGE> 21
course of business), or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial position,
stockholders equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is in your
reasonable judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or delivery of the Notes on the
terms and in the manner contemplated in the Prospectus, as amended or
supplemented;
(g) Subsequent to the date of any Terms Agreement relating to the
Notes, the rating accorded by any "nationally recognized statistical rating
organization," as that term is defined by the SEC for purposes of Rule 436(g)(2)
under the Securities Act to any of the Company's debt securities shall not have
been lowered nor shall any such rating agency have publicly announced that it
has under surveillance or review, with possible negative implications, its
rating of any debt securities of the Company;
(h) Subsequent to the date of any Terms Agreement relating to the
Notes, there shall not have occurred any of the following: (i) a suspension or
material limitation in trading in securities generally on or by, as the case may
be, the New York Stock Exchange; (ii) a general moratorium on commercial banking
activities in New York or Texas declared by either federal or New York State or
Texas authorities; or (iii) the engagement by the United States in hostilities
that have resulted in the declaration, on or after the date of such Terms
Agreement, of a national emergency or war if the effect of any such event
specified in this clause (iii), in your reasonable judgment, makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Notes on the terms and in the manner contemplated in the Prospectus, as
amended or supplemented.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, the Agents may terminate this
Agreement by notice to the Company at any time and any such termination shall be
without liability to the Company, except that the provisions of Sections 3(i),
4, 7, 8, 11, 12, and 15 shall remain in effect.
6. Additional Agreements of the Company. (a) Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for a change in the interest
rates of Notes or for a change the Agents deem to be immaterial, and, unless the
Agents shall otherwise specify, other than by an amendment or supplement which
relates exclusively to an offering of debt securities other than the Notes) or
(ii) there is filed with the SEC any document incorporated by reference into the
Prospectus (other than any Current Report on Form 8-K relating exclusively to
the issuance of debt securities under the Registration Statement, unless the
Agents shall otherwise specify) or (iii) (if required pursuant to the terms of
an agreement by an Agent to purchase Notes as principal) the Company sells Notes
to an Agent pursuant to an agreement by such Agent to purchase Notes as
principal or (iv) the Company sells Notes in a form not previously certified to
the Agents by the Company, the Company shall furnish or cause to be furnished to
each Agent forthwith a certificate dated the date of filing with the SEC of such
supplement or document, the date of effectiveness of such amendment, or the date
of such sale, as the case may be, in form satisfactory to each Agent to the
effect that the statements contained in the certificate referred to in Section
5(c) hereof which were last furnished to such Agent are true and correct at the
time of such amendment, supplement, filing or sale, as the case may be, as
though made at and as of
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<PAGE> 22
such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in said Section 5(c), modified as necessary to relate to
the Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such certificate.
(b) Each time that (i) the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or supplement
providing solely for a change in the interest rates of the Notes or for a change
the Agents deem to be immaterial, and, unless the Agents shall otherwise
specify, other than by an amendment or supplement which relates exclusively to
an offering of debt securities other than the Notes) or (ii) there is filed with
the SEC any document incorporated by reference into the Prospectus (other than
any Current Report on Form 8-K or Quarterly Report on Form 10-Q, unless the
Agents shall otherwise specify), or (iii) (if required pursuant to the terms of
an agreement by an Agent to purchase Notes as principal) the Company sells Notes
to an Agent pursuant to an agreement by such Agent to purchase Notes as
principal or (iv) the Company sells Notes in a form not previously certified to
the Agents by the Company, the Company shall furnish or cause to be furnished
forthwith to each Agent and to its counsel a written opinion of Thompson &
Knight, independent counsel for the Company or other counsel satisfactory to the
Agents, and an opinion of Raymond G. Smerge, Executive Vice President, Chief
Legal Officer and Secretary of the Company, dated the date of filing with the
SEC of such supplement or document, the date of effectiveness of such amendment,
or the date of such sale, as the case may be, in form and substance satisfactory
to the Agents, of the same tenor as their respective opinions referred to in
Section 5(b)(A) hereof, but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion; or, in lieu of such opinion, counsel last
furnishing such opinion to the Agents shall furnish the Agents with a letter to
the effect that the Agents may rely on such last opinion to the same extent as
though it was dated the date of such letter authorizing reliance (except that
statements in such last opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such letter authorizing reliance).
(c) Each time that (i) the Registration Statement or the Prospectus
shall be amended or supplemented to include additional financial information
unless the Agents shall otherwise specify, other than an amendment or supplement
which relates exclusively to an offering of debt securities other than the Notes
or there is filed with the SEC any document incorporated by reference into the
Prospectus which contains additional financial information or (ii) (if required
pursuant to the terms of any agreement by an Agent to purchase Notes as
principal) the Company sells Notes to an Agent pursuant to any agreement by such
Agent to purchase Notes as principal, the Company shall cause its independent
public accountants forthwith to furnish each Agent a letter, dated the date of
effectiveness of such amendment, supplement or document with the SEC, or the
date of such sale, as the case may be, in form satisfactory to each Agent, of
the same tenor as the letter referred to in Section 5(d) hereof but modified to
relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter.
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<PAGE> 23
7. Indemnification.
(a) Indemnification of the Agent. The Company agrees to indemnify and
hold each Agent and each person, if any, who controls each Agent within the
meaning of Section 15 of the Securities Act harmless as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, unless such untrue statement or omission or such
alleged untrue statement or omission was made in reliance upon and in
conformity with information furnished to the Company in writing by each
Agent expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto) or
in reliance upon the Trustee's Statement of Eligibility and
Qualification under the Trust Indenture Act of 1939 filed as an exhibit
to the Registration Statement;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or investigation
or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by the
Agents) reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above.
(b) Indemnification of Company. Each Agent agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with information furnished to the Company in writing by such Agent
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto).
(c) General. Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying
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<PAGE> 24
party from any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
and, to the extent that it wishes, jointly with any other indemnifying party,
similarly notified, in the defense of such action with counsel chosen by it (who
shall not, except with the consent of the indemnified party, be counsel to such
indemnified party). In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel (in addition to any local counsel)
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 7 or Section 8 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
8. Contribution.
(a) If the indemnification provided for in Section 7 is unavailable to
an indemnified party or insufficient in respect of any losses, claims, damages
or liabilities referred to therein in connection with any offering of Notes,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Agents on the other
from the offering of such Notes or (ii) if the allocation provided by clause (i)
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Agents on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Agents on the other in connection with the offering of such Notes shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of such Notes (before deducting expenses) received by the
Company bear to the total discounts and commissions received by the Agents in
respect thereof. The relative fault of the Company and of each Agent shall be
determined by reference to, among other things, whether the untrue or allegedly
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or by the Agents on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(b) The Company and each Agent agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (a) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (a) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably
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<PAGE> 25
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this Section 8, no
Agent shall be required to contribute any amount in excess of the amount by
which the total price at which the Notes referred to in paragraph (a) above that
were offered and sold to the public through such Agent exceeds the amount of any
damages that such Agent would have otherwise been required to pay by reason of
such untrue or allegedly untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Each Agent's obligation
to contribute pursuant to this Section 8 is several, in proportion to the
respective principal amounts of Notes referred to in paragraph (a) above
purchased or sold by each Agent, and not joint. The remedies provided for in
this Section 8 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
9. Termination.
(a) This Agreement may be terminated at any time either by the Company
or by an Agent with respect to such Agent upon the giving of 30 days' written
notice of such termination to the other party hereto. The termination of this
Agreement shall not require termination of any agreement by an Agent to purchase
Notes as principal, and the termination of any such agreement shall not require
termination of this Agreement.
(b) An Agent may terminate any agreement to purchase Notes from the
Company as principal, immediately upon notice to the Company, at any time prior
to the Settlement Date relating thereto, if (i) there has been, since the date
of such agreement or since the respective dates as of which information is given
in the Prospectus, any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, whether or not arising in the ordinary course of business, or
(ii) a stop order suspending the effectiveness of the Registration Statement
shall have been issued or a proceeding for that purpose shall have been
initiated or threatened by the SEC, or (iii) there shall have occurred any (A)
suspension or material limitation of trading generally on or by, as the case may
be, the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the
Chicago Mercantile Exchange or the Chicago Board of Trade, (B) suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market, (C) declaration of a general moratorium on commercial
banking activities in New York by either federal, New York State or Texas
authorities or declaration of a banking moratorium by the relevant authorities
in the country or countries of origin of foreign currency or currencies in which
the Notes are denominated or payable or (D) any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in an Agent's reasonable judgment, is material and adverse and, in the case of
any of the events described in clauses (iii)(A) through (D), such event, singly
or together with any other such event, makes it, in an Agent's reasonable
judgment, impracticable to market the Notes or to enforce contracts for the sale
of the Notes, or (iv) the rating assigned by any "nationally recognized
statistical rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act, to any debt securities of the Company as of
the date of such agreement shall have been lowered since that date or if any
such rating organization shall have publicly announced that it has under
surveillance or review, with
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<PAGE> 26
possible negative implications, its rating of any debt securities of the
Company, or (v) there shall have come to an Agent's attention any facts that
would cause such Agent to believe that the Prospectus, at the time it was
required to be delivered to a purchaser of Notes, included an untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances existing at the time
of such delivery, not misleading. As used in this Section, the term "Prospectus"
means the Prospectus in the form first provided to each Agent for use in
confirming sales of the related Notes.
(c) In the event of any such termination, neither the Company nor an
Agent as to which this Agreement has been terminated will have any liability to
each other, except that (i) an Agent terminating this Agreement shall be
entitled to any commission earned in accordance with the fifth paragraph of
Section 2(b) hereof, (ii) if at the time of termination (a) an Agent shall own
any Notes purchased pursuant to any agreement by such Agent to purchase Notes as
principal with the intention of reselling them or (b) an offer to purchase any
of the Notes has been accepted by the Company but the time of delivery to the
purchaser or his agent of the Note or Notes relating thereto has not occurred,
the covenants set forth in Sections 2(d), 3 and 6 hereof shall remain in effect
until such Notes are so resold or delivered, as the case may be, and (iii) the
provisions of Sections 3(h) and 4 hereof, the indemnity and contribution
agreements set forth in Sections 7 and 8 hereof, and the provisions of Sections
11, 13 and 15 hereof shall remain in effect.
10. Failure to Purchase. If the Company and two or more Agents enter
into an agreement pursuant to which such Agents agree to purchase Notes from the
Company as principal and one or more Agents shall fail at the relevant
Settlement Date to purchase the Notes which an Agent is obligated to purchase
(the "Defaulted Notes"), then the nondefaulting Agents shall have the right,
within 24 hours thereafter, to make arrangements for one Agent or one or more
other Agents to purchase all, but not less than all, of the Defaulted Notes in
such amounts as may be agreed upon and upon the terms herein set forth;
provided, however, that if such arrangements shall not have been completed
within such 24-hour period, then:
(A) if the aggregate principal amount of Defaulted
Notes does not exceed 10% of the aggregate principal amount of
Notes to be so purchased by all of such Agents on such
Settlement Date, the nondefaulting Agents shall be obligated,
severally and not jointly, to purchase the full amount thereof
in the proportions that their respective initial purchase
obligations bear to the purchase obligations of all
nondefaulting Agents; or
(B) if the aggregate principal amount of Defaulted
Notes exceeds 10% of the aggregate principal amount of Notes
to be so purchased by all of such Agents on such Settlement
Date, such agreement shall terminate without liability on the
part of any nondefaulting Agent.
No action taken pursuant to this paragraph shall relieve any defaulting
Agent from liability in respect of its default. In the event of any such default
which does not result in a termination of such agreement, either the
nondefaulting Agents or the Company shall have the right to postpone the
relevant Settlement Date for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectus or
in any other documents or arrangements.
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<PAGE> 27
11. Representations and Indemnities to Survive. The respective
indemnity and contribution agreements, representations, warranties and other
statements of the Company, its officers and each Agent set forth in or made
pursuant to this Agreement or any agreement by an Agent to purchase Notes as
principal will remain in full force and effect, regardless of any termination of
this Agreement or any such agreement, any investigation made by or on behalf of
an Agent or the Company or any of the officers, directors or controlling persons
referred to in Sections 7 and 8 and delivery of and payment for the Notes.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to each Agent, will be mailed, delivered
or telefaxed and confirmed to each Agent at:
Banc One Capital Markets, Inc.
1 First National Plaza
Chicago, IL 60670
Attention: Corporate Securities Structuring
Telephone: 312-732-2017
Telecopy: 312-732-4172
Banc of America Securities LLC
100 North Tyron Street
Mail Code NC1-007-07-01
Attention: Product Management/Medium Term Notes
Telephone: 704-386-7800
Telecopy: 704-388-9939
Chase Securities Inc.
270 Park Avenue
8th Floor
New York, N.Y. 10017
Attention: Medium-Term Note Desk
Telephone: 212-834-4421
Telecopy: 212-834-6081
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, N.Y. 10010
Attention: Short and Medium Term Finance
Telephone: 212-325-7198
Telecopy: 212-325-8183
Morgan Stanley & Co. Incorporated
1585 Broadway
2nd Floor
New York, N.Y. 10036
Attention: Manager - Continuously Offered Products
Telephone: 212-761-2000
Telecopy: 212-761-0780
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<PAGE> 28
with a copy to:
Morgan Stanley & Co. Incorporated
1585 Broadway
34th Floor
New York, N.Y. 10036
Attention: Peter Cooper, Investment Banking Information Center
Telephone: 212-761-8385
Telecopy: 212-761-0260
Warburg Dillon Read LLC
677 Washington Blvd.
Stamford, CT 06901
Attention: Debt Syndicate
Telephone: 203-719-1342
Telecopy: 203-719-7139
or, if sent to the Company, will be mailed, delivered or telefaxed and
confirmed to it at:
Centex Corporation,
2728 North Harwood Street,
Dallas, Texas 75201,
Attention: Vicki Roberts
Telephone: 214-981-6533
Telecopy: 214-981-6858
13. Successors. This Agreement and any Terms Agreement will inure to
the benefit of and be binding upon each of the parties hereto and their
respective successors and the officers, directors and controlling persons
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any Terms Agreement or any provision herein or therein contained. This
Agreement and any applicable Terms Agreement and all conditions and provisions
hereof and thereof are intended to be for the sole and exclusive benefit of the
parties hereto and respective successors and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Notes shall be
deemed to be a successor by reason merely of such purchase.
14. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
15. Applicable Law. This Agreement and all the rights and obligations
of the parties shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be performed in such
State.
16. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
28
<PAGE> 29
If the foregoing is in accordance with your respective understandings
of our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this instrument and your respective acceptances shall represent a
binding agreement between the Company and each Agent.
Very truly yours,
CENTEX CORPORATION
By:
------------------------------
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
BANC ONE CAPITAL MARKETS, INC.
By
-----------------------------
Title:
BANC OF AMERICA SECURITIES LLC
By
-----------------------------
Title:
CHASE SECURITIES INC.
By
-----------------------------
Title:
CREDIT SUISSE FIRST BOSTON CORPORATION
By
-----------------------------
Title:
MORGAN STANLEY & CO. INCORPORATED
By
-----------------------------
Title:
WARBURG DILLON READ LLC
By
-----------------------------
Title:
29
<PAGE> 30
EXHIBIT A
CENTEX CORPORATION
SENIOR MEDIUM-TERM NOTES, SERIES B
TERMS AGREEMENT
19
---- ---
Centex Corporation
2728 North Harwood Street
Dallas, Texas 75201
Attention:
Re: Distribution Agreement dated August 17, 1999
(the "Distribution Agreement")
Subject to the terms and conditions set forth or incorporated
by reference herein, the undersigned agrees to purchase $ (or principal amount
of foreign currency or composite currency) aggregate principal amount of your
Senior Medium-Term Notes having the following terms:
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Default Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
o LIBOR Reuters
o LIBOR
Telerate Index Currency:
If CMT Rate,
Designated CMT Telerate Page:
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Default Rate:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Calculation Agent:
30
<PAGE> 31
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
If Repayable:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Authorized Denomination:
Purchase Price: ___%, plus accrued interest, if any, from ___________
Settlement Date and Time:
Additional/Other Terms:
The certificates, opinions and letters referred to in Sections
6(a), (b) and (c) of the Distribution Agreement [will/will not] be required.
All provisions contained in the Distribution Agreement, dated
August 17, 1999, between Centex Corporation and _________________________ are
herein incorporated by reference in their entirety and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full here in.
[Name of Agent]
By
--------------------------------
Name:
Title:
Accepted:
CENTEX CORPORATION
By
------------------------
Name:
Title:
31
<PAGE> 32
EXHIBIT B
CENTEX CORPORATION
SUBORDINATED MEDIUM-TERM NOTES, SERIES B
TERMS AGREEMENT
19
---- ---
Centex Corporation
2728 North Harwood Street
Dallas, Texas 75201
Attention:
Re: Distribution Agreement dated August 17, 1999
(the "Distribution Agreement")
Subject to the terms and conditions set forth or incorporated
by reference herein, the undersigned agrees to purchase $ (or principal amount
of foreign currency or composite currency) aggregate principal amount of your
Subordinated Medium-Term Notes having the following terms:
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Default Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
o LIBOR Reuters
o LIBOR
Telerate Index Currency:
If CMT Rate,
Designated CMT Telerate Page:
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Default Rate:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Calculation Agent:
32
<PAGE> 33
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
If Repayable:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Authorized Denomination:
Purchase Price: ___%, plus accrued interest, if any, from ___________
Settlement Date and Time:
Additional/Other Terms:
The certificates, opinions and letters referred to in Sections
6(a), (b) and (c) of the Distribution Agreement [will/will not] be required.
All provisions contained in the Distribution Agreement, dated
August 17, 1999, between Centex Corporation and _________________________ are
herein incorporated by reference in their entirety and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full here in.
[Name of Agent]
By
-------------------------------
Name:
Title:
Accepted:
CENTEX CORPORATION
By
------------------------
Name:
Title:
33
<PAGE> 34
EXHIBIT C
ADMINISTRATIVE PROCEDURES
34
<PAGE> 35
SCHEDULE I
SUBSIDIARIES OF CENTEX CORPORATION
THAT ARE NOT DIRECTLY OR INDIRECTLY WHOLLY-OWNED
<TABLE>
<CAPTION>
Percent of Outstanding Equity Interests Owned
Subsidiary Directly or ndirectly by Centex Corporation
- ---------- ---------------------------------------------
<S> <C>
Advanced Protection Systems, Inc. 84.75%
Cavco Industries, LLC 80.50%
CC Rowlett MOB, LLC 50.00%
Centex-Aim Construction, L.L.C. 80.00%
Centex Concord Property Management, L.L.C. 50.00%
Centex Construction Products, Inc. 61.50%
Centex Development 1, LLC 98.00%
Centex Development Holding Company UK Limited 93.50%
Fairclough Homes Group Limited 93.50%
Fairclough Homes Limited 93.50%
Fairpine Limited 50.00%
Viewton Properties Limited 50.00%
Centex Homes International B.V. 93.50%
Centex Latin America, Inc. 95.00%
900 Development Corporation 95.00%
Inverloma, S. de R.L. de C.V. 30.00%
Centex Rodgers No. 1, LLC 99.00%
Centex-Rooney/HLM Correctional Design/Builders, L.C. 70.00%
Centex-Rooney National Development, J.V. 75.00%
Centex-Rooney/RS&H Design Builders, L.C. 90.00%
Centex-Rooney Schenkel Shultz Design/Builders, L.C. 50.00%
Centex Seismic Services, Inc. 95.00%
Centex Urban LLC 95.00%
Charles Church Homes Limited 50.00%
Copper Canyon Development Company LLC 45.70%
CSL Agnews Development, LLC 33.33%
GV Northfield I LLC 50.00%
M&W General Construction Company 49.00%
Nomas Corp. 49.90%
Nomas Development Company, LLC 49.90%
ST Lending, Inc. 49.90%
Parcel E, LLC 75.00%
PDG/Prescott Development Group, L.L.C. 50.00%
Rural Southwest Housing Company, L.L.C. 50.00%
Seabreeze, LLC 66.70%
Sun Built Development, LLC 49.00%
The Student Communities Group, L.C. 50.00%
Wayne Homes, LLC 97.00%
Arlington Mortgage, Inc. 97.00%
Westfest, LLC 50.00%
Windemere BLC Land Company 33.33%
</TABLE>
35
<PAGE> 36
Wholly-owned subsidiaries of Centex Construction Production, Inc.:
CCP Cement Company
Mountain Cement Company
Nevada Cement Company
Texas Cement Company
Western Cement Company of California
CCP Concrete/Aggregates Company
BP Sand & Gravel, Inc.
Centex Materials, Inc.
Mathews Readymix, Inc.
Western Aggregates, Inc.
CCP Gypsum Company
American Gypsum Company
CEGC Holding Company
Centex Eagle Gypsum Company
Centex Eagle Gypsum Company, L.L.C.
M&W Drywall Supply Company
Galtco, Inc.
CCP Land Company
Centex Cement Corporation
36
<PAGE> 1
EXHIBIT 4.2
CENTEX CORPORATION
Issuer
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
Trustee
INDENTURE SUPPLEMENT NO. 2
Dated as of August 1, 1999
to
INDENTURE
Dated as of October 1, 1998
Senior Medium-Term Notes, Series B
<PAGE> 2
INDENTURE SUPPLEMENT NO. 2 ("Indenture Supplement"), dated as of August
1, 1999, between CENTEX CORPORATION, a Nevada corporation (together with its
successors and assigns as provided in the Indenture referred to below, the
"Company"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking
association (together with its successors in trust thereunder as provided in the
Indenture referred to below, the "Trustee"), as trustee under an Indenture dated
as of October 1, 1998 (the "Indenture").
PRELIMINARY STATEMENT
Section 2.02 of the Indenture provides, among other things, that the
Company may, when authorized by its Board of Directors, and the Trustee may at
any time and from time to time, enter into a series supplement to the Indenture
for the purpose of authorizing one or more Series of Senior Debt Securities and
to specify certain terms of each such Series of Senior Debt Securities. The
Board of Directors of the Company has duly authorized the creation of a Series
of Senior Debt Securities to be known as the Company's Senior Medium-Term Notes,
Series B (the "Notes"), and the Company and the Trustee are executing and
delivering this Indenture Supplement in order to provide for the issuance of the
Notes.
ARTICLE ONE
Definitions
Except to the extent such terms are otherwise defined in this Indenture
Supplement or the context clearly requires otherwise, all terms used in this
Indenture Supplement which are defined in the Indenture or the form of Fixed
Rate Note or Floating Rate Note attached hereto as Exhibits A and B,
respectively, either directly or by reference therein, shall have the meanings
assigned to them therein.
As used in this Indenture Supplement, the following terms shall have
the following meanings:
AMORTIZED FACE AMOUNT:
The term "Amortized Face Amount" of an Original Issue Discount Note, as
of the date that (i) the principal amount of such Note is to be repaid prior to
its Stated Maturity, whether upon declaration of acceleration, call for
redemption, repayment at the option of the Holder or otherwise, or (ii) any
consent, notice, request, direction, waiver or suit by the Noteholders shall be
deemed to be given, made or commenced under this Indenture, shall mean the
principal amount of such Note multiplied by its Issue Price plus the portion of
the difference between the dollar amount thus obtained and the principal amount
of such Note that has accreted at the Yield to maturity of such Note (computed
in accordance with generally accepted United States bond yield computation
principles) to such date, but in no event shall the Amortized Face Amount of an
Original Issue Discount Note exceed its principal amount stated in the
applicable Company Order.
AMORTIZING NOTE:
The term "Amortizing Note" shall mean a Note for which payments of
principal of and interest on such Note are made in installments over the life of
such Note, and unless otherwise specified in the applicable Company Order,
payments with respect to an Amortizing Note shall be applied first to interest
due and payable thereon and then to the reduction of the unpaid principal amount
thereof.
-1-
<PAGE> 3
AUTHORIZED AGENT:
The term "Authorized Agent" shall mean an agent of the Company
designated by an Officers' Certificate to give to the Trustee the information
specified in clause (a) of "Company Order" for the issuance of a Note.
BASIS POINT:
The term "Basis Point" shall mean one-one hundredth of a percentage
point.
CD RATE:
The term "CD Rate" shall mean, with respect to any CD Rate Interest
Determination Date, the rate on such date for negotiable United States dollar
certificates of deposit having the Index Maturity specified in the applicable
Pricing Supplement as published in H.15(519) (as hereinafter defined) under the
heading "CD (secondary market)" or, if not so published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate on such CD Rate Interest
Determination Date for negotiable United States dollar certificates of deposit
of the Index Maturity specified in the applicable Pricing Supplement as
published in H.15 Daily Update (as hereinafter defined), or such other
recognized electronic source used for the purpose of displaying such rate, under
the caption "CD (secondary market)." If such rate is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the CD Rate on
such CD Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date,
of three leading nonbank dealers in negotiable United States dollar certificates
of deposit in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent for negotiable United States
dollar certificates of deposit of major United States money center banks for
negotiable certificates of deposit with a remaining maturity closest to the
Index Maturity specified in the applicable Pricing Supplement in an amount that
is representative for a single transaction in that market at that time;
provided, however, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the CD Rate determined as of such CD
Rate Interest Determination Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.
CD RATE INTEREST DETERMINATION DATE:
The term "CD Rate Interest Determination Date" shall mean the Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the CD Rate.
CMT RATE:
The term "CMT Rate" shall mean, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the CMT Rate, the rate displayed on the
Designated CMT Telerate Page under the caption "...Treasury Constant
Maturities...Federal Reserve Board Release H.15...Mondays Approximately 3:45
P.M.," under the column for the Designated CMT Maturity Index for (i) if the
Designated CMT Telerate Page is 7051, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
weekly or monthly average, as specified in the Company Order, for the week or
the month, as applicable, ended immediately preceding the week or the month, as
applicable, in which the related CMT Rate Interest Determination Date falls. If
such rate is no longer displayed on the relevant page or is not so displayed by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such CMT Rate Interest Determination
-3-
<PAGE> 4
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index as published in H.15(519). If such rate is no longer published or
is not so published by 3:00 P.M., New York City time, on the related Calculation
Date, then the CMT Rate on such CMT Rate Interest Determination Date will be
such treasury constant maturity rate for the Designated CMT Maturity Index (or
other United States Treasury rate for the Designated CMT Maturity Index) for the
CMT Rate Interest Determination Date with respect to such Interest Reset Date as
may then be published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519). If such information is
not so provided by 3:00 P.M., New York City time, on the related Calculation
Date, then the CMT Rate on the CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity, based on
the arithmetic mean of the secondary market offered rates as of approximately
3:30 P.M., New York City time, on such CMT Rate Interest Determination Date
reported, according to their written records, by three leading primary United
States government securities dealers in The City of New York (which may include
the Agents or their affiliates) (each, a "Reference Dealer") selected by the
Calculation Agent (from five such Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent is unable to obtain three such Treasury Note quotations, the
CMT Rate on such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offered rates as of approximately 3:30 P.M., New York
City time, on such CMT Rate Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100 million. If three or four (and not five)
of such Reference Dealers are quoting as described above, then the CMT Rate will
be based on the arithmetic mean of the offered rates obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided, however,
that if fewer than three Reference Dealers so selected by the Calculation Agent
are quoting as mentioned herein, the CMT Rate determined as of such CMT Rate
Interest Determination Date will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the Calculation Agent will
obtain quotations for the Treasury Note with the shorter remaining term to
maturity.
CMT RATE INTEREST DETERMINATION DATE:
The term "CMT Rate Interest Determination Date" shall mean any Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the CMT Rate.
CALCULATION AGENT:
The term "Calculation Agent" for a particular Floating Rate Note shall
mean the Trustee, unless otherwise specified in the applicable Company Order.
-3-
<PAGE> 5
CALCULATION DATE:
The term "Calculation Date" shall, unless otherwise specified in the
applicable Company Order, mean with regard to any particular Interest
Determination Date, the earlier of (i) the tenth calendar day after such
Interest Determination Date, or, if any such day is not a Business Day, the next
day that is a Business Day, or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity Date, as the case may be.
COMMERCIAL PAPER RATE:
The term "Commercial Paper Rate" for a particular Floating Rate Note,
unless otherwise indicated in the applicable Company Order, shall mean, with
respect to any Interest Determination Date, the Money Market Yield on such date
of the rate for commercial paper having the Index Maturity specified in such
Company Order, as such rate shall be published in H.15(519) under the caption
"Commercial Paper -- Nonfinancial" or, if not so published by 3:00 P.M., New
York City time, on the related Calculation Date, the rate on such Commercial
Paper Rate Interest Determination Date for commercial paper having the Index
Maturity specified in the applicable Company Order as published in H.15 Daily
Update, or such other recognized electronic source used for the purpose of
displaying such rate, under the caption "Commercial Paper-Nonfinancial." If such
rate is not yet published in H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 P.M., New York City time, on the related Calculation
Date, then the Commercial Paper Rate on such Commercial Paper Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
Money Market Yield of the arithmetic mean of the offered rates at approximately
11:00 A.M., New York City time, on such Commercial Paper Rate Interest
Determination Date of three leading dealers of commercial paper in The City of
New York (which may include the Agents or their affiliates) selected by the
Calculation Agent for commercial paper having the Index Maturity specified in
the applicable Pricing Supplement placed for industrial issuers whose bond
rating is "Aa," or the equivalent, from a nationally recognized statistical
rating organization; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper Rate Interest Determination
Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Interest Determination Date.
COMMERCIAL PAPER RATE INTEREST DETERMINATION DATE:
The term "Commercial Paper Rate Interest Determination Date" shall mean
any Interest Determination Date relating to a Floating Rate Note for which the
interest rate is determined with reference to the Commercial Paper Rate.
COMMERCIAL PAPER RATE NOTES:
The term "Commercial Paper Rate Notes" shall mean Floating Rate Notes
which are specified in the applicable Company Order as bearing interest at an
interest rate calculated with reference to the Commercial Paper Rate.
COMPANY ORDER:
The term "Company Order" shall mean:
(a) a written order signed in the name of the Company by the Chairman
of the Board, the President or any Vice President and by the Secretary or an
Assistant Secretary of the Company, and delivered
-4-
<PAGE> 6
to the Trustee, to authenticate a Note and to make it available for delivery,
and specifying for such Note the following information:
(1) the name of the Person in which a Note to be issued and
authenticated shall be registered;
(2) the address of such Person;
(3) the taxpayer identification number of such Person;
(4) the principal amount of such Note and, if multiple Notes are to
be issued to such Person, the denominations of such Notes;
(5) the Issue Price of such Note;
(6) the Original Issue Date of such Note;
(7) the date upon which such Note is scheduled to mature and the
Final Maturity Date;
(8) if the Note is to be redeemable at the option of the Company,
the Initial Redemption Date and the date or dates on which, and the
price or prices at which, such Note is redeemable at the option of the
Company;
(9) if the Note is to be repayable prior to the Stated Maturity at
the option of the Holder, the date or dates on which, and the price or
prices at which, such Note is repayable at the option of the Holder;
(10) if the Note is a Fixed Rate Note, the rate of interest on such
Note and the Interest Payment Dates, if other than March 1 and
September 1, and the Record Dates, if other than February 15 and August
15;
(11) if the Note is an Original Issue Discount Note, its Yield to
Maturity;
(12) if such Note is an Amortizing Note, a table setting forth the
schedule of dates and amounts of payments of principal of and interest
on such Note or the formula for the amortization of principal and/or
interest;
(13) if the Note is a Reset Note, the Optional Interest Reset Date
and the formula, if any, for resetting the interest rate of a Fixed
Rate Note or the Spread and/or Spread Multiplier of a Floating Rate
Note;
(14) if the Note is a Floating Rate Note, its:
(A) Initial Interest Rate (I) Interest Reset Dates
-5-
<PAGE> 7
(B) Interest Rate Basis or Bases (J) Spread
(including any Designated LIBOR
Currency and Designated LIBOR
Page or any Designated CMT
Maturity Index and Designated CMT
Telerate Page)
(C) Index Maturity (K) Spread Multiplier
(D) Interest Determination Dates (L) Maximum Interest Rate
(E) Interest Reset Period (M) Minimum Interest Rate
(F) Initial Interest Reset Date (N) Interest Payment Dates
(G) Fixed Rate Commencement Date, if (O) Record Dates
applicable
(H) Fixed Interest Rate, if applicable
(15) If such Note is a Floating Rate Note, whether it is a Regular
Floating Rate Note or a Floating Rate/Fixed Rate Note;
(16) whether or not such Note is to be issued in the form of a
Global Note to the Depositary;
(17) the name and address of the Calculation Agent, if other than
the Trustee;
(18) if other than United States dollars or denominations of $1,000
and integral multiples thereof, the authorized currency or
denominations in which Notes shall be issued; and
(19) all other information necessary for the issuance of such Note
not inconsistent with the provisions of this Indenture; or
(b) confirmation given to the Trustee by an officer of the Company
designated by an Officers' Certificate, by telephone, confirmed by telex or
facsimile or similar writing, of the information given to the Trustee by an
Authorized Agent for the issuance of a Note, and the written order of the
Company to authenticate such Note and to make it available for delivery.
COMPOSITE QUOTATIONS:
The term "Composite Quotations" shall mean the daily statistical
release "Composite 3:30 P.M. Quotations for U. S. Government Securities" or any
successor publication published by the Federal Reserve Bank of New York.
CONSOLIDATED NET TANGIBLE ASSETS:
The term "Consolidated Net Tangible Assets" shall mean the aggregate
amount of assets included on the most recent consolidated balance sheet of the
Company and its subsidiaries, less applicable reserves and other properly
deductible items and after deducting therefrom (a) all current liabilities and
(b) all goodwill, trade names, trademarks, patents, unamortized debt discount
and expense, and other like intangibles, all in accordance with generally
accepted accounting principles consistently applied.
-6-
<PAGE> 8
CUSIP:
The term "CUSIP" shall mean the registered trademark "Committee on
Uniform Securities Identification Procedures" or "CUSIP" and a unique system of
identification of each public issue of a security owned by the American Bankers
Association and administered by Standard and Poor's Corporation, as agent of the
American Bankers Association.
DEPOSITARY:
The term "Depositary" shall mean, unless otherwise specified by the
Company, The Depository Trust Company, New York, New York, or any successor
thereto registered as a Clearing Agency under the Securities and Exchange Act of
1934, as amended, or any successor statute or regulation.
DESIGNATED CMT TELERATE PAGE:
The term "Designated CMT Telerate Page" shall mean the display on
Bridge Telerate, Inc. (or any successor service) on the page specified in the
applicable Pricing Supplement (or any other page as may replace such page on
such service) for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519) or, if no such page is specified in the applicable Pricing
Supplement, page 7052.
DESIGNATED CMT MATURITY INDEX:
The term "Designated CMT Maturity Index" shall mean the original period
to maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified in the applicable Pricing Supplement with respect to which the
CMT Rate will be calculated or, if no such maturity is specified in the
applicable Pricing Supplement, 2 years.
DESIGNATED LIBOR CURRENCY:
The term "Designated LIBOR Currency" shall mean the currency or
composite currency specified in the applicable Company Order as to which LIBOR
shall be calculated or, if no such currency or composite currency is specified
in the applicable Company Order, United States dollars.
DESIGNATED LIBOR PAGE:
The term "Designated LIBOR Page" shall mean either (a) the display on
the Reuters Monitor Money Rates Service (or any successor service) on the page
specified in such Company Order (or any other page as may replace such page on
such service) for the purpose of displaying the London interbank rates of major
banks for the Designated LIBOR Currency (if "LIBOR Reuters" is specified in the
applicable Company Order), or (b) the display on Bridge Telerate, Inc. (or any
successor service) on the page specified in the applicable Company Order (or any
other page as may replace such page on such service) for the purpose of
displaying the London interbank rates of major banks for the Designated LIBOR
Currency (if "LIBOR Telerate" is specified in the applicable Company Order or
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable
Company Order as the method for calculating LIBOR).
ELEVENTH DISTRICT COST OF FUNDS RATE:
The term "Eleventh District Cost of Funds Rate" shall mean, with
respect to any Interest Determination Date relating to a Floating Rate Note for
which the interest rate is determined with reference
-7-
<PAGE> 9
to the Eleventh District Cost of Funds Rate (an "Eleventh District Cost of Funds
Rate Interest Determination Date"), the rate equal to the monthly weighted
average cost of funds for the calendar month immediately preceding the month in
which such Eleventh District Cost of Funds Rate Interest Determination Date
falls as set forth under the caption "11th District" on the display on Bridge
Telerate, Inc. (or any successor service) on page 7058 ("Telerate Page 7058") as
of 11:00 A.M., San Francisco time, on such Eleventh District Cost of Funds Rate
Interest Determination Date. If such rate does not appear on Telerate Page 7058
on such Eleventh District Cost of Funds Rate Interest Determination Date, then
the Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.
FEDERAL FUNDS RATE:
The terms "Federal Funds Rate" shall mean, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the Federal Funds Rate (a "Federal Funds Rate
Interest Determination Date"), the rate on such date for United States dollar
federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)", as such rate is displayed on Bridge Telerate, Inc. (or any
successor service) on page 120 ("Telerate Page 120"), or, if such rate does not
appear on Telerate Page 120 or is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the rate on such Federal Funds Rate
Interest Determination Date for United States dollar federal funds as published
in H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "Federal Funds (Effective)."
If such rate does not appear on Telerate Page 120 or is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the Federal
Funds Rate on such Federal Funds Rate Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
for the last transaction in overnight United States dollar federal funds
arranged by three leading brokers of federal funds transactions in The City of
New York (which may include the Agents or their affiliates) selected by the
Calculation Agent prior to 9:00 A.M., New York City time, on such Federal Funds
Rate Interest Determination Date; provided, however, that if the brokers so
selected by the Calculation Agent are not quoting as mentioned in this sentence,
the Federal Funds Rate determined as of such Federal Funds Rate Interest
Determination Date will be the Federal Funds Rate in effect on such Federal
Funds Rate Interest Determination Date.
FINAL MATURITY DATE:
The term "Final Maturity Date" shall mean the date beyond which the
Stated Maturity of a particular Note may not be extended at the option of the
Company.
FIXED RATE AMORTIZING NOTE:
The term "Fixed Rate Amortizing Note" shall mean a Fixed Rate Note
which is an Amortizing Note.
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FIXED RATE NOTE:
The term "Fixed Rate Note" shall mean a Note which bears interest at a
fixed rate (which may be zero in the case of a Zero Coupon Note) specified in
the applicable Company Order.
FLOATING RATE NOTE:
The term "Floating Rate Note" shall mean a Note which bears interest at
a variable rate determined by reference to an interest rate formula, and
includes a CD Rate Note, a CMT Rate Note, a Commercial Paper Rate Note, an
Eleventh District Cost of Funds Rate Note, a Federal Funds Rate Note, a LIBOR
Note, a Prime Rate Note or a Treasury Rate Note.
FUNDED INDEBTEDNESS:
The term "Funded Indebtedness" shall mean notes, bonds, debentures or
other similar evidences of indebtedness for money borrowed which by its terms
matures at or is extendible or renewable at the option of the obligor to a date
more than 12 months after the date of the creation of such debt.
GLOBAL NOTE:
The term "Global Note" shall mean a single Note that is issued to
evidence Notes having identical terms and provisions, which is delivered to the
Depositary or pursuant to instructions of the Depositary and which shall be
registered in the name of the Depositary or its nominee.
H.15(519):
The term "H.15(519)" shall mean the weekly publication "Statistical
Release H.15(519), Selected Interest Rates" or any successor publication
published by the Board of Governors of the Federal Reserve System.
H.15 DAILY UPDATE:
The term "H.15 Daily Update" shall mean the daily update of H.15(519),
available through the world-wide-web site of the Board of Governors of the
Federal Reserve System at http://www.bog.frb.fed.us/releases/h15/update, or any
successor site or publication.
INDEX MATURITY:
The term "Index Maturity" of a particular Floating Rate Note shall mean
the period to Stated Maturity of the instrument or obligation with respect to
which the related Interest Rate Basis or Bases of such Floating Rate Note is
calculated, as specified in the applicable Company Order.
INITIAL INTEREST RATE:
The term "Initial Interest Rate" for a particular Floating Rate Note
shall mean the interest rate specified in the applicable Company Order as in
effect from the Original Issue Date of such Floating Rate Note to its first
Interest Reset Date.
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INITIAL REDEMPTION DATE:
The term "Initial Redemption Date" shall mean the earliest date, if
any, on which a particular Note shall be redeemable at the option of the Company
prior to the Stated Maturity of such Note, as specified in the applicable
Company Order.
INTEREST ACCRUAL PERIOD:
The term "Interest Accrual Period" for a particular Floating Rate Note
shall mean the period from the date of issue of such Floating Rate Note, or from
an Interest Reset Date, if any, to its next subsequent Interest Reset Date.
INTEREST DETERMINATION DATE:
The term "Interest Determination Date" shall mean, with respect to the
CD Rate, the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and the
Prime Rate, the second Business Day immediately preceding the applicable
Interest Reset Date; the "Interest Determination Date" with respect to the
Eleventh District Cost of Funds Rate shall be the last working day of the month
immediately preceding the applicable Interest Reset Date on which the Federal
Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the
Index; and the "Interest Determination Date" with respect to LIBOR shall be the
second London Business Day immediately preceding the applicable Interest Reset
Date, unless the Designated LIBOR Currency is British pounds sterling, in which
case the "Interest Determination Date" shall be the applicable Interest Reset
Date. With respect to the Treasury Rate, the "Interest Determination Date" shall
be the day in the week in which the applicable Interest Reset Date falls on
which day Treasury Bills are normally auctioned (Treasury Bills are normally
sold at an auction held on Monday of each week, unless such Monday is a legal
holiday, in which case the auction is normally held on the immediately
succeeding Tuesday although such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the "Interest Determination Date"
shall be such preceding Friday; provided, further, that if the Interest
Determination Date would otherwise fall on an Interest Reset Date, then such
Interest Reset Date shall be postponed to the next succeeding Business Day. The
"Interest Determination Date" pertaining to a Floating Rate Note the interest
rate of which is determined by reference to two or more Interest Rate Bases
shall be the most recent Business Day which is at least two Business Days prior
to the applicable Interest Reset Date for such Floating Rate Note on which each
Interest Rate Basis is determinable. Each Interest Rate Basis shall be
determined as of such date, and the applicable interest rate shall take effect
on the applicable Interest Reset Date.
INTEREST PAYMENT DATE:
(a) The term "Interest Payment Date" shall mean with respect to a
Floating Rate Note, including a Floating Rate Amortizing Note, which has an
Interest Reset Date reset (1) daily, weekly or monthly: the third Wednesday of
each month or the third Wednesday of March, June, September and December of each
year, as specified in the applicable Company Order, (2) quarterly: the third
Wednesday of March, June, September and December of each year, as specified in
the applicable Company Order, (3) semiannually: the third Wednesday of the two
months of each year, as specified in the applicable Company Order; (4) annually:
the third Wednesday of the month of each year, as specified in the applicable
Company Order, and, in each case, the Maturity Date of such Floating Rate Note
and, with respect to defaulted interest on such Floating Rate Note, the date
established by the Company for the payment of such defaulted interest. If any
Interest Payment Date (other than at Maturity) for any Floating Rate Note would
fall on a day that is not a Business Day with respect to such Floating Rate
Note, such Interest Payment Date will be the immediately following day that is a
Business Day with respect to such Floating Rate Note, except that, in the case
of a LIBOR Note,
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if such Business Day with respect to such Floating Rate Note is in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding London Business Day.
(b) The term "Interest Payment Date" shall mean with respect to a Fixed
Rate Note, including a Fixed Rate Amortizing Note, each March 1 and September 1,
or such other dates which are specified in the applicable Company Order during
the period such Fixed Rate Note is outstanding, the Maturity Date of such Fixed
Rate Note, and with respect to defaulted interest on such Fixed Rate Note, the
date established by the Company for the payment of such defaulted interest.
(c) Notwithstanding the foregoing, the first Interest Payment Date for
any Note originally issued between a Record Date and the next Interest Payment
Date shall be the Interest Payment Date following the next succeeding Record
Date.
INTEREST RATE:
(a) The term "Interest Rate" for a particular Floating Rate Note shall
mean (1) from the date of issue of such Floating Rate Note to the first Interest
Reset Date for such Floating Rate Note, the Initial Interest Rate, and (2) each
Interest Accrual Period commencing on or after such First Interest Reset Date,
the Base Rate with reference to the Index Maturity for such Floating Rate Note
as specified in the applicable Company Order plus or minus the Spread, if any,
multiplied by the Spread Multiplier, if any; PROVIDED that in the event no
Spread or Spread Multiplier is provided in such Company Order, the Spread and
Spread Multiplier shall be zero and one, respectively; PROVIDED, FURTHER, in no
event shall the Interest Rate be greater than the Maximum Interest Rate, if any,
or less than the Minimum Interest Rate, if any; PROVIDED, FURTHER, the Interest
Rate in effect for the ten days immediately prior to Maturity will be the
Interest Rate in effect on the tenth day preceding such Maturity; and PROVIDED,
FURTHER, the Interest Rate will in no event be higher than the maximum rate
permitted by Texas or other applicable law, as the same may be modified by
United States federal laws of general application.
(b) The term "Interest Rate" for a particular Fixed Rate Note shall
mean the interest rate specified in the applicable Company Order.
INTEREST RATE BASIS:
The term "Interest Rate Basis" shall mean with respect to (a) CD Rate
Notes, the CD Rate, (b) CMT Rate Notes, the CMT Rate, (c) Commercial Paper Rate
Notes, the Commercial Paper Rate, (d) Eleventh District Cost of Funds Note, the
Eleventh District Cost of Funds Rate, (e) Federal Funds Rate Notes, the Federal
Funds Rate, (f) LIBOR Notes, LIBOR, (g) Prime Rate Notes, the Prime Rate, (h)
Treasury Rate Notes, the Treasury Rate, and (i) any other Floating Rate Note,
the interest rate formula which determines the variable rate at which such Note
bears interest.
INTEREST RESET DATE:
The term "Interest Reset Date" shall mean, in the case of a Floating
Rate Note specified in the applicable Company Order as being reset (a) daily:
each Business Day; (b) weekly: the Wednesday of each week (with the exception of
weekly reset Treasury Rate Notes which reset the Tuesday of each week, except as
specified below); (c) monthly: the third Wednesday of each month (with the
exception of monthly reset Floating Rate Notes as to which the Eleventh District
Cost of Funds Rate is an applicable Interest Rate Basis which will reset on the
first calendar day of the month); (d) quarterly: the third Wednesday of March,
June, September and December; (e) semiannually: the third Wednesday of the two
months specified in the applicable
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Company Order; and (f) annually: the third Wednesday of the month specified in
the applicable Company Order. If any Interest Reset Date for a Floating Rate
Note would otherwise be a day which is not a Business Day, such Interest Reset
Date shall be postponed to the next succeeding day that is a Business Day,
except that in the case of a LIBOR Note, if such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding London Business Day. If, in the case of a Treasury Rate Note, an
Interest Reset Date shall fall on a day on which the Treasury auctions Treasury
Bills, then such Interest Reset Date shall instead be the first Business Day
immediately following such auction.
INTEREST RESET PERIOD:
The term "Interest Reset Period" shall mean for:
(a) each Floating Rate Note on which interest is reset
monthly, quarterly, semiannually or annually, and each Fixed Rate Note,
the period:
(1) beginning on and including the Original Issue
Date of such Note or the most recent Interest Payment Date on
which interest was paid on such Note, and
(2) ending on but not including the next Interest
Payment Date or, for the last Interest Reset Period, the
Maturity Date, of such Note;
(b) each Floating Rate Note on which interest is reset daily
or weekly, the period:
(1) beginning on and including the Original Issue
Date of such Floating Rate Note, or beginning on but excluding
the most recent Record Date through which interest was paid on
such Note, and
(2) ending on and including the next Record Date or,
for the last Interest Reset Period, ending on but excluding
the Maturity Date, of such Note;
PROVIDED, HOWEVER, that the first Interest Reset Period for any Note which has
its Original Issue date after a Record Date and prior to its next Interest
Payment Date, shall begin on and include such Original Issue Date and (i) end on
and include the next Record Date for Floating Rate Notes on which interest is
reset daily or weekly, and (ii) end on but not include the second Interest
Payment Date after the Original Issue Date for all other Notes.
ISSUE PRICE:
The term "Issue Price" shall mean the price expressed as a percentage
of the aggregate principal amount of a Note at which such Note is issued.
LIBOR:
The term "LIBOR" for a particular Floating Rate Note, unless otherwise
indicated in the applicable Company Order, shall mean, with respect to any LIBOR
Interest Determination Date, the rate determined:
(i) With respect to any LIBOR Interest Determination Date,
LIBOR shall be either: (a) if "LIBOR Telerate" is specified in the
applicable Company Order or if neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified in the applicable Company Order as the method
for calculating LIBOR, the rate for deposits in the Designated LIBOR
Currency having the Index Maturity specified in such Company Order,
commencing on such Interest Reset Date, that appears on the Designated
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<PAGE> 14
LIBOR Page as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date; or (b) if "LIBOR Reuters" is specified in the
applicable Pricing Supplement, the arithmetic mean of the offered rates
(unless the Designated LIBOR Page by its terms provides only for a
single rate, in which case such single rate shall be used) for deposits
in the Designated LIBOR Currency having the Index Maturity specified in
such Pricing Supplement, commencing on the applicable Interest Reset
Date, that appear (or, if only a single rate is required as aforesaid,
appears) on the Designated LIBOR Page as of 11:00 A.M., London time, on
such LIBOR Interest Determination Date. If fewer than two such offered
rates so appear, or if no such rate so appears, as applicable, LIBOR on
such LIBOR Interest Determination Date shall be determined in
accordance with the provisions described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on
which fewer than two offered rates appear, or no rate appears, as the
case may be, on the Designated LIBOR Page as specified in clause (i)
above, the Calculation Agent will request the principal London offices
of each of four major reference banks (which may include affiliates of
the Agents) in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered
quotation for deposits in the Designated LIBOR Currency for the period
of the Index Maturity specified in the applicable Pricing Supplement,
commencing on the applicable Interest Reset Date, to prime banks in the
London interbank market at approximately 11:00 A.M., London time, on
such LIBOR Interest Determination Date and in a principal amount that
is representative for a single transaction in the Designated LIBOR
Currency in such market at such time. If at least two such quotations
are so provided, then LIBOR on such LIBOR Interest Determination Date
shall be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, then LIBOR on such LIBOR Interest
Determination Date shall be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., in the applicable Principal Financial Center,
on such LIBOR Interest Determination Date by three major banks (which
may include affiliates of the Agents) in such Principal Financial
Center selected by the Calculation Agent for loans in the Designated
LIBOR Currency to leading European banks, having the Index Maturity
specified in the applicable Company Order and in a principal amount
that is representative for a single transaction in the Designated LIBOR
Currency in such market at such time; provided, however, that if the
banks so selected by the Calculation Agent are not quoting as mentioned
in this sentence, LIBOR determined as of such LIBOR Interest
Determination Date shall be LIBOR in effect on such LIBOR Interest
Determination Date.
LIBOR INTEREST DETERMINATION DATE:
The term "LIBOR Interest Determination Date" shall mean the Interest
Determination Date pertaining to a LIBOR Note.
LIBOR NOTES:
The term "LIBOR Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to LIBOR.
LONDON BUSINESS DAY:
The term "London Business Day" shall mean any day on which dealings in
the Designated LIBOR Currency are transacted in the London interbank market.
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MATURITY DATE:
The term "Maturity Date," when used with respect to any Note, shall
mean the date on which the principal of such Note or an installment of principal
becomes due and payable in accordance with its terms and the terms of this
Indenture as therein or herein provided, whether at Stated Maturity, upon
declaration of acceleration, call for redemption, repayment at the option of the
Holder or otherwise.
MAXIMUM INTEREST RATE:
The term "Maximum Interest Rate" shall mean the maximum rate of
interest, if any, which may be applicable to any Floating Rate Note during any
Interest Accrual Period as specified in the applicable Company Order.
MINIMUM INTEREST RATE:
The term "Minimum Interest Rate" shall mean the minimum rate of
interest, if any, which may be applicable to any Floating Rate Note during any
Interest Accrual Period as specified in the applicable Company Order.
MONEY MARKET YIELD:
The term "Money Market Yield" shall be the yield (expressed as a
percentage) calculated in accordance with the following formula:
Money Market Yield = [(D x 360)/(360 - (D x M))] x 100
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable Interest Reset Period.
NOTEHOLDER; HOLDER:
The terms "Noteholder" or "Holder" shall mean any Person in whose name
at the time a particular Note is registered in the register of the Company kept
for that purpose in accordance with the terms hereof.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" when used with respect to the Company,
shall mean a certificate signed by the Chairman of the Board, the President or
any Vice President and by the Secretary or an Assistant Secretary of the
Company.
OPTIONAL INTEREST RESET DATE:
The term "Optional Interest Reset Date" shall mean each date on which
the interest rate on a Fixed Rate Reset Note or the Spread and/or Spread
Multiplier of a Floating Rate Reset Note may be reset at the option of the
Company.
ORIGINAL ISSUE DATE:
The term "Original Issue Date" shall mean for a particular Note, or
portions thereof, the date upon which it, or such portion, was issued by the
Company pursuant to this Indenture or any indenture
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<PAGE> 16
supplemental thereto and authenticated by the Trustee (other than in connection
with a transfer, exchange or substitution).
ORIGINAL ISSUE DISCOUNT NOTE:
The term "Original Issue Discount Note" shall mean (i) a Note that has
a "stated redemption price at maturity" that exceeds its "issue price", each as
defined for United States federal income tax purposes, by at least 0.25% of its
stated redemption price at maturity multiplied by the number of complete years
from the Original Issue Date to the Stated Maturity for such Note (or in the
case of a Note that provides for payment of any amount other than the "qualified
stated interest", as defined for United States federal income tax purposes,
prior to maturity, the weighted average maturity of the Note) and (ii) any other
Note designated by the Company in the applicable Company Order as issued with
original issue discount for United States federal income tax purposes.
PERSON:
The term "Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
PRIME RATE:
The term "Prime Rate" for a particular Floating Rate Note, unless
otherwise indicated in the applicable Company Order, shall mean, with respect to
any Prime Rate Interest Determination Date, the rate on such date as published
in H.15(519) under the caption "Bank Prime Loan" or, if not published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such
Prime Rate Interest Determination Date as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of displaying such
rate, under the caption "Bank Prime Loan." If such rate is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the Prime Rate
shall be the arithmetic mean of the rates of interest publicly announced by each
bank that appears on the Reuters Screen USPRIME1 Page (as hereinafter defined)
as such bank's prime rate or base lending rate as of 11:00 A.M., New York City
time, on such Prime Rate Interest Determination Date. If fewer than four such
rates appear on the Reuters Screen USPRIME1 Page for such Prime Rate Interest
Determination Date, then the Prime Rate shall be the arithmetic mean of the
prime rates or base lending rates quoted on the basis of the actual number of
days in the year divided by a 360-day year as of the close of business on such
Prime Rate Interest Determination Date by four major money center banks (which
may include affiliates of the Agents) in The City of New York selected by the
Calculation Agent. If fewer than four such quotations are so provided, then the
Prime Rate shall be the arithmetic mean of four prime rates quoted on the basis
of the actual number of days in the year divided by a 360-day year as of the
close of business on such Prime Rate Interest Determination Date as furnished in
The City of New York by the major money center banks, if any, that have provided
such quotations and by a reasonable number of substitute banks or trust
companies (which may include affiliates of the Agents) to obtain four such prime
rate quotations, provided such substitute banks or trust companies are organized
and doing business under the laws of the United States, or any State thereof,
each having total equity capital of at least $500 million and being subject to
supervision or examination by Federal or State authority, selected by the
Calculation Agent to provide such rate or rates; provided, however, that if the
banks or trust companies so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Prime Rate determined as of such Prime Rate
Interest Determination Date will be the Prime Rate in effect on such Prime Rate
Interest Determination Date.
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PRIME RATE NOTES:
The term "Prime Rate Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to the Prime Rate.
PRINCIPAL AMOUNT:
The term "principal amount" with respect to any Note shall mean the
principal amount thereof set forth in the applicable Company Order; PROVIDED
that in the case of any Original Issue Discount Note, its principal amount as of
(i) any date that the principal amount of such Note is to be repaid prior to its
Stated Maturity, whether upon declaration of acceleration, call for redemption,
repayment at the option of the Noteholder or otherwise, or (ii) any date that
any consent, notice, request, direction, waiver or suit by the Noteholders shall
be deemed to be given, made or commenced under this Indenture, such term shall
mean the Amortized Face Amount of such Note as of such date.
PRINCIPAL FINANCIAL CENTER:
The term "Principal Financial Center" shall mean the capital city of
the country to which the Designated LIBOR Currency relates (or, in the case of
ECU, Luxembourg), except that with respect to United States dollars, Australian
dollars, Canadian dollars, Deutsche marks, Dutch guilders, Portuguese escudos,
South African rand and Swiss francs, the "Principal Financial Center" shall be
The City of New York, Sydney, Toronto, Frankfurt, Amsterdam, London,
Johannesburg and Zurich, respectively.
RECORD DATE:
The term "Record Date" shall mean for the Interest Payment Date for the
payment of interest for an Interest Reset Period for a particular Note, unless
otherwise specified in the applicable Company Order, (a) the day which is
fifteen calendar days immediately prior to such Interest Payment Date, whether
or not such day is a Business Day, (b) the Maturity Date of such Note, unless
such Maturity Date for a Fixed Rate Note is a January 1 or a July 1, in which
event the Record Date will be as provided in clause (a), and (c) a date which is
not less than five Business Days immediately preceding the Interest Payment Date
of defaulted interest on such Note established by notice given by first-class
mail by or on behalf of the Company to the Holder of such Note not less than
fifteen calendar days prior to such Interest Payment Date.
REDEMPTION DATE:
The term "Redemption Date" for a Note shall mean the date fixed for the
redemption of such Note in accordance with the provisions of this Indenture.
RESET NOTE:
The term "Reset Note" shall mean a Fixed Rate Note, with respect to
which the Company has the option to reset the interest rate, and a Floating Rate
Note, with respect to which the Company has the option to reset the Spread
and/or Spread Multiplier.
REUTERS SCREEN USPRIME1 PAGE:
The term "Reuters Screen USPRIME1" shall mean the display designated as
page "USPRIME1" on the Reuters Monitor Money Rate Service (or such other page
which may replace the USPRIME1 page on such service) for the purpose of
displaying the prime rate or base lending rate of major United States banks.
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SPREAD:
The term "Spread" applicable to a particular Floating Rate Note shall
mean the number of Basis Points to be added to or subtracted from the related
Interest Rate Basis or Bases applicable to such Floating Rate Note as specified
in the applicable Company Order, used in the calculation of the Interest Rate
for such Floating Rate Note.
SPREAD MULTIPLIER:
The term "Spread Multiplier" applicable to a particular Floating Rate
Note shall mean the percentage of the related Interest Rate Basis or Bases
applicable to such Floating Rate Note as specified in the applicable Company
Order, used in the calculation of the Interest Rate for such Floating Rate Note.
STATED MATURITY:
The term "Stated Maturity," when used with respect to any Note, shall
mean the date specified in such Note as the date on which the principal of such
Note is due and payable.
TREASURY:
The term "Treasury" shall mean the United States Department of
Treasury.
TREASURY BILLS:
The term "Treasury Bills" shall mean direct obligations of the United
States.
TREASURY RATE:
The term "Treasury Rate" for a particular Floating Rate Note, unless
otherwise indicated in the applicable Company Order, shall mean, with respect to
any Treasury Rate Interest Determination Date, the rate from the auction held on
such Treasury Rate Interest Determination Date (the "Auction") of Treasury Bills
having the Index Maturity specified in the applicable Company Order under the
caption "AVGE INVEST YIELD" on the display on Bridge Telerate, Inc. (or any
successor service) on page 56 ("Telerate Page 56") or page 57 ("Telerate Page
57") or, if not so published by 3:00 P.M., New York City time, on the related
Calculation Date, the auction average rate of such Treasury Bills (expressed as
a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury. In the event that the results of the Auction of Treasury Bills
having the Index Maturity specified in the applicable Company Order are not so
published by 3:00 P.M., New York City time, on the related Calculation Date, or
if no such Auction is held, then the Treasury Rate shall be the rate (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) on such Treasury Rate Interest Determination Date
of Treasury Bills having the Index Maturity specified in the applicable Company
Order as published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market" or, if not yet published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such
Treasury Rate Interest Determination Date of such Treasury Bills as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market." If such rate is not yet published
in H.15(519), H.15 Daily Update or another recognized electronic source, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be a
yield to maturity (expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M., New
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York City time, on such Treasury Rate Interest Determination Date, of three
leading primary United States government securities dealers (which may include
the Agents or their affiliates) selected by the Calculation Agent, for the issue
of Treasury Bills with a remaining maturity closest to the Index Maturity
specified in the applicable Company Order; provided, however, that if the
dealers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate determined as of such Treasury Rate Interest
Determination Date shall be the Treasury Rate in effect on such Treasury Rate
Interest Determination Date.
TREASURY RATE NOTES:
The term "Treasury Rate Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to the Treasury Rate.
TRUSTEE:
The term "Trustee" shall mean Chase Bank of Texas, National Association
and shall also include any successor Trustee.
YIELD TO MATURITY:
The term "Yield to Maturity" shall mean for a particular Note the yield
to maturity of such Note, computed in accordance with generally accepted United
States bond yield computation principles and expressed as a percentage,
specified in the applicable Company Order.
ZERO COUPON NOTE:
The term "Zero Coupon Note" means a Note issued at a price representing
a discount from the principal amount payable at maturity and bearing a zero
fixed rate of interest.
ARTICLE TWO
Terms and Issuance of the Notes
Section 2.01. Issuance and Designation. A Series of Senior Debt
Securities which shall be designated as the Company's "Medium-Term Notes, Series
A" shall be executed, authenticated and delivered from time to time in
accordance with the provisions of, and shall in all respects be subject to, the
terms, conditions and covenants of, the Indenture and this Indenture Supplement
(including the form of Notes set forth in Exhibits A and B). The aggregate
principal amount of the Notes which may be authenticated and delivered under the
Indenture Supplement shall not, except as permitted by the provisions of the
Indenture, exceed $250,000,000.
Section 2.02. Form and Other Terms of Notes; Incorporation of Terms.
(a) Subject to subsection (b) below, the Notes shall be in the form attached
hereto as Exhibits A and B, respectively. The Notes shall be registered in such
names, shall be in such amounts and shall have such Original Issue Dates,
Interest Rates, Maturity Dates, Redemption Dates, if any, Initial Redemption
Percentages, if any, and Annual Redemption Percentage Reductions, if any, and
such other terms as are communicated by the Company to the Trustee in accordance
with the Administrative Procedures described in the Distribution Agreement,
dated August 17, 1999, between the Company and the agents named therein. The
terms of such Notes are herein incorporated by reference and are part of this
Indenture Supplement.
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(b) Any Note may be issued without the consent of the Holders of any
Notes in any such other form or forms and have such other term or terms that may
be established consistent with the Indenture and this Indenture Supplement,
including, but not limited to, Notes denominated in a foreign currency ("Foreign
Currency Notes"), and Notes that initially bear interest at a fixed rate or
floating rate through a certain date and then bear interest as established by a
remarketing agent for either a period of 365 days or less or a period of more
than 365 days ("Remarketed Notes").
Section 2.03. Depository for Global Securities. The Depositary for any
Global Securities of the series of which this Note is a part shall be the
Depository Trust Company in The City of New York.
Section 2.04. Place of Payment. The Place of Payment in respect of the
Notes will be at the principal office or agency of the Company in Dallas, Texas
or at the office or place of business of the Trustee or its successor in trust
under the Indenture, which, at the date hereof, is located at Chase Global
Trust, 450 W. 33rd, 15th Floor, New York, New York 10001.
ARTICLE THREE
Additional Covenants
Section 3.01. Limitation on Liens. The following provisions shall apply
to the Notes unless specifically otherwise provided in a series supplement.
(a) The Company will not itself, and will not permit any subsidiary
(other than Centex Financial Services, Inc. and its subsidiaries) to, issue,
assume or guarantee any indebtedness for borrowed money if such borrowed money
is secured by a mortgage, pledge, security interest, lien or other encumbrance
(any such mortgage, pledge, security interest, lien or other encumbrance being
hereinafter in this Section 3.01 referred to as a "Lien") upon or with respect
to any of the properties or assets of the Company or any such subsidiary or on
any shares of capital stock or other equity interests of any subsidiary that
owns property or assets (other than Centex Financial Services, Inc. and its
subsidiaries), whether, in each case, owned at the date of this Indenture
Supplement or thereafter acquired, unless the Company makes effective provision
whereby the Notes shall be secured by such Lien equally and ratably with any and
all other borrowed money thereby secured; provided, however, that the foregoing
restrictions shall not be applicable to:
(i) Any Lien existing on any of the Company's properties or
assets or shares of capital stock or other equity interests at the date
of this Indenture Supplement;
(ii) Any Lien created by a subsidiary in favor of the Company
or any wholly-owned subsidiary;
(iii) Any Lien on any asset of any corporation or other entity
(or on any accession or improvement to such asset or any proceeds
thereof) existing at the time such corporation or other entity becomes
a subsidiary;
(iv) Any Lien on any asset of any corporation or other entity
(or on any accession or improvement to such asset or any proceeds
thereof) existing at the time such corporation or other entity is
merged or consolidated with or into the Company or a subsidiary;
(v) Any Lien on any asset existing at the time of acquisition
thereof (or on any accession or improvement to such asset or any
proceeds thereof) by the Company or any subsidiary;
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<PAGE> 21
(vi) Any Lien on any asset (or on any accession or improvement
to such asset or any proceeds thereof) securing Indebtedness incurred
or assumed for the purpose of financing all or any part of the cost of
acquiring such asset or the making of any improvement thereof; provided
that such Lien attaches to such asset concurrently with or within 180
days after the acquisition thereof or the making of such improvement;
(vii) Any Lien incurred in connection with pollution control,
industrial revenue or any similar financing;
(viii) Any Lien arising out of the refinancing, extension,
renewal or replacement of any of the Liens permitted by any of clauses
(i) through (vii) above; provided that such Indebtedness is not
increased and is not secured by any additional assets; and
(ix) any Lien imposed by law.
(b) Notwithstanding the provisions of subsection (a) of this Section
3.01, the Company or any subsidiary may issue, assume or guarantee indebtedness
for borrowed money secured by a Lien which would otherwise be subject to the
foregoing restrictions in an aggregate amount which, together with all other
such secured borrowings of the Company and its subsidiaries and the Attributable
Debt (as defined below) in respect of Sale and Lease-Back Transactions (as
defined in Section 3.02) existing at such time (other than Sale and Lease-Back
Transactions not subject to the limitation contained in Section 3.02), does not
at the time exceed twenty percent (20%) of the Consolidated Net Tangible Assets
of the Company and its subsidiaries, as shown on the audited consolidated
balance sheet contained in the latest annual report to stockholders of the
Company. The term "Attributable Debt" as used in this paragraph shall mean, as
of any particular time, the present value of the obligation of a lessee for
rental payments during the remaining term of any lease (including any period for
which such lease has been extended or may, at the option of the lessor, be
extended).
Section 3.02. Limitation on Sale and Lease-Back Transactions. The
Company will not, nor will it permit any subsidiary to, enter into any
arrangement with any person (other than the Company) providing for the leasing
by the Company or a subsidiary of any of its properties or assets (except for
temporary leases for a term of not more than three (3) years and except for
sales and leases of model homes), which property has been or is to be sold or
transferred by the Company or such subsidiary to such person (herein referred to
as a "Sale and Lease-Back Transaction"), unless (a) the net proceeds to the
Company or such subsidiary from such sale or transfer equal or exceed the fair
value (as determined by the Board of Directors, the Chairman of the Board, the
Vice Chairman, the President or the principal financial officer of the Company)
of the property so leased, (b) the Company or such subsidiary would be entitled
to incur Indebtedness secured by a Lien on the property to be leased pursuant to
Section 3.01, (c) the Company shall, and in any such case the Company covenants
that it will, apply an amount equal to the fair value (as determined by the
Board of Directors, the Chairman of the Board, the Vice Chairman, the President
or the principal financial officer of the Company) of the property so leased to
the retirement (other than any mandatory retirement), within 180 days of the
effective date of any such Sale and Lease-Back Transaction, of Funded
Indebtedness of the Company, (d) such Sale and Lease-Back Transaction relates to
a sale which occurred within 180 days from the date of acquisition of such
property by the Company or a subsidiary or the date of the completion of
construction or commencement of full operations on such property, whichever is
later, or (e) such transaction was consummated prior to the date of this
Indenture Supplement.
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<PAGE> 22
ARTICLE FOUR
Defeasance
Section 4.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at any time, with respect to the Notes, elect to have either
Section 13.01 of the Indenture or Section 4.03 of this Indenture Supplement be
applied to all outstanding Notes upon compliance with the conditions set forth
in Article Thirteen of the Indenture and below in this Article Four.
Section 4.02. Legal Defeasance. Upon the Company's exercise under
Section 4.01 of the option applicable to Section 13.01 of the Indenture, the
Company may terminate its obligations under the Notes, the Indenture and this
Indenture Supplement by complying with the terms and conditions of Section 13.01
of the Indenture; provided, however, that the Opinion of Counsel delivered to
the Trustee will also state that either (A) the Company has received from, or
there has been published by, the Internal Revenue Service, a ruling or (B) since
the date hereof, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred.
Section 4.03. Covenant Defeasance. Upon the Company's exercise under
Section 4.01 of the option applicable to this Section 4.03, the Company shall be
released from its obligations under the covenants contained in Article Three of
this Indenture Supplement with respect to the outstanding Notes on and after the
date the conditions set forth below are satisfied ("Covenant Defeasance"), and
the Notes shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Notes, 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, but, except as
specified above, the remainder of the Indenture and such Notes shall be
unaffected thereby. In addition, the Company's exercise under Section 4.01 of
the option applicable to this Section 4.03 shall not constitute an Event of
Default.
Section 4.04. Conditions to Covenant Defeasance. The following shall be
the conditions to the application of Section 4.03 to the outstanding Notes:
(1) the Company shall irrevocably have deposited or caused to
be deposited with the Trustee under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust
funds in trust solely for the benefit of the holders of such Notes for
that purpose, money or direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America
for the payment of which guarantee or obligation the full faith and
credit of the United States is pledged ("U.S. Government Obligations")
maturing as to principal and interest in such amounts and at such times
as are sufficient, as verified in a Certificate of a Firm of
Independent Public Accountants, without consideration of any
reinvestment of such interest, to pay principal of and interest or
sinking funds on the outstanding Notes to maturity or redemption as the
case may be, provided that the Trustee or any paying agent shall have
been irrevocably instructed to apply such money or the proceeds of such
U.S. Government Obligations to the payment of said principal and
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<PAGE> 23
interest and said sinking fund with respect to the Notes. The Company
may make an irrevocable deposit pursuant to this Section 4.04 only if
at such time the Company shall have delivered to the Trustee and any
such paying agent an Officers' Certificate and an Opinion of Counsel,
each stating that all conditions herein precedent to the satisfaction
and discharge of this Indenture have been complied with and the Opinion
of Counsel further states that the making of such deposit (i) does not
contravene or violate any provision of any indenture, mortgage, loan
agreement or other similar agreement known to such counsel to which the
Company is a party or by which it or any of its property is bound, (ii)
does not require registration by the deposit referred to above under
the Investment Company Act of 1940, as amended, and (iii) to the effect
that the holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such
defeasance and will be subject to federal income tax in the same
amount, in the same manner and at the same times as would have been the
case if such defeasance had not occurred.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.06, 2.08, 5.01, 5.02, 5.05, 6.01, 8.06, 8.10, 13.04 and 13.05 of the
Indenture shall survive until the Notes are no longer outstanding. Thereafter,
the Company's obligations in Section 8.06, 13.04 and 13.05 of the Indenture
shall survive.
ARTICLE FIVE
Miscellaneous
Section 5.01. Ratification of Indenture. As supplemented by this
Indenture Supplement, the Indenture is in all respects ratified and confirmed
and the Indenture as so supplemented by this Indenture Supplement shall be read,
taken and construed as one and the same instrument.
Section 5.02. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture Supplement by any of the provisions of
the Trust Indenture Act, such required provisions shall control.
Section 5.03. Effect of Headings. The article and section headings
herein are included for convenience only and shall not affect the construction
hereof.
Section 5.04. Counterparts. This Indenture Supplement may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
Section 5.05. Severability. In case any provision of this Indenture
Supplement or in the Senior Notes shall be found invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 5.06. Benefits of Indenture Supplement. Nothing in this
Indenture Supplement or in the Notes, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture Supplement.
Section 5.07. Acceptance of Trusts. Chase Bank of Texas, National
Association hereby accepts the trusts in this Indenture Supplement declared and
provided, upon the terms and conditions herein and in the Indenture set forth.
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<PAGE> 24
Section 5.08. Governing Law. This Indenture Supplement and each Note
issued hereunder shall be deemed to be a contract made under the laws of the
State of Texas, and for all purposes shall be construed in accordance with the
laws of said State.
[Remainder of page intentionally left blank.]
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<PAGE> 25
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Indenture Supplement to be duly executed by their respective officers thereunto
duly authorized and their respective seals duly attested to be hereunto affixed
all as of the day and year first above written.
CENTEX CORPORATION
[SEAL]
Attest: By:
------------------------------------
Vicki A. Roberts
Vice President and Treasurer
- -------------------------------------
Drew F. Nachowiak
Assistant Secretary
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
[SEAL]
Attest: By:
------------------------------------
Name:
Title:
- -------------------------------------
Name:
Title:
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<PAGE> 26
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, a Notary Public in and for said
state, on this day personally appeared Vicki A. Roberts and Drew F. Nachowiak,
known to me to be the persons and officers whose names are subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said CENTEX CORPORATION, a Nevada corporation, and that they executed the same
as the act of said corporation for the purposes and consideration therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 17th day of August, 1999.
---------------------------------------------
Notary Public in and for the State of Texas
My commission expires:
---------------------------------------------
Printed Name of Notary Public
- --------------------------
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, a Notary Public in and for said
state, on this day personally appeared ________________ and ________________,
known to me to be the persons and officers whose names are subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking association,
and that they executed the same as the act of said national banking association
for the purposes and consideration therein expressed, and in the capacity
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 17th day of August, 1999.
---------------------------------------------
Notary Public in and for the State of Texas
My commission expires:
---------------------------------------------
Printed Name of Notary Public
- --------------------------
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<PAGE> 1
EXHIBIT 4.4
CENTEX CORPORATION
Issuer
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(Formerly Texas Commerce Bank National Association)
Trustee
INDENTURE SUPPLEMENT NO. 5
Dated as of August 1, 1999
to
INDENTURE
Dated as of March 12, 1987
Subordinated Medium-Term Notes, Series B
<PAGE> 2
INDENTURE SUPPLEMENT NO. 5 ("Indenture Supplement"), dated as of August
1, 1999, between CENTEX CORPORATION, a Nevada corporation (together with its
successors and assigns as provided in the Indenture referred to below, the
"Company"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking
association (formerly, Texas Commerce Bank National Association) (together with
its successors in trust thereunder as provided in the Indenture referred to
below, the "Trustee"), as trustee under an Indenture dated as of March 12, 1987
(the "Indenture").
PRELIMINARY STATEMENT
Section 2.02 of the Indenture provides, among other things, that the
Company may, when authorized by its Board of Directors, and the Trustee may at
any time and from time to time, enter into a series supplement to the Indenture
for the purpose of authorizing one or more Series of Subordinated Debt
Securities and to specify certain terms of each such Series of Subordinated Debt
Securities. The Board of Directors of the Company has duly authorized the
creation of a Series of Subordinated Debt Securities to be known as the
Company's Subordinated Medium-Term Notes, Series B (the "Subordinated Notes"),
and the Company and the Trustee are executing and delivering this Indenture
Supplement in order to provide for the issuance of the Subordinated Notes.
ARTICLE ONE
Definitions
Except to the extent such terms are otherwise defined in this Indenture
Supplement or the context clearly requires otherwise, all terms used in this
Indenture Supplement which are defined in the Indenture or the form of Fixed
Rate Note or Floating Rate Note attached hereto as Exhibits A and B,
respectively, either directly or by reference therein, shall have the meanings
assigned to them therein.
As used in this Indenture Supplement, the following terms shall have
the following meanings:
AMORTIZED FACE AMOUNT:
The term "Amortized Face Amount" of an Original Issue Discount Note, as
of the date that (i) the principal amount of such Subordinated Note is to be
repaid prior to its Stated Maturity, whether upon declaration of acceleration,
call for redemption, repayment at the option of the Holder or otherwise, or (ii)
any consent, notice, request, direction, waiver or suit by the Noteholders shall
be deemed to be given, made or commenced under this Indenture, shall mean the
principal amount of such Subordinated Note multiplied by its Issue Price plus
the portion of the difference between the dollar amount thus obtained and the
principal amount of such Subordinated Note that has accreted at the Yield to
maturity of such Subordinated Note (computed in accordance with generally
accepted United States bond yield computation principles) to such date, but in
no event shall the Amortized Face Amount of an Original Issue Discount Note
exceed its principal amount stated in the applicable Company Order.
AMORTIZING NOTE:
The term "Amortizing Note" shall mean a Subordinated Note for which
payments of principal of and interest on such Subordinated Note are made in
installments over the life of such Subordinated Note, and unless otherwise
specified in the applicable Company Order, payments with respect to an
Amortizing Note shall be applied first to interest due and payable thereon and
then to the reduction of the unpaid principal amount thereof.
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<PAGE> 3
AUTHORIZED AGENT:
The term "Authorized Agent" shall mean an agent of the Company
designated by an Officers' Certificate to give to the Trustee the information
specified in clause (a) of "Company Order" for the issuance of a Subordinated
Note.
BASIS POINT:
The term "Basis Point" shall mean one-one hundredth of a percentage
point.
CD RATE:
The term "CD Rate" shall mean, with respect to any CD Rate Interest
Determination Date, the rate on such date for negotiable United States dollar
certificates of deposit having the Index Maturity specified in the applicable
Pricing Supplement as published in H.15(519) (as hereinafter defined) under the
heading "CD (secondary market)" or, if not so published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate on such CD Rate Interest
Determination Date for negotiable United States dollar certificates of deposit
of the Index Maturity specified in the applicable Pricing Supplement as
published in H.15 Daily Update (as hereinafter defined), or such other
recognized electronic source used for the purpose of displaying such rate, under
the caption "CD (secondary market)." If such rate is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the CD Rate on
such CD Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date,
of three leading nonbank dealers in negotiable United States dollar certificates
of deposit in The City of New York (which may include the Agents or their
affiliates) selected by the Calculation Agent for negotiable United States
dollar certificates of deposit of major United States money center banks for
negotiable certificates of deposit with a remaining maturity closest to the
Index Maturity specified in the applicable Pricing Supplement in an amount that
is representative for a single transaction in that market at that time;
provided, however, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the CD Rate determined as of such CD
Rate Interest Determination Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.
CD RATE INTEREST DETERMINATION DATE:
The term "CD Rate Interest Determination Date" shall mean the Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the CD Rate.
CMT RATE:
The term "CMT Rate" shall mean, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the CMT Rate, the rate displayed on the
Designated CMT Telerate Page under the caption "...Treasury Constant
Maturities...Federal Reserve Board Release H.15...Mondays Approximately 3:45
P.M.," under the column for the Designated CMT Maturity Index for (i) if the
Designated CMT Telerate Page is 7051, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
weekly or monthly average, as specified in the Company Order, for the week or
the month, as applicable, ended immediately preceding the week or the month, as
applicable, in which the related CMT Rate Interest Determination Date falls. If
such rate is no longer displayed on the relevant page or is not so displayed by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such CMT Rate Interest Determination
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<PAGE> 4
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index as published in H.15(519). If such rate is no longer published or
is not so published by 3:00 P.M., New York City time, on the related Calculation
Date, then the CMT Rate on such CMT Rate Interest Determination Date will be
such treasury constant maturity rate for the Designated CMT Maturity Index (or
other United States Treasury rate for the Designated CMT Maturity Index) for the
CMT Rate Interest Determination Date with respect to such Interest Reset Date as
may then be published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519). If such information is
not so provided by 3:00 P.M., New York City time, on the related Calculation
Date, then the CMT Rate on the CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity, based on
the arithmetic mean of the secondary market offered rates as of approximately
3:30 P.M., New York City time, on such CMT Rate Interest Determination Date
reported, according to their written records, by three leading primary United
States government securities dealers in The City of New York (which may include
the Agents or their affiliates) (each, a "Reference Dealer") selected by the
Calculation Agent (from five such Reference Dealers selected by the Calculation
Agent and eliminating the highest quotation (or, in the event of equality, one
of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)), for the most recently issued direct noncallable fixed rate
obligations of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent is unable to obtain three such Treasury Note quotations, the
CMT Rate on such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offered rates as of approximately 3:30 P.M., New York
City time, on such CMT Rate Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100 million. If three or four (and not five)
of such Reference Dealers are quoting as described above, then the CMT Rate will
be based on the arithmetic mean of the offered rates obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided, however,
that if fewer than three Reference Dealers so selected by the Calculation Agent
are quoting as mentioned herein, the CMT Rate determined as of such CMT Rate
Interest Determination Date will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the Calculation Agent will
obtain quotations for the Treasury Note with the shorter remaining term to
maturity.
CMT RATE INTEREST DETERMINATION DATE:
The term "CMT Rate Interest Determination Date" shall mean any Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the CMT Rate.
CALCULATION AGENT:
The term "Calculation Agent" for a particular Floating Rate Note shall
mean the Trustee, unless otherwise specified in the applicable Company Order.
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<PAGE> 5
CALCULATION DATE:
The term "Calculation Date" shall, unless otherwise specified in the
applicable Company Order, mean with regard to any particular Interest
Determination Date, the earlier of (i) the tenth calendar day after such
Interest Determination Date, or, if any such day is not a Business Day, the next
day that is a Business Day, or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity Date, as the case may be.
COMMERCIAL PAPER RATE:
The term "Commercial Paper Rate" for a particular Floating Rate Note,
unless otherwise indicated in the applicable Company Order, shall mean, with
respect to any Interest Determination Date, the Money Market Yield on such date
of the rate for commercial paper having the Index Maturity specified in such
Company Order, as such rate shall be published in H.15(519) under the caption
"Commercial Paper -- Nonfinancial" or, if not so published by 3:00 P.M., New
York City time, on the related Calculation Date, the rate on such Commercial
Paper Rate Interest Determination Date for commercial paper having the Index
Maturity specified in the applicable Company Order as published in H.15 Daily
Update, or such other recognized electronic source used for the purpose of
displaying such rate, under the caption "Commercial Paper-Nonfinancial." If such
rate is not yet published in H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 P.M., New York City time, on the related Calculation
Date, then the Commercial Paper Rate on such Commercial Paper Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
Money Market Yield of the arithmetic mean of the offered rates at approximately
11:00 A.M., New York City time, on such Commercial Paper Rate Interest
Determination Date of three leading dealers of commercial paper in The City of
New York (which may include the Agents or their affiliates) selected by the
Calculation Agent for commercial paper having the Index Maturity specified in
the applicable Pricing Supplement placed for industrial issuers whose bond
rating is "Aa," or the equivalent, from a nationally recognized statistical
rating organization; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper Rate Interest Determination
Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Interest Determination Date.
COMMERCIAL PAPER RATE INTEREST DETERMINATION DATE:
The term "Commercial Paper Rate Interest Determination Date" shall mean
any Interest Determination Date relating to a Floating Rate Note for which the
interest rate is determined with reference to the Commercial Paper Rate.
COMMERCIAL PAPER RATE NOTES:
The term "Commercial Paper Rate Notes" shall mean Floating Rate Notes
which are specified in the applicable Company Order as bearing interest at an
interest rate calculated with reference to the Commercial Paper Rate.
COMPANY ORDER:
The term "Company Order" shall mean:
(a) a written order signed in the name of the Company by the Chairman
of the Board, the President or any Vice President and by the Secretary or an
Assistant Secretary of the Company, and delivered
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to the Trustee, to authenticate a Subordinated Note and to make it available for
delivery, and specifying for such Subordinated Note the following information:
(1) the name of the Person in which a Subordinated Note to be
issued and authenticated shall be registered;
(2) the address of such Person;
(3) the taxpayer identification number of such Person;
(4) the principal amount of such Subordinated Note and, if
multiple Subordinated Notes are to be issued to such Person, the
denominations of such Subordinated Notes;
(5) the Issue Price of such Subordinated Note;
(6) the Original Issue Date of such Subordinated Note;
(7) the date upon which such Subordinated Note is scheduled to
mature and the Final Maturity Date;
(8) if the Subordinated Note is to be redeemable at the option
of the Company, the Initial Redemption Date and the date or dates on
which, and the price or prices at which, such Subordinated Note is
redeemable at the option of the Company;
(9) if the Subordinated Note is to be repayable prior to the
Stated Maturity at the option of the Holder, the date or dates on
which, and the price or prices at which, such Subordinated Note is
repayable at the option of the Holder;
(10) if the Subordinated Note is a Fixed Rate Note, the rate
of interest on such Subordinated Note and the Interest Payment Dates,
if other than March 1 and September 1, and the Record Dates, if other
than February 15 and August 15;
(11) if the Subordinated Note is an Original Issue Discount
Note, its Yield to Maturity;
(12) if such Subordinated Note is an Amortizing Note, a table
setting forth the schedule of dates and amounts of payments of
principal of and interest on such Subordinated Note or the formula for
the amortization of principal and/or interest;
(13) if the Subordinated Note is a Reset Note, the Optional
Interest Reset Date and the formula, if any, for resetting the interest
rate of a Fixed Rate Note or the Spread and/or Spread Multiplier of a
Floating Rate Note;
(14) if the Subordinated Note is a Floating Rate Note, its:
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<PAGE> 7
<TABLE>
<S> <C> <C> <C>
(A) Initial Interest Rate (I) Interest Reset Dates
(B) Interest Rate Basis or Bases (J) Spread
(including any Designated LIBOR
Currency and Designated LIBOR Page
or any Designated CMT Maturity
Index and Designated CMT Telerate
Page)
(C) Index Maturity (K) Spread Multiplier
(D) Interest Determination Dates (L) Maximum Interest Rate
(E) Interest Reset Period (M) Minimum Interest Rate
(F) Initial Interest Reset Date (N) Interest Payment Dates
(G) Fixed Rate Commencement Date, if (O) Record Dates
applicable
(H) Fixed Interest Rate, if applicable
</TABLE>
(15) If such Subordinated Note is a Floating Rate Note,
whether it is a Regular Floating Rate Note or a Floating Rate/Fixed
Rate Note;
(16) whether or not such Subordinated Note is to be issued in
the form of a Global Note to the Depositary;
(17) the name and address of the Calculation Agent, if other
than the Trustee;
(18) if other than United States dollars or denominations of
$1,000 and integral multiples thereof, the authorized currency or
denominations in which Subordinated Notes shall be issued; and
(19) all other information necessary for the issuance of such
Subordinated Note not inconsistent with the provisions of this
Indenture; or
(b) confirmation given to the Trustee by an officer of the Company
designated by an Officers' Certificate, by telephone, confirmed by telex or
facsimile or similar writing, of the information given to the Trustee by an
Authorized Agent for the issuance of a Subordinated Note, and the written order
of the Company to authenticate such Subordinated Note and to make it available
for delivery.
COMPOSITE QUOTATIONS:
The term "Composite Quotations" shall mean the daily statistical
release "Composite 3:30 P.M. Quotations for U. S. Government Securities" or any
successor publication published by the Federal Reserve Bank of New York.
CUSIP:
The term "CUSIP" shall mean the registered trademark "Committee on
Uniform Securities Identification Procedures" or "CUSIP" and a unique system of
identification of each public issue of a security owned by the American Bankers
Association and administered by Standard and Poor's Corporation, as agent of the
American Bankers Association.
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<PAGE> 8
DEPOSITARY:
The term "Depositary" shall mean, unless otherwise specified by the
Company, The Depository Trust Company, New York, New York, or any successor
thereto registered as a Clearing Agency under the Securities and Exchange Act of
1934, as amended, or any successor statute or regulation.
DESIGNATED CMT TELERATE PAGE:
The term "Designated CMT Telerate Page" shall mean the display on
Bridge Telerate, Inc. (or any successor service) on the page specified in the
applicable Pricing Supplement (or any other page as may replace such page on
such service) for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519) or, if no such page is specified in the applicable Pricing
Supplement, page 7052.
DESIGNATED CMT MATURITY INDEX:
The term "Designated CMT Maturity Index" shall mean the original period
to maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified in the applicable Pricing Supplement with respect to which the
CMT Rate will be calculated or, if no such maturity is specified in the
applicable Pricing Supplement, 2 years.
DESIGNATED LIBOR CURRENCY:
The term "Designated LIBOR Currency" shall mean the currency or
composite currency specified in the applicable Company Order as to which LIBOR
shall be calculated or, if no such currency or composite currency is specified
in the applicable Company Order, United States dollars.
DESIGNATED LIBOR PAGE:
The term "Designated LIBOR Page" shall mean either (a) the display on
the Reuters Monitor Money Rates Service (or any successor service) on the page
specified in such Company Order (or any other page as may replace such page on
such service) for the purpose of displaying the London interbank rates of major
banks for the Designated LIBOR Currency (if "LIBOR Reuters" is specified in the
applicable Company Order), or (b) the display on Bridge Telerate, Inc. (or any
successor service) on the page specified in the applicable Company Order (or any
other page as may replace such page on such service) for the purpose of
displaying the London interbank rates of major banks for the Designated LIBOR
Currency (if "LIBOR Telerate" is specified in the applicable Company Order or
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable
Company Order as the method for calculating LIBOR).
ELEVENTH DISTRICT COST OF FUNDS RATE:
The term "Eleventh District Cost of Funds Rate" shall mean, with
respect to any Interest Determination Date relating to a Floating Rate Note for
which the interest rate is determined with reference to the Eleventh District
Cost of Funds Rate (an "Eleventh District Cost of Funds Rate Interest
Determination Date"), the rate equal to the monthly weighted average cost of
funds for the calendar month immediately preceding the month in which such
Eleventh District Cost of Funds Rate Interest Determination Date falls as set
forth under the caption "11th District" on the display on Bridge Telerate, Inc.
(or any successor service) on page 7058 ("Telerate Page 7058") as of 11:00 A.M.,
San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly
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<PAGE> 9
weighted average cost of funds paid by member institutions of the Eleventh
Federal Home Loan Bank District that was most recently announced (the "Index")
by the FHLB of San Francisco as such cost of funds for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date. If the FHLB of San Francisco fails to announce the Index on
or prior to such Eleventh District Cost of Funds Rate Interest Determination
Date for the calendar month immediately preceding such Eleventh District Cost of
Funds Rate Interest Determination Date, the Eleventh District Cost of Funds Rate
determined as of such Eleventh District Cost of Funds Rate Interest
Determination Date will be the Eleventh District Cost of Funds Rate in effect on
such Eleventh District Cost of Funds Rate Interest Determination Date.
FEDERAL FUNDS RATE:
The terms "Federal Funds Rate" shall mean, with respect to any Interest
Determination Date relating to a Floating Rate Note for which the interest rate
is determined with reference to the Federal Funds Rate (a "Federal Funds Rate
Interest Determination Date"), the rate on such date for United States dollar
federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)", as such rate is displayed on Bridge Telerate, Inc. (or any
successor service) on page 120 ("Telerate Page 120"), or, if such rate does not
appear on Telerate Page 120 or is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the rate on such Federal Funds Rate
Interest Determination Date for United States dollar federal funds as published
in H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "Federal Funds (Effective)."
If such rate does not appear on Telerate Page 120 or is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the Federal
Funds Rate on such Federal Funds Rate Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
for the last transaction in overnight United States dollar federal funds
arranged by three leading brokers of federal funds transactions in The City of
New York (which may include the Agents or their affiliates) selected by the
Calculation Agent prior to 9:00 A.M., New York City time, on such Federal Funds
Rate Interest Determination Date; provided, however, that if the brokers so
selected by the Calculation Agent are not quoting as mentioned in this sentence,
the Federal Funds Rate determined as of such Federal Funds Rate Interest
Determination Date will be the Federal Funds Rate in effect on such Federal
Funds Rate Interest Determination Date.
FINAL MATURITY DATE:
The term "Final Maturity Date" shall mean the date beyond which the
Stated Maturity of a particular Subordinated Note may not be extended at the
option of the Company.
FIXED RATE AMORTIZING NOTE:
The term "Fixed Rate Amortizing Note" shall mean a Fixed Rate Note
which is an Amortizing Note.
FIXED RATE NOTE:
The term "Fixed Rate Note" shall mean a Subordinated Note which bears
interest at a fixed rate (which may be zero in the case of a Zero Coupon Note)
specified in the applicable Company Order.
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<PAGE> 10
FLOATING RATE NOTE:
The term "Floating Rate Note" shall mean a Subordinated Note which
bears interest at a variable rate determined by reference to an interest rate
formula, and includes a CD Rate Note, a CMT Rate Note, a Commercial Paper Rate
Note, an Eleventh District Cost of Funds Rate Note, a Federal Funds Rate Note, a
LIBOR Note, a Prime Rate Note or a Treasury Rate Note.
GLOBAL NOTE:
The term "Global Note" shall mean a single Subordinated Note that is
issued to evidence Subordinated Notes having identical terms and provisions,
which is delivered to the Depositary or pursuant to instructions of the
Depositary and which shall be registered in the name of the Depositary or its
nominee.
H.15(519):
The term "H.15(519)" shall mean the weekly publication "Statistical
Release H.15(519), Selected Interest Rates" or any successor publication
published by the Board of Governors of the Federal Reserve System.
H.15 DAILY UPDATE:
The term "H.15 Daily Update" shall mean the daily update of H.15(519),
available through the world-wide-web site of the Board of Governors of the
Federal Reserve System at http://www.bog.frb.fed.us/releases/h15/update, or any
successor site or publication.
INDEX MATURITY:
The term "Index Maturity" of a particular Floating Rate Note shall mean
the period to Stated Maturity of the instrument or obligation with respect to
which the related Interest Rate Basis or Bases of such Floating Rate Note is
calculated, as specified in the applicable Company Order.
INITIAL INTEREST RATE:
The term "Initial Interest Rate" for a particular Floating Rate Note
shall mean the interest rate specified in the applicable Company Order as in
effect from the Original Issue Date of such Floating Rate Note to its first
Interest Reset Date.
INITIAL REDEMPTION DATE:
The term "Initial Redemption Date" shall mean the earliest date, if
any, on which a particular Subordinated Note shall be redeemable at the option
of the Company prior to the Stated Maturity of such Subordinated Note, as
specified in the applicable Company Order.
INTEREST ACCRUAL PERIOD:
The term "Interest Accrual Period" for a particular Floating Rate Note
shall mean the period from the date of issue of such Floating Rate Note, or from
an Interest Reset Date, if any, to its next subsequent Interest Reset Date.
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<PAGE> 11
INTEREST DETERMINATION DATE:
The term "Interest Determination Date" shall mean, with respect to the
CD Rate, the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and the
Prime Rate, the second Business Day immediately preceding the applicable
Interest Reset Date; the "Interest Determination Date" with respect to the
Eleventh District Cost of Funds Rate shall be the last working day of the month
immediately preceding the applicable Interest Reset Date on which the Federal
Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the
Index; and the "Interest Determination Date" with respect to LIBOR shall be the
second London Business Day immediately preceding the applicable Interest Reset
Date, unless the Designated LIBOR Currency is British pounds sterling, in which
case the "Interest Determination Date" shall be the applicable Interest Reset
Date. With respect to the Treasury Rate, the "Interest Determination Date" shall
be the day in the week in which the applicable Interest Reset Date falls on
which day Treasury Bills are normally auctioned (Treasury Bills are normally
sold at an auction held on Monday of each week, unless such Monday is a legal
holiday, in which case the auction is normally held on the immediately
succeeding Tuesday although such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the "Interest Determination Date"
shall be such preceding Friday; provided, further, that if the Interest
Determination Date would otherwise fall on an Interest Reset Date, then such
Interest Reset Date shall be postponed to the next succeeding Business Day. The
"Interest Determination Date" pertaining to a Floating Rate Note the interest
rate of which is determined by reference to two or more Interest Rate Bases
shall be the most recent Business Day which is at least two Business Days prior
to the applicable Interest Reset Date for such Floating Rate Note on which each
Interest Rate Basis is determinable. Each Interest Rate Basis shall be
determined as of such date, and the applicable interest rate shall take effect
on the applicable Interest Reset Date.
INTEREST PAYMENT DATE:
(a) The term "Interest Payment Date" shall mean with respect to a
Floating Rate Note, including a Floating Rate Amortizing Note, which has an
Interest Reset Date reset (1) daily, weekly or monthly: the third Wednesday of
each month or the third Wednesday of March, June, September and December of each
year, as specified in the applicable Company Order, (2) quarterly: the third
Wednesday of March, June, September and December of each year, as specified in
the applicable Company Order, (3) semiannually: the third Wednesday of the two
months of each year, as specified in the applicable Company Order; (4) annually:
the third Wednesday of the month of each year, as specified in the applicable
Company Order, and, in each case, the Maturity Date of such Floating Rate Note
and, with respect to defaulted interest on such Floating Rate Note, the date
established by the Company for the payment of such defaulted interest. If any
Interest Payment Date (other than at Maturity) for any Floating Rate Note would
fall on a day that is not a Business Day with respect to such Floating Rate
Note, such Interest Payment Date will be the immediately following day that is a
Business Day with respect to such Floating Rate Note, except that, in the case
of a LIBOR Note, if such Business Day with respect to such Floating Rate Note is
in the next succeeding calendar month, such Interest Payment Date shall be the
immediately preceding London Business Day.
(b) The term "Interest Payment Date" shall mean with respect to a Fixed
Rate Note, including a Fixed Rate Amortizing Note, each March 1 and September 1,
or such other dates which are specified in the applicable Company Order during
the period such Fixed Rate Note is outstanding, the Maturity Date of such Fixed
Rate Note, and with respect to defaulted interest on such Fixed Rate Note, the
date established by the Company for the payment of such defaulted interest.
(c) Notwithstanding the foregoing, the first Interest Payment Date for
any Subordinated Note originally issued between a Record Date and the next
Interest Payment Date shall be the Interest Payment Date following the next
succeeding Record Date.
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<PAGE> 12
INTEREST RATE:
(a) The term "Interest Rate" for a particular Floating Rate Note shall
mean (1) from the date of issue of such Floating Rate Note to the first Interest
Reset Date for such Floating Rate Note, the Initial Interest Rate, and (2) each
Interest Accrual Period commencing on or after such First Interest Reset Date,
the Base Rate with reference to the Index Maturity for such Floating Rate Note
as specified in the applicable Company Order plus or minus the Spread, if any,
multiplied by the Spread Multiplier, if any; PROVIDED that in the event no
Spread or Spread Multiplier is provided in such Company Order, the Spread and
Spread Multiplier shall be zero and one, respectively; PROVIDED, FURTHER, in no
event shall the Interest Rate be greater than the Maximum Interest Rate, if any,
or less than the Minimum Interest Rate, if any; PROVIDED, FURTHER, the Interest
Rate in effect for the ten days immediately prior to Maturity will be the
Interest Rate in effect on the tenth day preceding such Maturity; and PROVIDED,
FURTHER, the Interest Rate will in no event be higher than the maximum rate
permitted by Texas or other applicable law, as the same may be modified by
United States federal laws of general application.
(b) The term "Interest Rate" for a particular Fixed Rate Note shall
mean the interest rate specified in the applicable Company Order.
INTEREST RATE BASIS:
The term "Interest Rate Basis" shall mean with respect to (a) CD Rate
Notes, the CD Rate, (b) CMT Rate Notes, the CMT Rate, (c) Commercial Paper Rate
Notes, the Commercial Paper Rate, (d) Eleventh District Cost of Funds Note, the
Eleventh District Cost of Funds Rate, (e) Federal Funds Rate Notes, the Federal
Funds Rate, (f) LIBOR Notes, LIBOR, (g) Prime Rate Notes, the Prime Rate, (h)
Treasury Rate Notes, the Treasury Rate, and (i) any other Floating Rate Note,
the interest rate formula which determines the variable rate at which such
Subordinated Note bears interest.
INTEREST RESET DATE:
The term "Interest Reset Date" shall mean, in the case of a Floating
Rate Note specified in the applicable Company Order as being reset (a) daily:
each Business Day; (b) weekly: the Wednesday of each week (with the exception of
weekly reset Treasury Rate Notes which reset the Tuesday of each week, except as
specified below); (c) monthly: the third Wednesday of each month (with the
exception of monthly reset Floating Rate Notes as to which the Eleventh District
Cost of Funds Rate is an applicable Interest Rate Basis which will reset on the
first calendar day of the month); (d) quarterly: the third Wednesday of March,
June, September and December; (e) semiannually: the third Wednesday of the two
months specified in the applicable Company Order; and (f) annually: the third
Wednesday of the month specified in the applicable Company Order. If any
Interest Reset Date for a Floating Rate Note would otherwise be a day which is
not a Business Day, such Interest Reset Date shall be postponed to the next
succeeding day that is a Business Day, except that in the case of a LIBOR Note,
if such Business Day is in the next succeeding calendar month, such Interest
Reset Date shall be the immediately preceding London Business Day. If, in the
case of a Treasury Rate Note, an Interest Reset Date shall fall on a day on
which the Treasury auctions Treasury Bills, then such Interest Reset Date shall
instead be the first Business Day immediately following such auction.
INTEREST RESET PERIOD:
The term "Interest Reset Period" shall mean for:
(a) each Floating Rate Note on which interest is reset
monthly, quarterly, semiannually or annually, and each Fixed Rate Note,
the period:
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<PAGE> 13
(1) beginning on and including the Original Issue
Date of such Subordinated Note or the most recent Interest
Payment Date on which interest was paid on such Subordinated
Note, and
(2) ending on but not including the next Interest
Payment Date or, for the last Interest Reset Period, the
Maturity Date, of such Subordinated Note;
(b) each Floating Rate Note on which interest is reset daily
or weekly, the period:
(1) beginning on and including the Original Issue
Date of such Floating Rate Note, or beginning on but excluding
the most recent Record Date through which interest was paid on
such Subordinated Note, and
(2) ending on and including the next Record Date or,
for the last Interest Reset Period, ending on but excluding
the Maturity Date, of such Subordinated Note;
PROVIDED, HOWEVER, that the first Interest Reset Period for any Subordinated
Note which has its Original Issue date after a Record Date and prior to its next
Interest Payment Date, shall begin on and include such Original Issue Date and
(i) end on and include the next Record Date for Floating Rate Notes on which
interest is reset daily or weekly, and (ii) end on but not include the second
Interest Payment Date after the Original Issue Date for all other Subordinated
Notes.
ISSUE PRICE:
The term "Issue Price" shall mean the price expressed as a percentage
of the aggregate principal amount of a Subordinated Note at which such
Subordinated Note is issued.
LIBOR:
The term "LIBOR" for a particular Floating Rate Note, unless otherwise
indicated in the applicable Company Order, shall mean, with respect to any LIBOR
Interest Determination Date, the rate determined:
(i) With respect to any LIBOR Interest Determination Date,
LIBOR shall be either: (a) if "LIBOR Telerate" is specified in the
applicable Company Order or if neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified in the applicable Company Order as the method
for calculating LIBOR, the rate for deposits in the Designated LIBOR
Currency having the Index Maturity specified in such Company Order,
commencing on such Interest Reset Date, that appears on the Designated
LIBOR Page as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date; or (b) if "LIBOR Reuters" is specified in the
applicable Pricing Supplement, the arithmetic mean of the offered rates
(unless the Designated LIBOR Page by its terms provides only for a
single rate, in which case such single rate shall be used) for deposits
in the Designated LIBOR Currency having the Index Maturity specified in
such Pricing Supplement, commencing on the applicable Interest Reset
Date, that appear (or, if only a single rate is required as aforesaid,
appears) on the Designated LIBOR Page as of 11:00 A.M., London time, on
such LIBOR Interest Determination Date. If fewer than two such offered
rates so appear, or if no such rate so appears, as applicable, LIBOR on
such LIBOR Interest Determination Date shall be determined in
accordance with the provisions described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on
which fewer than two offered rates appear, or no rate appears, as the
case may be, on the Designated LIBOR Page as
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<PAGE> 14
specified in clause (i) above, the Calculation Agent will request the
principal London offices of each of four major reference banks (which
may include affiliates of the Agents) in the London interbank market,
as selected by the Calculation Agent, to provide the Calculation Agent
with its offered quotation for deposits in the Designated LIBOR
Currency for the period of the Index Maturity specified in the
applicable Pricing Supplement, commencing on the applicable Interest
Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest
Determination Date and in a principal amount that is representative for
a single transaction in the Designated LIBOR Currency in such market at
such time. If at least two such quotations are so provided, then LIBOR
on such LIBOR Interest Determination Date shall be the arithmetic mean
of such quotations. If fewer than two such quotations are so provided,
then LIBOR on such LIBOR Interest Determination Date shall be the
arithmetic mean of the rates quoted at approximately 11:00 A.M., in the
applicable Principal Financial Center, on such LIBOR Interest
Determination Date by three major banks (which may include affiliates
of the Agents) in such Principal Financial Center selected by the
Calculation Agent for loans in the Designated LIBOR Currency to leading
European banks, having the Index Maturity specified in the applicable
Company Order and in a principal amount that is representative for a
single transaction in the Designated LIBOR Currency in such market at
such time; provided, however, that if the banks so selected by the
Calculation Agent are not quoting as mentioned in this sentence, LIBOR
determined as of such LIBOR Interest Determination Date shall be LIBOR
in effect on such LIBOR Interest Determination Date.
LIBOR INTEREST DETERMINATION DATE:
The term "LIBOR Interest Determination Date" shall mean the Interest
Determination Date pertaining to a LIBOR Note.
LIBOR NOTES:
The term "LIBOR Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to LIBOR.
LONDON BUSINESS DAY:
The term "London Business Day" shall mean any day on which dealings in
the Designated LIBOR Currency are transacted in the London interbank market.
MATURITY DATE:
The term "Maturity Date," when used with respect to any Subordinated
Note, shall mean the date on which the principal of such Subordinated Note or an
installment of principal becomes due and payable in accordance with its terms
and the terms of this Indenture as therein or herein provided, whether at Stated
Maturity, upon declaration of acceleration, call for redemption, repayment at
the option of the Holder or otherwise.
MAXIMUM INTEREST RATE:
The term "Maximum Interest Rate" shall mean the maximum rate of
interest, if any, which may be applicable to any Floating Rate Note during any
Interest Accrual Period as specified in the applicable Company Order.
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<PAGE> 15
MINIMUM INTEREST RATE:
The term "Minimum Interest Rate" shall mean the minimum rate of
interest, if any, which may be applicable to any Floating Rate Note during any
Interest Accrual Period as specified in the applicable Company Order.
MONEY MARKET YIELD:
The term "Money Market Yield" shall be the yield (expressed as a
percentage) calculated in accordance with the following formula:
Money Market Yield = [(D x 360)/(360 - (D x M))] x 100
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable Interest Reset Period.
NOTEHOLDER; HOLDER:
The terms "Noteholder" or "Holder" shall mean any Person in whose name
at the time a particular Subordinated Note is registered in the register of the
Company kept for that purpose in accordance with the terms hereof.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" when used with respect to the Company,
shall mean a certificate signed by the Chairman of the Board, the President or
any Vice President and by the Secretary or an Assistant Secretary of the
Company.
OPTIONAL INTEREST RESET DATE:
The term "Optional Interest Reset Date" shall mean each date on which
the interest rate on a Fixed Rate Reset Note or the Spread and/or Spread
Multiplier of a Floating Rate Reset Note may be reset at the option of the
Company.
ORIGINAL ISSUE DATE:
The term "Original Issue Date" shall mean for a particular Subordinated
Note, or portions thereof, the date upon which it, or such portion, was issued
by the Company pursuant to this Indenture or any indenture supplemental thereto
and authenticated by the Trustee (other than in connection with a transfer,
exchange or substitution).
ORIGINAL ISSUE DISCOUNT NOTE:
The term "Original Issue Discount Note" shall mean (i) a Subordinated
Note that has a "stated redemption price at maturity" that exceeds its "issue
price", each as defined for United States federal income tax purposes, by at
least 0.25% of its stated redemption price at maturity multiplied by the number
of complete years from the Original Issue Date to the Stated Maturity for such
Subordinated Note (or in the case of a Subordinated Note that provides for
payment of any amount other than the "qualified stated interest", as defined for
United States federal income tax purposes, prior to maturity, the weighted
average maturity
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<PAGE> 16
of the Subordinated Note) and (ii) any other Subordinated Note designated by the
Company in the applicable Company Order as issued with original issue discount
for United States federal income tax purposes.
PERSON:
The term "Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
PRIME RATE:
The term "Prime Rate" for a particular Floating Rate Note, unless
otherwise indicated in the applicable Company Order, shall mean, with respect to
any Prime Rate Interest Determination Date, the rate on such date as published
in H.15(519) under the caption "Bank Prime Loan" or, if not published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such
Prime Rate Interest Determination Date as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of displaying such
rate, under the caption "Bank Prime Loan." If such rate is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the Prime Rate
shall be the arithmetic mean of the rates of interest publicly announced by each
bank that appears on the Reuters Screen USPRIME1 Page (as hereinafter defined)
as such bank's prime rate or base lending rate as of 11:00 A.M., New York City
time, on such Prime Rate Interest Determination Date. If fewer than four such
rates appear on the Reuters Screen USPRIME1 Page for such Prime Rate Interest
Determination Date, then the Prime Rate shall be the arithmetic mean of the
prime rates or base lending rates quoted on the basis of the actual number of
days in the year divided by a 360-day year as of the close of business on such
Prime Rate Interest Determination Date by four major money center banks (which
may include affiliates of the Agents) in The City of New York selected by the
Calculation Agent. If fewer than four such quotations are so provided, then the
Prime Rate shall be the arithmetic mean of four prime rates quoted on the basis
of the actual number of days in the year divided by a 360-day year as of the
close of business on such Prime Rate Interest Determination Date as furnished in
The City of New York by the major money center banks, if any, that have provided
such quotations and by a reasonable number of substitute banks or trust
companies (which may include affiliates of the Agents) to obtain four such prime
rate quotations, provided such substitute banks or trust companies are organized
and doing business under the laws of the United States, or any State thereof,
each having total equity capital of at least $500 million and being subject to
supervision or examination by Federal or State authority, selected by the
Calculation Agent to provide such rate or rates; provided, however, that if the
banks or trust companies so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Prime Rate determined as of such Prime Rate
Interest Determination Date will be the Prime Rate in effect on such Prime Rate
Interest Determination Date.
PRIME RATE NOTES:
The term "Prime Rate Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to the Prime Rate.
PRINCIPAL AMOUNT:
The term "principal amount" with respect to any Subordinated Note shall
mean the principal amount thereof set forth in the applicable Company Order;
PROVIDED that in the case of any Original Issue Discount Note, its principal
amount as of (i) any date that the principal amount of such Subordinated Note is
to be repaid prior to its Stated Maturity, whether upon declaration of
acceleration, call for redemption,
-15-
<PAGE> 17
repayment at the option of the Noteholder or otherwise, or (ii) any date that
any consent, notice, request, direction, waiver or suit by the Noteholders shall
be deemed to be given, made or commenced under this Indenture, such term shall
mean the Amortized Face Amount of such Subordinated Note as of such date.
PRINCIPAL FINANCIAL CENTER:
The term "Principal Financial Center" shall mean the capital city of
the country to which the Designated LIBOR Currency relates (or, in the case of
ECU, Luxembourg), except that with respect to United States dollars, Australian
dollars, Canadian dollars, Deutsche marks, Dutch guilders, Portuguese escudos,
South African rand and Swiss francs, the "Principal Financial Center" shall be
The City of New York, Sydney, Toronto, Frankfurt, Amsterdam, London,
Johannesburg and Zurich, respectively
RECORD DATE:
The term "Record Date" shall mean for the Interest Payment Date for the
payment of interest for an Interest Reset Period for a particular Subordinated
Note, unless otherwise specified in the applicable Company Order, (a) the day
which is fifteen calendar days immediately prior to such Interest Payment Date,
whether or not such day is a Business Day, (b) the Maturity Date of such
Subordinated Note, unless such Maturity Date for a Fixed Rate Note is a January
1 or a July 1, in which event the Record Date will be as provided in clause (a),
and (c) a date which is not less than five Business Days immediately preceding
the Interest Payment Date of defaulted interest on such Subordinated Note
established by notice given by first-class mail by or on behalf of the Company
to the Holder of such Subordinated Note not less than fifteen calendar days
prior to such Interest Payment Date.
REDEMPTION DATE:
The term "Redemption Date" for a Subordinated Note shall mean the date
fixed for the redemption of such Subordinated Note in accordance with the
provisions of this Indenture.
RESET NOTE:
The term "Reset Note" shall mean a Fixed Rate Note, with respect to
which the Company has the option to reset the interest rate, and a Floating Rate
Note, with respect to which the Company has the option to reset the Spread
and/or Spread Multiplier.
REUTERS SCREEN USPRIME1 PAGE:
The term "Reuters Screen USPRIME1" shall mean the display designated as
page "USPRIME1" on the Reuters Monitor Money Rate Service (or such other page
which may replace the USPRIME1 page on such service) for the purpose of
displaying the prime rate or base lending rate of major United States banks.
SPREAD:
The term "Spread" applicable to a particular Floating Rate Note shall
mean the number of Basis Points to be added to or subtracted from the related
Interest Rate Basis or Bases applicable to such Floating Rate Note as specified
in the applicable Company Order, used in the calculation of the Interest Rate
for such Floating Rate Note.
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<PAGE> 18
SPREAD MULTIPLIER:
The term "Spread Multiplier" applicable to a particular Floating Rate
Note shall mean the percentage of the related Interest Rate Basis or Bases
applicable to such Floating Rate Note as specified in the applicable Company
Order, used in the calculation of the Interest Rate for such Floating Rate Note.
STATED MATURITY:
The term "Stated Maturity," when used with respect to any Subordinated
Note, shall mean the date specified in such Subordinated Note as the date on
which the principal of such Subordinated Note is due and payable.
TREASURY:
The term "Treasury" shall mean the United States Department of
Treasury.
TREASURY BILLS:
The term "Treasury Bills" shall mean direct obligations of the United
States.
TREASURY RATE:
The term "Treasury Rate" for a particular Floating Rate Note, unless
otherwise indicated in the applicable Company Order, shall mean, with respect to
any Treasury Rate Interest Determination Date, the rate from the auction held on
such Treasury Rate Interest Determination Date (the "Auction") of Treasury Bills
having the Index Maturity specified in the applicable Company Order under the
caption "AVGE INVEST YIELD" on the display on Bridge Telerate, Inc. (or any
successor service) on page 56 ("Telerate Page 56") or page 57 ("Telerate Page
57") or, if not so published by 3:00 P.M., New York City time, on the related
Calculation Date, the auction average rate of such Treasury Bills (expressed as
a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury. In the event that the results of the Auction of Treasury Bills
having the Index Maturity specified in the applicable Company Order are not so
published by 3:00 P.M., New York City time, on the related Calculation Date, or
if no such Auction is held, then the Treasury Rate shall be the rate (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) on such Treasury Rate Interest Determination Date
of Treasury Bills having the Index Maturity specified in the applicable Company
Order as published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market" or, if not yet published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such
Treasury Rate Interest Determination Date of such Treasury Bills as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market." If such rate is not yet published
in H.15(519), H.15 Daily Update or another recognized electronic source, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be a
yield to maturity (expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Treasury Rate Interest Determination Date, of three leading
primary United States government securities dealers (which may include the
Agents or their affiliates) selected by the Calculation Agent, for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity specified
in the applicable Company Order; provided, however, that if the dealers so
selected by the Calculation Agent are not quoting as mentioned in this sentence,
the Treasury Rate determined as of such Treasury Rate Interest Determination
Date shall be the Treasury Rate in effect on such Treasury Rate Interest
Determination Date.
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<PAGE> 19
TREASURY RATE NOTES:
The term "Treasury Rate Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to the Treasury Rate.
TRUSTEE:
The term "Trustee" shall mean Chase Bank of Texas, National Association
and shall also include any successor Trustee.
YIELD TO MATURITY:
The term "Yield to Maturity" shall mean for a particular Subordinated
Note the yield to maturity of such Subordinated Note, computed in accordance
with generally accepted United States bond yield computation principles and
expressed as a percentage, specified in the applicable Company Order.
ZERO COUPON NOTE:
The term "Zero Coupon Note" means a Subordinated Note issued at a price
representing a discount from the principal amount payable at maturity and
bearing a zero fixed rate of interest.
ARTICLE TWO
Terms and Issuance of the Subordinated Notes
Section 2.01. Issuance and Designation. A Series of Subordinated Debt
Securities which shall be designated as the Company's "Subordinated Medium-Term
Notes, Series A" shall be executed, authenticated and delivered from time to
time in accordance with the provisions of, and shall in all respects be subject
to, the terms, conditions and covenants of, the Indenture and this Indenture
Supplement (including the form of Subordinated Notes set forth in Exhibits A and
B). The aggregate principal amount of the Subordinated Notes which may be
authenticated and delivered under the Indenture Supplement shall not, except as
permitted by the provisions of the Indenture, exceed $250,000,000.
Section 2.02. Form and Other Terms of Subordinated Notes; Incorporation
of Terms. (a) Subject to subsection (b) below, the Subordinated Notes shall be
in the form attached hereto as Exhibits A and B, respectively. The Subordinated
Notes shall be registered in such names, shall be in such amounts and shall have
such Original Issue Dates, Interest Rates, Maturity Dates, Redemption Dates, if
any, Initial Redemption Percentages, if any, and Annual Redemption Percentage
Reductions, if any, and such other terms as are communicated by the Company to
the Trustee in accordance with the Administrative Procedures described in the
Distribution Agreement, dated August 17, 1999, between the Company and the
agents named therein. The terms of such Subordinated Notes are herein
incorporated by reference and are part of this Indenture Supplement.
(b) Any Subordinated Note may be issued without the consent of the
Holders of any Subordinated Notes in any such other form or forms and have such
other term or terms that may be established consistent with the Indenture and
this Indenture Supplement, including, but not limited to, Subordinated Notes
denominated in a foreign currency ("Foreign Currency Subordinated Notes"), and
Subordinated Notes that initially bear interest at a fixed rate or floating rate
through a certain date and then
-18-
<PAGE> 20
bear interest as established by a remarketing agent for either a period of 365
days or less or a period of more than 365 days ("Remarketed Subordinated
Notes").
Section 2.03. Depository for Global Securities. The Depositary for any
Global Securities of the series of which a Subordinated Note is a part shall be
the Depository Trust Company in The City of New York.
Section 2.04. Place of Payment. The Place of Payment in respect of the
Subordinated Notes will be at the principal office or agency of the Company in
Dallas, Texas or at the office or place of business of the Trustee or its
successor in trust under the Indenture, which, at the date hereof, is located at
Chase Global Trust, 450 W. 33rd, 15th Floor, New York, New York 10001.
ARTICLE THREE
Defeasance
Section 3.01. Option to Effect Legal Defeasance. The Company may, at
any time, with respect to the Subordinated Notes, elect to have either Section
13.01 of the Indenture or Section 3.02 of this Indenture Supplement be applied
to all outstanding Subordinated Notes upon compliance with the conditions set
forth in Article Thirteen of the Indenture and below in this Article Three.
Section 3.02. Legal Defeasance. Upon the Company's exercise under
Section 3.01 of this Indenture Supplement of the option applicable to Section
13.01 of the Indenture, the Company may terminate its obligations under the
Subordinated Notes, the Indenture and this Indenture Supplement by complying
with the terms and conditions of Section 13.01 of the Indenture; provided,
however, that the Opinion of Counsel delivered to the Trustee will also state
that either (A) the Company has received from, or there has been published by,
the Internal Revenue Service, a ruling or (B) since the date hereof, there has
been a change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that, the
holders of the outstanding Subordinated Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance had not occurred.
ARTICLE FOUR
Miscellaneous
Section 4.01. Ratification of Indenture. As supplemented by this
Indenture Supplement, the Indenture is in all respects ratified and confirmed
and the Indenture as so supplemented by this Indenture Supplement shall be read,
taken and construed as one and the same instrument.
Section 4.02. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture Supplement by any of the provisions of
the Trust Indenture Act, such required provisions shall control.
Section 4.03. Effect of Headings. The article and section headings
herein are included for convenience only and shall not affect the construction
hereof.
-19-
<PAGE> 21
Section 4.04. Counterparts. This Indenture Supplement may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
Section 4.05. Severability. In case any provision of this Indenture
Supplement or in the Subordinated Notes shall be found invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 4.06. Benefits of Indenture Supplement. Nothing in this
Indenture Supplement or in the Subordinated Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture Supplement.
Section 4.07. Acceptance of Trusts. Chase Bank of Texas, National
Association hereby accepts the trusts in this Indenture Supplement declared and
provided, upon the terms and conditions herein and in the Indenture set forth.
Section 4.08. Governing Law. This Indenture Supplement and each
Subordinated Note issued hereunder shall be deemed to be a contract made under
the laws of the State of Texas, and for all purposes shall be construed in
accordance with the laws of said State.
[Remainder of page intentionally left blank.]
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<PAGE> 22
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Indenture Supplement to be duly executed by their respective officers thereunto
duly authorized and their respective seals duly attested to be hereunto affixed
all as of the day and year first above written.
CENTEX CORPORATION
[SEAL]
Attest: By:
---------------------------------------
Vicki A. Roberts
Vice President and Treasurer
- -------------------------------
Drew F. Nachowiak
Assistant Secretary
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
[SEAL]
Attest: By:
---------------------------------------
Name:
Title:
- -------------------------------
Name:
Title:
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<PAGE> 23
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, a Notary Public in and for said
state, on this day personally appeared Vicki A. Roberts and Drew F. Nachowiak,
known to me to be the persons and officers whose names are subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said CENTEX CORPORATION, a Nevada corporation, and that they executed the same
as the act of said corporation for the purposes and consideration therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 17th day of August, 1999.
-------------------------------------------
Notary Public in and for the State of Texas
My commission expires:
-------------------------------------------
Printed Name of Notary Public
- ---------------------------
STATE OF TEXAS )
)
COUNTY OF DALLAS )
BEFORE ME, the undersigned authority, a Notary Public in and for said
state, on this day personally appeared ________________ and ________________,
known to me to be the persons and officers whose names are subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking association,
and that they executed the same as the act of said national banking association
for the purposes and consideration therein expressed, and in the capacity
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 17th day of August, 1999.
-------------------------------------------
Notary Public in and for the State of Texas
My commission expires:
-------------------------------------------
Printed Name of Notary Public
- ---------------------------
-22-
<PAGE> 1
EXHIBIT 12.1
CENTEX CORPORATION
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
TOTAL COMPANY
(including CMO's and Savings and Loan)
<TABLE>
<CAPTION>
QTR. ENDED QTR. ENDED YEAR ENDED
06/30/99 06/30/98 03/31/99
---------- ---------- ----------
<S> <C> <C> <C>
FIXED CHARGES
(A) Interest Expensed and Capitalized 28,483 27,778 118,451
(B) Amortized Premiums, Discounts and
capitalized interest related to indebtedness included in (A) included in (A) included in (A)
(C) An estimate of the interest within
rental expense 2,551 1,904 10,457
(D) Preference security dividend requirements
of consolidated subsidiaries N/A N/A N/A
Additional Adjustments:
External Interest (CMO's) -- -- --
Amortization of discount and capitalized expense (CMO's) -- -- --
---------- ---------- ----------
TOTAL FIXED CHARGES $ 31,034 $ 29,682 $ 128,908
========== ========== ==========
EARNINGS
ADD:
(A) Pre-tax earnings 93,110 76,722 373,294
Add back: minority interest in consolidated subsidiaries 14,114 12,408 53,613
Adjust for income or loss from equity investees
Subtract : CDC earnings (add back losses) (20) 346 (430)
Subtract : CXP earnings -- -- --
---------- ---------- ----------
107,204 89,476 426,477
(B) Add back: fixed charges 31,034 29,682 128,908
(C) Add back: Amortization of capitalized interest -- -- --
(D) Add back: distributed income of equity investee N/A N/A N/A
(E) Your share of pre-tax losses of equity investees for which charges
arising from guarantees are included
in fixed charges. -- -- --
---------- ---------- ----------
138,238 119,158 555,385
SUBTRACT
(A) Capitalized Interest -- -- --
(B) Preference security dividend requirements of
consolidated subsidiaries N/A N/A N/A
(C) Minority interest in pre-tax income of subsidiaries
that have not incurred fixed charges -- -- --
---------- ---------- ----------
NET EARNINGS $ 138,238 $ 119,158 $ 555,385
========== ========== ==========
RATIO 4.45 4.01 4.31
<CAPTION>
CENTEX CORPORATION
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
TOTAL COMPANY
(including CMO's and Savings and Loan) YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
03/31/98 03/31/97 03/31/96 03/31/95
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
FIXED CHARGES
(A) Interest Expensed and Capitalized 78,128 65,517 69,724 58,771
(B) Amortized Premiums, Discounts and
capitalized interest related to indebtedness included in (A) included in (A) included in (A) included in (A)
(C) An estimate of the interest within
rental expense 7,886 6,182 4,331 5,162
(D) Preference security dividend requirements
of consolidated subsidiaries N/A N/A N/A N/A
Additional Adjustments:
External Interest (CMO's) -- -- 973 1,267
Amortization of discount and capitalized expense (CMO's) -- -- 86 136
---------- ---------- ---------- ----------
TOTAL FIXED CHARGES $ 86,014 $ 71,699 $ 75,114 $ 65,336
========== ========== ========== ==========
EARNINGS
ADD:
(A) Pre-tax earnings 231,634 163,734 87,786 145,788
Add back: minority interest in consolidated subsidiaries 43,447 31,690 -- --
Adjust for income or loss from equity investees
Subtract : CDC earnings (add back losses) (3,577) (925) (277) 727
Subtract : CXP earnings -- -- (25,628) (16,577)
---------- ---------- ---------- ----------
271,504 194,499 61,881 129,938
(B) Add back: fixed charges 86,014 71,699 75,114 65,336
(C) Add back: Amortization of capitalized interest -- -- -- --
(D) Add back: distributed income of equity investee N/A N/A N/A N/A
(E) Your share of pre-tax losses of equity investees for
which charges arising from guarantees are included
in fixed charges. -- -- -- --
---------- ---------- ---------- ----------
357,518 266,198 136,995 195,274
SUBTRACT
(A) Capitalized Interest -- -- -- --
(B) Preference security dividend requirements of
consolidated subsidiaries N/A N/A N/A N/A
(C) Minority interest in pre-tax income of subsidiaries
that have not incurred fixed charges -- -- -- --
NET EARNINGS $ 357,518 $ 266,198 $ 136,995 $ 195,274
========== ========== ========== ==========
RATIO 4.16 3.71 1.82 2.99
</TABLE>
<PAGE> 2
CENTEX CORPORATION
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
TRADITIONAL
(Excluding CMO's and Savings and Loan)
<TABLE>
<CAPTION>
QTR. ENDED QTR. ENDED YEAR ENDED
06/30/99 06/30/98 03/31/99
---------- ---------- ----------
<S> <C> <C> <C>
FIXED CHARGES
(A) Interest Expensed and Capitalized 11,828 8,193 41,581
(B) Amortized Premiums, Discounts and
capitalized interest related to indebtedness included in (A) included in (A) included in (A)
(C) An estimate of the interest within
rental expense 2,551 1,904 10,457
(D) Preference security dividend requirements
of consolidated subsidiaries N/A N/A N/A
---------- ---------- ----------
TOTAL FIXED CHARGES $ 14,379 $ 10,097 $ 52,038
========== ========== ==========
EARNINGS
ADD:
(A) Pre-tax earnings 93,110 76,722 373,294
Add back: minority interest in consolidated subsidiaries 14,114 12,408 53,613
Adjust for income or loss from equity investees
Subtract: Financial Services earnings (20,723) (23,712) (92,309)
Subtract : CDC earnings (add back losses) (20) 346 (430)
Subtract : CXP earnings -- -- --
Adjust for CFMC (earnings) loss (52) (50) (203)
---------- ---------- ----------
86,429 65,714 333,965
(B) Add back: fixed charges 14,379 10,097 52,038
(C) Add back: Amortization of capitalized interest -- -- --
(D) Add back: distributed income of equity investee N/A N/A N/A
(E) Your share of pre-tax losses of equity investees for which charges
arising from guarantees are included
in fixed charges. -- -- --
---------- ---------- ----------
100,808 75,811 386,003
SUBTRACT
(A) Capitalized Interest -- -- --
(B) Preference security dividend requirements of
consolidated subsidiaries N/A N/A N/A
(C) Minority interest in pre-tax income of subsidiaries
that have not incurred fixed charges -- -- --
---------- ---------- ----------
TOTAL EARNINGS $ 100,808 $ 75,811 $ 386,003
========== ========== ==========
RATIO OF EARNINGS TO FIXED CHARGES 7.01 7.51 7.42
<CAPTION>
CENTEX CORPORATION
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
TRADITIONAL
(Excluding CMO's and Savings and Loan) YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
03/31/98 03/31/97 03/31/96 03/31/95
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
FIXED CHARGES
(A) Interest Expensed and Capitalized 33,256 34,062 40,862 33,014
(B) Amortized Premiums, Discounts and
capitalized interest related to indebtedness included in (A) included in (A) included in (A) included in (A)
(C) An estimate of the interest within
rental expense 7,886 6,186 4,331 5,162
(D) Preference security dividend requirements
of consolidated subsidiaries N/A N/A N/A N/A
---------- ---------- ---------- ----------
TOTAL FIXED CHARGES $ 41,142 $ 40,248 $ 45,193 $ 38,176
========== ========== ========== ==========
EARNINGS
ADD:
(A) Pre-tax earnings 231,634 163,734 87,786 145,788
Add back: minority interest in consolidated subsidiaries 43,447 31,690 -- --
Adjust for income or loss from equity investees
Subtract: Financial Services earnings (31,371) (24,410) (17,155) (9,399)
Subtract : CDC earnings (add back losses) (3,577) (925) (277) 727
Subtract : CXP earnings -- -- (25,628) (16,577)
Adjust for CFMC (earnings) loss (191) (191) (15) (21)
---------- ---------- ---------- ----------
239,942 169,898 44,711 120,518
(B) Add back: fixed charges 41,142 40,248 45,193 38,176
(C) Add back: Amortization of capitalized interest -- -- -- --
(D) Add back: distributed income of equity investee N/A N/A N/A N/A
(E) Your share of pre-tax losses of equity investees for
which charges arising from guarantees are included
in fixed charges. -- -- -- --
---------- ---------- ---------- ----------
281,084 210,146 89,904 158,694
SUBTRACT
(A) Capitalized Interest -- -- -- --
(B) Preference security dividend requirements of
consolidated subsidiaries N/A N/A N/A N/A
(C) Minority interest in pre-tax income of subsidiaries
that have not incurred fixed charges -- -- -- --
---------- ---------- ---------- ----------
TOTAL EARNINGS $ 281,084 $ 210,146 $ 89,904 $ 158,694
========== ========== ========== ==========
RATIO OF EARNINGS TO FIXED CHARGES 6.83 5.22 1.99 4.16
</TABLE>
