As Filed with the Securities and Exchange Commission on _____________, 1997
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
M.D.C. Holdings, Inc.
Co-Registrants are listed after the cover page.
(Exact name of registrant as specified in charter)
Delaware 84-0622967
(State or other jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or organization)
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
(303) 773-1100
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
Daniel S. Japha, Esq. Copy to:
Secretary and General Counsel - Corporate Nick Nimmo, Esq.
M.D.C. Holdings, Inc. Holme Roberts & Owen LLP
3600 S. Yosemite Street, Suite 900 1700 Lincoln Street, Suite 4100
Denver, Colorado 80237 Denver, Colorado 80203
(303) 773-1100 (303) 861-7000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered in connection with
dividend or interest reinvestment plans, check the following box. /x /
<PAGE>
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement from the same offering. / / ..............
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / / ..............
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of each class of Proposed maximum Amount of
securities to be aggregate offering registration fee
registered price
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities, Preferred Stock, $300,000,000<F1> $90,909.09
Common Stock
Guarantees of the Debt Securities
by subsidiaries of M.D.C. Holdings, Inc.<F2> --- ---<F3>
- ----------------------------
<F1> Estimated solely for purposes of determining the registration fee.
<F2> See the following page for a list of the subsidiary guarantors.
<F3> Pursuant to Rule 457(n) under the Securities Act of 1933, no separate
fee for the guarantees is payable.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
===============================================================================
The following subsidiaries of Registrant may guarantee the Debt
Securities and are Co-Registrants under this Registration Statement.
<TABLE>
<CAPTION>
Jurisdiction of
Name of Incorporation I.R. S. Employer
Co-Registrant or Organization Identification No.
------------- --------------- ------------------
<S> <C> <C>
RICHMOND AMERICAN HOMES OF CALIFORNIA, INC. COLORADO 77-0084376
RICHMOND AMERICAN HOMES OF MARYLAND, INC. MARYLAND 52-0814857
RICHMOND AMERICAN HOMES OF NEVADA, INC. COLORADO 88-0227698
RICHMOND AMERICAN HOMES OF VIRGINIA, INC. VIRGINIA 54-0570445
RICHMOND AMERICAN HOMES OF ARIZONA, INC. DELAWARE 86-0277026
RICHMOND AMERICAN HOMES OF COLORADO, INC. DELAWARE 84-1256155
</TABLE>
<PAGE>
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Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
- -------------------------------------------------------------------------------
PROSPECTUS
------------
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED , 1997
----------
$300,000,000
[GRAPHIC OMITTED]
M.D.C. HOLDINGS, INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
---------
M.D.C. Holdings, Inc. ("MDC" or the "Company") may offer from time to
time in one or more series: (i) its unsecured debt securities ("Debt
Securities"), (ii) shares of its preferred stock, $.01 par value per share
("Preferred Stock") and (iii) shares of its common stock, $.01 par value per
share ("Common Stock"), with an aggregate public offering price of up to
$300,000,000 in amounts, at prices and on terms to be determined at the time of
offering. The Debt Securities, Preferred Stock and Common Stock (collectively,
the "Securities") may be offered separately or together, in separate series, in
amounts, at prices and on terms to be set forth in one or more supplements to
this Prospectus (each, a "Prospectus Supplement").
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<PAGE>
The specific terms of the Securities for which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement. In the case
of Debt Securities, the specific terms will include the title, aggregate
principal amount, ranking, form (which may be registered or bearer, or
certificated or global), authorized denominations, maturity, rate (or manner of
calculation thereof) and time of payment of interest, guarantees thereof (if
any), terms for redemption at the option of the Company or repayment at the
option of the holder, terms for sinking fund payments, terms for conversion into
Common Stock or Preferred Stock, covenants and any initial public offering
price. In the case of Preferred Stock, the specific terms to be described in a
Prospectus Supplement will include the designation and stated value per share,
any dividend, liquidation, redemption, conversion, voting and other rights, and
any initial public offering price. In the case of Common Stock, the specific
terms to be described in a Prospectus Supplement will include any initial public
offering price.
The applicable Prospectus Supplement also will contain information,
where appropriate, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities covered
by such Prospectus Supplement.
The Securities may be offered by the Company directly to one or more
purchasers, through agents designated from time to time by the Company or to or
through underwriters or dealers. If any agents or underwriters are involved in
the sale of any of the securities, their names, and any applicable purchase
price, fee, commission or discount arrangement between or among them will be set
forth, or will be calculable from the information set forth, in an accompanying
Prospectus Supplement. See "Plan of Distribution." No Securities may be sold
without delivery of a Prospectus Supplement describing the method and terms of
the offering of such Securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
The date of this Prospectus is , 1997
-------------
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<PAGE>
AVAILABLE INFORMATION
The Company and certain of its subsidiaries that are co-registrants
have filed jointly with the Securities and Exchange Commission (the
"Commission") a registration statement (together with all amendments and
exhibits thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Securities that are
being offered by this Prospectus. This Prospectus is part of the Registration
Statement, but does not contain all of the information set forth in the
Registration Statement. Certain parts of the Registration Statement are omitted
from this Prospectus in accordance with the rules and regulations of the
Commission. For further information about the Company and the Securities,
interested persons are referred to the Registration Statement.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
with those requirements, MDC files reports, proxy and information statements and
other information with the Commission. The Registration Statement, as well as
such reports, proxy and information statements and other information filed by
the Company with the Commission, may be inspected and copied (at prescribed
rates) at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the Commission's
regional offices located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New
York, New York 10048. The Commission also maintains an Internet Web Site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding MDC that are filed electronically with the
Commission. In addition, such reports, proxy and information statements and
other information concerning the Company may be inspected at the offices of the
New York Stock Exchange, at 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission (File
No. 1-8951) pursuant to the Exchange Act are incorporated into this Prospectus
by reference:
(i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996; and
(ii) the Company's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 1997 and June 30, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Securities offered hereby (except for
portions of such documents not deemed to be filed) shall be deemed incorporated
by reference into this Prospectus and to be a part hereof from the date such
documents are filed.
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<PAGE>
Any statement contained in this Prospectus or in a document
incorporated or deemed to be incorporated by reference in this Prospectus will
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in the applicable Prospectus
Supplement or in any subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded will not be deemed to constitute a part
of this Prospectus, except as so modified or superseded.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of each document incorporated herein by reference (not including
the exhibits to those documents, unless the exhibits are specifically
incorporated by reference therein or herein). Requests for such copies should be
directed to: Daniel S. Japha, Secretary, M.D.C. Holdings, Inc., 3600 South
Yosemite Street, Suite 900, Denver, Colorado 80237, (303) 773-1100.
THE COMPANY
M.D.C. Holdings, Inc. is a Delaware corporation which originally was
incorporated in Colorado in 1972. The Company is one of the ten largest
homebuilders in the United States, building homes under the name "Richmond
American Homes." MDC is a major regional homebuilder, with a significant
presence in a number of selected growth markets. The Company is the largest
homebuilder in Denver; among the top five builders in Riverside County,
California, Northern Virginia, suburban Maryland, Tucson and Colorado Springs;
among the top ten builders in Phoenix; and has a growing presence in Orange,
Ventura, San Bernardino, Los Angeles and San Diego Counties, California and Las
Vegas. The Company also builds homes in Sacramento and the San Francisco Bay
area.
The Company's strategy is to build quality homes at affordable prices,
generally for the first-time and move-up buyer. Homes are constructed according
to designs based on local customer preferences. The Company, as the general
contractor, supervises construction of all of its projects and employs
subcontractors for site development and home construction. The Company generally
builds single-family detached homes except in Northern Virginia and suburban
Maryland, where MDC also builds a significant number of townhomes.
Homes are built and sold by wholly owned subsidiaries of the Company.
The base prices for these homes range from approximately $80,000 to $400,000,
although the Company builds homes with prices as high as $700,000. The Company's
average sales prices per home closed in 1996 and the first six months of 1997
were $177,000 and $178,900, respectively.
HomeAmerican Mortgage Corporation ("HomeAmerican"), a wholly owned
subsidiary of MDC, is a full service mortgage lender originating mortgage loans
primarily for MDC's
4
<PAGE>
home buyers through offices located in each of MDC's markets. As the principal
originator of mortgage loans for MDC's home buyers, HomeAmerican is an integral
part of MDC's homebuilding operations.
The principal executive offices of the Company are located at 3600 S.
Yosemite Street, Suite 900, Denver, Colorado 80237 (telephone (303) 773-1100).
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities
for general corporate purposes.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratio of earnings to
fixed charges for the Company for the periods indicated:
<TABLE>
<CAPTION>
Six Months
Ended
June 30, Fiscal Year Ended December 31,
---------------- ------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges
(unaudited) <F1>................. 2.02 1.89 2.02 1.79 1.81 1.71 1.61
- ---------------------------
<F1> In computing the ratio of earnings to fixed charges, fixed charges
consist of homebuilding and corporate interest expense plus (i)
amortization and expensing of debt expenses; (ii) amortization of
discount or premium relating to indebtedness; and (iii) capitalized
interest. Earnings are computed by adding fixed charges (except
capitalized interest) and amortization of previously capitalized
interest during the period to pretax earnings from continuing
operations.
</TABLE>
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities will be direct unsecured obligations of the Company
and may be either senior Debt Securities ("Senior Debt Securities"), senior
subordinated Debt Securities ("Senior Subordinated Debt Securities") or junior
subordinated Debt Securities ("Junior
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<PAGE>
Subordinated Debt Securities"). The Debt Securities will be issued under one or
more indentures, each dated as of a date prior to the issuance of the Debt
Securities to which the indenture relates. Senior Debt Securities, Senior
Subordinated Debt Securities and Junior Subordinated Debt Securities may be
issued pursuant to separate indentures (respectively, a "Senior Indenture", a
"Senior Subordinated Indenture" and a "Junior Subordinated Indenture"), in each
case between the Company and a trustee (the "Trustee"), which may be the same
Trustee, and in the form that has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part, subject to such amendments or
supplements as may be adopted from time to time. The Senior Indenture, the
Senior Subordinated Indenture and the Junior Subordinated Indenture, as amended
or supplemented from time to time, are sometimes hereinafter referred to
individually as an "Indenture" and collectively as the "Indentures." The
Indentures will be subject to and governed by the Trust Indenture Act of 1939,
as amended (the "TIA"). The statements made relating to the Debt Securities and
the Indentures are summaries of the anticipated provisions thereof, do not
purport to be complete and are qualified in their entirety by reference to the
Indentures, the applicable Prospectus Supplements and such Debt Securities.
Capitalized terms used herein and not defined shall have the meanings
assigned to them in the applicable Indenture.
TERMS
The Debt Securities will be direct, unsecured obligations of the
Company. The indebtedness represented by Senior Subordinated Debt Securities or
Junior Subordinated Debt Securities will be subordinated in right of payment to
the prior payment in full of senior Indebtedness of the Company. The particular
terms of the Debt Securities offered by a Prospectus Supplement and any
applicable federal income tax considerations will be described in the applicable
Prospectus Supplement. Accordingly, for a description of the terms of any series
of Debt Securities, reference must be made to both the Prospectus Supplement
relating thereto and the description of the Debt Securities set forth in this
Prospectus.
Except as set forth in any Prospectus Supplement, the Debt Securities
may be issued without limit as to aggregate principal amount, in one or more
series. Specific terms of each series of debt securities will be contained in
authorizing resolutions or a supplemental indenture and described in an
applicable Prospectus Supplement. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Debt Securities of such
series, for issuance of additional Debt Securities of such series.
The Prospectus Supplement relating to the series of Debt Securities
being offered will describe the specific terms of the Debt Securities. The
following summarizes certain general terms and provisions of the Indentures and
the Debt Securities.
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<PAGE>
(1) The title of such Debt Securities and whether such Debt
Securities are Senior Debt Securities, Senior Subordinated
Debt Securities or Junior Subordinated Debt Securities;
(2) The aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) The price (expressed as a percentage of the principal amount
thereof) at which such Debt Securities will be issued and, if
other than the principal amount thereof, the portion of the
principal amount thereof payable upon declaration of
acceleration of the maturity thereof, or (if applicable) the
portion of the principal amount of such Debt Securities that
is convertible into Common Stock or Preferred Stock, and the
method by which any such portion shall be determined;
(4) If convertible, the terms on which such Debt Securities are
convertible, including the initial conversion price or rate
and the conversion period and any applicable limitations on
the ownership or transferability of the Common Stock or
Preferred Stock receivable on conversion;
(5) The date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be
payable;
(6) The rate or rates (which may be fixed or variable), or the
method by which such rate or rates shall be determined, at
which such Debt Securities will bear interest, if any;
(7) The date or dates, or the method for determining such date or
dates, from which any such interest will accrue, the date or
dates on which any such interest will be payable, the record
date or dates for such interest payments, or the method by
which such date or dates shall be determined, the persons to
whom such interest shall be payable, and the basis upon which
interest shall be calculated if other than that of a 360-day
year of twelve 30-day months;
(8) The place or places where the principal of and interest, if
any, on such Debt Securities will be payable, where such Debt
Securities may be surrendered for registration of transfer or
exchange and where notices or demands to or upon the Company
in respect of such Debt Securities and the applicable
Indenture may be served;
(9) The period or periods, if any, within which, the price or
prices at which, and the other terms and conditions upon
which, such Debt Securities may, pursuant to
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<PAGE>
any optional or mandatory redemption provisions, be redeemed,
as a whole or in part, at the option of the Company;
(10) The obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or
analogous provision or at the option of a holder thereof, and
the period or periods within which, the price or prices at
which and the other terms and conditions upon which such Debt
Securities will be redeemed, repaid or purchased, as a whole
or in part, pursuant to such obligation;
(11) Any changes to the Events of Default (as defined in the
Indenture) of the Company with respect to Debt Securities of
the series, whether or not such Events of Default are
consistent with the Events of Default described herein;
(12) The applicability, if any, of the defeasance and covenant
defeasance provisions of the Indenture to the Debt Securities
of the series;
(13) Any guarantees by subsidiaries of the Company that may
guarantee the Debt Securities, including the terms of any
subordination of any such guarantee to other obligations of
the Company;
(14) Any other terms of the series (which terms shall not be
inconsistent with the provisions of the Indenture under which
the Debt Securities are issued).
If so provided in the applicable Prospectus Supplement, the Debt
Securities may be issued at a discount below their principal amount and provide
for less than the entire principal amount thereof to be payable upon declaration
of acceleration of the maturity thereof ("Original Issue Discount Securities").
In such cases, all material U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.
Except as may be set forth in any Prospectus Supplement, the Debt
Securities will not contain any provisions that would limit the ability of the
Company to incur indebtedness or that would afford holders of Debt Securities
protection in the event of a highly leveraged or similar transaction involving
the Company or in the event of a change of control. The applicable Prospectus
Supplement will contain information with respect to any deletions from,
modifications of, or additions to, the events of default or covenants of the
Company that are described below, including any addition of a covenant or other
provision providing event risk or similar protection.
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<PAGE>
CERTAIN COVENANTS
The applicable Prospectus Supplement will describe any material
covenants to which a series of Debt Securities will be subject.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The applicable Prospectus Supplement and each Indenture will provide
the events that constitute "Events of Default" with respect to any series of
Debt Securities issued thereunder, including the following: (a) default in the
payment of any interest on any Debt Security of such series when such interest
becomes due and payable that continues for a period of 30 days; (b) default in
the payment of the principal of any Debt Security of such series when due and
payable; (c) default in the performance, or breach of any other covenant or
warranty of the Company in the applicable Indenture with respect to the Debt
Securities of such series and continuance of such default or breach for a period
of 90 days after written notice as provided in the Indenture; and (d) any other
event of default provided with respect to a particular series of Debt
Securities.
If an Event of Default under any Indenture occurs and is continuing,
then the applicable Trustee or the holders of not less than 25% in principal
amount of the Debt Securities of that series will have the right to declare the
principal amount (or, if the Debt Securities of that series are Original Issue
Discount Securities or indexed securities, such portion of the principal amount
as may be specified in the terms thereof) of all the Debt Securities of that
series to be due and payable immediately by written notice thereof to the
Company (and to the applicable Trustee if given by the holders). However, at any
time after such a declaration of acceleration with respect to Debt Securities of
such series has been made, but before a judgment or decree for payment of the
money due has been obtained by the applicable Trustee, the holders of not less
than a majority of the principal amount of outstanding Debt Securities of such
series may rescind and annul the acceleration if all conditions set forth in the
applicable Indenture are met. The Indentures also will provide that the holders
of not less than a majority of the principal amount of the outstanding Debt
Securities of any series may waive any past default with respect to such series
and its consequences, except a default (i) in the payment of the principal of or
interest on any Debt Security of such series or (ii) in respect of a covenant or
provision contained in the applicable Indenture that cannot be modified or
amended without the consent of the holder of each outstanding Debt Security
affected thereby.
The Indentures will provide for other procedures that may be followed
by holders of Debt Securities, the Trustee of any series of Debt Securities, or
both, upon the occurrence of an Event of Default.
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<PAGE>
MODIFICATION OF THE INDENTURES
Modifications and amendments of an Indenture will be permitted only
with the consent of the holders of not less than a majority in principal amount
of all outstanding Debt Securities issued under such Indenture affected by such
modification or amendment. No such modification or amendment may, without the
consent of the holder of each such Debt Security affected thereby, (a) reduce
the amount of Debt Securities whose holders must consent to an amendment,
supplement or waiver; (b) reduce the rate of or change the time for payment of
interest, including defaulted interest, on any Debt Security; (c) reduce the
principal of or change the fixed maturity of any Debt Security or alter the
provisions (including related definitions) with respect to redemption of Debt
Securities or with respect to any obligations on the part of the Company to
offer to purchase or to redeem Debt Securities; (d) modify the ranking or
priority of the Debt Securities or any guarantee thereof; (e) release any
guarantor from any of its obligations under its guarantee otherwise than in
accordance with the terms of the applicable Indenture; (f) waive a continuing
Default or Event of Default in the payment of the principal of or interest on
any Debt Security; or (g) make any Debt Security payable at a place or in money
other than that stated in the Debt Security, or impair the right of any holder
of Debt Securities to bring suit.
The holders of a majority in aggregate principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive covenants of the applicable
Indenture.
Certain modifications and amendments of an Indenture will be permitted
to be made by the Company and the respective Trustee thereunder without the
consent of any holder of Debt Securities as set forth in the applicable
Indenture and as described in the applicable Prospectus Supplement.
SUBORDINATION
Senior Subordinated Debt Securities and Junior Subordinated Debt
Securities, if any, will be subject to the subordination provisions set forth in
the applicable Prospectus Supplement.
If this Prospectus is being delivered in connection with a series of
Senior Subordinated Debt Securities or Junior Subordinated Debt Securities, the
accompanying Prospectus Supplement or the information incorporated herein by
reference will set forth the approximate amount of Senior Indebtedness (as
defined in the applicable Indenture) outstanding as of the end of the Company's
most recent fiscal quarter.
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<PAGE>
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company will be permitted, at its option, to discharge certain obligations to
holders of any series of Debt Securities issued under any Indenture that have
not already been delivered to the applicable Trustee for cancellation by
irrevocably depositing with the applicable Trustee, in trust, funds in an amount
sufficient to pay the entire indebtedness on such Debt Securities in respect of
principal and interest to the date of such deposit (if such Debt Securities have
become due and payable) or to the stated maturity or redemption date, as the
case may be.
The Indentures will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Company may elect either (a) to defease
and be discharged from any and all obligations with respect to such Debt
Securities (except for the obligations to register the transfer or exchange of
such Debt Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of such Debt
Securities, and to hold moneys for payment in trust) ("defeasance") or (b) to be
released from certain obligations with respect to such Debt Securities under the
applicable Indenture or, if provided in the applicable Prospectus Supplement,
its obligations with respect to any other covenant, and any omission to comply
with such obligations shall not constitute an Event of Default with respect to
such Debt Securities ("covenant defeasance"), in either case upon the
irrevocable deposit by the Company with the applicable Trustee, in trust, of an
amount, which through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount sufficient to pay
the principal of and interest on such Debt Securities, and any mandatory sinking
fund or analogous payments thereon, on the scheduled due dates therefor.
Such a trust will be permitted to be established only if, among other
conditions, the Company has delivered to the applicable Trustee an opinion of
counsel to the effect that the holders of such Debt Securities will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to U.S. 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 or covenant defeasance had not
occurred. In the event of such defeasance, the holders of such Debt Securities
would thereafter be able to look only to such trust fund for payment of
principal and interest.
The applicable Prospectus Supplement may further describe the
provisions and additional conditions, if any, permitting such defeasance or
covenant defeasance, including any modifications to the provisions described
above, with respect to the Debt Securities or a particular series.
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<PAGE>
BOOK-ENTRY SYSTEM
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities ("Global Securities"). Global
Securities will be deposited with, or on behalf of, a depository (the
"Depository") identified in the Prospectus Supplement relating to such series.
Global Securities, if any, issued in the United States are expected to be
deposited with The Depository Trust Company ("DTC"). Global Securities may be
issued in fully registered form and may be issued in either temporary or
permanent form. Unless and until it is exchanged in whole or in part for the
individual Debt Securities represented thereby, a Global Security may not be
transferred except as a whole by the Depository for such Global Security to a
nominee of such Depository or by a nominee of such Depository to such Depository
or another nominee of such Depository or by such Depository or any nominee of
such Depositor to a successor Depository or any nominee of such successor. The
specific terms of the depository arrangement with respect to a series of Debt
Securities will be described in the Prospectus Supplement relating to such
series.
PAYMENT AND PAYING AGENTS
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of and interest on any series of Debt Securities will be payable at
the corporate trust office of the Trustee, the address of which will be stated
in the applicable Prospectus Supplement; provided that, at the option of the
Company, payment of interest may be made by check mailed to the address of the
person entitled thereto as it appears in the applicable register for such Debt
Securities or by wire transfer of funds to such person at an account maintained
within the United States.
All moneys paid by the Company to a paying agent or a Trustee for the
payment of the principal of or interest on any Debt Security which remain
unclaimed at the end of two years after such payment has become due and payable
will be repaid to the Company, and the holder of such Debt Security thereafter
may look only to the Company for payment thereof.
DESCRIPTION OF PREFERRED STOCK
The description of the Company's preferred stock, par value $.01 per
share("Preferred Stock"), set forth below does not purport to be complete and is
qualified in its entirety by reference to the Company's Certificate of
Incorporation, as amended (the "Certificate of Incorporation") and amended
By-laws (the "Bylaws").
GENERAL
Under the Certificate of Incorporation, the Company has authority to
issue up to 25 million shares of Preferred Stock, none of which were issued and
outstanding as of August 31,
12
<PAGE>
1997. Shares of Preferred Stock may be issued from time to time, in one or more
series, as authorized by the Board of Directors of the Company with any terms,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or
conditions of redemption (collectively, the "Terms of the Preferred Stock"), as
are determined by the Company's Board of Directors and permitted by Delaware
law. At such time as MDC's Board of Directors determines the Terms of the
Preferred Stock, such terms will be set forth in a Certificate of Designations
to be filed with the Secretary of State of Delaware. Upon filing, the
Certificate of Designations will constitute an amendment to the Certificate of
Incorporation pursuant to the Delaware General Corporation Law (the "DGCL"). The
Preferred Stock will, when issued, be fully paid and nonassessable and will have
no preemptive rights. The Company's Board of Directors could authorize the
issuance of shares of Preferred Stock with terms and conditions that could have
the effect of discouraging a takeover or other transaction that holders of
Common Stock might believe to be in their best interests or in which holders of
some, or a majority, of the shares of Common Stock might receive a premium for
their shares over the then market price of such shares of Common Stock.
TERMS
The Terms of the Preferred Stock will be described in any Prospectus
Supplement related to the Preferred Stock and may include the following:
(1) The title and stated value of such Preferred Stock;
(2) The number of shares of such Preferred Stock offered and the
offering price and liquidation preference per share of such
Preferred Stock;
(3) The dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred
Stock;
(4) The date from which dividends on such Preferred Stock shall
accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for
such Preferred Stock;
(6) The provision for a sinking fund, if any, for such Preferred
Stock;
(7) The provision for redemption, if applicable, of such Preferred
Stock;
(8) Any voting rights of holders of the Preferred Stock;
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<PAGE>
(9) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock;
(10) The relative ranking and preference of such Preferred Stock as
to dividend rights and rights upon liquidation, dissolution or
winding up of the affairs of the Company;
(11) Any limitations on issuance of any series of Preferred Stock
ranking senior to or on a parity with such series of Preferred
Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company; and
(12) The terms and conditions, if applicable, upon which such
Preferred Stock will be convertible into or participate in
dividends, if any, paid on the Common Stock, including the
conversion price (or manner of calculation thereof).
TRANSFER AGENT
The transfer agent and registrar for the Preferred Stock will be set
forth in the applicable Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The Company has authorized 100,000,000 shares of Common Stock, $.01 par
value ("Common Stock").
At September 12, 1997, approximately 23,493,919 shares of the Common
Stock were issued and approximately 17,590,763 shares were outstanding. Holders
of shares of Common Stock are entitled to one vote for each share held of record
on matters submitted to a vote of stockholders. Holders of shares of the Common
Stock do not have cumulative voting rights in the election of directors to the
Company's Board of Directors, which is divided into three classes, with members
of each class serving a three-year term.
A vote by the holders of a majority of shares of the Common Stock
present at a meeting at which a quorum is present is necessary to take action,
except for certain extraordinary matters which require the approval of the
holders of 80% of the outstanding shares of voting stock. In addition, certain
Business Combinations (as defined in the Company's Certificate of Incorporation,
but generally a merger or consolidation of the Company with any holder (directly
or indirectly) of more than 10% of the outstanding shares of voting stock of the
Company (an "Interested Stockholder") or certain related parties; the sale or
other disposition by the Company of any assets or securities to an Interested
Stockholder involving assets or securities having a value of $15,000,000 or more
than 15% of the book value of the total assets or 15% of the stockholders'
equity of the Company; the adoption of any plan or proposal for the
14
<PAGE>
liquidation or dissolution of the Company; the adoption of any amendment to the
Company's Bylaws; or any reclassification of securities, recapitalization,
merger with a subsidiary or other transaction which has the effect of increasing
an Interested Stockholder's proportionate ownership of the capital stock of the
Company) involving the Company and an Interested Stockholder, must be approved
by the holders of 80% of the shares of outstanding voting stock, unless approved
by a majority of Continuing Directors (as defined in the Certificate of
Incorporation) or unless certain minimum price and procedural requirements are
met. In the case of any Business Combination involving payments to holders of
shares of the Common Stock, the fair market value per share of such payments
would have to be at least equal to the highest value determined under the
following alternatives: (i) the highest price per share of the Common Stock paid
by or on behalf of the Interested Stockholder during the two years prior to the
public announcement of the proposed Business Combination (the "Announcement
Date") or in the transaction in which it became an Interested Stockholder,
whichever is higher; and (ii) the fair market value per share of the Common
Stock on the Announcement Date or on the date on which the Interested
Stockholder became an Interested Stockholder, whichever is higher. "Fair market
value" is defined in the Certificate of Incorporation to mean, in the case of
exchange-listed or NASDAQ-quoted stock, the highest closing price or closing bid
in the 30 days preceding the date in question, and, in the case of other
property, the fair market value as determined by a majority of the Continuing
Directors.
Subject to the preferences applicable to any then outstanding shares of
Preferred Stock of the Company, holders of shares of Common Stock are entitled
to dividends when and as declared by the Board of Directors of the Company from
funds legally available therefor and are entitled, in the event of liquidation,
to share ratably in all assets remaining after payment of liabilities. The
shares of Common Stock are neither redeemable nor convertible, and the holders
thereof have no preemptive or subscription rights to purchase any securities of
the Company. All issued and outstanding shares of Common Stock are validly
issued, fully paid and nonassessable.
The transfer agent and registrar for the Common Stock is Continental
Stock Transfer & Trust Company, New York, New York.
PLAN OF DISTRIBUTION
The Company may sell the Securities offered hereby (i) through agents;
(ii) through underwriters; (iii) through dealers; (iv) directly to purchasers
(through a specific bidding or auction process or otherwise); or (v) through a
combination of any such methods of sale. The distribution of Securities may be
effected from time to time in one or more transactions at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of the
sale, at prices relating to such prevailing market prices or at negotiated
prices.
Each Prospectus Supplement will set forth the terms of the offering of
the particular issuance of Securities to which such Prospectus Supplement
relates, including (i) the name
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<PAGE>
or names of any underwriters or agents with whom the Company has entered into
arrangements with respect to the sale of such Securities; (ii) the initial
public offering or purchase price of such Securities; (iii) any underwriting
discounts, commissions and other items constituting underwriters' compensation
from the Company and any other discounts, concessions, or commissions allowed or
reallowed or paid by any underwriters to other dealers; and (iv) the securities
exchange, if any, on which such Securities will be listed.
If an underwriter or underwriters are utilized in the sale of
Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached,
and the names of the specific managing underwriter or underwriters, as well as
any other underwriters, and the terms of the transactions, including
compensation of the underwriters and dealers, if any, will be set forth in the
applicable Prospectus Supplement, which will be used by the underwriters to make
resales of the Securities.
If a dealer is utilized in the sale of the Securities, the Company will
sell such Securities to the dealer, as principal. The dealer may then resell
such Securities to the public at varying prices to be determined by such dealer
at the time of resale. The name of the dealer and the terms of the transactions
will be set forth in the applicable Prospectus Supplement relating thereto.
Offers to purchase the Securities may be solicited directly by the
Company and sales thereof may be made by the Company directly to institutional
investors or others. The terms of any such sales, including the terms of any
bidding or auction process, if utilized, will be described in the applicable
Prospectus Supplement.
Agents, underwriters and dealers may be entitled under agreements which
may be entered into with the Company to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and any
such agents, underwriters or dealers, or their affiliates may be customers of,
engage in transactions with or perform services for, the Company in the ordinary
course of business.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize agents, underwriters and other persons to solicit offers by
certain institutions to purchase Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
such contracts may include commercial and savings banks, insurance companies,
pension funds, investment companies, educational and charitable institutions and
others, but in all cases such institutions must be approved by the Company. The
obligations of any purchaser under any such contract will be subject to the
condition that the purchaser of the Securities shall not at the time of delivery
be prohibited under the laws of the jurisdiction to which such purchaser is
subject. The underwriters and such other agents will not have any responsibility
in respect of the validity or performance of such contracts.
16
<PAGE>
The Company may grant underwriters who participate in the distribution
of Securities an option to purchase additional Securities to cover
over-allotments, if any.
The place and date of delivery for Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Securities in respect of which this Prospectus is being delivered will be a new
issue of securities, will not have an established trading market when issued and
will not be listed on any securities exchange. Any underwriters or agents to or
through whom such Securities are sold by the Company for public offering and
sale may make a market in such Securities, but such underwriters or agents will
not be obligated to do so and may discontinue any market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market for any such Securities.
LEGAL MATTERS
Certain matters with respect to the legality and binding nature of the
Securities have been passed upon for the Company and the co-registrants by Holme
Roberts & Owen LLP, Denver, Colorado.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-K for the year ended December 31, 1996, have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
17
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY,
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCE, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
Page
Available Information 3
Incorporation of Certain Information by Reference 3
The Company 4
Use of Proceeds 5
Consolidated Ratio of Earnings to Fixed Charges 5
Description of Debt Securities 5
Description of Preferred Stock 12
Description of Common Stock 14
Plan of Distribution 15
Legal Matters 17
Experts 17
$300,000,000
M.D.C. HOLDINGS, INC.
DEBT SECURITIES,
PREFERRED STOCK AND
COMMON STOCK
--------------
PROSPECTUS
, 1997
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE REGISTRATION STATEMENT
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the offering are as follows:
Securities and Exchange Commission Registration Fee............ $ 90,909
Accounting Fees and Expenses................................... 25,000
Blue Sky Fees and Expenses (including counsel fees)............ 5,000
Legal Fees and Expenses........................................ 50,000
Printing and Engraving Expenses................................ 50,000
Trustee Fees and Expenses...................................... 5,000
Rating Agency Fees............................................. 50,000
Miscellaneous.................................................. 24,091
--------
Total..................................................... $300,000
--------
--------
- ---------
All expenses, except Securities and Exchange Commission filing fees, are
estimated.
Item 15. Indemnification of Directors and Officers.
The By-Laws and Certificates of Incorporation of the Company, Richmond
American Homes of Arizona, Inc. and Richmond American Homes of Colorado, Inc.
provide for indemnification of the officers and directors of those corporations
to the fullest extent permitted by applicable law. The governing documents of
the other Co-Registrants do not provide for the indemnification of directors or
officers against any liability which they may incur in their capacities as such.
Section 145 of the Delaware General Corporation Law provides in part
that a corporation shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to
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<PAGE>
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. Similar indemnity is authorized for such persons against
expenses (including attorneys's fees) actually and reasonably incurred in
defense or settlement of any threatened, pending or completed action or suit by
or in the right of the corporation, if such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and provided further (unless a court of competent jurisdiction
otherwise provides) such person shall not have been adjudged liable to the
corporation. Any such indemnification may be made only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct.
Additionally, the Certificates of Incorporation of the Company and
Richmond American Homes of Colorado, Inc. eliminate in certain circumstances the
monetary liability of directors for breach of their fiduciary duty as directors.
This provision does not eliminate the liability of a director (i) for a breach
of the director's duty of loyalty to the respective corporation or its
stockholders; (ii) for acts or omissions by the director not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii) for
liability arising under Section 174 of the Delaware General Corporation Law
(relating to the declaration of dividends and purchase or redemption of shares
in violation of the Delaware General Corporation Law); or (iv) for any
transaction from which the director derived an improper personal benefit.
Section 7-109-102 of the Colorado Business Corporation Act permits
indemnification of a director of a Colorado corporation, in the case of a third
party action, if the director (a) conducted himself in good faith, (b)
reasonably believed that (i) in the case of conduct in his official capacity,
his conduct was in the corporation's best interest, or (ii) in all other cases,
his conduct was not opposed to the corporation's best interest, and (c) in the
case of any criminal proceeding, had no reasonable cause to believe that his
conduct was unlawful. The section further provides for mandatory indemnification
of directors and officers who are successful on the merits or otherwise in
litigation. The statute limits the indemnification that a corporation may
provide to its directors in two key respects. A corporation may not indemnify a
director in a derivative action in which the director is held liable to the
corporation, or in any proceeding in which the director is held liable on the
basis of his improper receipt of a personal benefit. The statute permits a
corporation to indemnify and advance litigation expenses to officers, employees
and agents who are not directors to a greater extent than directors if
consistent with law and provided for by the articles of incorporation, the
bylaws, a resolution of directors or shareholders, or a contract between the
corporation and the officer, employee or agent.
Sections 13.1-697, -698, -699, -701, -702, -703 and -704 of the
Virginia Stock Corporation Act ("VSCA") provide, generally and in part, that a
corporation may indemnify an individual made a party to a proceeding because he
is or was a director against liability incurred in the proceeding if he
conducted himself in good faith and reasonably believed, in
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<PAGE>
the case of conduct in his official capacity with the corporation, that his
conduct was in its best interests, or in all other cases, that his conduct was
at least not opposed to its best interests and, in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful;
provided, however, that a corporation may not indemnify a director in connection
with a proceeding by or in the right of the corporation in which the director
was adjudged liable to the corporation or in connection with any other
proceeding charging improper personal benefit to him in which he was adjudged
liable. Such indemnification in connection with a proceeding by or in the right
of the corporation is limited to reasonable expenses incurred in connection
therewith. Unless limited by a corporation's certificate of incorporation,
similar indemnity with respect to expenses incurred is mandatory under the
above-referenced Sections of the VSCA for a director or officer who was wholly
successful on the merits or otherwise, in defense of any proceedings to which he
was a party because he is or was a director or officer, as the case may be. Any
such indemnification may be made only as authorized in each specific case after
a determination by disinterested directors, special legal counsel or
disinterested shareholders that indemnification is permissible because the
indemnitee has met the applicable standard of conduct. Directors and officers
may also apply for court-ordered indemnification. Pursuant to Section 13.1-704
of the VSCA, a corporation may also indemnify and advance expenses to any
director, officer, employee or agent to the extent provided by the corporation's
certificate of incorporation, any by-law made by the shareholders or any
resolution adopted by the shareholders, except an indemnity against willful
misconduct or a knowing violation of the criminal law.
Section 2-418 of the Maryland General Corporation Law ("MGCL")
provides, generally and in part, that a corporation may indemnify any director
made a party to a proceeding by reason of the individual's service in that
capacity unless it is established that the director's act or omission (1) was
material to the matter giving rise to the proceeding; (2) was committed in bad
faith; or (3) was the result of active and deliberate dishonesty; or unless it
is established that the director actually received an improper personal benefit
in money, property or services. In the case of a criminal proceeding, indemnity
is permissible unless it is established that the director had reasonable cause
to believe that the act or omission was unlawful. Indemnification may be against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by the director in connection with the proceeding, but if the
proceeding was one by or in the right of the corporation, indemnification may
not be made in respect of any proceeding in which at the director shall have
been adjudged liable to the corporation or in connection with any other
proceeding charging improper personal benefit to him in which he was adjudged
liable. Unless limited by a corporation's certificate of incorporation, similar
indemnity with respect to expenses incurred is mandatory under Section 2-418 of
the MGCL for a director or officer who was wholly successful in the defense of
any proceeding referred to in the first sentence of this paragraph to which he
was a party because he is or was a director or officer, as the case may be. Any
such indemnification may be made only as authorized in each specific case after
a determination by disinterested directors,
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<PAGE>
special legal counsel or disinterested shareholders that indemnification is
permissible because the indemnitee has met the applicable standard of conduct.
Directors and officers may also apply for court-ordered indemnification.
The Company has obtained Directors and Officers Liability Insurance
that provides insurance coverage for certain liabilities that may be incurred by
the directors and officers of the Company and the Co-Registrants in their
capacity as such.
Item 16. Exhibits.
Exhibit Number Description of Documents
- -------------- ------------------------
4.1 Form of Certificate for shares of the
Company's common stock (incorporated
herein by reference to Exhibit 4.1 of
the Company's Registration Statement on
Form S-3, Registration
No. 33-426). *
4.2(a) Form of Senior Indenture by and between
M.D.C. Holdings, Inc. and ,
------------
as trustee.
4.2(b) Form of Senior Subordinated Indenture by
and between M.D.C. Holdings, Inc. and
, as trustee.
---------------
4.2(c) Form of Junior Subordinated Indenture by
and between M.D.C. Holdings, Inc. and
, as trustee.
-------------------
5.1 Opinion of Holme Roberts & Owen LLP.
12.1 Statement re computation of earnings to
fixed charges.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Holme Roberts & Owen LLP
(included in Exhibit 5.1).
24 Power of attorney (included on the
signature pages hereof).
- -------------------
* Incorporated herein by reference.
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<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of
the Securities Act, unless the information required to be included in such
post-effective amendment is contained in a periodic report filed with or
furnished to the Securities and Exchange Commission by the registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 and
incorporated herein by reference;
(b) to reflect in the Prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement, unless the information required to be included in such post-effective
amendment is contained in a periodic report filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 and incorporated herein by
reference. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would exceed
that which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) of this chapter), if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(c) to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (1)(b) and (1)(c) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement;
(d) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
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<PAGE>
(2) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering;
(3) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and
(4) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the provisions described in Item 15 above, or
otherwise, the Company has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(5) The undersigned registrant hereby further undertakes that:
(a) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as a part of this registration statement in reliance upon Rule 430A and
contained in a form of Prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4), or 497(h) under the Securities Act of 1933 shall be deemed to
be a part of this registration statement as of the time it was declared
effective.
(b) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(6) The undersigned Registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act ("Act") in
accordance with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Act.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant, M.D.C. Holdings, Inc. and the Co-Registrants named below certify
that they have reasonable grounds to believe that they meet all of the
requirements for filing on Form S-3 and have duly caused this Registration
Statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on the 26th day of
September, 1997.
M.D.C. HOLDINGS, INC.
By:
---------------------------
Paris G. Reece III
Senior Vice President
CO-REGISTRANTS:
RICHMOND AMERICAN HOMES OF CALIFORNIA,
INC.
RICHMOND AMERICAN HOMES OF MARYLAND,
INC.
RICHMOND AMERICAN HOMES OF NEVADA, INC.
RICHMOND AMERICAN HOMES OF VIRGINIA, INC.
By:
----------------------------
Paris G. Reece III
Executive Vice President
RICHMOND AMERICAN HOMES OF ARIZONA, INC.
RICHMOND AMERICAN HOMES OF COLORADO,
INC.
By:
----------------------------
Paris G. Reece III
Vice President
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<PAGE>
POWER OF ATTORNEY
Each of the undersigned constitutes and appoints Paris G. Reece III,
Michael Touff and Daniel S. Japha, and each of them, as attorneys for him and in
his name, place, and stead, and in his capacity as a Director, Officer, or both,
of the Company, to execute and file any amended registration statement or
statements or supplements thereto, with all exhibits thereto and other documents
in connection therewith, with the Securities Exchange Commission, hereby giving
and granting to said attorneys full power and authority to do and perform all
and every act and thing whatsoever requisite and necessary to be done in and
about the premises as fully, to all intents and purposes, as he or she might or
could do if personally present at the doing thereof, hereby ratifying and
confirming all that said attorneys may or shall lawfully do, or cause to be
done, by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities and on the date indicated.
REGISTRANT OFFICERS AND DIRECTORS
Principal Executive Officer:
---------------------------
Larry A. Mizel,
Chairman of the Board of Directors,
President and Chief Executive Officer
Chief Operating Officer:
---------------------------
David D. Mandarich,
Director, Executive Vice President -
Real Estate and Chief Operating Officer
Principal Financial and Accounting Officer:
---------------------------
Paris G. Reece III,
Senior Vice President,
Chief Financial Officer and
Principal Accounting Officer
II-8
<PAGE>
Other Directors:
------------------------------
Steven J. Borick
------------------------------
Gilbert Goldstein
------------------------------
William B. Kemper
------------------------------
Herbert T. Buchwald
CO-REGISTRANT OFFICERS AND DIRECTORS
RICHMOND AMERICAN HOMES OF CALIFORNIA,
INC.
RICHMOND AMERICAN HOMES OF MARYLAND,
INC.
RICHMOND AMERICAN HOMES OF NEVADA, INC.
RICHMOND AMERICAN HOMES OF VIRGINIA, INC.
Principal Executive, Financial and
Accounting Officer:
---------------------------
Paris G. Reece III,
Executive Vice President, Director
RICHMOND AMERICAN HOMES OF ARIZONA, INC.
Principal Executive, Financial and
Accounting Officer:
---------------------------
Paris G. Reece III,
Vice President, Treasurer, Director
II-9
<PAGE>
RICHMOND AMERICAN HOMES OF COLORADO,
INC.
Principal Executive Officer:
---------------------------
David D. Mandarich,
Chairman of the Board of Directors,
President
Principal Financial and Accounting
Officer:
---------------------------
Paris G. Reece III,
Vice President
Other Directors:
-----------------------------
Steven J. Borick
-----------------------------
Larry A. Mizel
II-10
EXHIBIT 4.2(a)
M.D.C. HOLDINGS, INC.
Issuer
AND
-----------------------------
Trustee
SENIOR DEBT SECURITIES
----------------------
INDENTURE
DATED AS OF , 1997
------------
----------------------
<PAGE>
ARTICLE ONE - Definitions and Incorporation by Reference
Section 1.01. Definitions................................1
Section 1.02. Other Definitions..........................6
Section 1.03. Incorporation by Reference of Trust
Indenture Act............................7
Section 1.04. Rules of Construction......................7
ARTICLE TWO - The Securities
Section 2.01. Form and Dating............................8
Section 2.02. Execution and Authentication...............9
Section 2.03. Registrar and Paying Agent................10
Section 2.04. Paying Agent to Hold Money in Trust.......10
Section 2.05. Securityholder Lists......................11
Section 2.06. Transfer and Exchange.....................11
Section 2.07. Replacement Securities....................11
Section 2.08. Outstanding Securities....................12
Section 2.09. Temporary Securities......................12
Section 2.10. Cancellation..............................12
Section 2.11. Defaulted Interest........................13
Section 2.12. Treasury Securities.......................13
Section 2.13. CUSIP Numbers.............................13
Section 2.14. Deposit of Moneys.........................13
Section 2.15. Book-Entry Provisions for Global
Security................................14
ARTICLE THREE - Redemption
Section 3.01. Notices to Trustee........................15
Section 3.02. Selection of Securities to be Redeemed....15
Section 3.03. Notice of Redemption......................16
Section 3.04. Effect of Notice of Redemption............16
Section 3.05. Deposit of Redemption Price...............17
Section 3.06. Securities Redeemed in Part...............17
ARTICLE FOUR - Covenants
Section 4.01. Payment of Securities.....................17
Section 4.02. Maintenance of Office or Agency...........17
Section 4.03. Compliance Certificate....................17
Section 4.04. Payment of Taxes; Maintenance of
Corporate Existence;
Maintenance of Properties...............18
i
<PAGE>
ARTICLE FIVE - Successor Corporation
Section 5.01. When Company May Merge, etc...............19
ARTICLE SIX - Defaults and Remedies
Section 6.01. Events of Default.........................19
Section 6.02. Acceleration..............................21
Section 6.03. Other Remedies............................22
Section 6.04. Waiver of Existing Defaults...............22
Section 6.05. Control by Majority.......................22
Section 6.06. Limitation on Suits.......................23
Section 6.07. Rights of Holders to Receive Payment......23
Section 6.08. Collection Suit by Trustee................23
Section 6.09. Trustee May File Proofs of Claim..........24
Section 6.10. Priorities................................24
Section 6.11. Undertaking for Costs.....................24
ARTICLE SEVEN - Trustee
Section 7.01. Duties of Trustee.........................25
Section 7.02. Rights of Trustee.........................26
Section 7.03. Individual Rights of Trustee..............27
Section 7.04. Trustee's Disclaimer......................27
Section 7.05. Notice of Defaults........................27
Section 7.06. Reports by Trustee to Holders.............28
Section 7.07. Compensation and Indemnity................28
Section 7.08. Replacement of Trustee....................28
Section 7.09. Successor Trustee by Merger, etc..........29
Section 7.10. Eligibility; Disqualification.............29
Section 7.11. Preferential Collection of Claims
Against Company.........................30
ARTICLE EIGHT - Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys or
U.S. Government Obligations.............30
Section 8.02. Survival of the Company's Obligations.....33
Section 8.03. Application of Trust Money................33
Section 8.04. Repayment to the Company..................34
Section 8.05. Reinstatement.............................34
ii
<PAGE>
ARTICLE NINE - Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders................35
Section 9.02. With Consent of Holders...................35
Section 9.03. Compliance with Trust Indenture Act.......36
Section 9.04. Revocation and Effect of Consents.........36
Section 9.05. Notation on or Exchange of Securities.....37
Section 9.06. Trustee to Sign Amendments, etc...........37
ARTICLE TEN - Miscellaneous
Section 10.01. Trust Indenture Act Controls..............38
Section 10.02. Notices...................................38
Section 10.03. Communications by Holders with Other
Holders.................................39
Section 10.04. Certificate and Opinion as to Conditions
Precedent...............................39
Section 10.05. Statements Required in Certificate or
Opinion.................................39
Section 10.06. Rules by Trustee and Agents...............40
Section 10.07. Legal Holidays............................40
Section 10.08. Governing Law.............................40
Section 10.09. No Adverse Interpretation of Other
Agreements..............................40
Section 10.10. No Recourse Against Others................40
Section 10.11. Successors and Assigns....................40
Section 10.12. Duplicate Originals.......................41
Section 10.13. Severability..............................41
iii
<PAGE>
CROSS-REFERENCE TABLE
This Cross-Reference Table is not a part of the Indenture.
TIA Indenture
Section Section
--------- ---------
310(a)(1).......................................... 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(b)................................................ 7.08; 7.10; 10.02
311(a)............................................. 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)............................................. 2.05
(b)................................................ 10.03
(c)................................................ 10.03
313(a)............................................. 7.06
(b)(1)............................................. N.A.
(b)(2)............................................. 7.06
(c)................................................ 10.02
(d)................................................ 7.06
314(a)............................................. 7.06; 10.02
(b)................................................ N.A.
(c)(1)............................................. 10.04
(c)(2)............................................. 10.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 10.05
(f)................................................ N.A.
315(a)............................................. 7.01(b)
(b)................................................ 7.05; 10.02
(c)................................................ 7.01(a)
(d)................................................ 7.01(c)
(e)................................................ 6.11
316(a)(last sentence).............................. 2.12
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.07
(c)................................................ 9.04
317(a)(1).......................................... 6.08
(a)(2)............................................. 6.09
(b)................................................ 2.04
318(a)............................................. 10.01
- -----------------------------
N.A. means Not Applicable.
iv
<PAGE>
INDENTURE dated as of , 1997, by and among M.D.C.
------------
HOLDINGS, INC., a Delaware corporation (the "Company"), and , (the
-------------
"Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's debt securities
issued under this Indenture (the "Securities"):
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person, or (ii) any officer,
director, a Person acting with respect to such Person in a similar capacity, or
controlling shareholder of such other Person. For purposes of this definition,
the term "control" means (a) the power to direct the management and policies of
a Person, either directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise, or (b) without
limiting the foregoing, the beneficial ownership of 10% or more of the voting
power of the voting common equity of such Person (on a fully diluted basis).
Notwithstanding the foregoing, the term "Affiliate" will not include, with
respect to the Company or any Restricted Subsidiary of the Company, any
Restricted Subsidiary of the Company, or the Company, with respect to any
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.
"Bankruptcy Law" means title 11 of the United States Code, as amended,
or any similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
authorized committee thereof.
1
<PAGE>
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person's capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other equity interests, whether now
outstanding or issued after the applicable Issue Date, including, without
limitation, all Preferred Stock.
"Capitalized Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.
"Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means the
successor.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect such Person or any of its Subsidiaries or Affiliates against
fluctuations in currency values.
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, unless otherwise timely cured, an Event of
Default.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indebtedness" of any Person means, without duplication, (i) any
liability of such Person (other than accounts payable, other trade payables and
accrued expenses incurred in the ordinary course of such Person's business) (a)
for borrowed money or under any reimbursement obligation relating to a letter of
credit or other similar instruments (other than standby letters of credit issued
for the benefit of or surety, performance, completion or payment bonds, earnest
money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business, general contingency and tax reserves,
liabilities for deposits and deferred income which in accordance with GAAP is
recorded as a liability), (b) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind or with services
incurred in connection with capital expenditures (other than any obligation to
pay a contingent
2
<PAGE>
purchase price which, as of the date of incurrence thereof is not required to be
recorded as a liability in accordance with GAAP), or (c) in respect of
Capitalized Lease Obligations (to the extent of the Attributable Debt in respect
thereof), (ii) any Indebtedness of others that such Person has guaranteed to the
extent of the guarantee, (iii) to the extent not otherwise included, the
obligations of such Person under Currency Agreements or Interest Protection
Agreements to the extent recorded as liabilities not constituting Interest
Incurred, net of amounts recorded as assets in respect of such agreements, in
accordance with GAAP, and (iv) all Indebtedness of others secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person. The amount of Indebtedness of any Person at any date shall be (a) the
outstanding balance at such date of all unconditional obligations as described
above, net of any unamortized discount to be accounted for as Interest Expense,
in accordance with GAAP, (b) the maximum liability of such Person for any
contingent obligations under clause (ii) above at such date, net of, any
unamortized discount to be accounted for as Interest Expense in accordance with
GAAP and (c) in the case of clause (iv) above, the lesser of (1) the fair market
value of any asset subject to a Lien securing the Indebtedness of others on the
date that the Lien attaches and (2) the amount of the Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time
to time, including pursuant to any Authorizing Resolution or supplemental
indenture pertaining to any Series.
"Interest Expense" of any Person for any period means, without
duplication, the aggregate amount of (i) interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like caption
on an income statement for such Person (including, without limitation, imputed
interest included in Capitalized Lease Obligations, all commissions, discounts
and other fees and charges owned with respect to letters of credit and bankers'
acceptance financing, the net costs (but reduced by net gains) associated with
Currency Agreements and Interest Protection Agreements, amortization of other
financing fees and expenses; with respect to the Company and its Restricted
Subsidiaries, but excluding its Unrestricted Subsidiaries, the interest portion
of any deferred payment obligation, amortization of discount or premium, if any,
and all other noncash interest expense other than interest and other charges
amortized to cost of sales), and (ii) all interest actually paid by the Company
or a Restricted Subsidiary under any guarantee of Indebtedness (including,
without limitation, a guarantee of principal, interest or any combination
thereof) of any Person other than the Company or any Restricted Subsidiary
during such period; provided, that Interest Expense shall exclude any expense
associated with the complete write-off of financing fees and expenses in
connection with the repayment or repurchase of any Indebtedness.
"Interest Protection Agreement" of any Person means any interest rate
swap agreement, interest rate collar agreement, option or futures contract or
other similar agreement or arrangement designed to protect such Person or any of
its Subsidiaries
3
<PAGE>
against fluctuations in interest rates with respect to Indebtedness permitted to
be incurred under this Indenture.
"Investments" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
all guarantees of Indebtedness or other obligations of any other Person by such
person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments in any other
Person (including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
"Issue Date" means, with respect to any Series of Securities, the date
on which the Securities of such Series are originally issued under this
Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such Property
(other than an obligation to share revenues or profits upon the sale or
liquidation of Property to which such obligation relates). For purposes of this
definition, a Person shall be deemed to own, subject to a Lien, any Property
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person for which (i) the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments evidencing or securing such Indebtedness and such
property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within 90 days after the acquisition of such property
and (ii) no other assets of such Person may be realized upon in collection of
principal or interest on such Indebtedness. Indebtedness which is otherwise
Non-Recourse Indebtedness will not lose its character as Non-Recourse
Indebtedness because there is recourse to the borrower or any other Person for
(i) environmental warranties and indemnities, or (ii) indemnities for and
liabilities arising from fraud, misrepresentation, misapplication or non-payment
of rents, profits, insurance and condemnation proceeds and other sums actually
received by the borrower from secured assets to be paid to the lender, waste and
mechanics' liens.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company.
4
<PAGE>
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or with respect to the payment of
dividends.
"Principal" of a debt security means the principal of the security
plus, when appropriate, the premium, if any, on the security.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person, whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Subsidiary" means any Subsidiary of the Company which is
not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission or any successor
agency performing the duties now assigned to it under the TIA.
"Securities" means any Securities that are issued under this Indenture.
"Series" means a series of Securities established under this Indenture.
"Significant Subsidiary" means any Subsidiary of the Company which
would constitute a "significant subsidiary" as defined in Rule 1.02 of
Regulation S-X under the Securities Act and the Exchange Act.
"Subsidiary" of any Person means any corporation or other entity (other
than political subdivisions or enterprises thereof or governmental agencies) of
which a majority of the Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time directly or indirectly owned or controlled by such Person.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor serving hereunder.
5
<PAGE>
"Trust Officer" means the Chairman of the Board, the President, any
Vice President or any other officer or assistant officer of the Trustee assigned
by the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
"U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt issued
by a bank or trust company as custodian with respect to any such U.S. government
obligations or a specific payment of interest on or principal of any such U.S.
government obligation held by such custodian for the account of the holder of a
depositary receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. government obligation or the specific payment of interest on or
principal of the U.S. government obligation evidenced by such depositary
receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company so
designated by a resolution adopted by the Board of Directors of the Company.
Section 1.02. Other Definitions.
Term Defined in
Section
"Agent Members"....................................... 2.15
"Business Day"........................................ 10.07
"Custodian"........................................... 6.01
"Depositary".......................................... 2.15
"Event of Default".................................... 6.01
"Legal Holiday"....................................... 10.07
"Paying Agent"........................................ 2.03
"Registrar"........................................... 2.03
6
<PAGE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities of a Series thereof.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term, not otherwise defined, has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
7
<PAGE>
ARTICLE TWO
The Securities
Section 2.01. Form and Dating.
The aggregate principal amount of Securities that may be issued under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more Series. Each Series shall be created by an Authorizing Resolution or
a supplemental indenture that establishes the terms of the Series, which may
include the following:
(1) the title of the Series;
(2) the aggregate principal amount (or any limit on the aggregate
principal amount) of the Series and, if any Securities of a
Series are to be issued at a discount from their face amount,
the method of computing the accretion of such discount;
(3) the interest rate or method of calculation of the interest
rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Securities of the
Series;
(6) the dates when, places where and manner in which principal and
interest are payable;
(7) the Registrar and Paying Agent;
(8) the terms of any mandatory (including any sinking fund
requirements) or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form
and the terms of any such forms of Securities;
(12) whether any Securities will be represented by a global
Security and the terms of any such global Security;
8
<PAGE>
(13) if payments of principal or interest may be made in a currency
other than that in which Securities are denominated, the
manner for determining such payments;
(14) provisions for electronic issuance of Securities or issuance
of Securities in uncertificated form;
(15) any Events of Default, covenants and/or defined terms in
addition to or in lieu of those set forth in this Indenture;
(16) whether and upon what terms Securities may be defeased if
different from the provisions set forth in this Indenture;
(17) the form of the Securities, which, unless the Authorizing
Resolution or supplemental indenture otherwise provides, shall
be in the form of Exhibit A;
(18) any terms that may be required by or advisable under
applicable law;
(19) the percentage of the principal amount of the Securities which
is payable if the maturity of the Securities is accelerated in
the case of Securities issued at a discount from their face
amount; and
(20) any other terms in addition to or different from those
contained in this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and
delivery thereof are not subject to any conditions precedent.
Section 2.02. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
9
<PAGE>
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon
receipt of an Officers' Certificate of the Company. Each Security shall be dated
the date of its authentication.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent) and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such Agent
and the Trustee shall have the right to inspect the Securities register at all
reasonable times to obtain copies thereof, and the Trustee shall have the right
to rely upon such register as to the names and addresses of the Holders and the
principal amounts and certificate numbers thereof. If the Company fails to
maintain a Registrar or Paying Agent or fails to give the foregoing notice, the
Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
Section 2.04. Paying Agent to Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of
Securityholders and the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money and hold it
as a separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon doing so the Paying Agent shall
have no further liability for the money.
10
<PAGE>
Section 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least 5 Business Days before each semi-annual interest payment
date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
Section 2.06. Transfer and Exchange.
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.
Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
Section 2.07. Replacement Securities.
If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security; provided, however, in the case of a lost, destroyed or
wrongfully taken Security, that the requirements of Section 8-405 of the New
York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof. An indemnity bond must be sufficient in the judgment of the
Company and the
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Trustee to protect the Company, the Trustee or any Agent from any loss which any
of them may suffer if a Security is replaced, including the acquisition of such
Security by a bona fide purchaser. The Company or the Trustee may charge the
Holder for expenses in replacing a Security.
Section 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by it and those described in this Section.
A Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If, on a redemption date or maturity date, the Paying Agent holds money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.09. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.
Section 2.10. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
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cancellation. Unless the Authorizing Resolution so provides, the Company may not
issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record date and a payment date which
shall be reasonably satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest to
be paid. On or before the date such notice is mailed, the Company shall deposit
with the Paying Agent money sufficient to pay the amount of defaulted interest
to be so paid. The Company may pay defaulted interest in any other lawful manner
if, after notice given by the Company to the Trustee of the proposed payment,
such manner of payment shall be deemed practicable by the Trustee.
Section 2.12. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Subsidiaries shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so considered.
Section 2.13. CUSIP Numbers.
The Company in issuing the Securities of any Series may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.
Section 2.14. Deposit of Moneys.
Prior to 11:00 a.m. New York City time on each interest payment date
and maturity date with respect to each Series of Securities, the Company shall
have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments due on such interest payment date or maturity
date, as the case may be, in a timely manner
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which permits the Paying Agent to remit payment to the Holders on such interest
payment date or maturity date, as the case may be.
Section 2.15. Book-Entry Provisions for Global Security.
(a) Any global Security of a Series initially shall (i) be registered
in the name of the depository who shall be identified in the Authorizing
Resolution or supplemental indenture relating to such Securities (the
"Depository") or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear any required legends.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any global
Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of any global Security shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the global Security may be
transferred or exchanged for definitive Securities in accordance with the rules
and procedures of the Depository. In addition, definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue definitive
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.
(d) In connection with the transfer of an entire global Security to
beneficial owners pursuant to paragraph (b), the global Security shall be deemed
to be surrendered
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to the Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the global Security, an
equal aggregate principal amount of definitive Securities of authorized
denominations.
(e) The Holder of any global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities of such Series.
ARTICLE THREE
Redemption
Section 3.01. Notices to Trustee.
Securities of a Series that are redeemable prior to maturity shall be
redeemable in accordance with their terms and, unless the Authorizing Resolution
or supplemental indenture provides otherwise, in accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the Redemption Date
and the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed,
retired or acquired against any redemption pursuant to Paragraph 6 of the
Securities, it shall notify the Trustee of the amount of the credit and it shall
deliver any Securities not previously delivered to the Trustee for cancellation
with such notice.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed.
If fewer than all of the Securities of a Series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger
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than the minimum denomination for the Series. Securities and portions of them it
selects shall be in amounts equal to the minimum denomination for the Series or
an integral multiple thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(6) that the Securities are being redeemed pursuant to the
mandatory redemption or the optional redemption provisions,
as applicable.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall deliver to the Trustee at least 15 days prior to the date on which
notice of redemption is to be mailed or such shorter period as may be
satisfactory to the Trustee, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price as set
forth in the notice of redemption. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.
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Section 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Paying Agent immediately available funds sufficient to pay the redemption price
of and accrued interest on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for each Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a Series on the
dates and in the manner provided in the Securities of the Series. An installment
of principal or interest shall be considered paid on the date it is due, if on
that date the Paying Agent holds money designated for and sufficient to pay the
installment.
The Company shall pay interest on overdue principal at the rate borne
by the Series; it shall pay interest on overdue installments of interest at the
same rate.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee.
Section 4.03. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating whether or
not the signers know of any Default by the Company in performing any of its
obligations under this Indenture. If they do know of such a Default, the
certificate shall describe the Default.
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Section 4.04. Payment of Taxes; Maintenance of Corporate Existence;
Maintenance of Properties.
The Company will:
(a) cause to be paid and discharged all lawful taxes, assessments
and governmental charges or levies imposed upon the Company
and its Restricted Subsidiaries or upon the income or profits
of the Company and its Restricted Subsidiaries or upon
property or any part thereof belonging to the Company and its
Restricted Subsidiaries before the same shall be in default,
as well as all lawful claims for labor, materials and supplies
which, if unpaid, might become a lien or charge upon such
property or any part thereof; provided, however, that the
Company shall not be required to cause to be paid or
discharged any such tax, assessment, charge, levy or claim so
long as the validity or amount thereof shall be contested in
good faith by appropriate proceedings and the nonpayment
thereof does not, in the judgment of the Company, materially
adversely affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due; and provided further, that the Company shall not be
required to cause to be paid or discharged any such tax,
assessment, charge, levy or claim if, in the judgment of the
Company, such payment shall not be advantageous to the Company
in the conduct of its business and if the failure so to pay or
discharge does not, in its judgment, materially adversely
affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due;
(b) cause to be done all things necessary to preserve and keep in
full force and effect the corporate existence of the Company
and each of its Restricted Subsidiaries; provided, however,
that nothing in this subsection (b) shall prevent a
consolidation or merger of the Company or any Restricted
Subsidiary not prohibited by the provisions of Article Five or
any other provision or the Authorizing Resolution or
supplemental indenture pertaining to a Series, and the Company
need not maintain the corporate existence of an immaterial
Restricted Subsidiary ; and
(c) at all times keep, maintain and preserve the property of the
Company and the Restricted Subsidiaries in good repair,
working order and condition (reasonable wear and tear
excepted) and from time to time make all needful and proper
repairs, renewals, replacements, betterments and improvements
thereto, so that the business carried on in connection
therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this subsection
(c) shall prevent the Company from discontinuing the operation
and maintenance of any such properties if such discontinuance
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is, in the judgment of the Company, desirable in the conduct
of its business and not disadvantageous in any material
respect to the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge with or into, any other
corporation, or transfer all or substantially all of its assets to, any entity
unless permitted by law and unless (1) the resulting, surviving or transferee
entity, which shall be a corporation organized and existing under the laws of
the United States or a State thereof, assumes by supplemental indenture, in a
form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture and (2) immediately after giving
effect to, and as a result of, such transaction, no Default or Event of Default
shall have occurred and be continuing. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the "Company" and all such obligations
of the predecessor corporation shall terminate.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
To the extent that an Authorizing Resolution or supplemental indenture
pertaining to any Series provides for different provisions relating to the
subject matter of this Article Five, the provisions in such Authorizing
Resolution or supplemental indenture shall govern for purposes of such Series.
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.
An "Event of Default" on a Series occurs if, voluntarily or
involuntarily, whether by operation of law or otherwise, any of the following
occurs:
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(1) the failure by the Company to pay interest on any Security of
such Series when the same becomes due and payable and the continuance of any
such failure for a period of 30 days;
(2) the failure by the Company to pay the principal or premium of
any Security of such Series when the same becomes due and payable at maturity,
upon acceleration or otherwise;
(3) the failure by the Company or any Restricted Subsidiary to comply
in all material respects with any of its agreements or covenants in, or
provisions of, the Securities of such Series, or this Indenture (as they relate
thereto) and such failure continues for the period and after the notice
specified below (except in the case of a default with respect to Article Five
(or any replacement provisions as contemplated by Article Five), which will
constitute an Event of Default with notice but without passage of time);
(4) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary in an amount of $30
million or more, individually or in the aggregate, and such acceleration does
not cease to exist, or such Indebtedness is not satisfied, in either case within
30 days after such acceleration;
(5) the failure by the Company or any Restricted Subsidiary to make
any principal or interest payment in an amount of $30 million or more,
individually or in the aggregate, in respect of Indebtedness for borrowed
money (other than Non-Recourse Indebtedness) of the Company or any Restricted
Subsidiary within 30 days of such principal or interest becoming due and payable
(after giving effect to any applicable grace period set forth in the
documents governing such Indebtedness);
(6) a final judgment or judgments in an amount of $30 million or
more, individually or in the aggregate, for the payment of money having been
entered by a court or courts of competent jurisdiction against the Company or
any of its Restricted Subsidiaries and such judgment or judgments is not
covered by a policy of insurance, satisfied, stayed, annulled or rescinded
within 90 days of being entered;
(7) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or
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(D) makes a general assignment (except in the case of a
Restricted Subsidiary, to the Company) for the
benefit of its creditors; or
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary as debtor
in an involuntary case,
(B) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or a
Custodian for all or substantially all of the
property of the Company or any Restricted Subsidiary
that is a Significant Subsidiary, or
(C) orders the liquidation of the Company or any
Restricted Subsidiary that is a Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 90 days.
A Default as described in sub-clause (3) above will not be deemed an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25 percent in principal amount of the then outstanding Securities of the
applicable Series notify the Company and the Trustee, of the Default and (except
in the case of a default with respect to Article Five (or any replacement
provisions as contemplated by Article Five)) the Company does not cure the
Default within 90 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." If such a Default is cured within such time period, it ceases.
The term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default with respect to
the Company resulting from sub-clauses (7) or (8) above), shall have occurred
and be continuing under the Indenture, the Trustee by notice to the Company, or
the Holders of at least 25 percent in principal amount of the Securities of the
applicable Series then outstanding by notice to the Company and the Trustee, may
declare all Securities of such Series to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Securities
of such Series will be due and payable immediately. If an Event of Default with
respect to the Company specified in sub-clauses (7) or (8) above occurs, all
amounts due and payable on the Securities of such Series will ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the
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Trustee and the Company or any Holder. The Holders of a majority in principal
amount of the Securities of such Series then outstanding by written notice to
the Trustee and the Company may waive any Default or Event of Default (other
than any Default or Event of Default in payment of principal or interest) with
respect to such Series of Securities under the Indenture. Holders of a majority
in principal amount of the then outstanding Securities of such Series may
rescind an acceleration with respect to such Series and its consequence (except
an acceleration due to nonpayment of principal or interest on the Securities of
such Series) if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived.
No such rescission shall extend to or shall affect any subsequent Event
of Default, or shall impair any right or power consequent thereon.
Section 6.03. Other Remedies.
If an Event of Default on a Series occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on the Series or to enforce the
performance of any provision in the Securities or this Indenture applicable to
the Series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Existing Defaults.
Subject to Section 9.02, the Holders of a majority in principal amount
of the outstanding Securities of a Series on behalf of all the Holders of the
Series by notice to the Trustee may waive an existing Default on such Series and
its consequences. When a Default is waived, it is cured and stops continuing,
and any Event of Default arising therefrom shall be deemed to have been cured;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding
Securities of a Series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to such Series. The Trustee, however, may
refuse to follow any direction (i) that conflicts with law or this Indenture,
(ii) that, subject to Section 7.01, the Trustee determines is unduly
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prejudicial to the rights of other Securityholders, or (iii) that would involve
the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Securityholder of a Series may not pursue any remedy with respect to
this Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default on the Series;
(2) the Holders of at least a majority in principal amount of the
outstanding Securities of the Series make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 90 days
after receipt of the request and the offer of indemnity; and
(5) no written request inconsistent with such written request
shall have been given to the Trustee pursuant to this Section
6.06.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal and interest remaining unpaid.
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Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property, and unless prohibited by applicable law or regulation, may vote on
behalf of the Holders in any election of a Custodian, and shall be entitled and
empowered to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder to make
such payments to the Trustee. Nothing herein shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to authorize
the Trustee to vote in respect of the claim of any Securityholder except as
aforesaid for the election of the Custodian.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Securityholders of the Series for amounts due and unpaid on
the Series for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Series for principal and
interest, respectively; and
Third: to the Company as its interests may appear.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having the due regard
to the merits and good faith of the claims or defenses made by the party
litigant. This Section
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does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in principal amount of the Series.
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall, prior to the receipt of directions from the Holders of a
majority in principal amount of the Securities, exercise its rights and powers
and use the same degree of care and skill in their exercise as a prudent man
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no
others and no implied covenants or obligations shall
be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of his Indenture. The Trustee, however,
shall examine the certificates and opinions to
determine whether or not they conform to the
requirements of this Indenture but need not confirm
or investigate the accuracy of mathematical
calculations or other facts or matters stated herein.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in
accordance with a direction received by
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it pursuant to Section 6.05 or any other direction of
the Holders permitted hereunder.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
Section 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting on any document, resolution, certificate, instrument,
report, or direction believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document, resolution, certificate, instrument, report, or
direction.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both, which shall conform
to Sections 10.04 and 10.05 hereof and containing such other statements
as the Trustee reasonably deems necessary to perform its duties hereunder. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officers' Certificate, Opinion of Counsel or any other
direction of the Company permitted hereunder.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
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(e) The Trustee may consult with counsel, and the written advice of
such counsel or any Opinion of Counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Unless otherwise specifically provided in the Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(g) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default (other than under
Section 6.01(1) or 6.01(2)) unless a Trust Officer assigned to and working in
the Trustee's corporate trust office has actual knowledge thereof or unless
written notice of any Event of Default is received by the Trustee at its address
specified in Section 10.02 hereof and such notice references the Securities
generally, the Company or this Indenture.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture, the Securities or of any prospectus used to sell the Securities;
it shall not be accountable for the Company's use of the proceeds from the
Securities; it shall not be accountable for any money paid to the Company, or
upon the Company's direction, if made under and in accordance with any provision
of this Indenture; it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee; and it shall not be
responsible for any statement of the Company in this Indenture or in the
Securities other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default on a Series occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Securityholder of the Series notice
of the Default (which shall specify any uncured Default known to it) within 90
days after it occurs. Except in the case of a default in payment of principal of
or interest on a Series, the Trustee may withhold the notice if and so long as
the board of directors of the Trustee, the executive or any trust committee of
such directors and/or responsible officers of the Trustee in good faith
determine(s) that withholding the notice is in the interests of Holders of the
Series.
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Section 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA ss. 313(a) (but if
no event described in TIA ss. 313(2) has occurred within the twelve months
preceding the reporting date no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be delivered to the Company and filed by the Trustee with the SEC and each
national securities exchange on which the Securities are listed. The Company
agrees to notify the Trustee of each national securities exchange on which the
Securities are listed.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee or predecessor trustee from time
to time reasonable compensation for their respective services subject to any
written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith.
To ensure the Company's payment obligations in this Section, the
Trustee shall have a claim prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities. When the Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 6.01 or in
connection with Article 6 hereof, the expenses (including the reasonable fees
and expenses of its counsel) and the compensation for services in connection
therewith are to constitute expenses of administration under any bankruptcy law.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the
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removed Trustee in writing and may appoint a successor trustee with the
Company's consent. Such resignation or removal shall not take effect until the
appointment by the Securityholders or the Company as hereinafter provided of a
successor trustee and the acceptance of such appointment by such successor
trustee. The Company may remove the Trustee and any Securityholder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee for any or no reason, including if:
(1) the Trustee fails to comply with Section 7.10 after written
request by the Company or any bona fide Securityholder who has
been a Securityholder for at least six months;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for the appointment of a
successor trustee.
A successor trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor trustee shall mail
notice of its succession to each Securityholder.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges with or into or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.310(a)(1). The Trustee shall have a combined capital and
surplus of at least $10,000,000
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as set forth in its most recent published annual report of condition. The
Trustee shall comply with TIA ss.310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b). A Trustee who has resigned or been removed
shall be subject to TIA ss.311(a) to the extent indicated therein.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government
Obligations.
(a) The Company may, at its option and at any time, elect to have
either paragraph (b) or paragraph (c) below be applied to the outstanding
Securities of any Series upon compliance with the applicable conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its respective obligations with respect to the
outstanding Securities of a Series on the date the applicable conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Securities of
a Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of the Sections and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned, except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities of a Series to
receive solely from the trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii) obligations
listed in Section 8.02, subject to compliance with this Section 8.01. The
Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) below with respect to such
Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from the obligations under any covenant contained in Article Five and any other
covenant contained in the Authorizing Resolution or supplemental indenture
relating to such Series to the extent provided for therein, on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities of such Series shall thereafter
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be deemed to be not "outstanding" for the purpose of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities of a Series, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(3), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities of the
applicable Series:
(1) The Company shall have irrevocably deposited in trust
with the Trustee, pursuant to an irrevocable trust
and security agreement in form and substance
reasonably satisfactory to the Trustee, money in U.S.
dollars or U.S. government obligations or a
combination thereof in such amounts and at such times
as are sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to
pay the principal of and interest on the outstanding
Securities of such Series to maturity or redemption;
provided, however, that the Trustee (or other
qualifying trustee) shall have received an
irrevocable written order from the Company
instructing the Trustee (or other qualifying trustee)
to apply such money or the proceeds of such U.S.
government obligations to said payments with respect
to the Securities of such Series to maturity or
redemption;
(2) No Default or Event of Default shall have occurred
and be continuing on the date of such deposit;
(3) Such deposit will not result in a Default under this
Indenture or a breach or violation of, or constitute
a default under, any other material instrument or
agreement to which the Company or any of its
Subsidiaries is a party or by which it or any of
their property is bound;
(4) (i) In the event the Company elects paragraph (b)
hereof, the Company shall deliver to the Trustee an
Opinion of Counsel in the United States, in form and
substance reasonably satisfactory to the Trustee, to
the effect that (A) the Company has received from, or
there has been published by, the Internal Revenue
Service a ruling or (B) since the Issue Date
pertaining to such Series, there has been a
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change in the applicable federal income tax law, in
either case to the effect that, and based thereon
such Opinion of Counsel shall state that, or (ii) in
the event the Company elects paragraph (c) hereof,
the Company shall deliver to the Trustee an Opinion
of Counsel in the United States, in form and
substance reasonably satisfactory to the Trustee, to
the effect that, in the case of clauses (i) and (ii),
Holders of the Securities of such Series will not
recognize income, gain or loss for United States
federal income tax purposes as a result of such
deposit and the defeasance contemplated hereby and
will be subject to federal income tax in the same
amounts and in the same manner and at the same times
as would have been the case if such deposit and
defeasance had not occurred;
(5) The Company shall have delivered to the Trustee an
Officers' Certificate, stating that the deposit under
clause (1) was not made by the Company with the
intent of preferring the Holders of the Securities of
such Series over any other creditors of the Company
or with the intent of defeating, hindering, delaying
or defrauding any other creditors of the Company or
others;
(6) The Company shall have delivered to the Trustee an
Opinion of Counsel, reasonably satisfactory to the
Trustee, to the effect that, (A) the trust funds will
not be subject to the rights of Holders of
Indebtedness of the Company other than the Securities
of such Series and (B) assuming no intervening
bankruptcy of the Company between the date of deposit
and the 91st day following the deposit and that no
Holder of Securities of such Series is an insider of
the Company, after the 91st day following the
deposit, the trust funds will not be subject to any
applicable bankruptcy, insolvency, reorganization or
similar law affecting creditors' rights generally;
and
(7) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating
that all conditions precedent specified herein
relating to the defeasance contemplated by this
Section 8.01 have been complied with.
In the event all or any portion of the Securities of a Series are to be
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
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(e) In addition to the Company's rights above under this Section
8.01, the Company may terminate all of its obligations under this Indenture
with respect to a Series when:
(1) All Securities of such Series theretofore
authenticated and delivered (other than Securities
which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section
2.07 and Securities for whose payment money has
theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or all such
Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the
Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust
solely for that purpose an amount of money sufficient
to pay and discharge the entire Indebtedness on the
Securities not theretofore delivered to the Trustee
for cancellation, for principal of and interest;
(2) The Company has paid or caused to be paid all other
sums payable hereunder by the Company;
(3) The Company has delivered irrevocable instructions to
the Trustee to apply the deposited money toward the
payment of the Securities at maturity or redemption,
as the case may be; and
(4) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that
all conditions precedent specified herein relating to
the satisfaction and discharge of this Indenture have
been complied with.
Section 8.02. Survival of the Company's Obligations.
Notwithstanding the satisfaction and discharge of the Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Securities and
Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).
Section 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. government obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S.
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government obligations in accordance with this Indenture to the payment of
principal of and interest on the Securities of the defeased Series.
Section 8.04. Repayment to the Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person and all liability of the Trustee or such Paying Agent with respect to
such money shall cease.
Section 8.05. Reinstatement.
If the Trustee is unable to apply any money or U.S. government
obligations in accordance with Section 8.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities relating to the Series shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee is permitted to apply all such money or U.S.
government obligations in accordance with Section 8.01; provided, however, that
(a) if the Company has made any payment of interest on or principal of any
Securities of the Series because of the reinstatement of their obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. government obligations held by the
Trustee and (b) unless otherwise required by any legal proceeding or any order
or judgment of any court or governmental authority, the Trustee shall return all
such money or U.S. government obligations to the Company promptly after
receiving a written request therefor at any time, if such reinstatement of the
Company's obligations has occurred and continues to be in effect.
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ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to or consent of any Securityholder of
such Series:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article Five;
(3) to provide that specific provisions of this Indenture shall
not apply to a Series not previously issued;
(4) to create a Series and establish its terms;
(5) to provide for uncertificated Securities in addition to or in
place of certificated Securities; and
(6) to make any other change that does not adversely affect the
rights of Securityholders.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail notice of such amendment to the Securityholders.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to any Securityholder of such Series
but with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each such Series affected by the
amendment. Each such Series shall vote as a separate class. The Holders of a
majority in principal amount of the outstanding Securities of any Series may
waive compliance by the Company with any provision of the Securities of such
Series or of this Indenture relating to such Series without notice to any
Securityholder. Without the consent of each Securityholder of a Series affected,
however, an amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may not:
(1) reduce the amount of Securities of such Series whose Holders
must consent to an amendment, supplement or waiver;
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(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any
Security or alter the provisions (including related
definitions) with respect to redemption of Securities pursuant
to Article Three hereof or with respect to any obligations on
the part of the Company to offer to purchase or to redeem
Securities of a Series pursuant to the Authorizing Resolution
or supplemental indenture pertaining to such Series;
(4) modify the ranking or priority of the Securities of any
Series;
(5) make any change in Sections 6.04, 6.07 or this Section 9.02;
(6) waive a continuing Default or Event of Default in the payment
of the principal of or interest on any Security; or
(7) make any Security payable at a place or in money other than
that stated in the Security, or impair the right of any
Securityholder to bring suit as permitted by Section 6.07.
An amendment of a provision included solely for the benefit of one or
more Series does not affect the interests of Securityholders of any other
Series.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplement, but it shall
be sufficient if such consent approves the substance thereof.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder shall bind
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. Subject to the following
paragraph, any such Holder or subsequent Holder, however, may revoke the consent
as to his Security or portion of a Security. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
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The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Securities of any Series entitled to
consent to any amendment, supplement or waiver, which record date shall be at
least 10 days prior to the first solicitation of such consent. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security; provided, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal of
and interest on a Security, on or after the respective due dates expressed in
such Security, or to bring suit for the enforcement of any such payment on or
after such respective dates without the consent of such Holder.
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Company may require the Holder of the Security to deliver it to the Trustee,
at which time the Trustee shall place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
Section 9.06. Trustee to Sign Amendments, etc.
Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
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ARTICLE TEN
Miscellaneous
Section 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 10.02. Notices.
Any order, consent, notice or communication shall be sufficiently given
if in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
if to the Company:
M.D.C. Holdings, Inc.
3600 South Yosemite
Suite 900
Denver, CO 80237
Telecopy No.: (303) 793-2760
Attention: Chief Financial Officer
if to the Trustee:
-----------------------
-----------------------
Telecopy No.:
----------------
Attention:
-------------------
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail at his address as it appears on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee
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receives it except that notice to the Trustee shall only be effective upon
receipt thereof by the Trustee.
If the Company mails notice or communications to the Securityholders,
it shall mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss.
312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 10.05) stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of such
counsel, all such conditions precedent and covenants,
compliance with which constitutes a condition precedent, if
any, provided for in this Indenture relating to the proposed
action or inaction, have been complied with and that any such
section does not conflict with the terms of the Indenture.
Section 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
39
<PAGE>
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section 10.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in Denver, Colorado and New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. A "Business
Day" is any day other than a Legal Holiday.
Section 10.08. Governing Law.
The laws of the State of New York shall govern this Indenture and the
Securities of each Series.
Section 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.10. No Recourse Against Others.
All liability described in paragraph 12 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
Section 10.11. Successors and Assigns.
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
40
<PAGE>
Section 10.12. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 10.13. Severability.
In case any one or more of the provisions contained in this Indenture
or in the Securities of a Series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Securities.
SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
Dated: , 1997 M.D.C. HOLDINGS, INC.
--------------
By:
Name:
Title:
Dated: , 1997 , as Trustee
--------------- -----------------------
By:
Name:
Title:
(SEAL)
41
<PAGE>
Exhibit A
No. CUSIP No.:
-----------
[Title of Security]
M.D.C. HOLDINGS, INC.
a Delaware corporation
promises to pay to
or registered assigns
the principal sum of [Dollars] on
[Title of Security]
Interest Payment Dates: and
Record Dates and
Authenticated: Dated:
M.D.C. HOLDINGS, INC.
[Seal]
By
--------------------------
Title:
By
--------------------------
Title:
- ------------------------------,
as Trustee, certifies that this is one of the
Securities referred to in the within mentioned
Indenture.
By:
----------------------------
- --------------------------------
Authorized Signatory
A-1
<PAGE>
M.D.C. HOLDINGS, INC.
[Title of Security]
1. Interest.
M.D.C. HOLDINGS, INC. (the "Company"), a Delaware corporation, promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company will pay interest semiannually on
------------------
and of each year until the principal is paid or made available
---------------
for payment. Interest on the Securities will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid, from 19 ; provided that, if there is no existing default
---------------, --
in the payment of interest, and if this Security is authenticated between a
record date referred to on the face hereof and the next succeeding interest
payment date, interest shall accrue from such interest payment date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities (except
defaulted interest, if any, which will be paid on such special payment date to
Holders of record on such special record date as may be fixed by the Company) to
the persons who are registered Holders of Securities at the close of business on
the [Insert record dates]. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.
3. Paying Agent and Registrar.
Initially, (the "Trustee") will act as Paying Agent and
--------------
Registrar. The Company may change or appoint any Paying Agent, Registrar or
co-Registrar without notice. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
, 199 ("Indenture") among the Company and the Trustee. The terms
- ------------- --
of the Securities include those stated in the Indenture (including those terms
set forth in the Authorizing Resolution or supplemental indenture pertaining to
the Securities of the Series of which this Security is a part) and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 ("TIA") as
in effect on the date of the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the Act for a
statement of them.
A-2
<PAGE>
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture and the applicable Authorizing
Resolution or supplemental indenture. Requests may be made to: M.D.C. Holdings,
Inc., 3600 S. Yosemite, Suite 900, Denver, Colorado 80237, Attention: Secretary.
5. Optional Redemption.
The Company may redeem the Securities at any time on or
after , in whole or in part, at the following redemption prices
--------------
(expressed as a percentage of their principal amount) together with interest
accrued and unpaid to the date fixed for redemption:
If redeemed during the Twelve-Month period commencing
on and ending on in each of the
---------- ------------
following years Percentage
------- ------
------- ------
------- ------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date, interest ceases to accrue on
Securities or portions of them called for redemption; provided, that if the
Company shall default in the payment of such Security at the redemption price
together with accrued interest, interest shall continue to accrue at the rate
borne by the Securities.
[Insert provisions relating to redemption at option of Holders, if any]
6. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange
Securities by presentation of such Securities to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Securities of other denominations. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any
A-3
<PAGE>
Security selected for redemption, except the unredeemed part thereof if the
Security is redeemed in part, or transfer or exchange any Securities for a
period of 15 days before a selection of Securities to be redeemed.
7. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of
it for all purposes.
8. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its request. After that, Holders entitled to the money must look to the Company
for payment unless an abandoned property law designates another person.
9. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Securities of each Series affected by the
amendment and any past default or compliance with any provision relating to any
Series of the Securities may be waived in a particular instance with the consent
of the Holders of a majority in principal amount of the outstanding Securities
of such Series. Without the consent of any Securityholder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Securities in
addition to or in place of certificated Securities, to create a Series and
establish its terms, or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
10. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor corporation
will be released from those obligations.
11. Trustee Dealings With Company.
, the Trustee under the Indenture, in its individual or
--------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
A-4
<PAGE>
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
13. Discharge of Indenture.
The Indenture contains certain provisions pertaining to defeasance,
which provisions shall for all purposes have the same effect as if set forth
herein.
14. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
15. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
A-5
<PAGE>
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form
below:
I or we assign and transfer this Security to:
- --------------------------------------------------------------------
- --------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- --------------------------------------------------------------------
- --------------------------------------------------------------------
- --------------------------------------------------------------------
(Print or type assignee's name, address, and zip code)
and irrevocably appoint:
- --------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
- -------------------------------------------------------------------
Date: Your signature:
------------------- --------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature
Guarantee:
----------------------------------------------------------------
1
EXHIBIT 4.2(b)
SCHEDULE OF MATERIAL DETAILS IN WHICH THE FORM OF SENIOR SUBORDINATED DEBT
INDENTURE (INCLUDING FORM OF SENIOR SUBORDINATED DEBENTURE) DIFFERS FROM EXHIBIT
4.2(a), THE FORM OF SENIOR DEBT INDENTURE (INCLUDING FORM OF SENIOR DEBENTURE)
The form of Senior Subordinated Debt Indenture (including the form of
Senior Subordinated Debenture) (the "Senior Subordinated Debt Indenture")
differs from Exhibit 4.2(a), the form of Senior Debt Indenture (including the
form of Senior Debenture) (the "Senior Debt Indenture"), in the following
respects:
(1) The word "Senior" in the Senior Debt Indenture is changed to
the words "Senior Subordinated" in the Senior Subordinated
Debt Indenture; and
(2) Article 11 and the reference to Article 11 in the Table of
Contents in the Senior Subordinated Debt Indenture and
paragraph 16 of the form of Senior Subordinated Debenture are
not present in the form of Senior Debt Indenture and the form
of Senior Debenture; and
In addition, other provisions concerning subordination of the Senior
Subordinated Debentures, which are included in the Senior Subordinated Debt
Indenture, are not applicable to, and do not appear in, the Indenture for the
Senior Debentures.
<PAGE>
EXHIBIT 4.2(b)
M.D.C. HOLDINGS, INC.
Issuer
AND
-----------------------------
Trustee
SENIOR SUBORDINATED DEBT SECURITIES
----------------------
INDENTURE
DATED AS OF , 1997
-------------
----------------------
<PAGE>
ARTICLE ONE - Definitions and Incorporation by Reference
Section 1.01. Definitions....................... 1
Section 1.02. Other Definitions................. 6
Section 1.03. Incorporation by Reference of
Trust Indenture Act............. 7
Section 1.04. Rules of Construction............. 7
ARTICLE TWO - The Securities
Section 2.01. Form and Dating................... 8
Section 2.02. Execution and Authentication...... 9
Section 2.03. Registrar and Paying Agent........ 10
Section 2.04. Paying Agent to Hold Money in
Trust........................... 10
Section 2.05. Securityholder Lists.............. 11
Section 2.06. Transfer and Exchange............. 11
Section 2.07. Replacement Securities............ 11
Section 2.08. Outstanding Securities............ 12
Section 2.09. Temporary Securities.............. 12
Section 2.10. Cancellation...................... 12
Section 2.11. Defaulted Interest................ 13
Section 2.12. Treasury Securities............... 13
Section 2.13. CUSIP Numbers..................... 13
Section 2.14. Deposit of Moneys................. 13
Section 2.15. Book-Entry Provisions for Global
Security........................ 14
ARTICLE THREE - Redemption
Section 3.01. Notices to Trustee................ 15
Section 3.02. Selection of Securities to be
Redeemed........................ 15
Section 3.03. Notice of Redemption.............. 16
Section 3.04. Effect of Notice of Redemption.... 16
Section 3.05. Deposit of Redemption Price....... 17
Section 3.06. Securities Redeemed in Part....... 17
ARTICLE FOUR - Covenants
Section 4.01. Payment of Securities............. 17
Section 4.02. Maintenance of Office or Agency... 17
Section 4.03. Compliance Certificate............ 17
Section 4.04. Payment of Taxes; Maintenance of
Corporate Existence; Maintenance
of Properties................... 18
i
<PAGE>
ARTICLE FIVE - Successor Corporation
Section 5.01. When Company May Merge, etc....... 19
ARTICLE SIX - Defaults and Remedies
Section 6.01. Events of Default................. 20
Section 6.02. Acceleration...................... 22
Section 6.03. Other Remedies.................... 22
Section 6.04. Waiver of Existing Defaults....... 22
Section 6.05. Control by Majority............... 23
Section 6.06. Limitation on Suits............... 23
Section 6.07. Rights of Holders to Receive
Payment......................... 23
Section 6.08. Collection Suit by Trustee........ 24
Section 6.09. Trustee May File Proofs of Claim.. 24
Section 6.10. Priorities........................ 24
Section 6.11. Undertaking for Costs............. 25
ARTICLE SEVEN - Trustee
Section 7.01. Duties of Trustee................. 25
Section 7.02. Rights of Trustee................. 26
Section 7.03. Individual Rights of Trustee...... 27
Section 7.04. Trustee's Disclaimer.............. 27
Section 7.05. Notice of Defaults................ 28
Section 7.06. Reports by Trustee to Holders..... 28
Section 7.07. Compensation and Indemnity........ 28
Section 7.08. Replacement of Trustee............ 29
Section 7.09. Successor Trustee by Merger, etc. 30
Section 7.10. Eligibility; Disqualification..... 30
Section 7.11. Preferential Collection of Claims
Against Company................. 30
ARTICLE EIGHT - Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys
or U.S. Government Obligations. 30
Section 8.02. Survival of the Company's
Obligations..................... 34
Section 8.03. Application of Trust Money........ 34
Section 8.04. Repayment to the Company.......... 34
Section 8.05. Reinstatement..................... 34
ii
<PAGE>
ARTICLE NINE - Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders......... 35
Section 9.02. With Consent of Holders............ 35
Section 9.03. Compliance with Trust Indenture
Act.............................. 37
Section 9.04. Revocation and Effect of Consents.. 37
Section 9.05. Notation on or Exchange of
Securities....................... 37
Section 9.06. Trustee to Sign Amendments, etc.... 38
ARTICLE TEN - Miscellaneous
Section 10.01. Trust Indenture Act Controls....... 38
Section 10.02. Notices............................ 38
Section 10.03. Communications by Holders with
Other Holders.................... 39
Section 10.04. Certificate and Opinion as to
Conditions Precedent............. 39
Section 10.05. Statements Required in
Certificate or Opinion........... 40
Section 10.06. Rules by Trustee and Agents........ 40
Section 10.07. Legal Holidays..................... 40
Section 10.08. Governing Law...................... 40
Section 10.09. No Adverse Interpretation of
Other Agreements................. 41
Section 10.10. No Recourse Against Others......... 41
Section 10.11. Successors and Assigns............. 41
Section 10.12. Duplicate Originals................ 41
Section 10.13. Severability....................... 41
ARTICLE ELEVEN - Subordination
Section 11.01. Agreement to Subordinate........... 41
Section 11.02. Certain Definitions................ 42
Section 11.03. Liquidation; Dissolution;
Bankruptcy....................... 42
Section 11.04. Default on Senior Indebtedness..... 42
Section 11.05. Acceleration of Securities......... 43
Section 11.06. When Distributions Must Be Paid
over............................. 43
Section 11.07. Notice by the Company.............. 44
Section 11.08. Subrogation........................ 44
Section 11.09. Relative Rights.................... 44
Section 11.10. Subordination May Not Be Impaired
by the Company................... 45
Section 11.11. Distribution or Notice to the
Representative................... 45
Section 11.12. Rights of the Trustee and Paying
Agent............................ 45
Section 11.13. No Fiduciary Duty to Holders of
Senior Indebtedness.............. 46
iii
<PAGE>
CROSS-REFERENCE TABLE
This Cross-Reference Table is not a part of the Indenture.
TIA Indenture
Section Section
- ------------ --------
310(a)(1).......................................... 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(b)................................................ 7.08; 7.10; 10.02
311(a)............................................. 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)............................................. 2.05
(b)................................................ 10.03
(c)................................................ 10.03
313(a)............................................. 7.06
(b)(1)............................................. N.A.
(b)(2)............................................. 7.06
(c)................................................ 10.02
(d)................................................ 7.06
314(a)............................................. 7.06; 10.02
(b)................................................ N.A.
(c)(1)............................................. 10.04
(c)(2)............................................. 10.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 10.05
(f)................................................ N.A.
315(a)............................................. 7.01(b)
(b)................................................ 7.05; 10.02
(c)................................................ 7.01(a)
(d)................................................ 7.01(c)
(e)................................................ 6.11
316(a)(last sentence).............................. 2.12
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.07
(c)................................................ 9.04
317(a)(1).......................................... 6.08
(a)(2)............................................. 6.09
(b)................................................ 2.04
318(a)............................................. 10.01
- -----------------------------
N.A. means Not Applicable.
iv
<PAGE>
INDENTURE dated as of , 1997, by and among M.D.C.
-------------
HOLDINGS, INC., a Delaware corporation (the "Company"), and , (the
------------
"Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's debt securities
issued under this Indenture (the "Securities"):
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person, or (ii) any officer,
director, a Person acting with respect to such Person in a similar capacity, or
controlling shareholder of such other Person. For purposes of this definition,
the term "control" means (a) the power to direct the management and policies of
a Person, either directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise, or (b) without
limiting the foregoing, the beneficial ownership of 10% or more of the voting
power of the voting common equity of such Person (on a fully diluted basis).
Notwithstanding the foregoing, the term "Affiliate" will not include, with
respect to the Company or any Restricted Subsidiary of the Company, any
Restricted Subsidiary of the Company, or the Company, with respect to any
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.
"Bankruptcy Law" means title 11 of the United States Code, as
amended, or any similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or
any authorized committee thereof.
1
<PAGE>
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person's capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other equity interests, whether now
outstanding or issued after the applicable Issue Date, including, without
limitation, all Preferred Stock.
"Capitalized Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.
"Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means the
successor.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect such Person or any of its Subsidiaries or Affiliates against
fluctuations in currency values.
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, unless otherwise timely cured, an Event of
Default.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indebtedness" of any Person means, without duplication, (i) any
liability of such Person (other than accounts payable, other trade payables and
accrued expenses incurred in the ordinary course of such Person's business) (a)
for borrowed money or under any reimbursement obligation relating to a letter of
credit or other similar instruments (other than standby letters of credit issued
for the benefit of or surety, performance, completion or payment bonds, earnest
money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business, general contingency and tax reserves,
liabilities for deposits and deferred income which in accordance with GAAP is
recorded as a liability), (b) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind or with services
incurred in connection with capital expenditures (other than any obligation to
pay a contingent
2
<PAGE>
purchase price which, as of the date of incurrence thereof is not required to be
recorded as a liability in accordance with GAAP), or (c) in respect of
Capitalized Lease Obligations (to the extent of the Attributable Debt in respect
thereof), (ii) any Indebtedness of others that such Person has guaranteed to the
extent of the guarantee, (iii) to the extent not otherwise included, the
obligations of such Person under Currency Agreements or Interest Protection
Agreements to the extent recorded as liabilities not constituting Interest
Incurred, net of amounts recorded as assets in respect of such agreements, in
accordance with GAAP, and (iv) all Indebtedness of others secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person. The amount of Indebtedness of any Person at any date shall be (a) the
outstanding balance at such date of all unconditional obligations as described
above, net of any unamortized discount to be accounted for as Interest Expense,
in accordance with GAAP, (b) the maximum liability of such Person for any
contingent obligations under clause (ii) above at such date, net of, any
unamortized discount to be accounted for as Interest Expense in accordance with
GAAP and (c) in the case of clause (iv) above, the lesser of (1) the fair market
value of any asset subject to a Lien securing the Indebtedness of others on the
date that the Lien attaches and (2) the amount of the Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time
to time, including pursuant to any Authorizing Resolution or supplemental
indenture pertaining to any Series.
"Interest Expense" of any Person for any period means, without
duplication, the aggregate amount of (i) interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like caption
on an income statement for such Person (including, without limitation, imputed
interest included in Capitalized Lease Obligations, all commissions, discounts
and other fees and charges owned with respect to letters of credit and bankers'
acceptance financing, the net costs (but reduced by net gains) associated with
Currency Agreements and Interest Protection Agreements, amortization of other
financing fees and expenses; with respect to the Company and its Restricted
Subsidiaries, but excluding its Unrestricted Subsidiaries, the interest portion
of any deferred payment obligation, amortization of discount or premium, if any,
and all other noncash interest expense other than interest and other charges
amortized to cost of sales), and (ii) all interest actually paid by the Company
or a Restricted Subsidiary under any guarantee of Indebtedness (including,
without limitation, a guarantee of principal, interest or any combination
thereof) of any Person other than the Company or any Restricted Subsidiary
during such period; provided, that Interest Expense shall exclude any expense
associated with the complete write-off of financing fees and expenses in
connection with the repayment or repurchase of any Indebtedness.
"Interest Protection Agreement" of any Person means any interest rate
swap agreement, interest rate collar agreement, option or futures contract or
other similar agreement or arrangement designed to protect such Person or any of
its Subsidiaries
3
<PAGE>
against fluctuations in interest rates with respect to Indebtedness permitted to
be incurred under this Indenture.
"Investments" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
all guarantees of Indebtedness or other obligations of any other Person by such
person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments in any other
Person (including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
"Issue Date" means, with respect to any Series of Securities, the date
on which the Securities of such Series are originally issued under this
Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such Property
(other than an obligation to share revenues or profits upon the sale or
liquidation of Property to which such obligation relates). For purposes of this
definition, a Person shall be deemed to own, subject to a Lien, any Property
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person for which (i) the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments evidencing or securing such Indebtedness and such
property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within 90 days after the acquisition of such property
and (ii) no other assets of such Person may be realized upon in collection of
principal or interest on such Indebtedness. Indebtedness which is otherwise
Non-Recourse Indebtedness will not lose its character as Non-Recourse
Indebtedness because there is recourse to the borrower or any other Person for
(i) environmental warranties and indemnities, or (ii) indemnities for and
liabilities arising from fraud, misrepresentation, misapplication or non-payment
of rents, profits, insurance and condemnation proceeds and other sums actually
received by the borrower from secured assets to be paid to the lender, waste and
mechanics' liens.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company.
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"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or with respect to the payment of
dividends.
"Principal" of a debt security means the principal of the security
plus, when appropriate, the premium, if any, on the security.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person, whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Subsidiary" means any Subsidiary of the Company which is
not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission or any successor
agency performing the duties now assigned to it under the TIA.
"Securities" means any Securities that are issued under this Indenture.
"Series" means a series of Securities established under this Indenture.
"Significant Subsidiary" means any Subsidiary of the Company which
would constitute a "significant subsidiary" as defined in Rule 1.02 of
Regulation S-X under the Securities Act and the Exchange Act.
"Subsidiary" of any Person means any corporation or other entity (other
than political subdivisions or enterprises thereof or governmental agencies) of
which a majority of the Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time directly or indirectly owned or controlled by such Person.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor serving hereunder.
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"Trust Officer" means the Chairman of the Board, the President, any
Vice President or any other officer or assistant officer of the Trustee assigned
by the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
"U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt issued
by a bank or trust company as custodian with respect to any such U.S. government
obligations or a specific payment of interest on or principal of any such U.S.
government obligation held by such custodian for the account of the holder of a
depositary receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. government obligation or the specific payment of interest on or
principal of the U.S. government obligation evidenced by such depositary
receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company so
designated by a resolution adopted by the Board of Directors of the Company.
Section 1.02. Other Definitions
Term Defined in
Section
"Agent Members"........................................ 2.15
"Business Day"......................................... 10.07
"Custodian"............................................ 6.01
"Depositary"........................................... 2.15
"Event of Default"..................................... 6.01
"Legal Holiday"........................................ 10.07
"Paying Agent"......................................... 2.03
"Registrar"............................................ 2.03
"Senior Indebtedness".................................. 11.02
"Representative"....................................... 11.02
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Section 1.03. Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities of a Series thereof.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings so assigned to them.
Section 1.04. Rules of Construction
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term, not otherwise defined, has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
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ARTICLE TWO
The Securities
Section 2.01. Form and Dating
The aggregate principal amount of Securities that may be issued under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more Series. Each Series shall be created by an Authorizing Resolution or
a supplemental indenture that establishes the terms of the Series, which may
include the following:
(1) the title of the Series;
(2) the aggregate principal amount (or any limit on the aggregate
principal amount) of the Series and, if any Securities of a
Series are to be issued at a discount from their face amount,
the method of computing the accretion of such discount;
(3) the interest rate or method of calculation of the interest
rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Securities of the
Series;
(6) the dates when, places where and manner in which principal
and interest are payable;
(7) the Registrar and Paying Agent;
(8) the terms of any mandatory (including any sinking fund
requirements) or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer
form and the terms of any such forms of Securities;
(12) whether any Securities will be represented by a global
Security and the terms of any such global Security;
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(13) if payments of principal or interest may be made in a
currency other than that in which Securities are denominated,
the manner for determining such payments;
(14) provisions for electronic issuance of Securities or
issuance of Securities in uncertificated form;
(15) any Events of Default, covenants and/or defined terms in
addition to or in lieu of those set forth in this Indenture;
(16) whether and upon what terms Securities may be defeased if
different from the provisions set forth in this Indenture;
(17) the form of the Securities, which, unless the Authorizing
Resolution or supplemental indenture otherwise provides,
shall be in the form of Exhibit A;
(18) any terms that may be required by or advisable under
applicable law;
(19) the percentage of the principal amount of the Securities which
is payable if the maturity of the Securities is accelerated in
the case of Securities issued at a discount from their face
amount; and
(20) any other terms in addition to or different from those
contained in this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and
delivery thereof are not subject to any conditions precedent.
Section 2.02. Execution and Authentication
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
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A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon
receipt of an Officers' Certificate of the Company. Each Security shall be dated
the date of its authentication.
Section 2.03. Registrar and Paying Agent
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent) and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional paying agents.
The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such Agent
and the Trustee shall have the right to inspect the Securities register at all
reasonable times to obtain copies thereof, and the Trustee shall have the right
to rely upon such register as to the names and addresses of the Holders and the
principal amounts and certificate numbers thereof. If the Company fails to
maintain a Registrar or Paying Agent or fails to give the foregoing notice, the
Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
Section 2.04. Paying Agent to Hold Money in Trust
Each Paying Agent shall hold in trust for the benefit of
Securityholders and the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money and hold it
as a separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon doing so the Paying Agent shall
have no further liability for the money.
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Section 2.05. Securityholder Lists
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least 5 Business Days before each semi-annual interest payment
date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
Section 2.06. Transfer and Exchange
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.
Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
Section 2.07. Replacement Securities
If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security; provided, however, in the case of a lost, destroyed or
wrongfully taken Security, that the requirements of Section 8-405 of the New
York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof. An indemnity bond must be sufficient in the judgment of the
Company and the
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Trustee to protect the Company, the Trustee or any Agent from any loss which any
of them may suffer if a Security is replaced, including the acquisition of such
Security by a bona fide purchaser. The Company or the Trustee may charge the
Holder for expenses in replacing a Security.
Section 2.08. Outstanding Securities
Securities outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by it and those described in this Section.
A Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If, on a redemption date or maturity date, the Paying Agent holds money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.09. Temporary Securities
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.
Section 2.10. Cancellation
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
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cancellation. Unless the Authorizing Resolution so provides, the Company may not
issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record date and a payment date which
shall be reasonably satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest to
be paid. On or before the date such notice is mailed, the Company shall deposit
with the Paying Agent money sufficient to pay the amount of defaulted interest
to be so paid. The Company may pay defaulted interest in any other lawful manner
if, after notice given by the Company to the Trustee of the proposed payment,
such manner of payment shall be deemed practicable by the Trustee.
Section 2.12. Treasury Securities
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Subsidiaries shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so considered.
Section 2.13. CUSIP Numbers
The Company in issuing the Securities of any Series may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.
Section 2.14. Deposit of Moneys
Prior to 11:00 a.m. New York City time on each interest payment date
and maturity date with respect to each Series of Securities, the Company shall
have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments due on such interest payment date or maturity
date, as the case may be, in a timely manner
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which permits the Paying Agent to remit payment to the Holders on such interest
payment date or maturity date, as the case may be.
Section 2.15. Book-Entry Provisions for Global Security
(a) Any global Security of a Series initially shall (i) be
registered in the name of the depository who shall be identified in the
Authorizing Resolution or supplemental indenture relating to such Securities
(the "Depository") or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear any required legends.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any global
Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of any global Security shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the global Security may be
transferred or exchanged for definitive Securities in accordance with the rules
and procedures of the Depository. In addition, definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue definitive
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.
(d) In connection with the transfer of an entire global Security to
beneficial owners pursuant to paragraph (b), the global Security shall be deemed
to be surrendered
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to the Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the global Security, an
equal aggregate principal amount of definitive Securities of authorized
denominations.
(e) The Holder of any global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities of such Series.
ARTICLE THREE
Redemption
Section 3.01. Notices to Trustee
Securities of a Series that are redeemable prior to maturity shall be
redeemable in accordance with their terms and, unless the Authorizing Resolution
or supplemental indenture provides otherwise, in accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the Redemption Date
and the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed,
retired or acquired against any redemption pursuant to Paragraph 6 of the
Securities, it shall notify the Trustee of the amount of the credit and it shall
deliver any Securities not previously delivered to the Trustee for cancellation
with such notice.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed
If fewer than all of the Securities of a Series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger
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than the minimum denomination for the Series. Securities and portions of them it
selects shall be in amounts equal to the minimum denomination for the Series or
an integral multiple thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
Section 3.03. Notice of Redemption
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(6) that the Securities are being redeemed pursuant to the
mandatory redemption or the optional redemption provisions,
as applicable.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall deliver to the Trustee at least 15 days prior to the date on which
notice of redemption is to be mailed or such shorter period as may be
satisfactory to the Trustee, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price as set
forth in the notice of redemption. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.
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Section 3.05. Deposit of Redemption Price
On or before the redemption date, the Company shall deposit with the
Paying Agent immediately available funds sufficient to pay the redemption price
of and accrued interest on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for each Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities
The Company shall pay the principal of and interest on a Series on the
dates and in the manner provided in the Securities of the Series. An installment
of principal or interest shall be considered paid on the date it is due, if on
that date the Paying Agent holds money designated for and sufficient to pay the
installment; provided, however, that money held by the Paying Agent for the
benefit of holders of Senior Indebtedness pursuant to the provisions of Article
11 hereof shall not be considered paid within the meaning of this Section 4.01.
The Company shall pay interest on overdue principal at the rate borne
by the Series; it shall pay interest on overdue installments of interest at the
same rate.
Section 4.02. Maintenance of Office or Agency
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee.
Section 4.03. Compliance Certificate
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating whether or
not the signers know
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of any Default by the Company in performing any of its
obligations under this Indenture. If they do know of such a Default, the
certificate shall describe the Default.
Section 4.04. Payment of Taxes; Maintenance of Corporate Existence;
Maintenance of Properties
The Company will:
(a) cause to be paid and discharged all lawful taxes,
assessments and governmental charges or levies imposed upon
the Company and its Restricted Subsidiaries or upon the
income or profits of the Company and its Restricted
Subsidiaries or upon property or any part thereof belonging
to the Company and its Restricted Subsidiaries before the
same shall be in default, as well as all lawful claims for
labor, materials and supplies which, if unpaid, might
become a lien or charge upon such property or any part
thereof; provided, however, that the Company shall not be
required to cause to be paid or discharged any such tax,
assessment, charge, levy or claim so long as the validity
or amount thereof shall be contested in good faith by
appropriate proceedings and the nonpayment thereof does not,
in the judgment of the Company, materially adversely
affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture
when due; and provided further, that the Company shall not
be required to cause to be paid or discharged any such tax,
assessment, charge, levy or claim if, in the judgment of the
Company, such payment shall not be advantageous to the
Company in the conduct of its business and if the failure
so to pay or discharge does not, in its judgment,
materially adversely affect the ability of the Company and
the Restricted Subsidiaries to pay all obligations under
this Indenture when due;
(b) cause to be done all things necessary to preserve and keep in
full force and effect the corporate existence of the Company
and each of its Restricted Subsidiaries; provided, however,
that nothing in this subsection (b) shall prevent a
consolidation or merger of the Company or any Restricted
Subsidiary not prohibited by the provisions of Article Five or
any other provision or the Authorizing Resolution or
supplemental indenture pertaining to a Series, and the Company
need not maintain the corporate existence of an immaterial
Restricted Subsidiary ; and
(c) at all times keep, maintain and preserve the property
of the Company and the Restricted Subsidiaries in good
repair, working order and condition (reasonable wear and
tear excepted) and from time to time make all needful and
proper repairs, renewals, replacements, betterments
and improvements thereto, so that the business carried
on in connection therewith may be
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properly and advantageously conducted at all times;
provided, however, that nothing in this subsection (c) shall
prevent the Company from discontinuing the operation and
maintenance of any such properties if such discontinuance
is, in the judgment of the Company, desirable in the conduct
of its business and not disadvantageous in any material
respect to the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture
when due.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc
The Company shall not consolidate with or merge with or into, any other
corporation, or transfer all or substantially all of its assets to, any entity
unless permitted by law and unless (1) the resulting, surviving or transferee
entity, which shall be a corporation organized and existing under the laws of
the United States or a State thereof, assumes by supplemental indenture, in a
form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture and (2) immediately after giving
effect to, and as a result of, such transaction, no Default or Event of Default
shall have occurred and be continuing. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the "Company" and all such obligations
of the predecessor corporation shall terminate.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
To the extent that an Authorizing Resolution or supplemental indenture
pertaining to any Series provides for different provisions relating to the
subject matter of this Article Five, the provisions in such Authorizing
Resolution or supplemental indenture shall govern for purposes of such Series.
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ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default
An "Event of Default" on a Series occurs if, voluntarily or
involuntarily, whether by operation of law or otherwise, any of the following
occurs:
(1) the failure by the Company to pay interest on any Security of
such Series when the same becomes due and payable and the continuance of any
such failure for a period of 30 days;
(2) the failure by the Company to pay the principal or premium
of any Security of such Series when the same becomes due and payable at
maturity, upon acceleration or otherwise;
(3) the failure by the Company or any Restricted Subsidiary to
comply in all material respects with any of its agreements or covenants
in, or provisions of, the Securities of such Series, or this Indenture (as
they relate thereto) and such failure continues for the period and after
the notice specified below (except in the case of a default with respect to
Article Five (or any replacement provisions as contemplated by Article Five),
which will constitute an Event of Default with notice but without passage of
time);
(4) the acceleration of any Indebtedness (other than
Non-Recourse Indebtedness) of the Company or any Restricted Subsidiary in
an amount of $30 million or more, individually or in the aggregate, and such
acceleration does not cease to exist, or such Indebtedness is not satisfied, in
either case within 30 days after such acceleration;
(5) the failure by the Company or any Restricted Subsidiary to
make any principal or interest payment in an amount of $30 million or more,
individually or in the aggregate, in respect of Indebtedness for borrowed money
(other than Non-Recourse Indebtedness) of the Company or any Restricted
Subsidiary within 30 days of such principal or interest becoming due and payable
(after giving effect to any applicable grace period set forth in the documents
governing such Indebtedness);
(6) a final judgment or judgments in an amount of $30 million or
more, individually or in the aggregate, for the payment of money having been
entered by a court or courts of competent jurisdiction against the Company or
any of its Restricted Subsidiaries and such judgment or judgments is not covered
by a policy of insurance, satisfied, stayed, annulled or rescinded within 90
days of being entered;
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(7) the Company or any Restricted Subsidiary that is a
Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment (except in the case of a
Restricted Subsidiary, to the Company) for the
benefit of its creditors; or
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary as debtor
in an involuntary case,
(B) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or a
Custodian for all or substantially all of the
property of the Company or any Restricted Subsidiary
that is a Significant Subsidiary, or
(C) orders the liquidation of the Company or any
Restricted Subsidiary that is a Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 90 days.
A Default as described in sub-clause (3) above will not be deemed an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25 percent in principal amount of the then outstanding Securities of the
applicable Series notify the Company and the Trustee, of the Default and (except
in the case of a default with respect to Article Five (or any replacement
provisions as contemplated by Article Five)) the Company does not cure the
Default within 90 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." If such a Default is cured within such time period, it ceases.
The term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
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Section 6.02. Acceleration
If an Event of Default (other than an Event of Default with respect to
the Company resulting from sub-clauses (7) or (8) above), shall have occurred
and be continuing under the Indenture, the Trustee by notice to the Company, or
the Holders of at least 25 percent in principal amount of the Securities of the
applicable Series then outstanding by notice to the Company and the Trustee, may
declare all Securities of such Series to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Securities
of such Series will be due and payable immediately. If an Event of Default with
respect to the Company specified in sub-clauses (7) or (8) above occurs, all
amounts due and payable on the Securities of such Series will ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee and the Company or any Holder. The Holders of a
majority in principal amount of the Securities of such Series then outstanding
by written notice to the Trustee and the Company may waive any Default or Event
of Default (other than any Default or Event of Default in payment of principal
or interest) with respect to such Series of Securities under the Indenture.
Holders of a majority in principal amount of the then outstanding Securities of
such Series may rescind an acceleration with respect to such Series and its
consequence (except an acceleration due to nonpayment of principal or interest
on the Securities of such Series) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived.
No such rescission shall extend to or shall affect any subsequent Event
of Default, or shall impair any right or power consequent thereon.
Section 6.03. Other Remedies
If an Event of Default on a Series occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on the Series or to enforce the
performance of any provision in the Securities or this Indenture applicable to
the Series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Existing Defaults
Subject to Section 9.02, the Holders of a majority in principal amount
of the outstanding Securities of a Series on behalf of all the Holders of the
Series by notice to the
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Trustee may waive an existing Default on such Series and its consequences.
When a Default is waived, it is cured and stops continuing, and any Event of
Default arising therefrom shall be deemed to have been cured; but no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.05. Control by Majority
The Holders of a majority in principal amount of the outstanding
Securities of a Series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to such Series. The Trustee, however, may
refuse to follow any direction (i) that conflicts with law or this Indenture,
(ii) that, subject to Section 7.01, the Trustee determines is unduly prejudicial
to the rights of other Securityholders, or (iii) that would involve the Trustee
in personal liability.
Section 6.06. Limitation on Suits
A Securityholder of a Series may not pursue any remedy with respect to
this Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default on the Series;
(2) the Holders of at least a majority in principal amount of
the outstanding Securities of the Series make a written
request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 90 days
after receipt of the request and the offer of indemnity; and
(5) no written request inconsistent with such written request
shall have been given to the Trustee pursuant to this Section
6.06.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. Rights of Holders to Receive Payment
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Security, on or
after the respective due
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dates expressed in the Security, or to bring suit for the enforcement of any
such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal and interest remaining unpaid.
Section 6.09. Trustee May File Proofs of Claim
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property, and unless prohibited by applicable law or regulation, may vote on
behalf of the Holders in any election of a Custodian, and shall be entitled and
empowered to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder to make
such payments to the Trustee. Nothing herein shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to authorize
the Trustee to vote in respect of the claim of any Securityholder except as
aforesaid for the election of the Custodian.
Section 6.10. Priorities
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Indebtedness to the extent required by
Article 11;
Third: to Securityholders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable
on the Securities for principal and interest, respectively; and
Fourth: to the Company as its interests may appear. The Trustee may fix
a record date and payment date for any payment to Securityholders
pursuant to this Section 6.10.
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Section 6.11. Undertaking for Costs
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having the due regard
to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Series.
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the
Trustee shall, prior to the receipt of directions from the Holders of a
majority in principal amount of the Securities, exercise its rights and powers
and use the same degree of care and skill in their exercise as a prudent man
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that
are specifically set forth in this Indenture and no
others and no implied covenants or obligations shall
be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of his Indenture. The Trustee, however,
shall examine the certificates and opinions to
determine whether or not they conform to the
requirements of this Indenture but need not confirm
or investigate the accuracy of mathematical
calculations or other facts or matters stated herein.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
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(1) This paragraph does not limit the effect of
paragraph (b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant
to Section 6.05 or any other direction of the Holders
permitted hereunder.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to
the extent required by law.
(g) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
Section 7.02. Rights of Trustee
Subject to Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting on any document, resolution, certificate, instrument,
report, or direction believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document, resolution, certificate, instrument, report, or
direction.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both, which shall conform
to Sections 10.04 and 10.05 hereof and containing such other statements as the
Trustee reasonably deems necessary to perform its duties hereunder. The Trustee
shall not be liable for any action
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it takes or omits to take in good faith in reliance on the Officers'
Certificate, Opinion of Counsel or any other direction of the Company permitted
hereunder.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
(e) The Trustee may consult with counsel, and the written advice of
such counsel or any Opinion of Counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Unless otherwise specifically provided in the Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(g) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default (other than under
Section 6.01(1) or 6.01(2)) unless a Trust Officer assigned to and working in
the Trustee's corporate trust office has actual knowledge thereof or unless
written notice of any Event of Default is received by the Trustee at its address
specified in Section 10.02 hereof and such notice references the Securities
generally, the Company or this Indenture.
Section 7.03. Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer
The Trustee makes no representation as to the validity or adequacy of
this Indenture, the Securities or of any prospectus used to sell the Securities;
it shall not be accountable for the Company's use of the proceeds from the
Securities; it shall not be accountable for any money paid to the Company, or
upon the Company's direction, if made under and in accordance with any provision
of this Indenture; it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee; and it shall not be
responsible for any statement of the Company in this Indenture or in the
Securities other than its certificate of authentication.
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Section 7.05. Notice of Defaults
If a Default on a Series occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Securityholder of the Series notice
of the Default (which shall specify any uncured Default known to it) within 90
days after it occurs. Except in the case of a default in payment of principal of
or interest on a Series, the Trustee may withhold the notice if and so long as
the board of directors of the Trustee, the executive or any trust committee of
such directors and/or responsible officers of the Trustee in good faith
determine(s) that withholding the notice is in the interests of Holders of the
Series.
Section 7.06. Reports by Trustee to Holders
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA ss. 313(a) (but if
no event described in TIA ss. 313(2) has occurred within the twelve months
preceding the reporting date no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be delivered to the Company and filed by the Trustee with the SEC and each
national securities exchange on which the Securities are listed. The Company
agrees to notify the Trustee of each national securities exchange on which the
Securities are listed.
Section 7.07. Compensation and Indemnity
The Company shall pay to the Trustee or predecessor trustee from time
to time reasonable compensation for their respective services subject to any
written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith.
To ensure the Company's payment obligations in this Section, the
Trustee shall have a claim prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.
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When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 6.01 or in connection with Article 6
hereof, the expenses (including the reasonable fees and expenses of its counsel)
and the compensation for services in connection therewith are to constitute
expenses of administration under any bankruptcy law.
Section 7.08. Replacement of Trustee
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the removed Trustee in writing and may appoint a
successor trustee with the Company's consent. Such resignation or removal shall
not take effect until the appointment by the Securityholders or the Company as
hereinafter provided of a successor trustee and the acceptance of such
appointment by such successor trustee. The Company may remove the Trustee and
any Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee for any or no
reason, including if:
(1) the Trustee fails to comply with Section 7.10 after written
request by the Company or any bona fide Securityholder who has
been a Securityholder for at least six months;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for the appointment of a
successor trustee.
A successor trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor trustee shall mail
notice of its succession to each Securityholder.
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Section 7.09. Successor Trustee by Merger, etc
If the Trustee consolidates with, merges with or into or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor trustee.
Section 7.10. Eligibility; Disqualification
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.310(a)(1). The Trustee shall have a combined capital and
surplus of at least $10,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA ss.310(b).
Section 7.11. Preferential Collection of Claims Against Company
The Trustee shall comply with TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b). A Trustee who has resigned or been removed
shall be subject to TIA ss.311(a) to the extent indicated therein.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government
Obligations
(a) The Company may, at its option and at any time, elect to have
either paragraph (b) or paragraph (c) below be applied to the outstanding
Securities of any Series upon compliance with the applicable conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its respective obligations with respect to the
outstanding Securities of a Series on the date the applicable conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Securities of
a Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of the Sections and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned, except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities of a Series to
receive solely from the trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii)
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obligations listed in Section 8.02, subject to compliance with this Section
8.01. The Company may exercise its option under this paragraph
(b) notwithstanding the prior exercise of its option under paragraph
(c) below with respect to such Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from the obligations under any covenant contained in Article Five and any other
covenant contained in the Authorizing Resolution or supplemental indenture
relating to such Series to the extent provided for therein, on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities of such Series shall thereafter be deemed to be
not "outstanding" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities of a Series, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(3), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities of the
applicable Series:
(1) The Company shall have irrevocably deposited in
trust with the Trustee, pursuant to an irrevocable
trust and security agreement in form and substance
reasonably satisfactory to the Trustee, money in U.S.
dollars or U.S. government obligations or a
combination thereof in such amounts and at such times
as are sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to
pay the principal of and interest on the outstanding
Securities of such Series to maturity or redemption;
provided, however, that the Trustee (or other
qualifying trustee) shall have received an
irrevocable written order from the Company
instructing the Trustee (or other qualifying trustee)
to apply such money or the proceeds of such U.S.
government obligations to said payments with respect
to the Securities of such Series to maturity or
redemption;
(2) No Default or Event of Default shall have occurred
and be continuing on the date of such deposit;
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(3) Such deposit will not result in a Default under
this Indenture or a breach or violation of, or
constitute a default under, any other material
instrument or agreement to which the Company or any
of its Subsidiaries is a party or by which it or any
of their property is bound;
(4) (i) In the event the Company elects paragraph (b)
hereof, the Company shall deliver to the Trustee an
Opinion of Counsel in the United States, in form and
substance reasonably satisfactory to the Trustee, to
the effect that (A) the Company has received from, or
there has been published by, the Internal Revenue
Service a ruling or (B) since the Issue Date
pertaining to such Series, 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 state that, or (ii) in the event the
Company elects paragraph (c) hereof, the Company
shall deliver to the Trustee an Opinion of Counsel in
the United States, in form and substance reasonably
satisfactory to the Trustee, to the effect that, in
the case of clauses (i) and (ii), Holders of the
Securities of such Series will not recognize income,
gain or loss for United States federal income tax
purposes as a result of such deposit and the
defeasance contemplated hereby and will be subject to
federal income tax in the same amounts and in the
same manner and at the same times as would have been
the case if such deposit and defeasance had not
occurred;
(5) The Company shall have delivered to the Trustee
an Officers' Certificate, stating that the deposit
under clause (1) was not made by the Company with the
intent of preferring the Holders of the Securities of
such Series over any other creditors of the Company
or with the intent of defeating, hindering, delaying
or defrauding any other creditors of the Company or
others;
(6) The Company shall have delivered to the Trustee
an Opinion of Counsel, reasonably satisfactory to the
Trustee, to the effect that, (A) the trust funds will
not be subject to the rights of Holders of
Indebtedness of the Company other than the Securities
of such Series and (B) assuming no intervening
bankruptcy of the Company between the date of deposit
and the 91st day following the deposit and that no
Holder of Securities of such Series is an insider of
the Company, after the 91st day following the
deposit, the trust funds will not be subject to any
applicable bankruptcy, insolvency, reorganization or
similar law affecting creditors' rights generally;
and
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(7) The Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent specified
herein relating to the defeasance contemplated by
this Section 8.01 have been complied with.
In the event all or any portion of the Securities of a Series are to be
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
(e) In addition to the Company's rights above under this
Section 8.01, the Company may terminate all of its obligations under this
Indenture with respect to a Series when:
(1) All Securities of such Series theretofore
authenticated and delivered (other than Securities
which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section
2.07 and Securities for whose payment money has
theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or all such
Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the
Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust
solely for that purpose an amount of money sufficient
to pay and discharge the entire Indebtedness on the
Securities not theretofore delivered to the Trustee
for cancellation, for principal of and interest;
(2) The Company has paid or caused to be paid all other
sums payable hereunder by the Company;
(3) The Company has delivered irrevocable instructions
to the Trustee to apply the deposited money
toward the payment of the Securities at maturity or
redemption, as the case may be; and
(4) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that
all conditions precedent specified herein relating to
the satisfaction and discharge of this Indenture have
been complied with.
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<PAGE>
Section 8.02. Survival of the Company's Obligations
Notwithstanding the satisfaction and discharge of the Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Securities and
Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).
Section 8.03. Application of Trust Money
The Trustee shall hold in trust money or U.S. government obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. government obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities of the defeased
Series.
Section 8.04. Repayment to the Company
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person and all liability of the Trustee or such Paying Agent with respect to
such money shall cease.
Section 8.05. Reinstatement
If the Trustee is unable to apply any money or U.S. government
obligations in accordance with Section 8.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities relating to the Series shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee is permitted to apply all such money or U.S.
government obligations in accordance with Section 8.01; provided, however, that
(a) if the Company has made any payment of interest on or principal of any
34
<PAGE>
Securities of the Series because of the reinstatement of their obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. government obligations held by the
Trustee and (b) unless otherwise required by any legal proceeding or any order
or judgment of any court or governmental authority, the Trustee shall return all
such money or U.S. government obligations to the Company promptly after
receiving a written request therefor at any time, if such reinstatement of the
Company's obligations has occurred and continues to be in effect.
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to or consent of any Securityholder of
such Series:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article Five;
(3) to provide that specific provisions of this Indenture
shall not apply to a Series not previously issued;
(4) to create a Series and establish its terms;
(5) to provide for uncertificated Securities in addition to or
in place of certificated Securities; and
(6) to make any other change that does not adversely affect the
rights of Securityholders.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail notice of such amendment to the Securityholders.
Section 9.02. With Consent of Holders
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to any Securityholder of such Series
but with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each such Series affected by the
amendment. Each such Series shall vote
35
<PAGE>
as a separate class. The Holders of a majority in principal amount of the
outstanding Securities of any Series may waive compliance by the Company with
any provision of the Securities of such Series or of this Indenture relating to
such Series without notice to any Securityholder. Without the consent of each
Securityholder of a Series affected, however, an amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities of such Series whose
Holders must consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any
Security or alter the provisions (including related
definitions) with respect to redemption of Securities pursuant
to Article Three hereof or with respect to any obligations on
the part of the Company to offer to purchase or to redeem
Securities of a Series pursuant to the Authorizing Resolution
or supplemental indenture pertaining to such Series;
(4) modify the ranking or priority of the Securities of any
Series;
(5) make any change in Sections 6.04, 6.07 or this Section 9.02;
(6) waive a continuing Default or Event of Default in the payment
of the principal of or interest on any Security; or
(7) make any Security payable at a place or in money other than
that stated in the Security, or impair the right of any
Securityholder to bring suit as permitted by Section 6.07.
An amendment of a provision included solely for the benefit of one or
more Series does not affect the interests of Securityholders of any other
Series.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplement, but it shall
be sufficient if such consent approves the substance thereof.
After the issuance of any Securities, an amendment under this Section
or under Section 9.01 may not make any change that adversely affects in any
material respect the rights under Article 11 of the holders of Senior
Indebtedness, unless such holders of Senior Indebtedness consent to the change.
36
<PAGE>
Section 9.03. Compliance with Trust Indenture Act
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents
A consent to an amendment, supplement or waiver by a Holder shall bind
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. Subject to the following
paragraph, any such Holder or subsequent Holder, however, may revoke the consent
as to his Security or portion of a Security. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Securities of any Series entitled to
consent to any amendment, supplement or waiver, which record date shall be at
least 10 days prior to the first solicitation of such consent. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security; provided, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal of
and interest on a Security, on or after the respective due dates expressed in
such Security, or to bring suit for the enforcement of any such payment on or
after such respective dates without the consent of such Holder.
Section 9.05. Notation on or Exchange of Securities
If an amendment, supplement or waiver changes the terms of a Security,
the Company may require the Holder of the Security to deliver it to the Trustee,
at which time the Trustee shall place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Section 9.06. Trustee to Sign Amendments, etc
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<PAGE>
Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE TEN
Miscellaneous
Section 10.01. Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 10.02. Notices
Any order, consent, notice or communication shall be sufficiently given
if in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
if to the Company:
M.D.C. Holdings, Inc.
3600 South Yosemite
Suite 900
Denver, CO 80237
Telecopy No.: (303) 793-2760
Attention: Chief Financial Officer
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if to the Trustee:
-----------------------
-----------------------
-----------------------
Telecopy No.:
----------
Attention:
-------------
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail at his address as it appears on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it except that
notice to the Trustee shall only be effective upon receipt thereof by the
Trustee.
If the Company mails notice or communications to the Securityholders,
it shall mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders
Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA ss. 312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 10.05) stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of such
counsel, all such conditions
39
<PAGE>
precedent and covenants, compliance with which constitutes
a condition precedent, if any, provided for in this Indenture
relating to the proposed action or inaction, have been
complied with and that any such section does not conflict with
the terms of the Indenture.
Section 10.05. Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section 10.07. Legal Holidays
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in Denver, Colorado and New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. A "Business
Day" is any day other than a Legal Holiday.
Section 10.08. Governing Law
The laws of the State of New York shall govern this Indenture and the
Securities of each Series.
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<PAGE>
Section 10.09. No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.10. No Recourse Against Others
All liability described in paragraph 12 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
Section 10.11. Successors and Assigns
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
Section 10.12. Duplicate Originals
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 10.13. Severability
In case any one or more of the provisions contained in this Indenture
or in the Securities of a Series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Securities.
ARTICLE ELEVEN
Subordination
Section 11.01. Agreement to Subordinate
The Company agrees, and each Securityholder by accepting a Security
agrees, that the indebtedness evidenced by the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article, to
the prior payment in full of all Senior Indebtedness and that the subordination
is for the benefit of the holders of Senior Indebtedness.
41
<PAGE>
Section 11.02. Certain Definitions
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
"Senior Indebtedness" means all Indebtedness (present or future)
created, incurred, assumed or guaranteed by the Company (and all renewals,
extensions or refundings thereof), unless the instrument under which such
Indebtedness is created, incurred, assumed or guaranteed provides that such
Indebtedness is not senior or superior in right of payment to the Securities.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
shall not include (i) any Indebtedness of the Company to any of its
subsidiaries, (ii) any trade payables of the Company or (iii) guarantees by the
Company or any of its Subsidiaries of Indebtedness (a) outstanding at the date
hereof or (b) which may be outstanding in the future, except that Senior
Indebtedness shall include any guarantees as may be listed in a supplemental
indenture and any other present and future guarantees that provide by their
terms that they constitute Senior Indebtedness.
Section 11.03. Liquidation; Dissolution; Bankruptcy
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its Property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of the principal of and interest
(including interest accruing after the commencement of any
such proceeding) to the date of payment on the Senior
Indebtedness before Securityholders shall be entitled to
receive any payment of principal of or interest on Securities;
and
(2) until the Senior Indebtedness is paid in full in cash, any
distribution to which Securityholders would be entitled but
for this Article shall be made to holders of Senior
Indebtedness as their interests may appear, except that
Securityholders may receive securities that are subordinated
to Senior Indebtedness to at least the same extent as the
Securities.
For purposes of this Article 11, a distribution may consist of cash,
securities or other property, by set-off or otherwise.
Section 11.04. Default on Senior Indebtedness
Upon the final maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all such Senior Indebtedness shall first be paid in
full, or such payment duly provided for in cash or in a manner satisfactory to
the holders of such Senior
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Indebtedness, before any payment is made by the Company or any person
acting on behalf of the Company on account of the principal or interest
of the Securities.
The Company may not pay principal of or interest on the Securities and
may not acquire any Securities for cash or property (other than capital stock of
the Company or other securities of the Company that are subordinated to Senior
Indebtedness to at least the same extent as the Securities) if a default on
Senior Indebtedness occurs and is continuing that permits holders of such Senior
Indebtedness to accelerate its maturity.
The Company shall resume payments on the Securities and may acquire
them, if this Article otherwise permits the payment or acquisition at that time,
when the default is cured or waived.
Section 11.05. Acceleration of Securities
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness of the
acceleration. The Company shall pay the Securities when 180 days pass after the
acceleration occurs if this Article permits the payment at that time; provided,
however, that if no Senior Indebtedness is outstanding at the time of such
acceleration, the Company shall pay the Securities in accordance with the
provisions of Article 6.
Section 11.06. When Distributions Must Be Paid Over
In the event that the Company shall make any payment to the Trustee on
account of the principal or interest on the Securities at a time when such
payment is prohibited by Section 11.03 or 11.04, such payment shall be held by
the Trustee in trust for the benefit of, and shall forthwith be paid over and
delivered to, the holders of Senior Indebtedness (pro rata as to each of such
holders on the basis of the respective amounts of Senior Indebtedness held by
them) or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
If a distribution is made to Securityholders that because of this
Article should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
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<PAGE>
Section 11.07. Notice by the Company
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of principal of or
interest on the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior
Indebtedness provided in this Article. Nothing in this Article shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07.
Section 11.08. Subrogation
After all Senior Indebtedness is paid in full and until the Securities
are paid in full, Securityholders shall be subrogated to the rights of holders
of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the
Securityholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior Indebtedness which
otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on Senior Indebtedness.
Section 11.09. Relative Rights
This Article defines the relative rights of Securityholders and holders
of Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the
Securities in accordance with their terms;
(2) affect the relative rights of Securityholders and creditors
of the Company, other than holders of Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject
to the rights of holders of Senior Indebtedness to receive
distributions otherwise payable to Securityholders.
If the Company fails to pay principal of or interest on a Security on
the due date because of this Article, the failure is still a Default or Event of
Default.
44
<PAGE>
Section 11.10. Subordination May Not Be Impaired by the Company
No right of any holder of Senior Indebtedness to enforce the
subordination of the indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.
Section 11.11. Distribution or Notice to the Representative
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness pursuant to this Article 11, the distribution may be made
and the notice given to their Representative.
Section 11.12. Rights of the Trustee and Paying Agent
Notwithstanding any provision of this Article 11 or any other provision
of this Indenture, the Trustee and Paying Agent shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment to or by the Trustee or a Paying Agent or the taking of any other
action (pursuant to this Article 11) by the Trustee or a Paying Agent unless and
until the Trustee or such Paying Agent, as the case may be, shall have received
at its office specified in Section 10.02 written notice thereof from the
Company, a Representative or a holder of Senior Indebtedness and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, and such Paying Agent, shall be entitled in all respects
conclusively to assume that no such facts exist. The Trustee or Paying Agent may
continue to make payments on the Securities unless it receives such a notice at
least three business days prior to the date upon which payment is due.
The Trustee shall be entitled to rely reasonably in good faith on the
delivery to it of a written notice by a person representing himself, herself or
itself to be a Representative or a holder of Senior Indebtedness to establish
that such notice has been given by a Representative or a holder of such Senior
Indebtedness. Only the Company, a Representative or a holder of Senior
Indebtedness that has no Representative may give the notice.
In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article 11, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the
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<PAGE>
benefit of such person pursuant to the terms of this Indenture pending
judicial determination as to the rights of such person to receive such payment.
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
Custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 11.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 11.13. No Fiduciary Duty to Holders of Senior Indebtedness
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee or Paying Agent. Neither the Trustee nor
the Paying Agent shall be deemed to owe any fiduciary duty to the holders of
such Senior Indebtedness and, subject to the provisions of Section 7.02, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall, in the absence of bad faith, pay over or deliver to holders of
Securities, the Company or any other person monies or assets to which any holder
of such Senior Indebtedness shall be entitled by virtue of this Article 11 or
otherwise.
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SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
Dated: , 1997 M.D.C. HOLDINGS, INC
----------------
By:
Name:
Title:
Dated: , 1997 , as Trustee
------------------ ---------------------
By:
Name:
Title:
(SEAL)
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<PAGE>
Exhibit A
No. CUSIP No.:
---------
[Title of Security]
M.D.C. HOLDINGS, INC.
a Delaware corporation
promises to pay to
or registered assigns
the principal sum of [Dollars] on
[Title of Security]
Interest Payment Dates: and
Record Dates and
Authenticated: Dated:
M.D.C. HOLDINGS, INC.
[Seal]
By
----------------------------
Title:
By
----------------------------
Title:
- ------------------------------,
as Trustee, certifies that this is one of the
Securities referred to in the within mentioned
Indenture.
By:
-----------------------------
- --------------------------------
Authorized Signatory
M.D.C. HOLDINGS, INC.
[Title of Security]
A-1
<PAGE>
1. Interest.
M.D.C. HOLDINGS, INC. (the "Company"), a Delaware corporation, promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company will pay interest semiannually on
-------------------
and of each year until the principal is paid or made available
----------------
for payment. Interest on the Securities will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid, from , 19 ; provided that, if there is no existing default
-------------- --
in the payment of interest, and if this Security is authenticated between a
record date referred to on the face hereof and the next succeeding interest
payment date, interest shall accrue from such interest payment date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities (except
defaulted interest, if any, which will be paid on such special payment date to
Holders of record on such special record date as may be fixed by the Company) to
the persons who are registered Holders of Securities at the close of business on
the [Insert record dates]. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.
3. Paying Agent and Registrar.
Initially, (the "Trustee") will act as Paying Agent and
---------------
Registrar. The Company may change or appoint any Paying Agent, Registrar or
co-Registrar without notice. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
, 199 ("Indenture") among the Company and the Trustee. The terms
- ------------- --
of the Securities include those stated in the Indenture (including those terms
set forth in the Authorizing Resolution or supplemental indenture pertaining to
the Securities of the Series of which this Security is a part) and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 ("TIA") as
in effect on the date of the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the Act for a
statement of them.
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture and the applicable Authorizing
Resolution or supplemental indenture. Requests may be made to: M.D.C. Holdings,
Inc., 3600 S. Yosemite, Suite 900, Denver, Colorado 80237, Attention: Secretary.
A-2
<PAGE>
5. Optional Redemption.
The Company may redeem the Securities at any time on or
after , in whole or in part, at the following redemption prices
--------------
(expressed as a percentage of their principal amount) together with interest
accrued and unpaid to the date fixed for redemption:
If redeemed during the Twelve-Month period commencing
on and ending on in each of the
------------ ----------
following years Percentage
------- ------
------- ------
------- ------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date, interest ceases to accrue on
Securities or portions of them called for redemption; provided, that if the
Company shall default in the payment of such Security at the redemption price
together with accrued interest, interest shall continue to accrue at the rate
borne by the Securities.
[Insert provisions relating to redemption at option of Holders, if any]
6. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange
Securities by presentation of such Securities to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Securities of other denominations. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Security selected for
redemption, except the unredeemed part thereof if the Security is redeemed in
part, or transfer or exchange any Securities for a period of 15 days before a
selection of Securities to be redeemed.
A-3
<PAGE>
7. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of
it for all purposes.
8. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its request. After that, Holders entitled to the money must look to the Company
for payment unless an abandoned property law designates another person.
9. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Securities of each Series affected by the
amendment and any past default or compliance with any provision relating to any
Series of the Securities may be waived in a particular instance with the consent
of the Holders of a majority in principal amount of the outstanding Securities
of such Series. Without the consent of any Securityholder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Securities in
addition to or in place of certificated Securities, to create a Series and
establish its terms, or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
10. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor corporation
will be released from those obligations.
11. Trustee Dealings With Company.
, the Trustee under the Indenture, in its individual or
--------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for
A-4
<PAGE>
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
13. Discharge of Indenture.
The Indenture contains certain provisions pertaining to defeasance,
which provisions shall for all purposes have the same effect as if set forth
herein.
14. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
15. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
16. Subordination.
To the extent set forth in Article 11 of the Indenture, the Securities
are subordinated to Senior Indebtedness, which generally is any Indebtedness
outstanding on the date of the Indenture or Indebtedness thereafter created,
incurred, assumed or guaranteed by the Company and all renewals, extensions and
refundings thereof except Indebtedness that expressly provides that it is not
senior to or superior in right of payment to the Securities. Senior Indebtedness
does not include Indebtedness of the Company to any of its subsidiaries, trade
payables of the Company and certain Indebtedness of others guaranteed by the
Company. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination and
authorizes the Trustee to give it effect.
A-5
<PAGE>
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form
below:
I or we assign and transfer this Security to:
- ------------------------------------------------------------
- ------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
(Print or type assignee's name, address, and zip code)
and irrevocably appoint:
- ------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
- ------------------------------------------------------------
Date: Your signature:
---------------- --------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature
Guarantee:
----------------------------------------------------------
1
EXHIBIT 4.2(c)
SCHEDULE OF MATERIAL DETAILS IN WHICH THE FORM OF JUNIOR SUBORDINATED DEBT
INDENTURE (INCLUDING FORM OF JUNIOR SUBORDINATED DEBENTURE) DIFFERS FROM EXHIBIT
4.2(b), THE FORM OF SENIOR SUBORDINATED DEBT INDENTURE (INCLUDING FORM OF SENIOR
SUBORDINATED DEBENTURE)
The form of Junior Subordinated Debt Indenture (including the form of
Junior Subordinated Debenture) (the "Junior Subordinated Debt Indenture")
differs from Exhibit 4.2(b), the form of Senior Subordinated Debt Indenture
(including the form of Senior Subordinated Debenture) (the "Senior Subordinated
Debt Indenture"), in the following respects:
(1) The words "Senior Subordinated" in the Senior Subordinated
Debt Indenture are changed to the word "Junior Subordinated"
in the Junior Subordinated Debt Indenture, and there are
references to Junior Subordinated Debt in the Junior
Subordinated Debt Indenture, but not in the Senior
Subordinated Debt Indenture; and
(3) Provision for the possible right of the Registrant to defer
interest are included in the Junior Subordinated Debt
Indenture, but not in the Senior Subordinated Debt Indenture.
<PAGE>
EXHIBIT 4.2(c)
M.D.C. HOLDINGS, INC.
Issuer
AND
-----------------------------
Trustee
JUNIOR SUBORDINATED DEBT SECURITIES
----------------------
INDENTURE
DATED AS OF , 1997
-------------
----------------------
<PAGE>
ARTICLE ONE - Definitions and Incorporation by Reference
Section 1.01. Definitions...................................1
Section 1.02. Other Definitions.............................6
Section 1.03. Incorporation by Reference of Trust Indenture
Act.........................................7
Section 1.04. Rules of Construction.........................7
ARTICLE TWO - The Securities
Section 2.01. Form and Dating...............................8
Section 2.02. Execution and Authentication..................9
Section 2.03. Registrar and Paying Agent...................10
Section 2.04. Paying Agent to Hold Money in Trust..........10
Section 2.05. Securityholder Lists.........................11
Section 2.06. Transfer and Exchange........................11
Section 2.07. Replacement Securities.......................11
Section 2.08. Outstanding Securities.......................12
Section 2.09. Temporary Securities.........................12
Section 2.10. Cancellation.................................12
Section 2.11. Defaulted Interest...........................13
Section 2.12. Treasury Securities..........................13
Section 2.13. CUSIP Numbers................................13
Section 2.14. Deposit of Moneys............................13
Section 2.15. Book-Entry Provisions for Global Security....14
ARTICLE THREE - Redemption
Section 3.01. Notices to Trustee...........................15
Section 3.02. Selection of Securities to be Redeemed.......15
Section 3.03. Notice of Redemption.........................16
Section 3.04. Effect of Notice of Redemption...............16
Section 3.05. Deposit of Redemption Price..................17
Section 3.06. Securities Redeemed in Part..................17
ARTICLE FOUR - Covenants
Section 4.01. Payment of Securities........................17
Section 4.02. Maintenance of Office or Agency..............17
Section 4.03. Compliance Certificate.......................17
Section 4.04. Payment of Taxes; Maintenance of Corporate
Existence; Maintenance of Properties.......18
i
<PAGE>
ARTICLE FIVE - Successor Corporation
Section 5.01. When Company May Merge, etc..................19
ARTICLE SIX - Defaults and Remedies
Section 6.01. Events of Default............................20
Section 6.02. Acceleration.................................22
Section 6.03. Other Remedies...............................22
Section 6.04. Waiver of Existing Defaults..................22
Section 6.05. Control by Majority..........................23
Section 6.06. Limitation on Suits..........................23
Section 6.07. Rights of Holders to Receive Payment.........23
Section 6.08. Collection Suit by Trustee...................24
Section 6.09. Trustee May File Proofs of Claim.............24
Section 6.10. Priorities...................................24
Section 6.11. Undertaking for Costs........................25
ARTICLE SEVEN - Trustee
Section 7.01. Duties of Trustee............................25
Section 7.02. Rights of Trustee............................26
Section 7.03. Individual Rights of Trustee.................27
Section 7.04. Trustee's Disclaimer.........................27
Section 7.05. Notice of Defaults...........................28
Section 7.06. Reports by Trustee to Holders................28
Section 7.07. Compensation and Indemnity...................28
Section 7.08. Replacement of Trustee.......................29
Section 7.09. Successor Trustee by Merger, etc.............30
Section 7.10. Eligibility; Disqualification................30
Section 7.11. Preferential Collection of Claims Against
Company......................................30
ARTICLE EIGHT - Discharge of Indenture
Section 8.01. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations.....................30
Section 8.02. Survival of the Company's Obligations........34
Section 8.03. Application of Trust Money...................34
Section 8.04. Repayment to the Company.....................34
Section 8.05. Reinstatement................................34
ii
<PAGE>
ARTICLE NINE - Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders...................35
Section 9.02. With Consent of Holders......................35
Section 9.03. Compliance with Trust Indenture Act..........37
Section 9.04. Revocation and Effect of Consents............37
Section 9.05. Notation on or Exchange of Securities........37
Section 9.06. Trustee to Sign Amendments, etc..............38
ARTICLE TEN - Miscellaneous
Section 10.01. Trust Indenture Act Controls.................38
Section 10.02. Notices......................................38
Section 10.03. Communications by Holders with Other Holders.39
Section 10.04. Certificate and Opinion as to Conditions
Precedent...................................39
Section 10.05. Statements Required in Certificate or
Opinion.....................................40
Section 10.06. Rules by Trustee and Agents..................40
Section 10.07. Legal Holidays...............................40
Section 10.08. Governing Law................................40
Section 10.09. No Adverse Interpretation of Other
Agreements.................................41
Section 10.10. No Recourse Against Others...................41
Section 10.11. Successors and Assigns.......................41
Section 10.12. Duplicate Originals..........................41
Section 10.13. Severability.................................41
ARTICLE ELEVEN - Subordination
Section 11.01. Agreement to Subordinate.....................41
Section 11.02. Certain Definitions..........................42
Section 11.03. Liquidation; Dissolution; Bankruptcy.........42
Section 11.04. Default on Senior Indebtedness...............42
Section 11.05. Acceleration of Securities...................43
Section 11.06. When Distributions Must Be Paid over.........43
Section 11.07. Notice by the Company........................44
Section 11.08. Subrogation..................................44
Section 11.09. Relative Rights..............................44
Section 11.10. Subordination May Not Be Impaired by the
Company....................................45
Section 11.11. Distribution or Notice to the
Representative.............................45
Section 11.12. Rights of the Trustee and Paying Agent.......45
Section 11.13. No Fiduciary Duty to Holders of Senior
Indebtedness...............................46
iii
<PAGE>
CROSS-REFERENCE TABLE
This Cross-Reference Table is not a part of the Indenture.
------------------------------------------
TIA Indenture
Section Section
310(a)(1).......................................... 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(b)................................................ 7.08; 7.10; 10.02
311(a)............................................. 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)............................................. 2.05
(b)................................................ 10.03
(c)................................................ 10.03
313(a)............................................. 7.06
(b)(1)............................................. N.A.
(b)(2)............................................. 7.06
(c)................................................ 10.02
(d)................................................ 7.06
314(a)............................................. 7.06; 10.02
(b)................................................ N.A.
(c)(1)............................................. 10.04
(c)(2)............................................. 10.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 10.05
(f)................................................ N.A.
315(a)............................................. 7.01(b)
(b)................................................ 7.05; 10.02
(c)................................................ 7.01(a)
(d)................................................ 7.01(c)
(e)................................................ 6.11
316(a)(last sentence).............................. 2.12
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.07
(c)................................................ 9.04
317(a)(1).......................................... 6.08
(a)(2)............................................. 6.09
(b)................................................ 2.04
318(a)............................................. 10.01
- -----------------------------
N.A. means Not Applicable.
iv
<PAGE>
INDENTURE dated as of , 1997, by and among M.D.C.
-------------
HOLDINGS, INC., a Delaware corporation (the "Company"), and , (the
-------------
"Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's debt securities
issued under this Indenture (the "Securities"):
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person, or (ii) any officer,
director, a Person acting with respect to such Person in a similar capacity, or
controlling shareholder of such other Person. For purposes of this definition,
the term "control" means (a) the power to direct the management and policies of
a Person, either directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise, or (b) without
limiting the foregoing, the beneficial ownership of 10% or more of the voting
power of the voting common equity of such Person (on a fully diluted basis).
Notwithstanding the foregoing, the term "Affiliate" will not include, with
respect to the Company or any Restricted Subsidiary of the Company, any
Restricted Subsidiary of the Company, or the Company, with respect to any
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.
"Bankruptcy Law" means title 11 of the United States Code, as amended,
or any similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
authorized committee thereof.
1
<PAGE>
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person's capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other equity interests, whether now
outstanding or issued after the applicable Issue Date, including, without
limitation, all Preferred Stock.
"Capitalized Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.
"Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means the
successor.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect such Person or any of its Subsidiaries or Affiliates against
fluctuations in currency values.
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, unless otherwise timely cured, an Event of
Default.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indebtedness" of any Person means, without duplication, (i) any
liability of such Person (other than accounts payable, other trade payables and
accrued expenses incurred in the ordinary course of such Person's business) (a)
for borrowed money or under any reimbursement obligation relating to a letter of
credit or other similar instruments (other than standby letters of credit issued
for the benefit of or surety, performance, completion or payment bonds, earnest
money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business, general contingency and tax reserves,
liabilities for deposits and deferred income which in accordance with GAAP is
recorded as a liability), (b) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind or with services
incurred in connection with capital expenditures (other than any obligation to
pay a contingent
2
<PAGE>
purchase price which, as of the date of incurrence thereof is not required to be
recorded as a liability in accordance with GAAP), or (c) in respect of
Capitalized Lease Obligations (to the extent of the Attributable Debt in respect
thereof), (ii) any Indebtedness of others that such Person has guaranteed to the
extent of the guarantee, (iii) to the extent not otherwise included, the
obligations of such Person under Currency Agreements or Interest Protection
Agreements to the extent recorded as liabilities not constituting Interest
Incurred, net of amounts recorded as assets in respect of such agreements, in
accordance with GAAP, and (iv) all Indebtedness of others secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person. The amount of Indebtedness of any Person at any date shall be (a) the
outstanding balance at such date of all unconditional obligations as described
above, net of any unamortized discount to be accounted for as Interest Expense,
in accordance with GAAP, (b) the maximum liability of such Person for any
contingent obligations under clause (ii) above at such date, net of, any
unamortized discount to be accounted for as Interest Expense in accordance with
GAAP and (c) in the case of clause (iv) above, the lesser of (1) the fair market
value of any asset subject to a Lien securing the Indebtedness of others on the
date that the Lien attaches and (2) the amount of the Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time
to time, including pursuant to any Authorizing Resolution or supplemental
indenture pertaining to any Series.
"Interest Expense" of any Person for any period means, without
duplication, the aggregate amount of (i) interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like caption
on an income statement for such Person (including, without limitation, imputed
interest included in Capitalized Lease Obligations, all commissions, discounts
and other fees and charges owned with respect to letters of credit and bankers'
acceptance financing, the net costs (but reduced by net gains) associated with
Currency Agreements and Interest Protection Agreements, amortization of other
financing fees and expenses; with respect to the Company and its Restricted
Subsidiaries, but excluding its Unrestricted Subsidiaries, the interest portion
of any deferred payment obligation, amortization of discount or premium, if any,
and all other noncash interest expense other than interest and other charges
amortized to cost of sales), and (ii) all interest actually paid by the Company
or a Restricted Subsidiary under any guarantee of Indebtedness (including,
without limitation, a guarantee of principal, interest or any combination
thereof) of any Person other than the Company or any Restricted Subsidiary
during such period; provided, that Interest Expense shall exclude any expense
associated with the complete write-off of financing fees and expenses in
connection with the repayment or repurchase of any Indebtedness.
"Interest Protection Agreement" of any Person means any interest rate
swap agreement, interest rate collar agreement, option or futures contract or
other similar agreement or arrangement designed to protect such Person or any of
its Subsidiaries
3
<PAGE>
against fluctuations in interest rates with respect to Indebtedness permitted to
be incurred under this Indenture.
"Investments" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
all guarantees of Indebtedness or other obligations of any other Person by such
person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments in any other
Person (including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
"Issue Date" means, with respect to any Series of Securities, the date
on which the Securities of such Series are originally issued under this
Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such Property
(other than an obligation to share revenues or profits upon the sale or
liquidation of Property to which such obligation relates). For purposes of this
definition, a Person shall be deemed to own, subject to a Lien, any Property
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person for which (i) the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments evidencing or securing such Indebtedness and such
property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within 90 days after the acquisition of such property
and (ii) no other assets of such Person may be realized upon in collection of
principal or interest on such Indebtedness. Indebtedness which is otherwise
Non-Recourse Indebtedness will not lose its character as Non-Recourse
Indebtedness because there is recourse to the borrower or any other Person for
(i) environmental warranties and indemnities, or (ii) indemnities for and
liabilities arising from fraud, misrepresentation, misapplication or non-payment
of rents, profits, insurance and condemnation proceeds and other sums actually
received by the borrower from secured assets to be paid to the lender, waste and
mechanics' liens.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company.
4
<PAGE>
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or with respect to the payment of
dividends.
"Principal" of a debt security means the principal of the security
plus, when appropriate, the premium, if any, on the security.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person, whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Subsidiary" means any Subsidiary of the Company which is
not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission or any successor
agency performing the duties now assigned to it under the TIA.
"Securities" means any Securities that are issued under this Indenture.
"Series" means a series of Securities established under this Indenture.
"Significant Subsidiary" means any Subsidiary of the Company which
would constitute a "significant subsidiary" as defined in Rule 1.02 of
Regulation S-X under the Securities Act and the Exchange Act.
"Subsidiary" of any Person means any corporation or other entity (other
than political subdivisions or enterprises thereof or governmental agencies) of
which a majority of the Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time directly or indirectly owned or controlled by such Person.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor serving hereunder.
5
<PAGE>
"Trust Officer" means the Chairman of the Board, the President, any
Vice President or any other officer or assistant officer of the Trustee assigned
by the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
"U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt issued
by a bank or trust company as custodian with respect to any such U.S. government
obligations or a specific payment of interest on or principal of any such U.S.
government obligation held by such custodian for the account of the holder of a
depositary receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. government obligation or the specific payment of interest on or
principal of the U.S. government obligation evidenced by such depositary
receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company so
designated by a resolution adopted by the Board of Directors of the Company.
Section 1.02. Other Definitions.
Term Defined in
Section
"Agent Members"....................................... 2.15
"Business Day"........................................ 10.07
"Custodian"........................................... 6.01
"Depositary".......................................... 2.15
"Event of Default".................................... 6.01
"Legal Holiday"....................................... 10.07
"Paying Agent"........................................ 2.03
"Registrar"........................................... 2.03
"Senior Indebtedness"................................. 11.02
"Representative"...................................... 11.02
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Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities of a Series thereof.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term, not otherwise defined, has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
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ARTICLE TWO
The Securities
Section 2.01. Form and Dating.
The aggregate principal amount of Securities that may be issued under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more Series. Each Series shall be created by an Authorizing Resolution or
a supplemental indenture that establishes the terms of the Series, which may
include the following:
(1) the title of the Series;
(2) the aggregate principal amount (or any limit on the aggregate
principal amount) of the Series and, if any Securities of a
Series are to be issued at a discount from their face amount,
the method of computing the accretion of such discount;
(3) the interest rate or method of calculation of the interest
rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Securities of the
Series;
(6) the dates when, places where and manner in which principal and
interest are payable;
(7) the Registrar and Paying Agent;
(8) the terms of any mandatory (including any sinking fund
requirements) or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form
and the terms of any such forms of Securities;
(12) whether any Securities will be represented by a global
Security and the terms of any such global Security;
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(13) if payments of principal or interest may be made in a currency
other than that in which Securities are denominated, the
manner for determining such payments;
(14) provisions for electronic issuance of Securities or issuance
of Securities in uncertificated form;
(15) any Events of Default, covenants and/or defined terms in
addition to or in lieu of those set forth in this Indenture;
(16) whether and upon what terms Securities may be defeased if
different from the provisions set forth in this Indenture;
(17) the form of the Securities, which, unless the Authorizing
Resolution or supplemental indenture otherwise provides, shall
be in the form of Exhibit A;
(18) any terms that may be required by or advisable under
applicable law;
(19) the percentage of the principal amount of the Securities which
is payable if the maturity of the Securities is accelerated in
the case of Securities issued at a discount from their face
amount; and
(20) any other terms in addition to or different from those
contained in this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and
delivery thereof are not subject to any conditions precedent.
Section 2.02. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
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A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon
receipt of an Officers' Certificate of the Company. Each Security shall be dated
the date of its authentication.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent) and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such Agent
and the Trustee shall have the right to inspect the Securities register at all
reasonable times to obtain copies thereof, and the Trustee shall have the right
to rely upon such register as to the names and addresses of the Holders and the
principal amounts and certificate numbers thereof. If the Company fails to
maintain a Registrar or Paying Agent or fails to give the foregoing notice, the
Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
Section 2.04. Paying Agent to Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of
Securityholders and the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money and hold it
as a separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon doing so the Paying Agent shall
have no further liability for the money.
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Section 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least 5 Business Days before each semi-annual interest payment
date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
Section 2.06. Transfer and Exchange.
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.
Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
Section 2.07. Replacement Securities.
If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security; provided, however, in the case of a lost, destroyed or
wrongfully taken Security, that the requirements of Section 8-405 of the New
York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof. An indemnity bond must be sufficient in the judgment of the
Company and the
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Trustee to protect the Company, the Trustee or any Agent from any loss which any
of them may suffer if a Security is replaced, including the acquisition of such
Security by a bona fide purchaser. The Company or the Trustee may charge the
Holder for expenses in replacing a Security.
Section 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by it and those described in this Section.
A Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If, on a redemption date or maturity date, the Paying Agent holds money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.09. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.
Section 2.10. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
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cancellation. Unless the Authorizing Resolution so provides, the Company may not
issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record date and a payment date which
shall be reasonably satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest to
be paid. On or before the date such notice is mailed, the Company shall deposit
with the Paying Agent money sufficient to pay the amount of defaulted interest
to be so paid. The Company may pay defaulted interest in any other lawful manner
if, after notice given by the Company to the Trustee of the proposed payment,
such manner of payment shall be deemed practicable by the Trustee.
Section 2.12. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Subsidiaries shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so considered.
Section 2.13. CUSIP Numbers.
The Company in issuing the Securities of any Series may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.
Section 2.14. Deposit of Moneys.
Prior to 11:00 a.m. New York City time on each interest payment date
and maturity date with respect to each Series of Securities, the Company shall
have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments due on such interest payment date or maturity
date, as the case may be, in a timely manner
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which permits the Paying Agent to remit payment to the Holders on such interest
payment date or maturity date, as the case may be.
Section 2.15. Book-Entry Provisions for Global Security.
(a) Any global Security of a Series initially shall (i) be registered
in the name of the depository who shall be identified in the Authorizing
Resolution or supplemental indenture relating to such Securities (the
"Depository") or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear any required legends.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any global
Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of any global Security shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the global Security may be
transferred or exchanged for definitive Securities in accordance with the rules
and procedures of the Depository. In addition, definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue definitive
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.
(d) In connection with the transfer of an entire global Security to
beneficial owners pursuant to paragraph (b), the global Security shall be deemed
to be surrendered
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to the Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the global Security, an
equal aggregate principal amount of definitive Securities of authorized
denominations.
(e) The Holder of any global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities of such Series.
ARTICLE THREE
Redemption
Section 3.01. Notices to Trustee.
Securities of a Series that are redeemable prior to maturity shall be
redeemable in accordance with their terms and, unless the Authorizing Resolution
or supplemental indenture provides otherwise, in accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the Redemption Date
and the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed,
retired or acquired against any redemption pursuant to Paragraph 6 of the
Securities, it shall notify the Trustee of the amount of the credit and it shall
deliver any Securities not previously delivered to the Trustee for cancellation
with such notice.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed.
If fewer than all of the Securities of a Series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger
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than the minimum denomination for the Series. Securities and portions of them it
selects shall be in amounts equal to the minimum denomination for the Series or
an integral multiple thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(6) that the Securities are being redeemed pursuant to the
mandatory redemption or the optional redemption provisions,
as applicable.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall deliver to the Trustee at least 15 days prior to the date on which
notice of redemption is to be mailed or such shorter period as may be
satisfactory to the Trustee, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price as set
forth in the notice of redemption. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.
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Section 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Paying Agent immediately available funds sufficient to pay the redemption price
of and accrued interest on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for each Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a Series on the
dates and in the manner provided in the Securities of the Series. An installment
of principal or interest shall be considered paid on the date it is due, if on
that date the Paying Agent holds money designated for and sufficient to pay the
installment; provided, however, that money held by the Paying Agent for the
benefit of holders of Senior Indebtedness pursuant to the provisions of Article
11 hereof shall not be considered paid within the meaning of this Section 4.01.
The Company shall pay interest on overdue principal at the rate borne
by the Series; it shall pay interest on overdue installments of interest at the
same rate.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee.
Section 4.03. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating whether or
not the signers know
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of any Default by the Company in performing any of its obligations under this
Indenture. If they do know of such a Default, the certificate shall describe the
Default.
Section 4.04. Payment of Taxes; Maintenance of Corporate Existence;
Maintenance of Properties.
The Company will:
(a) cause to be paid and discharged all lawful taxes, assessments
and governmental charges or levies imposed upon the Company
and its Restricted Subsidiaries or upon the income or profits
of the Company and its Restricted Subsidiaries or upon
property or any part thereof belonging to the Company and its
Restricted Subsidiaries before the same shall be in default,
as well as all lawful claims for labor, materials and supplies
which, if unpaid, might become a lien or charge upon such
property or any part thereof; provided, however, that the
Company shall not be required to cause to be paid or
discharged any such tax, assessment, charge, levy or claim so
long as the validity or amount thereof shall be contested in
good faith by appropriate proceedings and the nonpayment
thereof does not, in the judgment of the Company, materially
adversely affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due; and provided further, that the Company shall not be
required to cause to be paid or discharged any such tax,
assessment, charge, levy or claim if, in the judgment of the
Company, such payment shall not be advantageous to the Company
in the conduct of its business and if the failure so to pay or
discharge does not, in its judgment, materially adversely
affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due;
(b) cause to be done all things necessary to preserve and keep in
full force and effect the corporate existence of the Company
and each of its Restricted Subsidiaries; provided, however,
that nothing in this subsection (b) shall prevent a
consolidation or merger of the Company or any Restricted
Subsidiary not prohibited by the provisions of Article Five
or any other provision or the Authorizing Resolution or
supplemental indenture pertaining to a Series, and the Company
need not maintain the corporate existence of an immaterial
Restricted Subsidiary ; and
(c) at all times keep, maintain and preserve the property of the
Company and the Restricted Subsidiaries in good repair,
working order and condition (reasonable wear and tear
excepted) and from time to time make all needful and proper
repairs, renewals, replacements, betterments and improvements
thereto, so that the business carried on in connection
therewith may be
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properly and advantageously conducted at all times; provided,
however, that nothing in this subsection (c) shall prevent the
Company from discontinuing the operation and maintenance of
any such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business and
not disadvantageous in any material respect to the ability of
the Company and the Restricted Subsidiaries to pay all
obligations under this Indenture when due.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge with or into, any other
corporation, or transfer all or substantially all of its assets to, any entity
unless permitted by law and unless (1) the resulting, surviving or transferee
entity, which shall be a corporation organized and existing under the laws of
the United States or a State thereof, assumes by supplemental indenture, in a
form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture and (2) immediately after giving
effect to, and as a result of, such transaction, no Default or Event of Default
shall have occurred and be continuing. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the "Company" and all such obligations
of the predecessor corporation shall terminate.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
To the extent that an Authorizing Resolution or supplemental indenture
pertaining to any Series provides for different provisions relating to the
subject matter of this Article Five, the provisions in such Authorizing
Resolution or supplemental indenture shall govern for purposes of such Series.
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ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.
An "Event of Default" on a Series occurs if, voluntarily or
involuntarily, whether by operation of law or otherwise, any of the following
occurs:
(1) the failure by the Company to pay interest on any Security of
such Series when the same becomes due and payable and the continuance of any
such failure for a period of 30 days;
(2) the failure by the Company to pay the principal or premium of
any Security of such Series when the same becomes due and payable at maturity,
upon acceleration or otherwise;
(3) the failure by the Company or any Restricted Subsidiary to
comply in all material respects with any of its agreements or covenants in, or
provisions of, the Securities of such Series, or this Indenture (as they relate
thereto) and such failure continues for the period and after the notice
specified below (except in the case of a default with respect to Article Five
(or any replacement provisions as contemplated by Article Five), which will
constitute an Event of Default with notice but without passage of time);
(4) the acceleration of any Indebtedness (other than
Non-Recourse Indebtedness) of the Company or any Restricted Subsidiary in an
amount of $30 million or more, individually or in the aggregate, and such
acceleration does not cease to exist, or such Indebtedness is not satisfied, in
either case within 30 days after such acceleration;
(5) the failure by the Company or any Restricted Subsidiary to make
any principal or interest payment in an amount of $30 million or more,
individually or in the aggregate, in respect of Indebtedness for borrowed money
(other than Non-Recourse Indebtedness) of the Company or any Restricted
Subsidiary within 30 days of such principal or interest becoming due and payable
(after giving effect to any applicable grace period set forth in the documents
governing such Indebtedness);
(6) a final judgment or judgments in an amount of $30 million or
more, individually or in the aggregate, for the payment of money having been
entered by a court or courts of competent jurisdiction against the Company or
any of its Restricted Subsidiaries and such judgment or judgments is not covered
by a policy of insurance, satisfied, stayed, annulled or rescinded within 90
days of being entered;
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(7) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or
(D) makes a general assignment (except in the case of a
Restricted Subsidiary, to the Company) for the
benefit of its creditors; or
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary as debtor
in an involuntary case,
(B) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or a
Custodian for all or substantially all of the
property of the Company or any Restricted Subsidiary
that is a Significant Subsidiary, or
(C) orders the liquidation of the Company or any
Restricted Subsidiary that is a Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 90 days.
A Default as described in sub-clause (3) above will not be deemed an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25 percent in principal amount of the then outstanding Securities of the
applicable Series notify the Company and the Trustee, of the Default and (except
in the case of a default with respect to Article Five (or any replacement
provisions as contemplated by Article Five)) the Company does not cure the
Default within 90 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." If such a Default is cured within such time period, it ceases.
The term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
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Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default with respect to
the Company resulting from sub-clauses (7) or (8) above), shall have occurred
and be continuing under the Indenture, the Trustee by notice to the Company, or
the Holders of at least 25 percent in principal amount of the Securities of the
applicable Series then outstanding by notice to the Company and the Trustee, may
declare all Securities of such Series to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Securities
of such Series will be due and payable immediately. If an Event of Default with
respect to the Company specified in sub-clauses (7) or (8) above occurs, all
amounts due and payable on the Securities of such Series will ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee and the Company or any Holder. The Holders of a
majority in principal amount of the Securities of such Series then outstanding
by written notice to the Trustee and the Company may waive any Default or Event
of Default (other than any Default or Event of Default in payment of principal
or interest) with respect to such Series of Securities under the Indenture.
Holders of a majority in principal amount of the then outstanding Securities of
such Series may rescind an acceleration with respect to such Series and its
consequence (except an acceleration due to nonpayment of principal or interest
on the Securities of such Series) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived.
No such rescission shall extend to or shall affect any subsequent Event
of Default, or shall impair any right or power consequent thereon.
Section 6.03. Other Remedies.
If an Event of Default on a Series occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on the Series or to enforce the
performance of any provision in the Securities or this Indenture applicable to
the Series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Existing Defaults.
Subject to Section 9.02, the Holders of a majority in principal amount
of the outstanding Securities of a Series on behalf of all the Holders of the
Series by notice to the
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Trustee may waive an existing Default on such Series and its consequences. When
a Default is waived, it is cured and stops continuing, and any Event of Default
arising therefrom shall be deemed to have been cured; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding
Securities of a Series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to such Series. The Trustee, however, may
refuse to follow any direction (i) that conflicts with law or this Indenture,
(ii) that, subject to Section 7.01, the Trustee determines is unduly prejudicial
to the rights of other Securityholders, or (iii) that would involve the Trustee
in personal liability.
Section 6.06. Limitation on Suits.
A Securityholder of a Series may not pursue any remedy with respect to
this Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default on the Series;
(2) the Holders of at least a majority in principal amount of the
outstanding Securities of the Series make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 90 days
after receipt of the request and the offer of indemnity; and
(5) no written request inconsistent with such written request
shall have been given to the Trustee pursuant to this Section
6.06.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Security, on or
after the respective due
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dates expressed in the Security, or to bring suit for the enforcement of any
such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal and interest remaining unpaid.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property, and unless prohibited by applicable law or regulation, may vote on
behalf of the Holders in any election of a Custodian, and shall be entitled and
empowered to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder to make
such payments to the Trustee. Nothing herein shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to authorize
the Trustee to vote in respect of the claim of any Securityholder except as
aforesaid for the election of the Custodian.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Indebtedness to the extent required by
Article 11;
Third: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
Fourth: to the Company as its interests may appear.
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The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having the due regard
to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Series.
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall, prior to the receipt of directions from the Holders of a majority
in principal amount of the Securities, exercise its rights and powers and use
the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no
others and no implied covenants or obligations shall
be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of his Indenture. The Trustee, however,
shall examine the certificates and opinions to
determine whether or not they conform to the
requirements of this Indenture but need not confirm
or investigate the accuracy of mathematical
calculations or other facts or matters stated herein.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
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(1) This paragraph does not limit the effect of paragraph
(b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in
accordance with a direction received by it pursuant
to Section 6.05 or any other direction of the Holders
permitted hereunder.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to
the extent required by law.
(g) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
Section 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting on any document, resolution, certificate, instrument,
report, or direction believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document, resolution, certificate, instrument, report, or
direction.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both, which shall conform
to Sections 10.04 and 10.05 hereof and containing such other statements as
the Trustee reasonably deems necessary to perform its duties hereunder. The
Trustee shall not be liable for any action
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it takes or omits to take in good faith in reliance on the Officers'
Certificate, Opinion of Counsel or any other direction of the Company permitted
hereunder.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
(e) The Trustee may consult with counsel, and the written advice of
such counsel or any Opinion of Counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Unless otherwise specifically provided in the Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(g) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default (other than under
Section 6.01(1) or 6.01(2)) unless a Trust Officer assigned to and working in
the Trustee's corporate trust office has actual knowledge thereof or unless
written notice of any Event of Default is received by the Trustee at its address
specified in Section 10.02 hereof and such notice references the Securities
generally, the Company or this Indenture.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture, the Securities or of any prospectus used to sell the Securities;
it shall not be accountable for the Company's use of the proceeds from the
Securities; it shall not be accountable for any money paid to the Company, or
upon the Company's direction, if made under and in accordance with any provision
of this Indenture; it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee; and it shall not be
responsible for any statement of the Company in this Indenture or in the
Securities other than its certificate of authentication.
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Section 7.05. Notice of Defaults.
If a Default on a Series occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Securityholder of the Series notice
of the Default (which shall specify any uncured Default known to it) within 90
days after it occurs. Except in the case of a default in payment of principal of
or interest on a Series, the Trustee may withhold the notice if and so long as
the board of directors of the Trustee, the executive or any trust committee of
such directors and/or responsible officers of the Trustee in good faith
determine(s) that withholding the notice is in the interests of Holders of the
Series.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA ss. 313(a) (but if
no event described in TIA ss. 313(2) has occurred within the twelve months
preceding the reporting date no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be delivered to the Company and filed by the Trustee with the SEC and each
national securities exchange on which the Securities are listed. The Company
agrees to notify the Trustee of each national securities exchange on which the
Securities are listed.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee or predecessor trustee from time
to time reasonable compensation for their respective services subject to any
written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith.
To ensure the Company's payment obligations in this Section, the
Trustee shall have a claim prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.
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When the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 6.01 or in connection with Article 6 hereof, the
expenses (including the reasonable fees and expenses of its counsel) and the
compensation for services in connection therewith are to constitute expenses of
administration under any bankruptcy law.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the removed Trustee in writing and may appoint a
successor trustee with the Company's consent. Such resignation or removal shall
not take effect until the appointment by the Securityholders or the Company as
hereinafter provided of a successor trustee and the acceptance of such
appointment by such successor trustee. The Company may remove the Trustee and
any Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee for any or no
reason, including if:
(1) the Trustee fails to comply with Section 7.10 after written
request by the Company or any bona fide Securityholder who has
been a Securityholder for at least six months;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for the appointment of a
successor trustee.
A successor trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor trustee shall mail
notice of its succession to each Securityholder.
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Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges with or into or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.310(a)(1). The Trustee shall have a combined capital and
surplus of at least $10,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA ss.310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b). A Trustee who has resigned or been removed
shall be subject to TIA ss.311(a) to the extent indicated therein.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations.
(a) The Company may, at its option and at any time, elect to have
either paragraph (b) or paragraph (c) below be applied to the outstanding
Securities of any Series upon compliance with the applicable conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its respective obligations with respect to the
outstanding Securities of a Series on the date the applicable conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Securities of
a Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of the Sections and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned, except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities of a Series to
receive solely from the trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii)
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obligations listed in Section 8.02, subject to compliance with this Section
8.01. The Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) below with
respect to such Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from the obligations under any covenant contained in Article Five and any other
covenant contained in the Authorizing Resolution or supplemental indenture
relating to such Series to the extent provided for therein, on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities of such Series shall thereafter be deemed to be
not "outstanding" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities of a Series, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(3), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities of the
applicable Series:
(1) The Company shall have irrevocably deposited in trust
with the Trustee, pursuant to an irrevocable trust
and security agreement in form and substance
reasonably satisfactory to the Trustee, money in U.S.
dollars or U.S. government obligations or a
combination thereof in such amounts and at such times
as are sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to
pay the principal of and interest on the outstanding
Securities of such Series to maturity or redemption;
provided, however, that the Trustee (or other
qualifying trustee) shall have received an
irrevocable written order from the Company
instructing the Trustee (or other qualifying trustee)
to apply such money or the proceeds of such U.S.
government obligations to said payments with respect
to the Securities of such Series to maturity or
redemption;
(2) No Default or Event of Default shall have occurred
and be continuing on the date of such deposit;
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(3) Such deposit will not result in a Default under this
Indenture or a breach or violation of, or constitute
a default under, any other material instrument or
agreement to which the Company or any of its
Subsidiaries is a party or by which it or any of
their property is bound;
(4) (i) In the event the Company elects paragraph (b)
hereof, the Company shall deliver to the Trustee an
Opinion of Counsel in the United States, in form and
substance reasonably satisfactory to the Trustee, to
the effect that (A) the Company has received from, or
there has been published by, the Internal Revenue
Service a ruling or (B) since the Issue Date
pertaining to such Series, 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 state that, or (ii) in the event the
Company elects paragraph (c) hereof, the Company
shall deliver to the Trustee an Opinion of Counsel in
the United States, in form and substance reasonably
satisfactory to the Trustee, to the effect that, in
the case of clauses (i) and (ii), Holders of the
Securities of such Series will not recognize income,
gain or loss for United States federal income tax
purposes as a result of such deposit and the
defeasance contemplated hereby and will be subject to
federal income tax in the same amounts and in the
same manner and at the same times as would have been
the case if such deposit and defeasance had not
occurred;
(5) The Company shall have delivered to the Trustee an
Officers' Certificate, stating that the deposit under
clause (1) was not made by the Company with the
intent of preferring the Holders of the Securities of
such Series over any other creditors of the Company
or with the intent of defeating, hindering, delaying
or defrauding any other creditors of the Company or
others;
(6) The Company shall have delivered to the Trustee an
Opinion of Counsel, reasonably satisfactory to the
Trustee, to the effect that, (A) the trust funds will
not be subject to the rights of Holders of
Indebtedness of the Company other than the Securities
of such Series and (B) assuming no intervening
bankruptcy of the Company between the date of deposit
and the 91st day following the deposit and that no
Holder of Securities of such Series is an insider of
the Company, after the 91st day following the
deposit, the trust funds will not be subject to any
applicable bankruptcy, insolvency, reorganization or
similar law affecting creditors' rights generally;
and
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(7) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating
that all conditions precedent specified herein
relating to the defeasance contemplated by this
Section 8.01 have been complied with.
In the event all or any portion of the Securities of a Series are to be
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
(e) In addition to the Company's rights above under this Section
8.01, the Company may terminate all of its obligations under this Indenture with
respect to a Series when:
(1) All Securities of such Series theretofore
authenticated and delivered (other than Securities
which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section
2.07 and Securities for whose payment money has
theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or all such
Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the
Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust
solely for that purpose an amount of money sufficient
to pay and discharge the entire Indebtedness on the
Securities not theretofore delivered to the Trustee
for cancellation, for principal of and interest;
(2) The Company has paid or caused to be paid all other
sums payable hereunder by the Company;
(3) The Company has delivered irrevocable instructions to
the Trustee to apply the deposited money toward the
payment of the Securities at maturity or redemption,
as the case may be; and
(4) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that
all conditions precedent specified herein relating to
the satisfaction and discharge of this Indenture have
been complied with.
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Section 8.02. Survival of the Company's Obligations.
Notwithstanding the satisfaction and discharge of the Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Securities and
Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).
Section 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. government obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. government obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities of the defeased
Series.
Section 8.04. Repayment to the Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person and all liability of the Trustee or such Paying Agent with respect to
such money shall cease.
Section 8.05. Reinstatement.
If the Trustee is unable to apply any money or U.S. government
obligations in accordance with Section 8.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities relating to the Series shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee is permitted to apply all such money or U.S.
government obligations in accordance with Section 8.01; provided, however, that
(a) if the Company has made any payment of interest on or principal of any
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Securities of the Series because of the reinstatement of their obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. government obligations held by the
Trustee and (b) unless otherwise required by any legal proceeding or any order
or judgment of any court or governmental authority, the Trustee shall return all
such money or U.S. government obligations to the Company promptly after
receiving a written request therefor at any time, if such reinstatement of the
Company's obligations has occurred and continues to be in effect.
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to or consent of any Securityholder of
such Series:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article Five;
(3) to provide that specific provisions of this Indenture shall
not apply to a Series not previously issued;
(4) to create a Series and establish its terms;
(5) to provide for uncertificated Securities in addition to or in
place of certificated Securities; and
(6) to make any other change that does not adversely affect the
rights of Securityholders.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail notice of such amendment to the Securityholders.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to any Securityholder of such Series
but with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each such Series affected by the
amendment. Each such Series shall vote
35
<PAGE>
as a separate class. The Holders of a majority in principal amount of the
outstanding Securities of any Series may waive compliance by the Company with
any provision of the Securities of such Series or of this Indenture relating to
such Series without notice to any Securityholder. Without the consent of each
Securityholder of a Series affected, however, an amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities of such Series whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any
Security or alter the provisions (including related
definitions) with respect to redemption of Securities pursuant
to Article Three hereof or with respect to any obligations on
the part of the Company to offer to purchase or to redeem
Securities of a Series pursuant to the Authorizing Resolution
or supplemental indenture pertaining to such Series;
(4) modify the ranking or priority of the Securities of any
Series;
(5) make any change in Sections 6.04, 6.07 or this Section 9.02;
(6) waive a continuing Default or Event of Default in the payment
of the principal of or interest on any Security; or
(7) make any Security payable at a place or in money other than
that stated in the Security, or impair the right of any
Securityholder to bring suit as permitted by Section 6.07.
An amendment of a provision included solely for the benefit of one or
more Series does not affect the interests of Securityholders of any other
Series.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplement, but it shall
be sufficient if such consent approves the substance thereof.
After the issuance of any Securities, an amendment under this Section
or under Section 9.01 may not make any change that adversely affects in any
material respect the rights under Article 11 of the holders of Senior
Indebtedness, unless such holders of Senior Indebtedness consent to the change.
36
<PAGE>
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder shall bind
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. Subject to the following
paragraph, any such Holder or subsequent Holder, however, may revoke the consent
as to his Security or portion of a Security. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Securities of any Series entitled to
consent to any amendment, supplement or waiver, which record date shall be at
least 10 days prior to the first solicitation of such consent. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security; provided, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal of
and interest on a Security, on or after the respective due dates expressed in
such Security, or to bring suit for the enforcement of any such payment on or
after such respective dates without the consent of such Holder.
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Company may require the Holder of the Security to deliver it to the Trustee,
at which time the Trustee shall place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
37
<PAGE>
Section 9.06. Trustee to Sign Amendments, etc.
Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE TEN
Miscellaneous
Section 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 10.02. Notices.
Any order, consent, notice or communication shall be sufficiently given
if in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
if to the Company:
M.D.C. Holdings, Inc.
3600 South Yosemite
Suite 900
Denver, CO 80237
Telecopy No.: (303) 793-2760
Attention: Chief Financial Officer
38
<PAGE>
if to the Trustee:
-----------------------
-----------------------
-----------------------
Telecopy No.:
------------
Attention:
--------------
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail at his address as it appears on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it except that
notice to the Trustee shall only be effective upon receipt thereof by the
Trustee.
If the Company mails notice or communications to the Securityholders,
it shall mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss.
312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 10.05) stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of such
counsel, all such conditions
39
<PAGE>
precedent and covenants, compliance with which constitutes a
condition precedent, if any, provided for in this Indenture
relating to the proposed action or inaction, have been
complied with and that any such section does not conflict with
the terms of the Indenture.
Section 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section 10.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in Denver, Colorado and New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. A "Business
Day" is any day other than a Legal Holiday.
Section 10.08. Governing Law.
The laws of the State of New York shall govern this Indenture and the
Securities of each Series.
40
<PAGE>
Section 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.10. No Recourse Against Others.
All liability described in paragraph 12 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
Section 10.11. Successors and Assigns.
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
Section 10.12. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 10.13. Severability.
In case any one or more of the provisions contained in this Indenture
or in the Securities of a Series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Securities.
ARTICLE ELEVEN
Subordination
Section 11.01. Agreement to Subordinate.
The Company agrees, and each Securityholder by accepting a Security
agrees, that the indebtedness evidenced by the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article, to
the prior payment in full of all Senior Indebtedness and that the subordination
is for the benefit of the holders of Senior Indebtedness.
41
<PAGE>
Section 11.02. Certain Definitions.
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
"Senior Indebtedness" means all Indebtedness (present or future)
created, incurred, assumed or guaranteed by the Company (and all renewals,
extensions or refundings thereof), unless the instrument under which such
Indebtedness is created, incurred, assumed or guaranteed provides that such
Indebtedness is not senior or superior in right of payment to the Securities.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
shall not include (i) any Indebtedness of the Company to any of its
subsidiaries, (ii) any trade payables of the Company or (iii) guarantees by the
Company or any of its Subsidiaries of Indebtedness (a) outstanding at the date
hereof or (b) which may be outstanding in the future, except that Senior
Indebtedness shall include any guarantees as may be listed in a supplemental
indenture and any other present and future guarantees that provide by their
terms that they constitute Senior Indebtedness.
Section 11.03. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its Property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of the principal of and interest
(including interest accruing after the commencement of any
such proceeding) to the date of payment on the Senior
Indebtedness before Securityholders shall be entitled to
receive any payment of principal of or interest on Securities;
and
(2) until the Senior Indebtedness is paid in full in cash, any
distribution to which Securityholders would be entitled but
for this Article shall be made to holders of Senior
Indebtedness as their interests may appear, except that
Securityholders may receive securities that are subordinated
to Senior Indebtedness to at least the same extent as the
Securities.
For purposes of this Article 11, a distribution may consist of cash,
securities or other property, by set-off or otherwise.
Section 11.04. Default on Senior Indebtedness.
Upon the final maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all such Senior Indebtedness shall first be paid in
full, or such payment duly provided for in cash or in a manner satisfactory to
the holders of such Senior
42
<PAGE>
Indebtedness, before any payment is made by the Company or any person acting on
behalf of the Company on account of the principal or interest of the Securities.
The Company may not pay principal of or interest on the Securities and
may not acquire any Securities for cash or property (other than capital stock of
the Company or other securities of the Company that are subordinated to Senior
Indebtedness to at least the same extent as the Securities) if a default on
Senior Indebtedness occurs and is continuing that permits holders of such Senior
Indebtedness to accelerate its maturity.
The Company shall resume payments on the Securities and may acquire
them, if this Article otherwise permits the payment or acquisition at that time,
when the default is cured or waived.
Section 11.05. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness of the
acceleration. The Company shall pay the Securities when 180 days pass after the
acceleration occurs if this Article permits the payment at that time; provided,
however, that if no Senior Indebtedness is outstanding at the time of such
acceleration, the Company shall pay the Securities in accordance with the
provisions of Article 6.
Section 11.06. When Distributions Must Be Paid Over.
In the event that the Company shall make any payment to the Trustee on
account of the principal or interest on the Securities at a time when such
payment is prohibited by Section 11.03 or 11.04, such payment shall be held by
the Trustee in trust for the benefit of, and shall forthwith be paid over and
delivered to, the holders of Senior Indebtedness (pro rata as to each of such
holders on the basis of the respective amounts of Senior Indebtedness held by
them) or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
If a distribution is made to Securityholders that because of this
Article should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
43
<PAGE>
Section 11.07. Notice by the Company.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of principal of or
interest on the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior
Indebtedness provided in this Article. Nothing in this Article shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07.
Section 11.08. Subrogation.
After all Senior Indebtedness is paid in full and until the Securities
are paid in full, Securityholders shall be subrogated to the rights of holders
of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the
Securityholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior Indebtedness which
otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on Senior Indebtedness.
Section 11.09. Relative Rights.
This Article defines the relative rights of Securityholders and holders
of Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the
Securities in accordance with their terms;
(2) affect the relative rights of Securityholders and creditors of
the Company, other than holders of Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject
to the rights of holders of Senior Indebtedness to receive
distributions otherwise payable to Securityholders.
If the Company fails to pay principal of or interest on a Security on
the due date because of this Article, the failure is still a Default or Event of
Default.
44
<PAGE>
Section 11.10. Subordination May Not Be Impaired by the Company.
No right of any holder of Senior Indebtedness to enforce the
subordination of the indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.
Section 11.11. Distribution or Notice to the Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness pursuant to this Article 11, the distribution may be made
and the notice given to their Representative.
Section 11.12. Rights of the Trustee and Paying Agent.
Notwithstanding any provision of this Article 11 or any other provision
of this Indenture, the Trustee and Paying Agent shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment to or by the Trustee or a Paying Agent or the taking of any other
action (pursuant to this Article 11) by the Trustee or a Paying Agent unless and
until the Trustee or such Paying Agent, as the case may be, shall have received
at its office specified in Section 10.02 written notice thereof from the
Company, a Representative or a holder of Senior Indebtedness and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, and such Paying Agent, shall be entitled in all respects
conclusively to assume that no such facts exist. The Trustee or Paying Agent may
continue to make payments on the Securities unless it receives such a notice at
least three business days prior to the date upon which payment is due.
The Trustee shall be entitled to rely reasonably in good faith on the
delivery to it of a written notice by a person representing himself, herself or
itself to be a Representative or a holder of Senior Indebtedness to establish
that such notice has been given by a Representative or a holder of such Senior
Indebtedness. Only the Company, a Representative or a holder of Senior
Indebtedness that has no Representative may give the notice.
In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article 11, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the
45
<PAGE>
benefit of such person pursuant to the terms of this Indenture pending judicial
determination as to the rights of such person to receive such payment.
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
Custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 11.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 11.13. No Fiduciary Duty to Holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee or Paying Agent. Neither the Trustee nor
the Paying Agent shall be deemed to owe any fiduciary duty to the holders of
such Senior Indebtedness and, subject to the provisions of Section 7.02, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall, in the absence of bad faith, pay over or deliver to holders of
Securities, the Company or any other person monies or assets to which any holder
of such Senior Indebtedness shall be entitled by virtue of this Article 11 or
otherwise.
46
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
Dated: , 1997 M.D.C. HOLDINGS, INC.
-----------
By:
Name:
Title:
Dated: , 1997 , as Trustee
----------------- ------------------
By:
Name:
Title:
(SEAL)
47
<PAGE>
Exhibit A
No. CUSIP No.:
---------
[Title of Security]
M.D.C. HOLDINGS, INC.
a Delaware corporation
promises to pay to
or registered assigns
the principal sum of [Dollars] on
[Title of Security]
Interest Payment Dates: and
Record Dates and
Authenticated: Dated:
M.D.C. HOLDINGS, INC.
[Seal]
By
---------------------------
Title:
By
---------------------------
Title:
- ------------------------------,
as Trustee, certifies that this is one of the
Securities referred to in the within mentioned
Indenture.
By:
-----------------------------
- --------------------------------
Authorized Signatory
M.D.C. HOLDINGS, INC.
[Title of Security]
A-1
<PAGE>
1. Interest.
M.D.C. HOLDINGS, INC. (the "Company"), a Delaware corporation, promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company will pay interest semiannually on
------------------
and of each year until the principal is paid or made available
--------------
for payment. Interest on the Securities will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid, from , 19 ; provided that, if there is no existing default
-------------- --
in the payment of interest, and if this Security is authenticated between a
record date referred to on the face hereof and the next succeeding interest
payment date, interest shall accrue from such interest payment date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
[Provisions as to the right of the Company to defer interest, if any, may be set
forth here. ]
2. Method of Payment. The Company will pay interest on the Securities (except
defaulted interest, if any, which will be paid on such special payment date to
Holders of record on such special record date as may be fixed by the Company) to
the persons who are registered Holders of Securities at the close of business on
the [Insert record dates]. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.
3. Paying Agent and Registrar.
Initially, (the "Trustee") will act as Paying Agent and
---------------
Registrar. The Company may change or appoint any Paying Agent, Registrar or
co-Registrar without notice. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
, 199 ("Indenture") among the Company and the Trustee. The terms
- ------------- --
of the Securities include those stated in the Indenture (including those terms
set forth in the Authorizing Resolution or supplemental indenture pertaining to
the Securities of the Series of which this Security is a part) and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 ("TIA") as
in effect on the date of the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the Act for a
statement of them.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture and the applicable Authorizing Resolution
or supplemental
A-2
<PAGE>
indenture. Requests may be made to: M.D.C. Holdings, Inc., 3600 S. Yosemite,
Suite 900, Denver, Colorado 80237, Attention: Secretary.
5. Optional Redemption.
The Company may redeem the Securities at any time on or
after , in whole or in part, at the following redemption prices
-------------
(expressed as a percentage of their principal amount) together with interest
accrued and unpaid to the date fixed for redemption:
If redeemed during the Twelve-Month period commencing
on and ending on in each of the
---------- -----------
following years Percentage
------- ------
------- ------
------- ------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date, interest ceases to accrue on
Securities or portions of them called for redemption; provided, that if the
Company shall default in the payment of such Security at the redemption price
together with accrued interest, interest shall continue to accrue at the rate
borne by the Securities.
[Insert provisions relating to redemption at option of Holders, if any]
6. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange
Securities by presentation of such Securities to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Securities of other denominations. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Security selected for
redemption, except the unredeemed part thereof if the Security is
A-3
<PAGE>
redeemed in part, or transfer or exchange any Securities for a period of 15 days
before a selection of Securities to be redeemed.
7. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of
it for all purposes.
8. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its request. After that, Holders entitled to the money must look to the Company
for payment unless an abandoned property law designates another person.
9. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Securities of each Series affected by the
amendment and any past default or compliance with any provision relating to any
Series of the Securities may be waived in a particular instance with the consent
of the Holders of a majority in principal amount of the outstanding Securities
of such Series. Without the consent of any Securityholder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Securities in
addition to or in place of certificated Securities, to create a Series and
establish its terms, or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
10. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor corporation
will be released from those obligations.
11. Trustee Dealings With Company.
, the Trustee under the Indenture, in its individual or
--------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
A-4
<PAGE>
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
13. Discharge of Indenture.
The Indenture contains certain provisions pertaining to defeasance,
which provisions shall for all purposes have the same effect as if set forth
herein.
14. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
15. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
16. Subordination.
To the extent set forth in Article 11 of the Indenture, the Securities
are subordinated to Senior Indebtedness, which generally is any Indebtedness
outstanding on the date of the Indenture or Indebtedness thereafter created,
incurred, assumed or guaranteed by the Company and all renewals, extensions and
refundings thereof except Indebtedness that expressly provides that it is not
senior to or superior in right of payment to the Securities. Senior Indebtedness
does not include Indebtedness of the Company to any of its subsidiaries, trade
payables of the Company and certain Indebtedness of others guaranteed by the
Company. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination and
authorizes the Trustee to give it effect.
A-5
<PAGE>
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form
below:
I or we assign and transfer this Security to:
- --------------------------------------------------------------
- --------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
(Print or type assignee's name, address, and zip code)
and irrevocably appoint:
- ---------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
- ---------------------------------------------------------------
Date: Your signature:
------------------- ---------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature
Guarantee:
-----------------------------------------------------------
1
EXHIBIT 5.1
-----------
(Letterhead of Holme Roberts & Owen LLP)
September [26], 1997
M.D.C. Holdings, Inc.
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
Re: M.D.C. Holdings, Inc. Public Offering
Ladies and Gentlemen:
As counsel for M.D.C. Holdings, Inc., a Delaware corporation (the
"Company"), we are familiar with the Company's Registration Statement on Form
S-3 (as amended, the "Registration Statement") filed with the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933 (as amended,
the "Act"), on September [26], 1997, with respect to the offering and issuance
from time to time by the Company of up to $300,000,000 aggregate offering price
of the following: (i) one or more series of its debt securities (the "Debt
Securities"), (ii) shares of its Preferred Stock, par value $.01 per share (the
"Preferred Stock"), or (iii) shares of its Common Stock, par value $.01 per
share (the "Common Stock").
1
<PAGE>
All capitalized terms which are not defined herein shall have the meanings
assigned to them in the Registration Statement.
In connection with our examination of documents as hereinafter
described, we have assumed the genuineness of all signatures on, and the
authenticity of, all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as copies. With respect
to agreements and instruments executed by natural persons, we have assumed the
legal competency of such persons.
For the purpose of rendering this opinion, we have made such factual and legal
examination as we deemed necessary under the circumstances, and in that
connection we have examined, among other things, originals or copies of the
following:
(1) The Certificate of Incorporation of the Company, as
amended to date;
(2) The Bylaws of the Company, as amended to date;
(3) The Form of Senior Indenture (and form of notes) filed as an
exhibit to the Registration Statement;
(4) The Form of Senior Subordinated Indenture (and form of notes)
filed as an exhibit to the Registration Statement;
(5) The Form of Junior Subordinated Indenture (and form of notes)
filed as an exhibit to the Registration Statement;
(6) Such records of the corporate proceedings of the Company, and
such other documents that we considered necessary or
appropriate for the purpose of rendering this opinion; and
(7) Such other certificates and assurances from public officials,
officers and representatives of the Company that we
considered necessary or appropriate for the purpose of
rendering this opinion.
2
<PAGE>
On the basis of the foregoing examination, and in reliance
thereon, we are of the opinion that (subject to compliance with the pertinent
provisions of the Act and, with respect to the Indentures (as defined below) and
the Debt Securities, the Trust Indenture Act of 1939, as amended, and to
compliance with such securities or "blue sky" laws of any jurisdiction as may be
applicable):
1. When (a) the Debt Securities in substantially the form
contained in (as appropriate) the Form of Senior Indenture, the Form of Senior
Subordinated Indenture or the Form of Junior Subordinated Indenture (as amended
or supplemented in accordance with the respective terms thereof, each an
"Indenture") shall have been authorized, executed and authenticated in
accordance with the terms of the applicable Indenture, (b) the Indentures shall
have been qualified under the Trust Indenture Act of 1939, duly executed and
delivered and (c) the Debt Securities shall have been issued and sold as
described in the Registration Statement, and if in an underwritten offering, in
accordance with the terms and conditions of the applicable underwriting
agreement, and in a manner contemplated in the Registration Statement, including
the Prospectus Supplement relating to any such Debt Securities, the Debt
Securities will be duly authorized and valid and binding obligations of the
Company, subject to the effect of any bankruptcy, insolvency, reorganization,
moratorium, arrangement, or similar laws affecting the enforcement of creditors'
rights generally (including, without limitation, the effect of statutory or
other laws regarding fraudulent transfers or preferential transfers) and general
principles of equity, regardless of whether enforceability is considered in a
proceeding in equity or at law.
2. When the Preferred Stock shall have been authorized, issued
and sold as described in the Registration Statement, and if in an underwritten
offering, in accordance with the terms and conditions of the applicable
underwriting agreement, and in a manner contemplated in the Registration
Statement, including the Prospectus Supplement relating to the applicable series
of such Preferred Stock, the Preferred Stock will be validly issued, fully paid
and nonassessable.
3. When the Common Stock shall have been authorized, issued and
sold as described in the Registration Statement, and if in an underwritten
offering, in accordance with the terms and conditions of the applicable
underwriting agreement, and in a manner contemplated in the Registration
Statement, including the Prospectus Supplement relating to the applicable
offering of such Common Stock, the Common Stock will be validly issued, fully
paid and nonassessable.
This opinion is limited to the present corporate laws of the
State of Delaware, the present laws of the State of Colorado and the present
federal laws of the United States and to the present judicial interpretations
thereof and to the facts as they presently exist. We undertake no obligation to
advise you as a result of developments occurring after the date
3
<PAGE>
hereof or as a result of facts or circumstances brought to our attention after
the date hereof.
This opinion may be filed as an exhibit to the Registration
Statement. Consent is also given to the reference to this firm under the caption
"Legal Matters" in the prospectus contained in the Registration Statement. In
giving this consent, we do not admit we are included in the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the SEC promulgated thereunder.
Very truly yours,
/s/
HOLME ROBERTS & OWEN LLP
4
Exhibit 12.1
- ------------
<TABLE>
<CAPTION>
M.D.C. Holdings, Inc.
Computation of Ratio of Earnings to Fixed Charges
(Amounts in thousands of dollars)
June 30, June 30,
1997 1997 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Pre-tax income from continuing
operations..................... $ 14,049 $ 13,945 $ 32,754 $ 26,651 $ 30,982 $ 15,032 $ 6,520
Fixed charges:
Interest expense and
amortization of debt discount,
net of interest capitalized....
13,976 16,479 30,933 38,662 38,874 34,425 36,447
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings before income taxes, and
fixed charges.................. $ 28,025 $ 30,424 $ 63,687 $ 65,313 $ 69,856 $ 49,457 $ 42,967
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total fixed charges............... $ 13,890 $ 16,101 $ 31,461 $ 36,401 $ 38,671 $ 28,930 $ 26,769
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
Ratio of earnings to fixed charges
2.018 1.890 2.024 1.794 1.806 1.710 1.605
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 3, 1997 appearing on page F-2 of M.D.C. Holdings, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 1996. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Denver, Colorado
September 25, 1997
