As Filed with the Securities and Exchange Commission on January 28, 1998
Registration No. 333-36631
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
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. / /
<PAGE>
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>
PART II
INFORMATION NOT REQUIRED IN THE REGISTRATION STATEMENT
Item 16. Exhibits.
Exhibit Number Description of Documents
- - -------------- ------------------------
1.1 Underwriting Agreement
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) Senior Indenture dated January 28, 1998,
by and between M.D.C. Holdings, Inc.
and U.S. Bank National Association, 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 of the original filing
of Form S-3).
25.1 Statement of Eligibility of Trustee;
Form T-1.
- - -------------------
* Incorporated herein by reference.
** Previously filed.
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 28th day of
January, 1998.
M.D.C. HOLDINGS, INC.
By: /s/ Paris G. Reece III
---------------------------
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: /s/ Paris G. Reece III
----------------------------
Paris G. Reece III
Executive Vice President
RICHMOND AMERICAN HOMES OF ARIZONA, INC.
RICHMOND AMERICAN HOMES OF COLORADO,
INC.
By: /s/ Paris G. Reece III
----------------------------
Paris G. Reece III
Vice President
II-2
<PAGE>
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-3
<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-4
<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
- - --------------------------------------
* By Daniel S. Japha, Attorney-in-Fact
M.D.C. HOLDINGS, INC.
$175,000,000
8-3/8% Senior Notes due 2008
Underwriting Agreement
New York, New York
January 23, 1998
Salomon Smith Barney
Salomon Brothers Inc
Morgan Stanley & Co. Incorporated
SBC Warburg Dillon Read Inc.
c/o Salomon Brothers Inc
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
M.D.C. Holdings, Inc., a Delaware corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, $175,000,000 principal amount of its 8-3/8% Senior Notes due
2008 (the "Securities"), to be issued under an indenture (the "Indenture") to be
dated as of January 28, 1998, between the Company and U.S. Bank National
Association, as trustee (the "Trustee"). To the extent there are no additional
Underwriters listed on Schedule I other than you, the term Representatives as
used herein shall mean you, as Underwriters, and the terms Representatives and
Underwriters shall mean either the singular or plural as the context requires.
Any reference herein to the "Registration Statement," a "Preliminary Prospectus"
or the "Prospectus" shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of such Preliminary Prospectus or the Prospectus, as
the case may be; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date of the
Registration Statement, or the issue date of any Preliminary Prospectus or the
Prospectus, as the case may be, deemed to be incorporated therein by reference.
Certain terms used herein are defined in Section 17 hereof.
<PAGE>
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a
registration statement (file number 333-36631) on Form S-3, including a
related preliminary prospectus, for the registration under the Act of
the offering and sale of the Securities. The Company may have filed one
or more amendments thereto, including a related preliminary prospectus,
each of which has previously been furnished to you. The Company will
next file with the Commission one of the following: (1) prior to the
Effective Date of such registration statement, a further amendment to
such registration statement, including the form of final prospectus,
(2) after the Effective Date of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b), or (3) a final
prospectus in accordance with Rules 415 and 424(b). In the case of
clause (2), the Company has included in such registration statement, as
amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectus. As filed,
such amendment and form of final prospectus, or such final prospectus,
shall contain all Rule 430A Information, together with all other such
required information, and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein. If the Registration Statement contains the undertaking
specified by Regulation S-K Item 512(a), the Registration Statement, at
the Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Prospectus
(and any supplements thereto) will, comply in all material respects
with the applicable requirements of the Act, the Exchange Act and the
Trust Indenture Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement
did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; on
the Effective Date and on the Closing Date the Indenture did or will
comply in all material respects with the requirements of the Trust
Indenture Act and the rules thereunder; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date and
any settlement date, the Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Company makes no
representations or warranties as to (i) that part of the
<PAGE>
Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (ii) the information contained in or omitted from the
Registration Statement, or the Prospectus (or any supplement thereto)
in reliance upon and in conformity with information furnished herein or
in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(c) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business
as described in the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except in each case as
would not, singly or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business (a "Material Adverse Effect"), except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto
subsequent to the Execution Time).
(d) All the outstanding shares of capital stock of each of the
Company's significant subsidiaries (as defined by Rule 1-02 of
Regulation S-X under the Exchange Act) have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the Prospectus, all outstanding shares of
capital stock of such subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest or any other security interests, claims,
liens or encumbrances.
(e) The Company's authorized equity capitalization is as set
forth in the Prospectus; the Securities conform in all material
respects to the description thereof contained in the Prospectus. The
Securities being sold hereunder by the Company are duly listed, and
admitted and authorized for trading, subject to official notice of
issuance and evidence of satisfactory distribution on the New York
Stock Exchange (the "NYSE").
(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required. The statements in the Prospectus under
the headings "Description of Notes," "Description of Debt Securities"
and "Plan of Distribution" fairly summarize the matters therein
described.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable in accordance with its terms.
<PAGE>
(h) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus.
(j) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter or by-laws of the Company or any of its
subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its
or their properties, except, in the case of clause (ii) or (iii), as
would not, singly or in the aggregate, have a Material Adverse Effect.
No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(l) The consolidated historical financial statements of the
Company and its consolidated subsidiaries included in the Prospectus
and the Registration Statement present fairly in all material respects
the financial condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Summary -- Selected Financial and
Other Data" in the Prospectus fairly present, on the basis stated in
the Prospectus, the information included therein.
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending
or, to the best knowledge of the Company, threatened that (i) could
reasonably be expected to have a material adverse
<PAGE>
effect on the performance of this Agreement or the consummation of any
of the transactions contemplated hereby or (ii) could reasonably be
expected to have a Material Adverse Effect.
(n) Each of the Company and each of its subsidiaries owns or
leases all such properties as are necessary to the conduct of its
operations as presently conducted, except as would not have a Material
Adverse Effect.
(o) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its
properties, as applicable, except, in the case of clause (ii) or (iii),
as would not, singly or in the aggregate, have a Material Adverse
Effect.
(p) Price Waterhouse LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated
financial statements included in the Prospectus, are independent public
accountants with respect to the Company within the meaning of the Act
and the applicable published rules and regulations thereunder.
There are no material transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Securities.
(r) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or as would not have a Material
Adverse Effect.
(s) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its subsidiaries'
principal suppliers, contractors or customers, that, in either case,
could have a Material Adverse Effect.
(t) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts
<PAGE>
as are prudent and customary in the businesses in which they are
engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force
and effect; the Company and its subsidiaries are in compliance with the
terms of such policies and instruments in all material respects; and
neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect.
(u) Except as described in or contemplated by the Prospectus,
no subsidiary of the Company is currently materially restricted,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, in any
case, to any extent that the Company deems necessary.
(v) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses, and neither the Company nor any
such subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
(w) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that, in all material respects, (i) transactions are executed
in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) The Company has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(y) Except as would not, singly or in the aggregate, have a
Material Adverse Effect, the Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic
<PAGE>
substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received and are in compliance with all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii)
have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants. Except as set
forth in the Prospectus, neither the Company nor any of the
subsidiaries has been named as a "potentially responsible party" under
the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended.
(z) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Section 302
of the United States Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in Section 3(3) of ERISA and
such regulations and published interpretations) in which employees of
the Company and its subsidiaries are eligible to participate and each
such plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations. The Company and its subsidiaries have not incurred any
unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA.
(aa) The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all material patents,
patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of the Company's business as now conducted or as proposed in the
Prospectus to be conducted.
(bb) Except as disclosed in the Registration Statement and the
Prospectus, the Company (i) does not have any material lending or other
relationship with any bank or lending affiliate of Salomon Smith Barney
Holdings Inc. and (ii) does not intend to use any of the proceeds from
the sale of the Securities hereunder to repay any outstanding debt owed
to any affiliate of Salomon Smith Barney Holding Inc.
(cc) The Company is in compliance with the Commission's staff legal
bulletin No. 5 dated October 8, 1997 related to Year 2000 compliance.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale; Underwriting Compensation. The Company agrees to sell
to each Underwriter, and each Underwriter agrees, subject to the terms and
conditions
<PAGE>
and in reliance upon the representations and warranties herein set forth,
severally and not jointly, to purchase from the Company, at a purchase price
(the "Purchase Price") of 99.598% of the principal amount thereof, the principal
amount of the Securities set forth opposite such Underwriter's name in Schedule
I hereto. The Company agrees to pay to each Underwriter underwriting discounts
and commissions equal to 1.375% of the principal amount of the Securities set
forth opposite such Underwriter's name in Schedule I hereto (the "Underwriting
Compensation").
3. Delivery and Payment. Delivery of and payment for the
Securities and payment of the Underwriting Compensation shall be made at 10:00
AM, New York City time, on January 28, 1998, or at such time on such later date
not more than three Business Days after the foregoing date as the
Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and the Company or as provided in Section
9 hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities, and payment of
the Underwriting Compensation, shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof. Delivery
of the Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct. The Purchase Price
shall be paid by the several Underwriters by wire transfer payable in same-day
funds to an account specified by the Representatives. The Representatives, or
such other person as is designated by the Company, shall purchase from such
funds U.S. Governmental Obligations (as defined in the Indenture dated as of
December 15, 1993 among the Company, the U.S. Bank National Association, as
trustee (the "Old Trustee"), and the Guarantors and Pledgors named therein (the
"Old Indenture")) with the type of security, maturity date, rate and price
stated in the certificate required by Section 6(j) hereof and shall deliver such
U.S. Governmental Obligations on the Closing Date no later than 2:00 p.m. (New
York City time) by wire transfer to the Old Trustee to be held in accordance
with the terms of the Irrevocable Trust Agreement described in Section 6(k)
hereof. The balance of the purchase price shall be (x) delivered to or upon the
order of the Company by wire transfer payable in same-day funds to an account
specified by the Company or (y) at the direction of the Company, applied toward
the Underwriting Compensation. The Underwriting Compensation, to the extent not
deducted from the Purchase Price in accordance with clause (y) of the preceding
sentence, shall be paid by the Company by wire transfer payable in same-day
funds to an account specified by the Representatives. The Company and the
Representatives shall finalize all payment arrangements on the Business Day
preceding the Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Securities for sale to the public as set forth in the
Prospectus.
5. Agreements. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereof, to
<PAGE>
become effective. Prior to the termination of the offering of the
Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for
your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company
will promptly advise the Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become
effective, (2) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (4) of any request by the
Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Prospectus or for any additional information, (5) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will (1) notify the
Representatives of such event; (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance; and (3) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
<PAGE>
The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary Prospectus and
the Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Securities and will pay any fee of the National Association of
Securities Dealers, Inc., in connection with its review of the
offering; provided that in no event shall the Company be obligated to
do business in any jurisdiction where it is not now so qualified or to
take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities
in any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Salomon Smith Barney, for a period of 90 days following the Execution
Time, offer, sell or contract to sell, or otherwise dispose of (or
enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition
or effective economic disposition due to cash settlement or otherwise)
by the Company or any affiliate of the Company or any person in privity
with the Company or any affiliate of the Company), directly or
indirectly, or announce the offering of any debt securities issued or
guaranteed by the Company (other than the Securities).
(g) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
6. If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such
<PAGE>
determination occurred at or prior to 3:00 PM New York City time on
such date or (ii) 9:30 AM on the Business Day following the day on
which the public offering price was determined, if such determination
occurred after 3:00 PM New York City time on such date; if filing of
the Prospectus, or any supplement thereto, is required pursu ant to
Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no
stop order sus pending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have furnished to the Representatives
the opinion of Daniel S. Japha, Secretary and General Counsel-Corporate
of the Company, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) Each of the Company and its subsidiaries has been duly
incor porated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is
chartered or organized with full corpo rate power and
authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except in each
case as would not, singly or in the aggregate, have a Material
Ad verse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto subsequent to
the Execution Time).
(ii) all the outstanding shares of capital stock of each
significant subsidiary of the Company (as defined by Rule 1-02
of Regulation S-X) (individually a "Subsidiary" and
collectively the "Subsidiaries") have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Subsidiaries are
owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interest, claim, lien or encumbrance;
(iii) the Company's authorized equity capitalization is as
set forth in the Prospectus; the Securities being sold
hereunder by the Company are duly listed, and admitted and
authorized for trading, subject to official notice of issuance
and evidence of satisfactory distribution on the NYSE;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries or its or
their property of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in
the Pro spectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required;
(v) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be
an "investment company" as defined in the In vestment Company
Act of 1940, as amended;
(vi) neither the execution and delivery of the Indenture, the
issue and sale of the Securities, nor the consummation of any
other of the transac tions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in
a breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to, (x) the charter or by-laws of the
Company or its subsidiaries, (y) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, cove nant
or instrument to which the Company or its subsidiaries is a
party or bound or to which its or their property is subject,
or (z) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or its subsidiaries of any
court, regulatory body, administrative agency, govern mental
body, arbitrator or other authority having jurisdiction over
the Com pany or its subsidiaries or any of its or their
properties, except, in the case of clause (y) or (z), as would
not, singly or in the aggregate, have a Material Adverse
Effect; and
(vii) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
In rendering such opinion, such counsel may rely as to matters
involving the appli cation of laws of any jurisdiction other than the
States of New York or Colorado, the Delaware General Corporation Law or
the Federal laws of the United States, to the extent he deems proper
and specified in such opinion, upon the opinion of other counsel of
good standing whom he believes to be reliable and who are satisfactory
to counsel for the Underwriters. References to the Prospectus in this
paragraph (b) in clude any supplements thereto at the Closing Date.
(c) Holme Roberts & Owen LLP, counsel for the Company, dated
the Closing Date and addressed to the Representatives, to the effect
that:
(i) this Agreement has been duly authorized, executed and deliv ered by the
Company;
(ii) the Indenture has been duly authorized, executed and
deliv ered, has been duly qualified under the Trust Indenture
Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in ac cordance with its terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time
in effect); and the Securities
have been duly authorized and, when executed and authenticated
in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture;
(iii) the statements in the Prospectus under the headings
"Description of Notes", "Description of Debt Securities" and
"Plan of Dis tribution" fairly summarize the matters described
therein;
(iv) no consent, approval, authorization, filing with or
order of any court or governmental agency or body is required
in connection with the transactions contemplated herein,
except such as have been obtained under the Act and such as
may be required under the blue sky laws of any jurisdic tion
in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated in
this Agreement and in the Pro spectus; and
(v) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period re quired by Rule
424(b); to the knowledge of such counsel, no stop order sus
pending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened and the Reg istration Statement and
the Prospectus (other than the financial statements and other
financial information contained therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act,
the Exchange Act and the Trust Indenture Act and the
respective rules thereunder; and such counsel has no reason to
believe that on the Effective Date or at the Execution Time
the Registration Statement contains or contained any untrue
statement of a material fact or omitted or omits to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospec
tus as of its date or on the Closing Date includes any untrue
statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading (in each case, other than the financial statements
and other financial information contained therein, as to which
such counsel need express no opinion).
In rendering such opinion, such counsel may rely (A) as to matters
involving the ap plication of laws of any jurisdiction other than the
States of New York or Colorado, the Delaware General Corporation Law or
the Federal laws of the United States, to the extent they deem proper
and specified in such opinion, upon the opinion of other counsel of
good standing whom they believe to be reliable and who are satisfactory
to counsel for the Underwriters and (B) as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus in this
paragraph (c) include any supplements thereto at the Closing Date. The
opinion or opinions of such counsel shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(d) The Representatives shall have received from Cahill Gordon
& Rein del, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Se curities, the Indenture, the
Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters. The opin ion of such counsel shall be
rendered to the Underwriters at the request of the Com pany and shall
so state therein.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by Paris G. Reece III, Senior Vice
President and Chief Fi nancial Officer, and Michael Touff, Vice
President and General Counsel, dated the Closing Date, to the effect
that the signers of such certificate have carefully exam ined the
Registration Statement, the Prospectus, any supplements to the
Prospectus and this Agreement and that:
the representations and warranties of the Company in
this Agreement are true and correct in all material respects
on and as of the Closing Date with the same effect as if made
on the Closing Date and the Company has complied with all the
agreements and satisfied all the condi tions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) to the Company's knowledge, no stop order suspending the
ef fectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement
thereto subsequent to the Execution Time), there has been no
material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or con templated in the Prospectus
(exclusive of any supplement thereto subsequent to the
Execution Time).
(f) At the Execution Time and at the Closing Date, Price
Waterhouse LLP shall have furnished to the Representatives letters,
dated respectively as of the Execution Time and as of the Closing Date,
in form and substance satisfactory to the Representatives, confirming
that they are independent accountants within the mean ing of the Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and that they have performed a review of the
unaudited interim financial information of the Company for the
nine-month periods ended September 30, 1996 and 1997 and as at
September 30, 1997, in accordance with Statement on Auditing Standards
No. 71, stating in effect that:
(i) in their opinion the audited financial statements
included or in corporated in the Registration Statement and
the Prospectus and reported on by them comply as to form in
all material respects with the applicable ac counting
requirements of the Act and the Exchange Act and the related
pub lished rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review, in accordance with
standards established under Statement on Audit ing Standards
No. 71, of the unaudited interim financial information for the
nine-month periods ended September 30, 1996 and 1997 and as at
September 30, 1997, as indicated in their report included in
the Registration Statement and the Prospectus; carrying out
certain specified procedures (but not an ex amination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with
respect to the com ments set forth in such letter; a reading
of the minutes of the meetings of the stockholders and board
of directors (and committees thereof) of the Company and its
subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions
and events subsequent to December 31, 1996, nothing came to
their attention which caused them to believe that:
any unaudited financial statements included
or incorporated in the Registration Statement and the
Prospectus do not comply as to form in all material
respects with applicable accounting requirements of
the Act and with the published rules and regulations
of the Com mission with respect to financial
statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity
with generally accepted accounting principles applied
on a basis substantially con sistent with that of the
audited financial statements included or incor
porated in the Registration Statement and the
Prospectus;
with respect to the period subsequent to
September 30, 1997, there were any changes, at a
specified date not more than five days prior to the
date of the letter, in the long-term debt of the
Company and its subsidiaries or capital stock of the
Company or decreases in the stockholders' equity or
working capital of the Company as com pared with the
amounts shown on the September 30, 1997 consoli dated
balance sheet included or incorporated in the
Registration Statement and the Prospectus, or for the
period from September 30, 1997 to such specified date
there were any decreases, as compared with the
comparable period in the preceding year in net
revenues or income before income taxes or in total or
per share amounts of net in come of the Company and
its subsidiaries, except in all instances for changes
or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless
said explanation is not deemed necessary by the
Representatives;
the information included in the Registration
Statement and Prospectus in response to Regulation
S-K, Item 301 (Selected Finan cial Data), Item 302
(Supplementary Financial Information), Item 402
(Executive Compensation) and Item 503(d) (Ratio of
Earnings to Fixed Charges) is not in conformity with
the applicable disclosure re quirements of Regulation
S-K; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information
of an accounting, fi nancial or statistical nature (which is
limited to accounting, financial or sta tistical information
derived from the general accounting records of the Com pany
and its subsidiaries) set forth in the Registration Statement
and the Pro spectus and in Exhibit 12 to the Registration
Statement, including the infor mation set forth under the
captions "Summary -- Selected Financial and Other Data"
"Capitalization" and "Business" in the Prospectus, the informa
tion included or incorporated in Items 1, 2, 6, 7 and 11 of
the Company's Annual Report on Form 10-K, incorporated in the
Registration Statement and the Prospectus, and the information
included in the "Management's Discus sion and Analysis of
Financial Condition and Results of Operations" included or
incorporated in the Company's Quarterly Reports on Form 10-Q,
incorpo rated in the Registration Statement and the
Prospectus, agrees with the ac counting records of the Company
and its subsidiaries, excluding any ques tions of legal
interpretation.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(g) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto subsequent to the Execution Time), there shall
not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (e) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordi nary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto subsequent to the Execution Time)
the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto subsequent to the
Execution Time).
Subsequent to the Execution Time and prior to the Closing
Date, there shall not have been any decrease in the rating of any of
the Company's debt securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act) or any notice given of any intended or potential decrease in any
such rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(i) The Securities shall have been listed and admitted and
authorized for trading on the NYSE, and satisfactory evidence of such
actions shall have been pro vided to the Representatives.
(j) At least one full Business Day prior to the Closing Date
(or such shorter period as shall be satisfactory to the
Representatives), Price Waterhouse LLP shall have delivered to the
Company and the Representatives a certificate verifying the
mathematical accuracy of computations relating to the adequacy of cash
plus U.S. Governmental Obligations to be held in trust to pay the debt
service require ments on all of the Company's 11 1/8% Senior Notes due
2003 outstanding on the Closing Date.
(k) The Company shall have furnished to the Representatives a
copy of an Irrevocable Trust Agreement executed by the Company and the
Old Trustee, sub stantially in the form attached hereto as Exhibit A.
(l) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Repre sentatives may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been ful filled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters here under
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Cahill Gordon & Reindel, counsel for the
Underwriters, at 80 Pine Street, New York, New York 10005, on the Closing Date.
Reimbursement of Underwriters' Expenses. If the sale of the
Securi ties provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pur suant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Under writers
severally through Salomon Smith Barney on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities.
8. Indemnification and Contribution. (a) The Company agrees to in demnify
and hold harmless each Underwriter (including SBC Warburg Dillon Read Inc. in
its capacity as "qualified independent underwriter" within the meaning of the
Conduct Rules of the National Association of Securities Dealers, Inc.), the
directors, officers, employees and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the Pro spectus, or in
any amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably in curred by them in connection with investigating or
defending any such loss, claim, damage, liability or action.
Notwithstanding the foregoing, the Company will not be liable
in any such case (I) to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives specifically for inclusion
therein or (II) to any Underwriter with respect to any Preliminary Prospectus to
the extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Securities to a person as to
whom it shall be established in the related proceedings that there was not sent
or given, at or prior to the written confir mation of such sale, a copy of the
Prospectus (or of the Prospectus as then amended or sup plemented if the Company
shall have furnished such Underwriter with such amendment or supplement thereto
prior to the written confirmation of such sale), if such delivery was re quired
by the Act, and such loss, claim, damage or liability results from an untrue
state ment or omission of a material fact contained in such Preliminary
Prospectus that was com pletely corrected in the Prospectus (or of the
Prospectus as then amended or supplemented if the Company shall have furnished
such Underwriter with such amendment or supplement thereto prior to the written
confirmation of such sale) (it being understood that no Under writer shall be
required to send or give any amendment or supplement to any document in
corporated by reference in any Preliminary Prospectus or the Prospectus to any
person in order to benefit from the indemnification provisions herein or
otherwise).
This indemnity agreement will be in addition to any liability
which the Com pany may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity to each Underwriter, but only with reference
to written information relating to such Underwriter furnished to the Company by
or on behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agree ment will be in addition to any liability which any Underwriter
may otherwise have. The Company acknowledges that (i) the statements set forth
in the last paragraph of the cover page regarding delivery of the Securities,
(ii) the legend in block capital letters on page S-2 related to stabilization,
syndicate covering transactions and penalty bids and (iii) under the heading
"Underwriting," the sentences related to concessions and reallowances, the para
graph related to stabilization, syndicate covering transactions and penalty bids
and the para graph relating to the qualified independent underwriter in any
Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in re spect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above un less and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a) or (b)
above. The in demnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be re sponsible for the fees
and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel shall
be satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have em ployed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv)
the indemnify ing party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indem nified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any rea
son, the Company and the Underwriters severally agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably in curred in connection with investigating or defending
same) (collectively "Losses") to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and by the
Underwriters on the other from the offering of the Securities; provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among un derwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the rela tive fault of the Company and of the Underwriters in connection with
the statements or omissions which resulted in such Losses as well as any other
relevant equitable considera tions. Benefits received by the Company shall be
deemed to be equal to the total net pro ceeds from the offering (before
deducting expenses) received by it, and benefits received by the Underwriters
shall be deemed to be equal to the total underwriting discounts and com
missions, in each case as set forth on the cover page of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged un true statement of a material fact or the omission
or alleged omission to state a material fact relates to information provided by
the Company on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, access to information and op portunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this para graph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
con trols (within the meaning of either the Act or the Exchange Act) an
Underwriter and each director, officer, employee and agent of an Underwriter
shall have the same rights to con tribution as such Underwriter, and each person
who controls the Company within the meaning of either the Act or the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
con ditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Under writer or Underwriters hereunder and such failure to purchase
shall constitute a default in the performance of its or their obligations under
this Agreement, the remaining Underwrit ers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
re maining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate prin cipal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Securities set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such nonde
faulting Underwriters do not purchase all the Securities, this Agreement will
terminate without liability to any nondefaulting Underwriter or the Company. In
the event of a de fault by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall determine in order that the required changes
in the Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Com pany's Common Stock shall have
been suspended by the Commission, the NYSE or the Pa cific Stock Exchange or
trading in securities generally on the NYSE or the Pacific Stock Exchange shall
have been suspended or limited or minimum prices shall have been estab lished on
either of such Exchanges, (ii) a banking moratorium shall have been declared ei
ther by Federal or New York State authorities or (iii) there shall have occurred
any out break or escalation of hostilities, declaration by the United States of
a national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of any
supplement thereto subsequent to the Execution Time).
11. Representations and Indemnities to Survive. The respective
agree ments, representations, warranties, indemnities and other statements of
the Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will re main in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Company or any
of the officers, directors or controlling persons re ferred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, will be mailed, delivered
or tele faxed to the Salomon Smith Barney General Counsel (fax no.: (212)
816-7912) and con firmed to the General Counsel, Salomon Smith Barney, at 388
Greenwich Street, New York, New York, 10013, Attention: General Counsel; or, if
sent to the Company, will be mailed, delivered or telefaxed to (303) 804-7980
and confirmed to it at 3600 South Yosem ite Street, Denver, Colorado 80237,
Attention: General Counsel.
13. Successors. This Agreement will inure to the benefit of and be bind ing
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more coun
terparts, each of which shall constitute an original and all of which together
shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement, shall
have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a le gal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the
Registration State ment, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or becomes
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is exe cuted and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus (including any related
prospectus supplement) relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Reg istration Statement, as the case may be. Such term
shall include any Rule 430A In formation deemed to be included therein
at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the Act.
"Rule 430A Information" shall mean information with respect to
the Securi ties and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering cov ered by the initial registration
statement.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"Salomon Smith Barney" shall mean Smith Barney Inc. or Salomon Brothers Inc
to the extent that any such party is a signatory to this Agreement.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Un derwriters.
Very truly yours,
M.D.C. HOLDINGS, INC.
By: /s/
Name:
Title:
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Salomon Brothers Inc
Morgan Stanley & Co. Incorporated
SBC Warburg Dillon Read Inc.
By: Salomon Brothers Inc
By: /s/
Name:
Title:
<PAGE>
SCHEDULE I
Principal Amount
of Securities
Underwriters to be Purchased
Salomon Brothers Inc ........................................... $ 96,250,000
Morgan Stanley & Co. Incorporated................................ $ 39,375,000
SBC Warburg Dillon Read Inc. ................................... $ 39,375,000
Total................................................... $175,000,000
===========
<PAGE>
M.D.C. HOLDINGS, INC.
Issuer
AND
U.S. BANK NATIONAL ASSOCIATION
Trustee
SENIOR NOTES
INDENTURE
DATED AS OF January 28, 1998
#365296v4
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Page
CROSS-REFERENCE TABLE.............................................................................................v
ARTICLE ONE - Definitions and Incorporation by Reference..........................................................1
Section 1.01. Definitions............................................................................1
Section 1.02. Incorporation by Reference of Trust Indenture Act.....................................16
Section 1.03. Rules of Construction.................................................................17
ARTICLE TWO - The Notes..........................................................................................17
Section 2.01. Form and Dating.......................................................................17
Section 2.02. Execution and Authentication..........................................................17
Section 2.03. Registrar and Paying Agent............................................................18
Section 2.04. Paying Agent to Hold Money in Trust...................................................18
Section 2.05. Holder Lists..........................................................................18
Section 2.06. Transfer and Exchange.................................................................19
Section 2.07. Replacement Notes.....................................................................19
Section 2.08. Outstanding Notes.....................................................................19
Section 2.09. Temporary Notes.......................................................................20
Section 2.10. Cancellation..........................................................................20
Section 2.11. Defaulted Interest....................................................................20
Section 2.12. Treasury Notes........................................................................20
Section 2.13. CUSIP Numbers.........................................................................21
Section 2.14. Deposit of Moneys.....................................................................21
Section 2.15. Book-Entry Provisions for Global Note.................................................21
ARTICLE THREE - Redemption.......................................................................................22
Section 3.01. Right of Redemption...................................................................22
Section 3.02. Notices to Trustee....................................................................22
Section 3.03. Selection of Notes to Be Redeemed.....................................................23
Section 3.04. Notice of Redemption..................................................................23
Section 3.05. Effect of Notice of Redemption........................................................24
Section 3.06. Deposit of Redemption Price...........................................................24
Section 3.07. Notes Redeemed in Part................................................................25
ARTICLE FOUR - Covenants.........................................................................................25
Section 4.01. Payment of Notes......................................................................25
Section 4.02. Maintenance of Office or Agency.......................................................25
Section 4.03. Limitation on Restricted Payments.....................................................26
Section 4.04. Compliance Certificate. ..............................................................27
Section 4.05. SEC Reports...........................................................................27
Section 4.06. Limitations on Transactions with Affiliates...........................................28
Section 4.07 Limitations on Additional Indebtedness................................................29
Section 4.08. Limitations on Restricting Restricted Subsidiary Distributions........................30
Section 4.09. Limitations on Liens..................................................................31
Section 4.10. Use of Proceeds.......................................................................31
ii
<PAGE>
Section 4.11. Repurchase of Notes Upon Change of Control Triggering Event...........................31
Section 4.12. Limitations on Asset Sales............................................................32
ARTICLE FIVE - Successor Corporation.............................................................................34
Section 5.01. When Company May Merge, etc...........................................................34
ARTICLE SIX - Defaults and Remedies..............................................................................35
Section 6.01. Events of Default.....................................................................35
Section 6.02. Acceleration of Maturity Date; Rescission and Annulment...............................36
Section 6.03. Collection of Indebtedness and Suits for Enforcement by Trustee.......................37
Section 6.04. Trustee May File Proofs of Claim......................................................38
Section 6.05. Trustee May Enforce Claims Without Possession of Notes................................38
Section 6.06. Priorities............................................................................39
Section 6.07. Limitation on Suits...................................................................39
Section 6.08. Unconditional Right of Holders to Receive Principal, Premium and
Interest..............................................................................40
Section 6.09. Rights and Remedies Cumulative........................................................40
Section 6.10. Delay or Omission Not Waiver..........................................................40
Section 6.11. Control by Holders....................................................................40
Section 6.12. Waiver of Past Default................................................................41
Section 6.13. Undertaking for Costs.................................................................41
Section 6.14. Restoration of Rights and Remedies....................................................41
ARTICLE SEVEN - Trustee..........................................................................................42
Section 7.01. Duties of Trustee.....................................................................42
Section 7.02. Rights of Trustee.....................................................................43
Section 7.03. Individual Rights of Trustee..........................................................44
Section 7.04. Trustee's Disclaimer..................................................................44
Section 7.05. Notice of Defaults....................................................................44
Section 7.06. Reports by Trustee to Holders.........................................................44
Section 7.07. Compensation and Indemnity............................................................45
Section 7.08. Replacement of Trustee................................................................45
Section 7.09. Successor Trustee by Merger, etc......................................................46
Section 7.10. Eligibility; Disqualification.........................................................46
Section 7.11. Preferential Collection of Claims Against Company.....................................46
ARTICLE EIGHT - Discharge of Indenture...........................................................................46
Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government Obligations.....................46
Section 8.02. Survival of the Company's Obligations.................................................49
Section 8.03. Application of Trust Money............................................................49
Section 8.04. Repayment to the Company..............................................................50
Section 8.05. Reinstatement.........................................................................50
ARTICLE NINE - Amendments, Supplements and Waivers...............................................................50
Section 9.01. Without Consent of Holders............................................................50
Section 9.02. With Consent of Holders...............................................................51
Section 9.03. Compliance with Trust Indenture Act...................................................52
iii
<PAGE>
Section 9.04. Revocation and Effect of Consents.....................................................52
Section 9.05. Notation on or Exchange of Notes......................................................52
Section 9.06. Trustee to Sign Amendments, etc.......................................................52
ARTICLE TEN - Miscellaneous......................................................................................53
Section 10.01. Trust Indenture Act Controls.................................................53
Section 10.02. Notices......................................................................53
Section 10.03. Communications by Holders with Other Holders.................................54
Section 10.04. Certificate and Opinion as to Conditions Precedent...........................54
Section 10.05. Statements Required in Certificate or Opinion................................54
Section 10.06. Rules by Trustee and Agents..................................................55
Section 10.07. Legal Holidays...............................................................55
Section 10.08. Governing Law................................................................55
Section 10.09. No Adverse Interpretation of Other Agreements................................55
Section 10.10. No Recourse Against Others...................................................55
Section 10.11. Successors and Assigns.......................................................55
Section 10.12. Duplicate Originals..........................................................56
Section 10.13. Severability.................................................................57
</TABLE>
iv
<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)................................................ 4.04; 4.05; 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)................................................... 6.13
316(a)(last sentence)................................. 2.12
(a)(1)(A)............................................. 6.11
(a)(1)(B)............................................. 6.12
(a)(2)................................................ N.A.
(b)................................................... 6.08
(c)................................................... 9.04
317(a)(1)............................................. 6.03
(a)(2)................................................ 6.04
(b)................................................... 2.04
318(a)................................................ 10.01
- -----------------------------
N.A. means Not Applicable.
v
<PAGE>
INDENTURE dated as of January 28, 1998, by and among M.D.C. HOLDINGS,
INC., a Delaware corporation (the "Company"), and U.S. BANK NATIONAL ASSOCIATION
(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 "Notes"):
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of any Person that is not a
Restricted Subsidiary, which Indebtedness is outstanding at the time such Person
becomes a Restricted Subsidiary, or is merged into or consolidated with, the
Company or a Restricted Subsidiary; provided, however, that such Indebtedness
was not Incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary or such merger or consolidation.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified 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, 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, any Restricted Subsidiary
or, with respect to any Restricted Subsidiary, the Company.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Agent Member" shall have the meaning specified in Section 2.15.
"Asset Sale" means, with respect to any Person, the sale, lease,
conveyance or other disposition (including, without limitation, by merger or
consolidation, and whether by operation of law or otherwise) of any of that
Person's assets (including, without limitation, the sale or other disposition of
Capital Stock of any Subsidiary of such Person, whether by such Person or by
such Subsidiary, not including the capital contribution to a joint venture in
consideration of the Company's or its Restricted Subsidiaries' interest in such
joint venture), whether owned on the Issue Date or subsequently acquired, in one
transaction or a series of related transactions, in which such Person and/or its
Subsidiaries receive cash and/or other consideration (including, without
limitation, the unconditional assumption of Indebtedness of such Person and/or
its Subsidiaries) having an aggregate fair market value of $10,000,000 or more
as to such transaction or series of related transactions (each such transaction
being referred to herein as a "disposition"); provided, however, that the
following transactions shall not constitute an Asset Sale: (i) a transaction or
series of related
1
<PAGE>
transactions that results in a Change of Control Triggering Event; (ii)
dispositions of land, homes, infrastructure, other buildings, improvements,
appurtenances and entitlements and dispositions of mortgage loans, mortgage loan
servicing and mortgage-backed securities in the ordinary course of business;
(iii) exchanges or swaps of real estate by the Company in the ordinary course of
business for real estate of substantially equivalent value (or for real estate
and cash or Cash Equivalents which, in the aggregate, have a substantially
equivalent value); (iv) dispositions between or among the Company and any one or
more Restricted Subsidiaries or between or among Restricted Subsidiaries; (v) a
disposition that is a Permitted Investment (to the extent such Permitted
Investment may be deemed to constitute an Asset Sale) or a Restricted Payment
permitted hereunder; and (vi) dispositions of securities of the Company or any
Restricted Subsidiary held exclusively by the Company or any Restricted
Subsidiary and such disposition is made to the issuer of such securities or a
Restricted Subsidiary of such issuer which issuer is the Company or a Restricted
Subsidiary (regardless of whether such disposition is a direct disposition or an
indirect disposition through the sale of all of the Capital Stock of a
Restricted Subsidiary whose principal asset is the securities which are the
subject of the disposition).
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Bank Credit Facility" means the Credit Agreement, dated as of April
10, 1996, among the Company, as guarantor, certain of its Restricted
Subsidiaries, as borrowers, and the lenders named therein and Bank One, Arizona,
NA, as Agent (together with the documents related thereto (including, without
limitation, any guaranty agreements)), as such facility has been or may be
amended, restated, supplemented or otherwise modified from time to time, and
includes any facility extending the maturity of, increasing the total commitment
of, or restructuring (including, without limitation, the inclusion of additional
borrowers thereunder that are Subsidiaries of the Company and whose obligations
thereunder are guaranteed by the Company) all or any portion of, the
Indebtedness under such facility or any successor or replacement facilities and
includes any facility with one or more agents or lenders refinancing or
replacing all or any portion of the Indebtedness under such facility or any
successor facilities.
"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.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of or in a 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
Issue Date, including, without limitation, all Preferred Stock of such Person if
such Person is a corporation or membership interests if such Person is a limited
liability company and each general and limited partnership interest of such
Person if such Person is a partnership.
2
<PAGE>
"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.
"cash" means U.S. Legal Tender.
"Cash Equivalents" means (a) U.S. Government Obligations; (b) GNMA
securities; (c) debt insured by other agencies guaranteed by the full faith and
credit of the United States of America; (d) commercial paper rated either "A1"
or comparable by S&P or "P1" or comparable by Moody's; (e) Dutch auction
preferred stocks rated either "AA" or comparable by S&P or "Aa2" or comparable
by Moody's; (f) certificates of deposit issued by commercial banks or savings
and loan associations whose short-term debt is rated either "A1" or comparable
by S&P or "P1" or comparable by Moody's, or if such an institution is a
subsidiary, then its parent corporation may have such a rating; (g) bankers
acceptances issued by financial institutions that meet the requirements for
certificates of deposit; (h) deposits in institutions having the same
qualifications required for investments in certificates of deposit; (i)
repurchase agreements collateralized by any otherwise acceptable collateral as
defined above; and (j) money market accounts a majority of whose assets are
composed of items described by any of the foregoing clauses (a) through (i)
through brokerage firms deemed acceptable by the Company's management.
"Change of Control" means (i) any sale, transfer or other conveyance
(other than to the Company or a wholly owned Subsidiary), whether direct or
indirect, of all or substantially all of the assets of the Company, on a
consolidated basis, to any "person" or "group" in one transaction or a series of
related transactions, provided that a transaction where the holders of all
classes of voting stock of the Company immediately prior to such transaction
own, directly or indirectly, 50% or more of the aggregate voting power of all
classes of voting stock of such "person" or "group" immediately after such
transaction will not be a Change of Control, or (ii) any "person" or "group,"
other than the Management Group (as defined below), is or becomes the
"beneficial owner," directly or indirectly, of more than 50% of the total voting
power of the voting stock then outstanding. For the purpose of this definition,
(i) the terms "person" and "group" shall have the meanings used for purposes of
Rules 13d-3 and 13d-5 of the Exchange Act, whether or not applicable and (ii)
the term "beneficial owner" shall have the meaning used in Rules 13d-3 and 13d-5
under the Exchange Act, whether or not applicable; except that a Person shall be
deemed to have "beneficial ownership" of all shares that any such Person had the
right to acquire, whether such right is exercisable immediately or only after
the passage of time or upon the occurrence of certain events.
"Change of Control Triggering Event" mean the occurrence of both a
Change of Control and a Rating Decline.
"Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"Consolidated EBITDA" of any Person for any period means (a) the
Consolidated Net Income of such Person for such period, plus (b) the sum,
without duplication (and only to the extent
3
<PAGE>
such amounts are deducted in determining such Consolidated Net Income), of (i)
the provision for income taxes for such period for such Person and its
Subsidiaries (or, with respect to the Company, for the Company and its
Restricted Subsidiaries) except to the extent of tax benefits associated with an
extraordinary loss for such period, (ii) depreciation and amortization expense
of such Person and its Subsidiaries (or, with respect to the Company, for the
Company and its Restricted Subsidiaries), (iii) Consolidated Interest Expense of
such Person for such period, and (iv) all other noncash, nonextraordinary
charges reducing Consolidated Net Income for such period determined, in each
case, on a consolidated basis for such Person and its Subsidiaries (or, with
respect to the Company, for the Company and its Restricted Subsidiaries) in
accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" on any date (the
"Transaction Date") means, with respect to any Person, the ratio of (a) the
aggregate amount of Consolidated EBITDA of such Person attributable to
continuing operations and businesses for the Reference Period to (b) the sum of
(i) the aggregate Consolidated Interest Incurred of such Person (exclusive of
amounts attributable to discontinued operations and businesses, but in each case
only to the extent that the obligations giving rise to such Consolidated
Interest Incurred would no longer be obligations contributing to such Person's
Consolidated Interest Incurred subsequent to the Transaction Date) for the
Reference Period, plus (ii) dividends paid or accrued (unless paid to, or
accrued in favor of, the Company or its Restricted Subsidiaries) on Disqualified
Capital Stock of the Company and Restricted Subsidiaries of the Company during
the Reference Period; provided that for purposes of such computation, in
calculating Consolidated EBITDA and Consolidated Interest Incurred, (w) the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio will be assumed to have occurred (on a pro forma basis) on the
first day of the Reference Period; (x) the Incurrence of any Refinancing
Indebtedness during the Reference Period or subsequent thereto and on or prior
to the Transaction Date (and the proceeds of which were used to refinance
Indebtedness other than Indebtedness under revolving credit facilities) will be
assumed to have occurred (on a pro forma basis) on the first day of such
Reference Period; (y) Consolidated Interest Incurred attributable to any
Indebtedness being Incurred bearing a floating interest rate shall be computed
as if the rate in effect on the Transaction Date had been the applicable rate
for the entire period, unless the Company or any of its Restricted Subsidiaries
is a party to an Interest Swap Obligation (which shall remain in effect for the
12-month period after the Transaction Date) that has the effect of fixing the
interest rate on the date of computation, in which case such rate (whether
higher or lower) shall be used; and (z) all members of the consolidated group of
the Company on the Transaction Date that were acquired during the Reference
Period or on or prior to the Transaction Date shall be deemed to be members of
the consolidated group of the Company, along with any Indebtedness incurred in
connection with the acquisition thereof, for the entire Reference Period.
"Consolidated Interest Expense" of any Person for any period means the
Interest Expense of such Person and its Subsidiaries or, with respect to the
Company, of the Company and its Restricted Subsidiaries (other than the
Company's financial services segment Restricted Subsidiaries) for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Incurred" of any Person for any period means the
Interest Incurred of such Person and its Subsidiaries or, with respect to the
Company, of the Company and its Restricted
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Subsidiaries (other than the Company's financial services segment Restricted
Subsidiaries) for such period, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Net Assets" of the Company as of any date means the total
amount of assets of the Company and its Restricted Subsidiaries (less applicable
reserves) on a consolidated basis at the end of the fiscal quarter immediately
preceding such date for which financial information is available, as determined
in accordance with GAAP, as reflected on the consolidated balance sheet of the
Company and its Restricted Subsidiaries as of the end of such fiscal quarter.
"Consolidated Net Income" of any Person for any period means the
aggregate net income (or loss) of such Person and its Subsidiaries (or, with
respect to the Company, of the Company and its Restricted Subsidiaries)
(collectively for the purposes of this definition of Consolidated Net Income
only, the "Relevant Person") for such period, determined on a consolidated basis
in accordance with GAAP, excluding without duplication: (a) the net income (or
loss) of any other Person in which the Relevant Person has an ownership
interest, other than the lesser of (i) cash dividends or cash distributions
during such period that have been received by the Relevant Person; and (ii) the
Relevant Person's pro rata share of such other Person's aggregate net income;
(b) extraordinary gains and losses, net of the tax effects thereof; (c) except
to the extent includable in Consolidated Net Income pursuant to the foregoing
clause (a), the net income (or loss) of any Person that accrued prior to the
date that such Person was acquired by the Relevant Person or is merged into or
consolidated with the Relevant Person or any of its Subsidiaries (or in the case
of the Company, any Person is an Unrestricted Subsidiary or prior to the date
that such Person is acquired by the Company as a Restricted Subsidiary becomes a
Restricted Subsidiary); and (d) the net income of any Restricted Subsidiary
(other than any Mortgage Subsidiary) to the extent that (and only so long as)
the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of that income is prohibited by the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary during such
period.
"Consolidated Net Worth" of any Person as of any date means the
stockholders' equity (including any preferred stock that is classified as equity
under GAAP, but excluding Disqualified Capital Stock) of such Person and its
Subsidiaries (or, with respect to the Company, of the Company and its Restricted
Subsidiaries) on a consolidated basis at the end of the fiscal quarter
immediately preceding such date for which financial information is available, as
determined in accordance with GAAP.
"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.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"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.
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"Designation Amount" has the meaning set forth in the definition of
"Unrestricted Subsidiary."
"Disinterested Director" means a member of the Board of Directors of
the Company who does not have any material direct or indirect financial interest
in or with respect to the transaction being considered.
"Disqualified Capital Stock" means (a) with respect to any Person, any
Capital Stock of such Person or its Subsidiaries that, by its terms or by the
terms of any security into which it is convertible or exchangeable, is, or upon
the happening of an event or the passage of time would be, required to be
redeemed or repurchased by such Person or its Subsidiaries, including at the
option of the Holder, in whole or in part, or has, or upon the happening of an
event or passage of time would have, a redemption or similar payment due on or
prior to the Stated Maturity and (b) with respect to any Restricted Subsidiary,
any Capital Stock (other than (i) Capital Stock owned by the Company or a
Restricted Subsidiary and (ii) common stock with no preferences or privileges
and with no redemption or repayment provisions).
"Equity Investor," with respect to any Person, means any other Person
that has made an investment in the capital stock, shares, interests,
participation or other ownership interests of such other Person (including any
option, warrant or right to acquire any such interest) or has made any capital
contribution to such other Person and owns a minority interest in such Person.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indebtedness" means all of the Indebtedness of the Company
and its Subsidiaries that is outstanding on the Issue Date.
"Final Change of Control Put Date" has the meaning specified in Section
4.11.
"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" means the person in whose name a Note is registered on the
register for the Notes.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the
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foregoing). Indebtedness of a Person existing at the time such Person becomes a
Restricted Subsidiary or is merged or consolidated with or into the Company or
any Restricted Subsidiary shall be deemed to be Incurred at such time. Neither
the accrual of interest, nor the accretion of original issue discount, shall be
deemed to be an Incurrence of Indebtedness. In addition, the mere extension of
the term of lender commitments to extend credit or funds to the Company or any
of its Subsidiaries pursuant to a revolving credit agreement or similar
arrangement shall not be deemed to be an Incurrence of Indebtedness.
"Indebtedness" of any Person means, without duplication, (a) any
liability of such Person (other than accounts payable, other trade payables,
general contingency and tax reserves, liabilities for deposits and deferred
income which in accordance with GAAP are recorded as liabilities and accrued
expenses (including without limitation, obligations for insurance premiums)
Incurred in the ordinary course of business) (i) for borrowed money or under any
reimbursement obligation relating to a letter of credit or other similar
instruments (other than standby letters of credit, performance, completion,
surety or similar bonds or instruments issued for the benefit of such Person 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, (ii) 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
(other than any obligation to pay a contingent purchase price which, as of the
date of Incurrence thereof is not required to be recorded as a liability in
accordance with GAAP), or (iii) in respect of Capitalized Lease Obligations (to
the extent of the Attributable Debt in respect thereof), (b) any Indebtedness of
others that such Person has guaranteed to the extent of the guaranty, (c) to the
extent not otherwise included, Interest Swap Obligations or the obligations of
such Person under Currency Agreements, in either case 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, (d) all
Indebtedness of others secured by a Lien (other than a Permitted Lien) on any
asset of such Person, whether or not such Indebtedness is assumed by such
Person, and (e) all Disqualified Stock issued by such Person (the amount of
indebtedness represented by any Disqualified Stock will equal the greater of the
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends). 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 (b) 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 (d) 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.
"Interest Expense" of any Person for any period means, without
duplication, the aggregate amount of interest which, in conformity with GAAP,
should be set opposite the caption "interest expense" or any like caption on an
income statement for such Person (including, without limitation, imputed
interest included on Capitalized Lease Obligations, the interest portion of any
deferred
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payment obligation, amortization of discount or premium, if any, and all other
noncash interest expense) plus, with respect to the Company and its Restricted
Subsidiaries, without duplication (including duplication of the foregoing
items), amortization of issue costs on Indebtedness, all interest included as a
component of cost of sales for such period, and all commissions, discounts and
other fees and charges owed with respect to bankers' acceptance financing, and
amortization and expensing of other financing fees and expenses, and all
interest actually paid by the Company or a Restricted Subsidiary under any
guaranty of Indebtedness (including, without limitation, a guaranty of
principal, interest or any combination thereof) of any other Person during such
period.
"Interest Incurred" of any Person for any period means, without
duplication, the aggregate amount of interest which, in conformity with GAAP,
should be set opposite the caption "interest expense" or any like caption on an
income statement for such Person (including, without limitation, imputed
interest included on Capitalized Lease Obligations, the interest portion of any
deferred payment obligation, amortization of discount or premium, if any, and
all other noncash interest expense) plus, with respect to the Company and its
Restricted Subsidiaries, without duplication (including duplication of the
foregoing items), all interest capitalized for such period, amortization of
issue costs on Indebtedness, all commissions, discounts and other fees and
charges owed with respect to bankers' acceptance financing, amortization and
expensing of other financing fees and expenses, and all interest actually paid
by the Company or a Restricted Subsidiary under any guaranty of Indebtedness
(including, without limitation, a guaranty of principal, interest or any
combination thereof) of any other Person during such period.
"Interest Payment Date" means the stated due date of an installment of
interest on the Notes.
"Interest Swap Obligation" means any obligation of any Person pursuant
to any arrangement whereby such Person is entitled to receive from time to time
periodic payments calculated by applying either a fixed or floating rate of
interest on a stated notional amount in exchange for periodic payments made by
such Person calculated by applying a fixed or floating rate of interest on the
same notional amount; provided, that the term "Interest Swap Obligation" shall
also include interest rate exchange, collar, swap option, futures contracts or
other similar agreements providing interest rate protection.
"Investment" by any Person in any other Person means (without
duplication) (a) the acquisition by such Person (whether for cash, property,
services, securities or otherwise) of Capital Stock, bonds, notes, debentures,
partnership, or other ownership interests, or other securities of such other
Person, (b) the making by such Person of any deposit with, or advance, loan or
other extension of credit to, such other Person (including the purchase of
property from such other Person subject to an understanding or agreement,
contingent or otherwise, to resell such property to such other Person), except
in the ordinary course of the business, (c) the entering into by such Person of
any guaranty of, or other contingent obligation with respect to, Indebtedness or
other liability of such other Person, or (d) the making of any capital
contribution by such Person to such other Person. Notwithstanding the preceding
sentence, the assets of the Company's insurance operations shall not be deemed
to be Investments.
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"Investment Grade" mean BBB- or higher by S&P or Baa3 or higher by
Moody's or the equivalent of such ratings by S&P or Moody's.
"Issue Date" means January 28, 1998, the date of original issuance of the
Notes.
"Legal Holiday" shall have the meaning provided in Section 10.07.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind with respect to any Property.
"Management Group" means the executive officers of the Company as of
the Issue Date, members of their immediate families, certain trusts for their
benefit, and legal representatives of, or heirs, beneficiaries or legatees
receiving Common Stock (or securities convertible or exchangeable for Common
Stock) under any such person's estate.
"Maturity Date," when used with respect to any Note, means the date on
which the principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity, Change of Control Payment Date, Asset
Sale Offer Date, or by declaration of acceleration, call for redemption or
otherwise.
"Moody's" means Moody's Investors Service, Inc. or any successor to its
debt rating business.
"Mortgage Subsidiary" means any Subsidiary of the Company substantially
all of whose operations consists of the mortgage lending business.
"Net Cash Proceeds" means (i) cash (in U.S. dollars or freely
convertible into U.S. dollars) received by the Company or any Restricted
Subsidiary from an Asset Sale net of all (a) brokerage commissions, and all
other fees and expenses (including, without limitation, fees and expenses of
counsel and investment bankers) related to such Asset Sale, (b) provisions for
all income and other taxes measured by or resulting from such Asset Sale, (c)
payments made to retire Indebtedness where payment of such Indebtedness is
required by instruments governing such indebtedness and secured by the assets
sold pursuant to and in connection with such Asset Sale, (d) amounts required to
be paid to any Person (other than the Company or Subsidiary) owning a legal or
beneficial interest in the assets subject to the Asset Sale, (e) appropriate
amounts to be provided by the Company or any Restricted Subsidiary thereof, as
the case may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Restricted
Subsidiary thereof, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee, and (ii) all noncash
consideration received by the Company or any of its Restricted Subsidiaries from
such Asset Sale promptly thereupon liquidated or converted into cash, without
duplication, net of all items enumerated in subclauses (a) through (e) of clause
(i) hereof.
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"Non-Recourse Indebtedness" means, with respect to any Person,
Indebtedness (or any portion thereof) of such Person for which the sole legal
recourse for collection of principal, premium, and interest on such Indebtedness
is against the specific property identified in the instruments evidencing or
securing such Indebtedness, which property was acquired with the proceeds of
such Indebtedness or such Indebtedness was Incurred within 180 days after the
acquisition of such property, without any liability on the part of any such
Person for any deficiency with respect to principal, premium or interest.
"Notes" means the 8-3/8% Senior Notes due 2008 issued hereunder, as
supplemented from time to time in accordance with the terms hereof.
"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 and complying with the provisions of Section 10.05.
"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 and complying with the provisions of
Section 10.05.
"Paying Agent" shall have the meaning specified in Section 2.03.
"Permitted Investment" means (a) Investments in Cash Equivalents, (b)
Investments in the Company or in its Restricted Subsidiaries, (c) loans or
advances made in the ordinary course of business to officers, directors or
employees of the Company or any of its Restricted Subsidiaries, (d) Investments
in any receivables or loans taken by the Company or a Subsidiary of the Company,
(e) Investments in joint ventures in a Related Business with unaffiliated third
parties in an aggregate amount at any time outstanding not to exceed 10% of
Consolidated Net Assets at such time, (f) Investments in interests in issuances
of collateralized mortgage obligations, mortgages, mortgage loan servicing or
other mortgage related assets, (g) Investments in contract rights granted by,
entitlements granted by, interests in securities issued by, or tangible assets
of, political subdivisions or enterprises thereof related to the homebuilding or
real estate operations of the Company or its Restricted Subsidiaries, (h)
Investments made prior to the Issue Date, (i) Investments in the form of
guaranties to the extent such guaranties are permitted to be Incurred pursuant
to the provisions of Section 4.07 hereof and (j) any other Investments which
would not otherwise be permitted by the foregoing in an aggregate amount at any
time outstanding not to exceed $25,000,000.
"Permitted Liens" means (a) Liens for taxes, assessments or
governmental charges or claims that either (i) are not yet delinquent, (ii) are
being contested in good faith by appropriate proceedings and as to which
appropriate reserves have been established or other provisions have been made in
accordance with GAAP, or (iii) solely encumber property abandoned or in the
process of being abandoned, (b) statutory Liens of landlords and carriers',
warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other
Liens imposed by law and arising in the ordinary course of
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business and with respect to amounts that, to the extent applicable, either (i)
are not yet delinquent or (ii) are being contested in good faith by appropriate
proceedings and as to which appropriate reserves have been established or other
provisions have been made in accordance with GAAP, (c) Liens Incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security, (d)
Liens Incurred or deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, progress payments,
government contracts, utility services and other obligations of like nature in
each case Incurred in the ordinary course of business, (e) attachment or
judgment Liens with respect to judgments or proceedings which, with the passage
of time, would not constitute an Event of Default and which are being contested
in good faith by appropriate proceedings, (f) easements, dedications, assessment
district or similar Liens in connection with municipal or special district
financing, rights-of-way, zoning restrictions, reservations and other similar
charges, encumbrances or burdens not materially interfering with the ordinary
course of business, (g) leases or subleases granted to others not materially
interfering with the ordinary course of business, (h) purchase money mortgages
(including, without limitation, Capitalized Lease Obligations and purchase money
security interests), (i) Liens on assets securing Refinancing Indebtedness which
refinanced Indebtedness that was previously secured by such assets, (j) Liens
securing Real Property Indebtedness Incurred in compliance with this Indenture,
(k) any interest in or title of a lessor to property subject to any Capitalized
Lease Obligations Incurred in compliance with this Indenture, (l) Liens existing
on the date hereof, including without limitation, Liens securing Existing
Indebtedness, (m) any right of first refusal, right of first offer, option,
contract or other agreement to sell or purchase an asset, pay lot premiums or
participate in the income or revenue derived therefrom, (n) Liens securing
Non-Recourse Indebtedness of the Company or a Restricted Subsidiary, (o) Liens
on property or assets of any Subsidiary securing Indebtedness of such Subsidiary
owing to the Company or one or more of its Restricted Subsidiaries, (p) Liens
with respect to any asset, which Lien existed at the time such asset was
acquired by the Company or any of its Subsidiaries, provided that such Liens
only extend to assets that were subject to such Liens prior to the acquisition
of such asset by such Person, (q) any legal right of, or right granted in good
faith to a lender or lenders to which the Company or a Restricted Subsidiary may
be indebted to offset against, or appropriate and apply to the payment of, such
Indebtedness any and all balances, credits, deposits, accounts or monies of the
Company or a Restricted Subsidiary with or held by such lender or lenders, (r)
any pledge or deposit of cash or property by the Company or any Restricted
Subsidiary in conjunction with obtaining surety and performance bonds, letters
of credit and similar instruments required to engage in constructing on-site and
off-site improvements or as otherwise required by political subdivisions or
other governmental authorities in the ordinary course of business or secured
Indebtedness permitted to be Incurred in compliance with Section 4.07(a)(x)
hereof, (s) Liens in favor of the Trustee arising pursuant to this Indenture,
(t) Liens Incurred in the ordinary course of business as security for the
Company's or its Restricted Subsidiaries' obligations with respect to
indemnification in favor of title insurance providers, (u) letters of credit,
bonds or other assets pledged to secure insurance in the ordinary course of
business, (v) Liens on assets securing warehouse lines of credit and other
credit facilities to finance the operations of the Company's financial services
segment Restricted Subsidiaries and Liens related to issuances of CMOs and
mortgage-related securities, and (w) any other Liens which would not otherwise
be permitted by the foregoing; provided that the aggregate amount of obligations
secured by such other Liens outstanding at any one time does not exceed 10% of
the sum of (i) the Company's
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Consolidated Net Worth at such time plus (ii) the consolidated minority
interests of the Company (determined in accordance with GAAP) at such time.
"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.
"Public Equity Offering" means an underwritten public offering by the
Company of its Qualified Capital Stock pursuant to a registration statement
effective under the Securities Act (other than a registration statement on Form
S-8 or similar form).
"Qualified Capital Stock" means Capital Stock other than Disqualified
Capital Stock.
"Rating Agencies" mean (i) S&P and (ii) Moody's.
"Rating Category" mean (i) with respect to S&P, any of the following
categories: BB, B, CCC, CC, C and D (or equivalent successor categories); and
(ii) with respect to Moody's, any of the following categories; Ba, B, Caa, Ca, C
and D (or equivalent successor categories). In determining whether the rating of
the Notes has decreased by one or more gradations, gradations within Rating
Categories shall be taken into account (e.g., with respect to S&P, a decline in
a rating from BB to BB-, as well as from BB- to B+, will constitute a decrease
of one gradation).
"Rating Date" mean that date which is 90 days prior to public notice by
the Company of the occurrence of a Change of Control or of the specific
intention by the Company or any member of the Management Group to enter into a
transaction to effect a Change of Control; provided that if the Company publicly
announces termination of its or any member of the Management Group's intention
to effect such transactions, such prior notice shall not be utilized in
determining an applicable Rating Date.
"Rating Decline" mean, at any time during the period (i) from and after
the date of public notice of either (x) the occurrence of a Change of Control or
(y) the specific intention by the Company or any member of the Management Group
to effect a Change of Control and (ii) until the date which is 90 days after the
date of the occurrence of a Change of Control, the occurrence of (a) in the
event the Notes are rated by both Moody's and S&P on the Rating Date as
Investment Grade, the rating of the Notes by either Rating Agency being below
Investment Grade; (b) in the event the
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Notes are rated by either, but not both, of the Rating Agencies on the Rating
Date as Investment Grade, the rating of the Notes by both Rating Agencies being
below Investment Grade; or (c) in the event the Notes are rated below Investment
Grade by both Rating Agencies on the Rating Date, the rating of the Notes by
either Rating Agency decreasing by one or more gradations (including gradations
within Rating Categories as well as between Rating Categories).
"Real Property Indebtedness" means Indebtedness of the Company or any
Restricted Subsidiary Incurred to finance the acquisition, holding and/or
development of real property and related appurtenances and the construction of
improvements, including homes, thereon in the ordinary course of business.
"Record Date" means a Record Date specified in the Notes whether or not
such Record Date is a Business Day.
"Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and
Paragraph 5 of the Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price for such redemption pursuant to Paragraph 5 of the Notes, which
shall include, without duplication, in each case, accrued and unpaid interest to
the Redemption Date.
"Reference Period," with regard to any Person, means the four full
fiscal quarters of such Person ended on or immediately preceding any date upon
which any determination is to be made pursuant to the terms of the Notes or this
Indenture for which financial information is available.
"Refinancing Indebtedness" means Indebtedness that is an extension,
renewal, replacement or refunding permitted to be Incurred by this Indenture,
provided, however, that (a) the maximum principal amount of Refinancing
Indebtedness (or, if such Refinancing Indebtedness does not require cash
payments prior to maturity or is otherwise issued at a discount, the original
issue price of such Refinancing Indebtedness) permitted may not exceed the
lesser of (i) the principal amount of the Indebtedness being extended, renewed,
replaced or refunded plus reasonable financing fees and other associated
reasonable out-of-pocket expenses (collectively, "Refinancing Fees"), or (ii) if
such Indebtedness being extended, renewed, replaced, or refunded was issued at
an original issue discount, the original issue price, plus amortization of the
original issue discount at the time of the Incurrence of the Refinancing
Indebtedness plus Refinancing Fees, (b) except with respect to Indebtedness
Incurred to finance the acquisition, holding or development of real property and
related appurtenances and the construction of improvements thereon and Incurred
in the ordinary course of business and in compliance with the terms of this
Indenture, the Refinancing Indebtedness has a Weighted Average Life and a final
maturity that is equal to or greater than the Indebtedness being extended,
renewed, replaced or refunded at the time of such extension, renewal,
replacement or refunding, (c) the Refinancing Indebtedness shall rank with
respect to the Notes to an extent no less favorable in respect thereof to the
Holders than the Indebtedness being refinanced, and (d) the Company may Incur
Refinancing Indebtedness only to refinance Indebtedness of the Company or a
Restricted Subsidiary, and a Restricted Subsidiary may Incur Refinancing
Indebtedness only to refinance Indebtedness of a Restricted Subsidiary.
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"Registrar" shall have the meaning specified in Section 2.03.
"Related Business" means any line or lines of business or business
activity reasonably related to (x) the real estate business or (y) a business or
business activity of the Company and/or its Restricted Subsidiaries conducted on
the Issue Date.
"Restricted Investment" means any direct or indirect Investment with
respect to any Person by the Company or any Restricted Subsidiary other than a
Permitted Investment.
"Restricted Payment" means, with respect to any Person, (a) any
dividend or other distribution on shares of Capital Stock of the Company or any
Restricted Subsidiary, (b) any payment on account of the purchase, redemption or
other acquisition or retirement for value, in whole or in part, of any shares of
Capital Stock of the Company or any Restricted Subsidiary, (c) any defeasance,
redemption, repurchase, or other acquisition or retirement for value, or any
payment in respect of any amendment (in anticipation of or in connection with
any such retirement, acquisition, or defeasance), in whole or in part, of any
Indebtedness of the Company or a Restricted Subsidiary that is subordinate in
right of payment to the Notes, but only if such defeasance, redemption,
repurchase or other acquisition or retirement is made prior to the scheduled
payment on such Indebtedness and (d) any Investment (other than a Permitted
Investment); provided, however, that the term "Restricted Payment" does not
include (i) any dividend, distribution, or other payment on shares of Capital
Stock of the Company or a Restricted Subsidiary solely in shares of Qualified
Capital Stock of the Company, (ii) any dividend, distribution, or other payment
to the Company or any of its Restricted Subsidiaries by any of its Subsidiaries,
(iii) the purchase, redemption or other acquisition or retirement for value of
any shares of Capital Stock of a Subsidiary owned by the Company, (iv) any
defeasance, redemption, repurchase or other acquisition or retirement for value,
in whole or in part, of (A) Indebtedness of the Company payable solely in shares
of Capital Stock or Subordinated Indebtedness of the Company, (B) Indebtedness
or Disqualified Capital Stock of a Restricted Subsidiary payable solely in
shares of Capital Stock of the Company or such Restricted Subsidiary or
Subordinated Indebtedness of the Company, or (C) Indebtedness of the Company
subordinated to the Notes owed to its Restricted Subsidiaries, (v) any
defeasance, redemption, repurchase, or other acquisition or retirement for
value, in whole or in part, of Subordinated Indebtedness of the Company or a
Restricted Subsidiary existing on the Issue Date or (vi) any proportionate
payment in respect of minority interests in Restricted Subsidiaries to the
extent that the payment constitutes a return of capital that was not included in
the Company's shareholders' equity or a dividend or similar distribution not
included in determining the Company's Consolidated Net Income.
"Restricted Subsidiary" means each of the Subsidiaries 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.
"S&P" means Standard and Poor's Ratings Group or any successor to its
debt rating business.
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"Securities Act" means the Securities Act of 1933, as amended.
"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.
"Stated Maturity," when used with respect to any Note, means February
1, 2008.
"Subordinated Indebtedness" means Indebtedness of the Company which is
subordinated in right of payment to the prior payment in full, including all
payment of principal, premium and all accrued interest (and post-petition
interest) on, and all other amounts owing in connection with the Notes.
"Subsidiary" of any Person means any corporation or other entity (other
than political subdivisions or enterprises thereof or governmental agencies) of
which at least 50% of the Capital Stock having ordinary voting power to elect
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.
"Trust Officer" means the Chairman of the Board, the President, any
Vice President or any other 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 (a) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (b) 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.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
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"Unrestricted Subsidiary" means each of the Subsidiaries of the Company
so designated by a resolution adopted by the Board of Directors of the Company
as provided below and whose creditors have no direct or indirect recourse
(including, without limitation, no recourse with respect to the payment of
principal or interest on Indebtedness of such Subsidiary) to the Company or a
Restricted Subsidiary. The Board of Directors of the Company may redesignate an
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that (i) any
such redesignation will be deemed to be an Incurrence by the Company and its
Restricted Subsidiaries of the Indebtedness (if any) of such redesignated
Subsidiary for purposes hereof as of the date of such redesignation, and (ii)
immediately after giving effect to such redesignation and the incurrence of any
such additional Indebtedness, the Company and its Restricted Subsidiaries could
incur $1.00 of additional Indebtedness pursuant to Section 4.07(b) hereof.
Subject to the foregoing, the Board of Directors of the Company also may
designate any Restricted Subsidiary to be an Unrestricted Subsidiary; provided
that (i) a Restricted Payment will be deemed to be made at the time of such
designation and such designation will reduce the Basket to the extent of the
book value (in accordance with GAAP) of the Company's or a Restricted
Subsidiary's investment in the Subsidiary being designated an Unrestricted
Subsidiary (the "Designation Amount"), and (ii) immediately after giving effect
to such designation and reduction of the Basket, the Company and its Restricted
Subsidiaries could Incur $1.00 of additional Indebtedness pursuant to Section
4.07(b) hereof. Any such designation or redesignation by the Board of Directors
of the Company will be evidenced to the Trustee by the filing with the Trustee a
certified copy of the resolution of the Board of Directors of the Company giving
effect to such designation or redesignation and an Officers' Certificate
certifying that such designation or redesignation complied with the foregoing
conditions and setting forth the underlying calculations of such Officers'
Certificate.
"Voting Stock" means Capital Stock of the Company having generally the
right to vote in the election of the directors of the Company.
"Weighted Average Life" means, as of the date of determination, with
respect to any debt instrument, the quotient obtained by dividing (i) the sum of
the products of the number of years from the date of determination to the dates
of each successive scheduled principal payment of such debt instrument
multiplied by the amount of such principal payment by (ii) the sum of all such
principal payments.
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made 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 Notes.
"indenture security holder" means a Holder.
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"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
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 1.03. 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.
ARTICLE TWO
The Notes
Section 2.01. Form and Dating.
The aggregate principal amount of Notes that may be issued under this
Indenture is $250,000,000. The Notes and the Trustee's certificate of
authentication with respect thereto shall be in substantially the form set forth
in Exhibit A hereto, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or system on which the Notes may be listed or eligible for
trading or as may, consistently herewith, be determined by the officers
executing such Notes, as evidenced by their execution of the Notes.
Section 2.02. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Notes for the Company by manual or facsimile signature.
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If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall nevertheless be
valid.
A Note shall not be valid until the Trustee manually signs the
certificate of authentication on the Note. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall authenticate Notes for original issue upon receipt of
an Officers' Certificate of the Company. Each Note shall be dated the date of
its authentication.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Notes 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 Notes and this Indenture may be served. The Registrar shall keep a register
of the Notes 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 Notes 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 or a Subsidiary of the Company may act as
Paying Agent.
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 Holders and
the Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Notes, 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.
Section 2.05. Holder 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
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least 5 Business Days before each semi-annual interest
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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 Holders.
Section 2.06. Transfer and Exchange.
If a Note 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 Notes are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Notes 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 Notes at the Registrar's request. The Registrar need not
transfer or exchange any Note selected for redemption, except the unredeemed
part thereof if the Note is redeemed in part, or transfer or exchange any Notes
for a period of 15 days before a selection of Notes 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,
3.07, or 9.05 not involving any transfer.
Any Holder of a global Note shall, by acceptance of such global Note,
agree that transfers of beneficial interests in such global Note may be effected
only through a book entry system maintained by the Holder of such global Note
(or its agent), and that ownership of a beneficial interest in the Note shall be
required to be reflected in a book entry.
Section 2.07. Replacement Notes.
If the Holder of a Note claims that the Note 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
Note; provided, however, in the case of a lost, destroyed or wrongfully taken
Note, 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 Note
shall have matured or shall be about to mature, the Company may, instead of
issuing a substitute Note therefor, pay such Note without requiring (except in
the case of a mutilated Note) the surrender thereof. An indemnity bond must be
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer if
a Note is replaced, including the acquisition of such Note by a bona fide
purchaser. The Company or the Trustee may charge the Holder for expenses in
replacing a Note.
Section 2.08. Outstanding Notes.
Notes outstanding at any time are all Notes authenticated by the
Trustee except for those canceled by it and those described in this Section. A
Note does not cease to be outstanding because the Company or one of its
Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
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If, on a redemption date or maturity date, the Paying Agent holds money
sufficient to pay Notes payable on that date, then on and after that date such
Notes cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
Section 2.09. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and, upon surrender for cancellation of the temporary
Note, the Company shall execute and the Trustee shall authenticate definitive
Notes in exchange for temporary Notes. Until so exchanged, the temporary Notes
shall in all respects be entitled to the same benefits under this Indenture as
definitive Notes authenticated and delivered hereunder.
Section 2.10. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes 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 Notes surrendered for
registration or transfer, exchange, redemption, paying or cancellation. The
Company may not issue new Notes to replace Notes 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 Notes, it shall
pay the defaulted interest plus any interest payable on the defaulted interest
to the persons who are Holders 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 Holder 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 Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes 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
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whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes which the Trustee actually knows are so owned shall be so
considered.
Section 2.13. CUSIP Numbers.
The Company in issuing the Notes 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 Notes; 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 Notes, and that reliance may be
placed only on the other identification numbers printed on such Notes. 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, 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
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 Note.
(a) The Notes will be issued in the form of a fully registered global
Note. The global Note will be deposited with, or on behalf of, The Depository
Trust Company (the "Depository") and registered in the name of Cede & Co., as
nominee of the Depositary.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any global
Note held on their behalf by the Depository, or the Trustee as its custodian, or
under the global Note, and the Depository, or its nominee, may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of the global Note 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 Note.
(b) Transfers of any global Note 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 Note may be transferred
or exchanged for definitive Notes in accordance with the rules and procedures of
the Depository. In addition, definitive Notes shall be transferred to all
beneficial owners in exchange for their beneficial interests in a global Note if
(i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for the global Note 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 Notes.
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(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the global Note in an amount equal to the principal amount
of the beneficial interest in the global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
definitive Notes of like tenor and amount.
(d) In connection with the transfer of an entire global Note to
beneficial owners pursuant to paragraph (b), the global Note shall be deemed to
be surrendered 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 Note, an equal aggregate principal amount of definitive Notes of
authorized denominations.
(e) The Holder of any global Note 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 Notes.
ARTICLE THREE
Redemption
Section 3.01. Right of Redemption.
Redemption of Notes, as permitted or required by any provision of this
Indenture, shall be made in accordance with such provision and this Article
Three. The Notes may be redeemed in cash at the election of the Company, as a
whole or from time to time in part, at any time on or after February 1, 2003, at
the Redemption Prices specified in the form of Note attached as Exhibit A under
the caption "Redemption," in each case, including accrued and unpaid interest,
if any, to the Redemption Date.
Section 3.02. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 5 of the
Notes, it shall notify the Trustee in writing of the Redemption Date and the
principal amount of Notes to be redeemed and whether it wants the Trustee to
give notice of redemption to the Holders.
If the Company elects to credit the principal amount of Notes to be
redeemed pursuant to Paragraph 5 of the Notes by crediting against any such
redemption Notes it has not previously delivered to the Trustee for
cancellation, it shall so notify the Trustee and deliver such Notes with such
notice.
The Company shall give each notice to the Trustee provided for in this
Section 3.02 at least 45 days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee).
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Section 3.03. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed pursuant to Paragraph
5 thereof, the Trustee shall select the Notes to be redeemed pro rata or by lot
or by such other method as the Trustee shall determine to be fair and
appropriate and in such manner as complies with any applicable legal and stock
exchange requirements.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes in denominations of $1,000 may be redeemed only in whole. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Notes that have denominations larger than $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.04. Notice of Redemption.
At least 15 days and not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first class mail, postage
prepaid, to the Trustee and each Holder, at such Holder's last address as then
shown upon the books of the registrar, whose Notes are to be redeemed. At the
Company's request, the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense. Each notice for redemption shall
identify the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued and unpaid
interest to be paid upon such redemption;
(3) the name, address and telephone number of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the Paying
Agent at the address specified in such notice to collect the Redemption Price;
(5) that, unless the Company defaults in its obligation to deposit U.S.
Legal Tender with the Paying Agent in accordance with Section 3.06 hereof,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date and the only remaining right of the Holders of such Notes is to
receive payment of the Redemption Price, including accrued and unpaid interest
to the Redemption Date, upon surrender to the Paying Agent of the Notes called
for redemption and to be redeemed;
(6) if any Note is being redeemed in part, the portion of the principal
amount, equal to $1,000 or any integral multiple thereof, of such Note equal to
the unredeemed portion thereof and that, on and after the Redemption Date, and
upon surrender of such Note, a new Note or Notes in aggregate principal amount
equal to the unredeemed portion thereof will be issued;
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(7) if less than all the Notes are to be redeemed, the identification
of the particular Notes (or portion thereof) to be redeemed, as well as the
aggregate principal amount of such Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such partial redemption;
(8) the CUSIP number of the Notes to be redeemed; and
(9) that the notice is being sent pursuant to this Section 3.04 and
pursuant to the redemption provisions of Paragraph 5 of the Notes.
Section 3.05. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.04,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price, including accrued and unpaid interest to the Redemption
Date. Upon surrender to the Trustee or Paying Agent, such Notes called for
redemption shall be paid at the Redemption Price, including interest, if any,
accrued and unpaid on the Redemption Date; provided that if the Redemption Date
is after a regular Record Date and on or prior to the Interest Payment Date, the
accrued interest shall be payable to the Holder of the redeemed Notes registered
on the relevant Record Date; and provided, further, that if a Redemption Date is
a Legal Holiday, payment shall be made on the next succeeding Business Day and
no interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.
Section 3.06. Deposit of Redemption Price.
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (other than the Company or a Subsidiary or Affiliate of the
Company) U.S. Legal Tender sufficient to pay the Redemption Price of, including
accrued and unpaid interest to the Redemption Date on, all Notes to be redeemed
on such Redemption Date (other than Notes or portions thereof called for
redemption on that date that have been delivered by the Company to the Trustee
for cancellation). The Paying Agent shall promptly return to the Company any
U.S. Legal Tender so deposited which is not required for that purpose upon the
written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article Three, interest on the Notes to be redeemed will
cease to accrue on the applicable Redemption Date, whether or not such Notes are
presented for payment. Notwithstanding anything herein to the contrary, if any
Note surrendered for redemption in the manner provided in the Notes shall not be
so paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest shall continue to accrue and be
paid from the Redemption Date until such payment is made on the unpaid
principal, and, to the extent lawful, on any interest not paid on such unpaid
principal, in each case at the rate and in the manner provided in Section 4.01
hereof and the Notes.
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Section 3.07. Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder,
without service charge, a new Note or Notes equal in principal amount to the
unredeemed portion of the Note surrendered.
ARTICLE FOUR
Covenants
Section 4.01. Payment of Notes.
The Company shall pay the principal of and interest on the Notes on the
dates and in the manner provided in the Notes. An installment of principal of or
interest on the Notes shall be considered paid on the date it is due if the
Trustee or Paying Agent (other than the Company, a Subsidiary of the Company or
an Affiliate of the Company) holds for the benefit of the Holders on that date,
U.S. Legal Tender deposited and designated for and sufficient to pay the
installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Notes compounded
semi-annually, to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in New York, New York, an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt 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 set forth in Section 10.02.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in New York, New York,
for such purposes. The Company shall give prompt written notice to the Trustee
of any such designation or rescission and of any change in the location of any
such other office or agency. The Company hereby initially designates the office
of the agent of the Trustee at the address set forth in Article Ten as such
office of the Company.
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Section 4.03. Limitation on Restricted Payments.
Until the Notes are rated Investment Grade by both Rating Agencies,
after which time the following covenant no longer will be binding on the
Company:
(a) neither the Company nor any of its Restricted Subsidiaries will,
directly or indirectly, make any Restricted Payment, if, after giving effect
thereto on a pro forma basis, (i) the Company could not Incur $1.00 of
additional Indebtedness pursuant to provisions described in Section 4.07(b)
hereof; (ii) a Default or an Event of Default would occur or be continuing; or
(iii) the aggregate amount of all Restricted Payments, including such proposed
Restricted Payment, made by the Company and its Restricted Subsidiaries, from
and after the Issue Date and on or prior to the date of such Restricted Payment,
shall exceed the sum (the "Basket") of: (A) 50% of Consolidated Net Income of
the Company for the period (taken as one accounting period), commencing with the
first full fiscal quarter which commenced after the Issue Date, to and including
the fiscal quarter ended immediately prior to the date of each calculation (or,
if Consolidated Net Income for such period is negative, then minus 100% of such
deficit); plus (B) 100% of the amount of any Indebtedness of the Company or a
Restricted Subsidiary that is converted into or exchanged for Qualified Capital
Stock of the Company after the Issue Date; plus (C) 100% of the aggregate
amounts received by the Company or any Restricted Subsidiary upon the return
(including by way of dividend and any release of any guaranty) of any Investment
but only to the extent (1) not included in Consolidated Net Income of the
Company and (2) that the making of such Investment constituted a Restricted
Investment made pursuant to this Indenture; plus (D) unless accounted for
pursuant to clause (B) above, 100% of the aggregate net proceeds (after payment
of reasonable out-of-pocket expenses, commissions and discounts incurred in
connection therewith) received by the Company from the sale or issuance (other
than to a Subsidiary of the Company) of its Qualified Capital Stock after the
Issue Date and on or prior to the date of such Restricted Payment; plus (E) with
respect to any Unrestricted Subsidiary that is redesignated as a Restricted
Subsidiary after the Issue Date in accordance with the definition of
Unrestricted Subsidiary (so long as the designation of such Subsidiary as an
Unrestricted Subsidiary was treated as a Restricted Payment made after the Issue
Date and only to the extent not included in the calculation of Consolidated Net
Income), an amount equal to the lesser of (x) the book value in accordance with
GAAP of the Company's or a Restricted Subsidiaries' investment in such
Subsidiary, and (y) the Designation Amount at the time of such Subsidiary's
designation as an Unrestricted Subsidiary.
(b) The foregoing clause (a) does not prohibit: (i) the payment of any
dividend within 60 days after the date of its declaration if such dividend could
have been made on the date of its declaration in compliance with the foregoing
provisions; (ii) the payment of cash dividends or other distributions to any
Equity Investor or joint venture participant of a Restricted Subsidiary with
respect to a class of Capital Stock of such Restricted Subsidiary owned by such
Equity Investor or joint venture participant so long as the Company or its
Restricted Subsidiaries simultaneously receive a dividend or distribution with
respect to their Investment in such Restricted Subsidiary either in U.S. Legal
Tender or the same form as the dividend or distribution received by such Equity
Investor or joint venture participant and in proportion to their proportionate
interest in the same class of Capital Stock of such Restricted Subsidiary, as
the case may be; (iii) repurchases or redemptions of Capital Stock of the
Company from any former directors, officers and employees of the Company
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in the aggregate up to $1,000,000 during any calendar year (provided, however,
that any amounts not used in any calendar year may be used in any subsequent
year); (iv) the retirement of Capital Stock of the Company or the retirement of
Indebtedness of the Company, in exchange for or out of the proceeds of a
substantially concurrent sale (other than a sale to a Subsidiary of the Company)
of, other shares of its Qualified Capital Stock and the retirement of Capital
Stock or Indebtedness of a Restricted Subsidiary in exchange for or out of the
proceeds of a substantially concurrent sale of its Qualified Capital Stock; (v)
the payment of cash dividends on, and acquisitions or other retirement for value
of, shares of Capital Stock of Restricted Subsidiaries required to be held by
employees thereof in accordance with the laws governing the Company's
consolidated real estate business in the ordinary course of business; or (vi)
Restricted Payments not otherwise permitted above up to $75,000,000 in the
aggregate after the Issue Date. Any Restricted Payment made in accordance with
this paragraph (other than pursuant to clause (ii) or (v)) shall reduce the
Basket. In calculating the Basket, any Restricted Payment not made in cash and
any non-cash amounts received for purposes of clause (C) or (D) shall be valued
in accordance with GAAP.
Section 4.04. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the end
of its fiscal year an Officers' Certificate complying with Section 314(a)(4) of
the TIA and stating that a review of its activities and the activities of its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing persons with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture and further stating, as to each such person signing such certificate,
whether or not the signer knows of any failure by the Company or any Subsidiary
of the Company to comply with any conditions or covenants in this Indenture and,
if such signor does know of such a failure to comply, the certificate shall
describe such failure with particularity. The Officers' Certificate shall also
notify the Trustee should the relevant fiscal year end on any date other than
the current fiscal year end date.
Section 4.05. SEC Reports.
The Company shall deliver to the Trustee and each Holder, within 15
days after it files the same with the SEC, copies of all reports and information
(or copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe), if any, exclusive of exhibits, which the Company is
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act or pursuant to the immediately following sentence. So long as any Notes
remain outstanding, the Company shall file with the Commission such reports as
may be required pursuant to Section 13 of the Exchange Act in respect of a
security registered pursuant to Section 12 of the Exchange Act. If the Company
is not subject to the requirements of Section 13 or 15(d) of the Exchange Act
(or otherwise required to file reports pursuant to the immediately preceding
sentence), the Company shall deliver to the Trustee and to each Holder, within
15 days after it would have been required to file such information with the SEC
were it required to do so, financial statements, including any notes thereto
(and, in the case of a fiscal year end, an auditors' report by an independent
certified public accounting firm of established national reputation), and a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," substantially equivalent to that which it would have been required
to include in such quarterly or annual reports, information, documents
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or other reports if it had been subject to the requirements of Section 13 or
15(d) of the Exchange Act. The Company shall also comply with the other
provisions of TIA Section 314(a).
The Trustee has no duty to review the financial reports and other
information for the purpose of determining compliance with any provision of this
Indenture.
Section 4.06. Limitations on Transactions with Affiliates.
Until the Notes are rated Investment Grade by both Rating Agencies,
after which time the following covenant no longer will be binding on the
Company:
(a) neither the Company nor any of its Restricted Subsidiaries may,
directly or indirectly, make any loan, advance, guaranty or capital contribution
to or for the benefit of, or sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of any Affiliate which transaction
involves or has a value in excess of $250,000 (each an "Affiliate Transaction"),
except for (i) Restricted Payments otherwise permitted hereunder, and (ii)
transactions, the terms of which are at least as favorable as the terms which
could be obtained by the Company or such Restricted Subsidiary, as the case may
be, in a comparable transaction made on an arm's-length basis with Persons who
are not Affiliates.
(b) In addition, (i) with respect to any Affiliate Transaction or
series of related Affiliate Transactions with an aggregate value in excess of
$5,000,000, such transaction must first be approved, by a majority of the
Disinterested Directors and (ii) with respect to any Affiliate Transaction or
related series of Affiliate Transactions with an aggregate value in excess of
$25,000,000, the Company must first deliver to the Trustee a favorable written
opinion from an independent financial advisor of national reputation as to the
fairness from a financial point of view of such transaction to the Company or
such Subsidiary, as the case may be.
(c) Notwithstanding the foregoing, Affiliate Transactions shall not
include (i) transactions exclusively between or among the Company and one or
more Restricted Subsidiaries or between or among one or more Restricted
Subsidiaries, (ii) any contract, agreement or understanding with, or for the
benefit of, or planned for the benefit of, employees of the Company or any
Restricted Subsidiaries (in their capacity as such) that has been approved by
the Board of Directors, (iii) issuances of Qualified Capital Stock of the
Company to members of the Board of Directors, officers and employees of the
Company or its Subsidiaries pursuant to plans approved by the stockholders or
the Board of Directors of the Company or the respective Subsidiary, (iv) home
sales and readily marketable mortgage loans to employees, officers and directors
of the Company and Subsidiaries in the ordinary course of business, (v) payment
of regular fees and reimbursement of expenses to directors of the Company who
are not employees of the Company and reimbursement of expenses and payment of
wages and other compensation to officers and employees of the Company or any of
its Subsidiaries or (vi) contractual arrangements in effect on the Issue Date
and renewals and extensions thereof not involving modifications adverse to the
Company or any Restricted Subsidiary.
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Section 4.07 Limitations on Additional Indebtedness.
(a) Neither the Company nor any of its Restricted Subsidiaries may,
directly or indirectly, Incur any Indebtedness except (i) Non-Recourse
Indebtedness Incurred in the ordinary course of business; (ii) Indebtedness
evidenced by Notes issued on the Issue Date; (iii) Indebtedness of the Company
solely to any Restricted Subsidiary, or Indebtedness of any Restricted
Subsidiary solely to the Company or to any Restricted Subsidiary, provided that
(x) neither the Company nor any Restricted Subsidiary shall become liable to any
Person with respect to such Indebtedness other than the Company or a Restricted
Subsidiary and (y) any such Indebtedness of the Company (other than to the
Company's financial services segment Subsidiaries) is subordinate and junior in
right of payment to the Notes; (iv) Refinancing Indebtedness (x) of any
Indebtedness permitted to be Incurred pursuant to this clause (iv) or the
immediate following paragraph (b) or (y) of any Indebtedness to the extent
outstanding on the Issue Date (other than under the Bank Credit Facility); (v)
Indebtedness Incurred solely in respect of performance, completion, guaranty and
similar bonds and similar purpose undertakings and Indebtedness under any
earnest money notes, tenders, bids, leases, statutory obligations, surety and
appeal bonds, progress statements, government contracts, letters of credit,
escrow agreements and other obligations of like nature and deposits made to
secure performance of any of the foregoing, in each case in the ordinary course
of business; (vi) Indebtedness under the Bank Credit Facility in an aggregate
principal amount not to exceed $175,000,000 at any time, and guaranties thereof;
(vii) (A) Indebtedness which represents the assumption by the Company or a
Restricted Subsidiary of Indebtedness of a Restricted Subsidiary, and (B)
Indebtedness of a Restricted Subsidiary represented by guaranties in respect of
Indebtedness of another Restricted Subsidiary permitted to be Incurred pursuant
to this Indenture and Indebtedness of the Company represented by guaranties in
respect of Indebtedness of a Restricted Subsidiary permitted to be Incurred
pursuant to this Indenture; (viii) Capitalized Lease Obligations; (ix)
Indebtedness under warehouse lines of credit, repurchase agreements and
Indebtedness secured by mortgage loan servicing of mortgage lending Subsidiaries
in the ordinary course of a mortgage lending business; (x) obligations for,
pledge of assets in respect of, and guaranties of, bond financings of political
subdivisions or enterprises thereof in the ordinary course of business; (xi)
Indebtedness secured by mortgages and mortgage-related assets and Indebtedness
representing all mortgage-related liabilities in the ordinary course of the
mortgage lending and asset management business; and (xii) Disqualified Capital
Stock of Restricted Subsidiaries outstanding on the Issue Date and which may
from time to time be issued as required by laws governing the Company's
consolidated real estate business.
(b) Notwithstanding the foregoing, (I) the Company may Incur
Indebtedness, and (II) a Restricted Subsidiary may Incur (x) Real Property
Indebtedness or (y) Acquired Indebtedness, in each case, if, at the time such
Indebtedness is Incurred: (i) no Default or Event of Default shall have occurred
and be continuing or would occur after giving effect to such transaction, and
(ii) immediately after giving effect thereto (without duplication) on a pro
forma basis, either (A) the Consolidated Fixed Charge Coverage Ratio of the
Company on the date of such Incurrence is at least equal to 2.0 to 1 or (B) the
ratio of Indebtedness of the Company and its Restricted Subsidiaries on a
consolidated basis on the date of such Incurrence (excluding for purposes of
such calculation other Indebtedness specifically permitted to be Incurred
pursuant to the preceding paragraph), to Consolidated Net Worth of the Company
is less than 3.25 to 1.
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Section 4.08. Limitations on Restricting Restricted Subsidiary
Distributions.
Neither the Company nor any of its Restricted Subsidiaries may create,
assume or suffer to exist any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to pay dividends or make other
distributions on the Capital Stock of any Restricted Subsidiary or pay any
obligation to the Company or any of its Restricted Subsidiaries or otherwise
transfer assets or make or pay loans or advances to the Company or any of its
Restricted Subsidiaries, except encumbrances and restrictions existing under or
contained in (a) this Indenture and the Notes or Refinancing Indebtedness
Incurred to refinance the Notes; provided that in the case the Notes are
refinanced in part, such encumbrances and restrictions are no more restrictive
than those contained herein as in effect on the Issue Date, (b) applicable law,
(c) any agreement relating to the financing of the acquisition, development or
construction of real or tangible personal property after the Issue Date, which
encumbrance or restriction relates only to the transfer of the property so
acquired, (d) any agreement of a Person acquired by the Company or a Restricted
Subsidiary, which restrictions existed at the time of acquisition, were not put
in place in anticipation of such acquisition and are not applicable to any
Person or property other than the Person or any property of the Person so
acquired, (e) reasonable and customary covenants set forth in credit agreements
evidencing Real Property Indebtedness or Indebtedness permitted by clauses (vi),
(ix) and (xi) of Section 4.07(a) hereof (including, but not limited to,
covenants limiting (A) dividends to a certain percentage of the net income of
such Restricted Subsidiary, (B) distributions after the occurrence of a default
under such Indebtedness and (C) transfers of assets by such Restricted
Subsidiary), (f) covenants or restrictions contained in instruments evidencing
or securing Existing Indebtedness of the Company or any Restricted Subsidiary as
in effect on the Issue Date or any Refinancing Indebtedness with respect
thereto, provided that any restrictions or encumbrances relating to or that
arise under Refinancing Indebtedness are not more restrictive than those under
the agreement creating or evidencing the Indebtedness being refunded or
refinanced thereby, (g) any agreement restricting the sale or other disposition
of properties securing Indebtedness permitted hereby if such agreement does not
expressly restrict the ability of a Restricted Subsidiary to pay dividends or
make loans or advances to the Company, (h) restrictions or encumbrances
contained in any security agreements permitted hereby securing Indebtedness
permitted hereby to the extent that such restrictions or encumbrances restrict
the transfer of assets subject to such security agreement, (i) any restrictions
or encumbrances with respect to a Restricted Subsidiary imposed pursuant to an
agreement which has been entered into for the sale or disposition of the Capital
Stock or assets of such Restricted Subsidiary or such an agreement which has
been entered into for the sale or disposition of assets of the Company to the
extent otherwise permitted hereby, as applicable only to such assets or Capital
Stock to be sold, and (j) customary agreements entered into in the ordinary
course of business restricting the ability of a joint venture to make
distributions or payments of cash or property to participants in such joint
venture. Notwithstanding the foregoing, customary provisions restricting
subletting or assignment of any lease entered into in the ordinary course of
business shall not be considered a restriction on the ability of the applicable
Restricted Subsidiary to transfer such agreement or assets, as the case may be.
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Section 4.09. Limitations on Liens.
The Company may not and may not permit any Restricted Subsidiary to,
directly or indirectly, Incur, or suffer to exist any Lien (other than Permitted
Liens) upon any of its property or assets, whether now owned or hereafter
acquired.
Section 4.10. Use of Proceeds.
The Company covenants that it shall use the proceeds of the sale of the
Notes to defease or to make open market or negotiated purchases of all of the
Company's outstanding 11 1/8% Senior Notes due 2003 and the remainder for
general corporate purposes.
Section 4.11. Repurchase of Notes upon Change of Control Triggering Event.
(a) In the event that a Change of Control Triggering Event has
occurred, each Holder will have the right, at such Holder's option, subject to
the terms and conditions of this Indenture, to require the Company to repurchase
all or any part of such Holder's Notes (provided that the principal amount of
such Notes must be $1,000 or an integral multiple thereof) on the date that is
no later than 90 Business Days (unless a later date is required by applicable
law) after the occurrence of such Change of Control Triggering Event (the
"Change of Control Payment Date"), at a cash price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, if any (the "Change
of Control Purchase Price"), to the Change of Control Payment Date.
(b) The Company shall notify the Trustee within 10 Business Days after
the Company knows or reasonably should know of the occurrence of a Change of
Control Triggering Event. Within 20 Business Days after the Company knows or
reasonably should know of the occurrence of a Change of Control Triggering
Event, the Company will make an unconditional offer (a "Change of Control
Offer") to all Holders of Notes to purchase all of the Notes at the Change of
Control Purchase Price by sending written notice of a Change of Control Offer,
by first class mail, to each Holder at its registered address, with a copy to
the Trustee. The notice to Holders, which shall govern the terms of the Change
of Control Offer, shall state:
(i) that the Change of Control Offer is being made pursuant to this
Section 4.11 and that all Notes, or portions thereof, tendered will be accepted
for payment;
(ii) the Change of Control Purchase Price (including the amount of
accrued and unpaid interest), the Change of Control Payment Date and the Final
Change of Control Put Date (as defined below);
(iii) that any Note, or portion thereof, not tendered or accepted for
payment will continue to accrue interest;
(iv) that, unless the Company defaults in depositing U.S. Legal Tender with
the Paying Agent in accordance with Section 4.11(c), or payment is otherwise
prevented, any Note, or portion
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thereof, accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest on and after the Change of Control Payment Date;
(v) that Holders electing to have a Note, or portion thereof, purchased
pursuant to a Change of Control Offer will be required to surrender the Note,
with the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, to the Paying Agent (which may not for purposes of this
Section 4.11, notwithstanding anything in this Indenture to the contrary, be the
Company or any Affiliate of the Company) at the address specified in the notice
prior to the close of business on the third Business Day prior to the Change of
Control Payment Date (the "Final Change of Control Put Date");
(vi) that Holders will be entitled to withdraw their election, in whole
or in part, if the Paying Agent receives, prior to the close of business on the
Final Change of Control Put Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Notes
the Holder is withdrawing and a statement that such Holder is withdrawing his
election to have such principal amount of Notes purchased; and
(vii) a brief description of the events resulting in such Change of
Control Triggering Event.
(c) On or before the Change of Control Payment Date, the Company will
(i) accept for payment Notes or portions thereof properly tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the Change of Control Purchase Price (together with
accrued and unpaid interest) of all Notes so tendered and (iii) deliver to the
Trustee Notes so accepted together with an Officers' Certificate listing the
Notes or portions thereof being purchased by the Company. The Paying Agent will
promptly mail to the Holders of Notes so accepted payment in an amount equal to
the Change of Control Purchase Price (together with accrued and unpaid
interest), and the Trustee will promptly authenticate and mail or deliver to
such Holders a new Note equal in principal amount to any unpurchased portion of
the Note surrendered. Any Note not so accepted will be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
Section 4.12. Limitations on Asset Sales.
(a) Subject to the provisions of Article V hereof, neither the Company
nor any Restricted Subsidiary may, directly or indirectly, consummate an Asset
Sale, unless the Company (or such Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the fair
market value (reasonably evidenced by a good faith resolution of the Board of
Directors) of the assets sold or otherwise disposed of, provided that the
aggregate fair market value of the consideration received from any Asset Sale
that is not in the form of cash or Cash Equivalents will not, when aggregated
with the fair market value of all other noncash consideration received by the
Company and its Restricted Subsidiaries from all previous Asset Sales since the
Issue Date that has not been converted into cash or Cash Equivalents, exceed 10%
of the Consolidated Net Assets of the Company at the time of the Asset Sale
under consideration; and, provided, further, however, that the amount of (x) any
liabilities of the Company or any Restricted Subsidiary (other than
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liabilities that are Incurred in connection with or in contemplation of such
Asset Sale) that are assumed by the transferee of any such assets and (y) any
notes or other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are promptly converted by the Company or
such Restricted Subsidiary into cash, shall be deemed to be cash (to the extent
of the cash received) for purposes of this provision.
(b) Within one year after any Asset Sale, the Company (or such
Restricted Subsidiary, as the case may be) shall apply 100% of the Net Cash
Proceeds from such Asset Sale as follows: (A) to repay any outstanding
Indebtedness of any Restricted Subsidiary or any unsubordinated Indebtedness of
the Company, provided that the Company may repay unsecured Indebtedness that is
pari passu in right of payment with the Notes only if the Company shall, prior
to or simultaneously therewith, make an irrevocable, unconditional offer to
Holders to purchase Notes on a pro rata basis in an amount equal to the Net Cash
Proceeds from such Asset Sale multiplied by a fraction, the numerator of which
is the principal amount of the Notes then outstanding and the denominator of
which is the principal amount of the Notes then outstanding plus the aggregate
amount of outstanding unsecured Indebtedness other than the Notes ranking pari
passu in right of payment with the Notes that is to be repaid with such Net Cash
Proceeds and, provided, further, that the Company shall not be required to offer
to repurchase the Notes unless the amount available for such repurchase is at
least $20,000,000 or (B) to replace the properties and assets that were the
subject of the Asset Sale, or to acquire or improve properties and assets that
will be used by the Company and its Restricted Subsidiaries in the ordinary
course of business.
(c) Notwithstanding the foregoing, to the extent the Company or any
Restricted Subsidiary receives securities or other noncash property or assets as
proceeds of any Asset Sale, the Company will not be required to make any
application of such noncash proceeds as described in the immediately preceding
paragraph until it receives cash or cash equivalent proceeds from a sale,
repayment, exchange, redemption or retirement of or extraordinary cash dividend
or return of capital on such noncash property.
(d) To the extent the Company is required to make an offer to purchase
the Notes pursuant to this Section 4.12 (an "Asset Sale Offer"), the Company
will so notify the Trustee in writing by delivery of an Officers' Certificate
and will offer to purchase from all Holders, and will purchase from Holders
accepting such Asset Sale Offer on the date fixed for the closing of such Asset
Sale Offer (the "Asset Sale Offer Date"), the maximum principal amount
(expressed as a multiple of $1,000) of Notes that may be purchased out of the
Net Cash Proceeds, at an offer price (the "Asset Sale Offer Price") in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the Asset Sale Offer Date, in accordance with the
procedures as described below. To the extent that the aggregate amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Net Cash Proceeds
relating thereto, then the Company may use such Excess Proceeds, or a portion
thereof, for general corporate purposes. Upon completion of an Asset Sale Offer,
the amount of Net Cash Proceeds will be reset to zero.
(e) In the event the aggregate principal amount of Notes surrendered by
the Holders exceeds the amount of Net Cash Proceeds available to such Holders,
the Company will select the Notes to be purchased on a pro rata basis from all
Notes so surrendered, with such adjustments as may be
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deemed appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, will be purchased. Holders whose Notes are
purchased only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
(f) Not later than one Business Day prior to the Asset Sale Offer Date
in connection with which the Asset Sale Offer is being made, the Company will
(i) accept for payment Notes or portions thereof tendered pursuant to the Asset
Sale Offer (on a pro rata basis if required pursuant to this Indenture), (ii)
deposit with the Paying Agent money sufficient, in immediately available funds,
to pay the purchase price of all Notes or portions thereof so accepted, and
(iii) deliver to the Paying Agent an Officers' Certificate identifying the Notes
or portions thereof accepted for payment by the Company. The Paying Agent will
promptly mail or deliver to Holders of Notes so accepted payment in an amount
equal to the Asset Sale Offer Price of the Notes purchased from each such
Holder. Any Notes not so accepted will be promptly mailed or delivered by the
Paying Agent at the Company's expense to the Holder thereof.
(g) Any Asset Sale Offer will be conducted by the Company in compliance
with applicable law, including, without limitation, Section 14(e) of the
Exchange Act and Rule 14e-1 thereunder, if applicable.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.
(a) 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 (i) the resulting, surviving or
transferee entity, which shall be a corporation, partnership, limited liability
company or other entity 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 Notes and this Indenture, (ii) immediately after giving effect to, and
as a result of, such transaction, no Default or Event of Default shall have
occurred and be continuing, (iii) immediately after giving effect to such
transaction on a pro forma basis, the net worth of the surviving or transferee
entity on a stand-alone basis is at least equal to the Consolidated Net Worth of
the Company immediately prior to such transaction; and (iv) the Company or the
surviving or transferee entity thereof would immediately thereafter be permitted
to Incur at least $1.00 of additional Indebtedness pursuant to the provisions
described in Section 4.07(b). The provisions of clause (iv) above shall not
apply to a transaction or series of related transactions in which the sole
participants are Restricted Subsidiaries of the Company or to a transaction
between the Company and its Restricted Subsidiaries.
(b) For purposes of clause (a), the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would
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constitute all or substantially all of the properties and assets of the Company,
on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company. 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.
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events:
(a) default in the payment of interest on the Notes as and when the same
becomes due and payable and the continuance of any such failure for 30 days;
(b) default in the payment of all or any part of the principal or
premium, if any, on the Notes when and as the same become due and payable at
maturity, at an Asset Sale Offer Date or Change of Control Payment Date, at
redemption, by declaration of acceleration or otherwise;
(c) default in the observance or performance of, or breach of, any
covenant, agreement or warranty of the Company contained in the Notes or this
Indenture (unless specifically dealt with elsewhere), and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee, or to the Company
and the Trustee by Holders of at least 25% in aggregate principal amount of the
outstanding Notes, a written notice specifying such default or breach, requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder;
(d) a decree, judgment, or order by a court of competent jurisdiction
shall have been entered adjudging the Company or any of its Significant
Subsidiaries as bankrupt or insolvent, or approving as properly filed a petition
in an involuntary case or proceeding seeking reorganization of the Company or
any of its Significant Subsidiaries under any bankruptcy or similar law, or a
decree, judgment or order of a court of competent jurisdiction directing the
appointment of a receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of the Company, any of its Significant Subsidiaries, or of the
property of any such Person, or the winding up or liquidation of the affairs of
any such Person, shall have been entered, and the continuance of any such
decree, judgment or order unstayed and in effect for a period of 90 consecutive
days;
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(e) the Company or any of its Significant Subsidiaries shall institute
proceedings to be adjudicated a voluntary bankrupt (including conversion of an
involuntary proceeding into a voluntary proceeding), or shall consent to the
filing of a bankruptcy proceeding against it, or shall file a petition or answer
or consent to the filing of any such petition, or shall consent to the
appointment of a Custodian, receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency of it or any of its assets or property, or shall make a
general assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due, or shall, within the
meaning of any Bankruptcy Law, become insolvent, or fail generally to pay its
debts as they become due;
(f) (i) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any of its Restricted Subsidiaries (in
accordance with the terms of such Indebtedness and after giving effect to any
applicable grace period set forth in the documents governing such Indebtedness)
that has an outstanding principal amount of $20,000,000 or more individually or
in the aggregate to be immediately due and payable; provided that, in the event
any such acceleration is withdrawn or otherwise rescinded (including
satisfaction of such Indebtedness) within a period of ten business days after
such acceleration by the holders of such Indebtedness, any Event of Default
under this clause (f) will be deemed to be cured and any acceleration hereunder
will be deemed withdrawn or rescinded; and (ii) the failure by the Company or
any of its Restricted Subsidiaries to make any principal, premium, interest or
other required payment in respect of Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any of its Restricted Subsidiaries with an
outstanding aggregate principal amount of $20,000,000 or more individually or in
the aggregate (after giving effect to any applicable grace period set forth in
the documents governing such Indebtedness); and
(g) one or more final nonappealable judgments (in the amount not
covered by insurance or not reserved for) or the issuance of any warrant of
attachment against any portion of the property or assets (except with respect to
Non-Recourse Indebtedness) of the Company or any Restricted Subsidiary, which
are $20,000,000 or more individually or in the aggregate, at any one time
rendered against the Company or any of its Restricted Subsidiaries by a court of
competent jurisdiction and not bonded, satisfied or discharged for a period
(during which execution shall not be effectively stayed) of (i) 60 days after
the judgment (which, if there is more than one judgment, causes such judgments
to exceed $20,000,000 in the aggregate) becomes final and such court shall not
have ordered or approved, and the parties shall not have agreed upon, the
payment of such judgment at a later date or dates or (ii) 60 days after all or
any part of such judgment is payable pursuant to any court order or agreement
between the parties.
Section 6.02. Acceleration of Maturity Date; Rescission and Annulment.
If an Event of Default occurs and is continuing (other than an Event of
Default specified in Section 6.01(d) or (e) of this Article Six, relating to the
Company, then in each such case, unless the principal of all of the Notes shall
have already become due and payable, either the Trustee or the Holders of 25% in
aggregate principal amount of the Notes then outstanding, by notice in writing
to the Company (and to the Trustee if given by the Holders) (an "Acceleration
Notice"), may declare all principal, determined as set forth below, including in
each case accrued interest thereon, or, as
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appropriate, the Change of Control Purchase Price (solely with respect to a
Default relating to the payment of the Change of Control Purchase Price), to be
due and payable immediately. If an Event of Default specified in Section 6.01(d)
or (e) occurs relating to the Company, all principal and accrued and unpaid
interest thereon will be immediately due and payable on all outstanding Notes
without any declaration or other act on the part of the Trustee or the Holders.
At any time after such a declaration of acceleration is made and before
a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter provided in this Article Six, the Holders of a majority
in aggregate principal amount of then outstanding Notes, by written notice to
the Company and the Trustee, may waive, on behalf of all Holders, any such
declaration of acceleration if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(i) all overdue interest on all Notes,
(ii) the principal of (and premium, if any, applicable to) any
Notes which would become due otherwise than by such declaration of
acceleration, and interest thereon at the rate borne by the Notes,
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes,
(iv) all sums paid or advanced by the Trustee hereunder and the
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and
(b) all Events of Default, other than the non-payment of the principal
of, premium, if any, and interest on Notes which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
6.12.
Section 6.03. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if an Event of Default in payment of
principal, premium, or interest specified in clause (a) or (b) of Section 6.01
occurs and is continuing, the Company shall, upon demand of the Trustee, pay to
it, for the benefit of the Holders of such Notes, the whole amount then due and
payable on such Notes for principal, premium (if any) and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, at the
rate borne by the Notes, and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including
compensation to, and expenses, disbursements and advances of the Trustee, its
agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company and collect the moneys
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adjudged or decreed to be payable in the manner provided by law out of the
property of the Company wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.04. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or the property of the Company, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment
of overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise to take any and all actions under
the TIA, including
(a) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and to
file such 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 of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 6.05. Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in
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its own name as trustee of an express trust in favor of the Holders, and any
recovery of judgment shall, after provision for the payment of compensation to,
and expenses, disbursements and advances of the Trustee, its agents and counsel,
be for the ratable benefit of the Holders of the Notes in respect of which such
judgment has been recovered.
Section 6.06. Priorities.
Any money collected by the Trustee pursuant to this Article Six shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium
(if any) or interest, upon presentation of the Notes and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to Section
7.07;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any) and interest on, the Notes in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Notes for principal, premium (if any) and interest,
respectively; and
THIRD: To the Company, the remainder, if any.
Section 6.07. Limitation on Suits.
No Holder of any Note shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of then
outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be incurred
or reasonably probable to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Notes;
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it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
Section 6.08. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision of this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of such Note on the Maturity Date and interest on such
Note on the Interest Payment Dates, and to institute suit for the enforcement of
any such payment after such respective dates, and such rights shall not be
impaired without the consent of such Holder.
Section 6.09. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes in Section 2.07, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.10. Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Note to
exercise any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such Event of
Default. Every right and remedy given by this Article Six or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 6.11. Control by Holders.
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Notes shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, provided that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture,
(b) the Trustee shall not determine that the action so directed would be
unjustly prejudicial to the Holders not taking part in such direction,
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(c) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(d) the Trustee need not take any action hereunder that the Trustee
determines would create personal liability for the Trustee unless the Holders
have offered to the Trustee security and indemnity satisfactory to the Trustee.
Section 6.12. Waiver of Past Default.
Subject to Section 6.08, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Notes may, on behalf
of all Holders, waive any past Default hereunder and its consequences, except a
Default
(a) in the payment of the principal of, premium, if any, or interest on,
any Note not yet cured, or
(b) in respect of a covenant or provision hereof which, under Article
Nine, cannot be modified or amended without the consent of the Holder of each
outstanding Note affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair the exercise of any right arising therefrom.
Section 6.13. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted to be taken by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the outstanding Notes, or to any suit instituted by any
Holder for enforcement of the payment of principal of any Note on or after the
Maturity Date and interest on such Note on the Interest Payment Dates.
Section 6.14. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored
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severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
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 Notes, exercise its rights and powers and use the same
degree of care and skill in their exercise as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) 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.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. 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:
(i) This paragraph does not limit the effect of paragraph (b) of this
Section.
(ii) 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.
(iii) 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 6.11 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.
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(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity reasonably 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.
(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 herein, any demand, request,
direction or notice from the Company shall be sufficient if signed by an Officer
of the Company.
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(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(a) or 6.01(b)) 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 Notes
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 Notes 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 Notes or of any prospectus used to sell the Notes; it shall
not be accountable for the Company's use of the proceeds from the Notes; 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 Notes
other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default on the Notes occurs and is continuing and if it is known
to the Trustee, the Trustee shall mail to each Holder 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, premium or
interest on the Notes, 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.
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 Holder a brief report
dated as of such May 15 that complies with TIA section 313(a) (but if no event
described in TIA section 313(2) has occurred within the twelve months preceding
the reporting date no report need be transmitted). The Trustee also shall comply
with TIA section 313(b).
A copy of each report at the time of its mailing to Holders shall be
delivered to the Company and filed by the Trustee with the SEC and each national
securities exchange on which the Notes are
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listed. The Company agrees to notify the Trustee of each national
securities exchange on which the Notes 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
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 Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of or
interest on particular Notes. 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 Notes 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 Holders 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 Holder may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee if:
(a) the Trustee fails to comply with Section 7.10 after written request
by the Company or any bona fide Holder who has been a Holder for at least six
months;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
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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 Holder.
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 Section 310(a)(1) and (2). 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 Section
310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA section 311(a), excluding any
creditor relationship listed in TIA section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA section 311(a) to the extent indicated
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 Notes
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 Notes on the date the applicable conditions set
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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 Notes, 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 the Notes and this Indenture
insofar as the Notes are concerned, except for the following which shall survive
until otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes 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 the Notes 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 the Notes.
(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 Four (other than
Section 4.01 and 4.02), on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes 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 and the Company shall remain obligated for the
principal and interest on the Notes. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Notes, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01(c), but, except as specified above, the remainder
of this Indenture and the Notes shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Notes:
(i) 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 Notes 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 Notes to maturity or redemption; provided
that to the extent or until such time that the Trustee is unable to
acquire U.S. Government Obligations that match the Maturity Date, the
Trustee may invest amounts deposited hereunder in common investment
funds that invest in U.S.
government securities.
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(ii) No Default or Event of Default shall have occurred and be continuing
on the date of such deposit;
(iii) 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;
(iv) (A) 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 (1) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (2)
since the Issue Date, 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, Holders of the Notes 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; or (B) 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 Holders of the Notes 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;
(v) The Company shall have delivered to the Trustee an
Officers' Certificate, stating that the deposit under clause (i) was
not made by the Company with the intent of preferring the Holders of
the Notes 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;
(vi) 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 Notes 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
Notes 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
(vii) 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.
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In the event all or any portion of the Notes 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 the Notes when:
(i) All Notes theretofore authenticated and delivered (other
than Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.07 and Notes 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 Notes not theretofore delivered to the Trustee
for cancellation have become due and payable or will become due and
payable within one year, either by the terms of such Notes or upon
redemption (and if upon redemption the Company has deposited with the
Trustee irrevocable instructions to redeem such Notes) 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 Notes
not theretofore delivered to the Trustee for cancellation, for
principal of and interest to maturity or redemption;
(ii) The Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(iii) The Company has delivered irrevocable instructions to
the Trustee to apply the deposited money toward the payment of the
Notes at maturity or redemption, as the case may be; and
(iv) 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 this Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Notes and Sections
2.03 through 2.07, 4.01, 4.02, 4.11, 4.12, 7.07, 7.08, 8.04 and 8.05, however,
shall survive until the Notes are no longer outstanding. Thereafter, the
Company's obligations in paragraph 9 of the Notes and Sections 7.07, 8.04 and
8.05 shall survive.
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
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Obligations in accordance with this Indenture to the payment of principal of and
interest on the defeased Notes.
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, Holders
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 Notes 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 Notes because of the
reinstatement of their obligations, the Company shall be subrogated to the
rights of the Holders of such Notes 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 Notes without notice to or consent of any Holder:
(a) to cure any ambiguity, omission, defect or inconsistency;
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(b) to comply with Article Five;
(c) to provide for uncertificated Notes in addition to or in place of
certificated Notes; and
(d) to make any other change that does not adversely affect the rights of
Holders.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail notice of such amendment to the Holders.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Notes without notice to any Holder but with the written consent of the
Holders of at least a majority in principal amount of the outstanding Notes. The
Holders of a majority in principal amount of the outstanding Notes may waive
compliance by the Company with any provision of the Notes or of this Indenture
without notice to any Holder. Without the consent of each Holder affected,
however, an amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may not:
(a) reduce the amount of Notes 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 Note;
(c) reduce the principal of or change the fixed maturity of any Note or
alter the provisions (including related definitions) with respect to redemption
of Notes pursuant to Article Three hereof or with respect to repurchases
required under Sections 4.11 or 4.12 hereof;
(d) modify the ranking or priority of the Notes;
(e) make any change in Sections 6.08, 6.12 or this Section 9.02;
(f) waive a continuing Default or Event of Default in the payment of the
principal of or interest on any Note; or
(g) make any Note payable at a place or in money other than that stated
in the Note, or impair the right of any Holder to bring suit as permitted by
Section 6.07.
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.
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Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Notes 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 Note or portion of a Note that
evidences the same debt as the consenting Holder's Note, even if notation of the
consent is not made on any Note. Subject to the following paragraph, any such
Holder or subsequent Holder, however, may revoke the consent as to his Note or
portion of a Note. 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 Notes 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 (a)
through (g) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; 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 Note, on or after the respective due dates expressed in such Note, 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 Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Company may require the Holder of the Note to deliver it to the Trustee, at
which time the Trustee shall place an appropriate notation on the Note 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 Note shall issue and the
Trustee shall authenticate a new Note 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
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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
if to the Trustee:
U.S. Bank National Association
First Trust Center
180 East 5th Street
St. Paul, MN 55101
Telecopy No.: (612) 244-0711
Attention: Kathe Barrett, Corporate Finance Department
and
First Trust National Association/New York
100 Wall Street, Suite 2000
New York, New York 1005
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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 Holder 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 Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. 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 Holders, it shall
mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) 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
(b) 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 action
does not conflict with the terms hereof.
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:
(a) a statement that the person making such certificate or opinion has read
such covenant or condition;
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(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Holders. 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 or 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
Notes.
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 Notes 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
Notes shall bind its successors and assigns. All agreements of the Trustee in
this Indenture shall bind its successors and assigns.
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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.
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Section 10.13. Severability.
In case any one or more of the provisions contained in this Indenture
or in the Notes 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 the Notes.
SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
Dated: January 28, 1998 M.D.C. HOLDINGS, INC.
By: /s/
Name:
Title:
Dated: January 28, 1998 U.S. Bank National Association, as Trustee
By: /s/
Name:
Title:
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Exhibit A
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CUSIP No.: 552676 AL 2
8 3/8% Senior Notes due 2008
M.D.C. HOLDINGS, INC.
a Delaware corporation
#369490
A-1
<PAGE>
M.D.C. HOLDINGS, INC.
a Delaware corporation
promises to pay to
Cede & Co.
or registered assigns
the principal sum of $175,000,000 on
February 1, 2008.
8 3/8% Senior Notes due 2008
Interest Payment Dates: February 1, and August 1
Record Dates: January 15 and July 15
Dated: January 28, 1998
M.D.C. HOLDINGS, INC.
By___________________
Title:
By___________________
Title:
#369490
A-2
<PAGE>
U.S. Bank National Association,
as Trustee, certifies that this is one of the
Notes referred to in the within mentioned
Indenture.
By: ____________________________
- --------------------------------
Authorized Signatory
#369490
A-3
<PAGE>
M.D.C. HOLDINGS, INC.
8 3/8% Senior Notes
1. Interest.
M.D.C. HOLDINGS, INC. (the "Company"), a Delaware corporation, promises
to pay interest on the principal amount of this Note at the rate per annum shown
above. The Company will pay interest semiannually on February 1 and August 1 of
each year until the principal is paid or made available for payment. Interest on
the Notes 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 January 28, 1998;
provided that, if there is no existing default in the payment of interest, and
if this Note 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 Notes (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) on each Interest
Payment Date to the persons who are registered Holders of Notes at the close of
business on the January 15 and July 15 preceding such Interest Payment Date.
Holders must surrender Notes 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, U.S. Bank National Association (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 Notes under an Indenture dated as of January 28,
1998 ("Indenture") between the Company and the Trustee. The terms of the Notes
include those stated in the Indenture 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 Notes are subject to all such terms, and Holders are referred
to the Indenture and the Act for a statement of them.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to: M.D.C. Holdings, Inc.,
3600 S. Yosemite, Suite 900, Denver, Colorado 80237, Attention: Secretary.
#369490
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<PAGE>
5. Optional Redemption.
The Notes will be redeemable at the option of the Company, in whole or
in part, at any time on or after February 1, 2003, at the redemption prices
(expressed as a percentage of principal amount) set forth below, plus accrued
and unpaid interest thereon, if any, to the redemption date, if redeemed during
the 12-month period beginning on February 1 of the years indicated below:
REDEMPTION
YEAR PRICE
- --------------------------------------------------------------------------------
2003................................................................... 104.188%
2004................................................................... 102.792%
2005................................................................... 101.396%
2006 and thereafter............................................ 100.000%
In addition, prior to February 1, 2001, the Company may redeem up to
33% of the aggregate principal amount of the Notes issued under the Indenture at
a redemption price equal to 108.375% of the principal amount of the Notes so
redeemed, plus accrued and unpaid interest thereon, if any, to the redemption
date with the net cash proceeds of one or more Public Equity Offerings;
provided, however, that (x) at least $125,000,000 aggregate principal amount of
the Notes would remain outstanding immediately after giving effect to any such
redemption (excluding any Notes held by the Company) and (y) notice of any such
redemption is given within 60 days of the applicable Public Equity Offering.
Notice of redemption will be mailed at least 15 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at his
registered address. Notes in denominations larger than $1,000 may be redeemed in
part. On and after the redemption date, interest ceases to accrue on Notes or
portions of them called for redemption; provided, that if the Company shall
default in the payment of such Note at the redemption price together with
accrued interest, interest shall continue to accrue at the rate borne by the
Notes.
6. Denominations, Transfer, Exchange.
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. A Holder may transfer or exchange Notes
by presentation of such Notes to the Registrar or a co-Registrar with a request
to register the transfer or to exchange them for an equal principal amount of
Notes 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 Note selected for redemption, except the
unredeemed part thereof if the Note is redeemed in part, or transfer or exchange
any Notes for a period of 15 days before a selection of Notes to be redeemed.
#369490
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7. Persons Deemed Owners.
The registered Holder of this Note 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 Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Notes and any past default or compliance
with any provision relating to the Notes may be waived in a particular instance
with the consent of the Holders of a majority in principal amount of the
outstanding Notes. Without the consent of any Holder, the Company and the
Trustee may amend or supplement the Indenture or the Notes to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, or to make any other change,
provided such action does not adversely affect the rights of any Holder.
10. Change of Control.
In the event that a Change of Control Triggering Event (as defined in
Section 4.11 of the Indenture) has occurred, each Holder will have the right, at
such Holder's option, subject to the terms and conditions set forth in the
Indenture, to require the Company to repurchase in the manner specified in the
Indenture, all or any part (in integral multiples of $1,000) of such Holder's
Notes at a purchase price equal to 101% of the principal amount thereof, plus
accrued and unpaid interest to the date of purchase.
11. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor corporation will
be released from those obligations.
12. Trustee Dealings With Company.
U.S. Bank National Association, 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.
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13. 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 Notes
or the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
14. 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.
15. Authentication.
This Note shall not be valid until the Trustee signs the certificate of
authentication on the other side of this Note.
16. Abbreviations.
Customary abbreviations may be used in the name of a Holder 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).
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ASSIGNMENT FORM
If you, the Holder, want to assign this Note, fill in the form below:
I or we assign and transfer this Note 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 Note 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 Note)
Signature
Guarantee:___________________________________________________________
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Sections 4.11 or 4.12 of the Indenture, check the appropriate box:
[_] Section 4.11 [_] Section 4.12
If you want to elect to have only part of this Note purchased by
theCompany pursuant to Sections 4.11 or 4.12 of the Indenture, as the case may
be, state the amount you want to be purchased: $________
Date: ________________ Signature: ______________________
(Sign exactly as your
name appears on the
other side of this Note)
Signature Guarantee: ___________________________________
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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1
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM T-1
Statement of Eligibility Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
FIRST TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0257700
(State of Incorporation) (I.R.S. Employer Identification No.)
First Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
M.D.C. Holdings, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 84-0622967
(State of Incorporation) (I.R.S. Employer Identification No.)
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
(Address of Principal Executive Offices) (Zip Code)
8 3/8% Senior Notes Due 2008
(Title of the Indenture Securities)
<PAGE>
2
GENERAL
1. GENERAL INFORMATION. Furnish the following information as to the Trustee.
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS. If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe
each such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.
16. LIST OF EXHIBITS. List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. Copy of Articles of Association.*
2. Copy of Certificate of Authority to Commence Business.*
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).*
4. Copy of existing By-Laws.*
5. Copy of each Indenture referred to in Item 4. N/A
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority is incorporated by reference to Registration Number
333-34585.
*Incorporated by reference to Registration Number 22-27000.
<PAGE>
3
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligor within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligor, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, First Trust National Association, an Association organized and existing
under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 30th day of October,
1997.
FIRST TRUST NATIONAL ASSOCIATION
/s/ Kathe M. Barrett
---------------------
Kathe M. Barrett
Trust Officer
/s/ Eve D. Kaplan
- - -------------------
Eve D. Kaplan
Assistant Secretary
<PAGE>
4
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, FIRST TRUST NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: October 30, 1997 FIRST TRUST NATIONAL ASSOCIATION
/s/ Kathe M. Barrett
----------------------
Kathe M. Barrett
Trust Officer
