<PAGE>
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 14, 1998
NVR, Inc.
(Exact Name of Registrant as Specified in its
Charter)
Virginia 333-44515 54-1394360
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
7601 Lewinsville Road, Suite 300, McLean, Virginia 22101
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (703) 637-2200
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
________________________________________________________________________________
Exhibit Index is on page 4.
<PAGE>
ITEM 5. OTHER EVENTS.
On April 14, 1998, NVR, Inc. (the "Company") sold $145,000,000 aggregate
principal amount of its 8% Senior Notes due 2005 (the "Notes") pursuant to an
Underwriting Agreement, dated April 8, 1998, between the Company and Salomon
Smith Barney, Credit Suisse First Boston and Friedman, Billings, Ramsey & Co.,
Inc. The Notes were issued pursuant to a First Supplemental Indenture, dated as
of April 14, 1998, between the Company, NVR Homes, Inc. (the "Guarantor") and
The Bank of New York, as Trustee (the "Trustee"), to that certain Indenture
dated as of April 14, 1998, between the Company, the Guarantor and the Trustee.
The Notes have been registered under the Securities Act of 1933, as amended (the
"Act"), by a registration statement on Form S-3, File No. 333-44515 filed with
the Securities and Exchange Commission (the "Commission") and declared effective
by the Commission on February 27, 1998. The terms of the offering of the Notes
are described in a final Prospectus Supplement, dated April 8, 1998, as filed
with the Commission pursuant to Rule 424(b)(5) under the Act, including the
related Prospectus dated April 6, 1998.
ITEM 7(C). EXHIBITS.
Exhibit
Number Exhibit Description
- ------- -------------------
4.3 Indenture, dated as of April 14, 1998, between the Company, the
Guarantor and the Trustee.
4.4 First Supplemental Indenture, dated as of April 14, 1998, between
the Company, the Guarantor and the Trustee.
4.5 Form of Note.
5.1 Opinion of Hogan & Hartson, L.L.P. regarding the validity of the
Notes.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NVR, Inc.
Date: April 23, 1998 By: /s/ Paul C. Saville
--------------------
Paul C. Saville
Senior Vice President and
Chief Financial Officer
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT
- -------
NUMBER EXHIBIT DESCRIPTION
- ------ -------------------
4.3 Indenture, dated as of April 14, 1998, between the Company, the
Guarantor and the Trustee.
4.4 First Supplemental Indenture, dated as of April 14, 1998, between
the Company, the Guarantor and the Trustee.
4.5 Form of Note.
5.1 Opinion of Hogan & Hartson, L.L.P. regarding the validity of the
Notes.
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[EXECUTION COPY]
NVR, INC.
and
THE BANK OF NEW YORK
AS TRUSTEE
_________________________
INDENTURE
DATED AS OF April 14, 1998
-----------------------------------------------------------
SENIOR DEBT SECURITIES
-----------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
PARTIES.................................................................... 2
RECITALS................................................................... 2
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION.............................................................. 2
SECTION 101. Definitions................................................ 2
Act.................................................................... 3
Additional Amounts..................................................... 3
Affiliate.............................................................. 3
Authenticating Agent................................................... 3
Authorized Newspaper................................................... 3
Bankruptcy Law......................................................... 3
Bearer Security........................................................ 3
Board of Directors..................................................... 3
Board Resolution....................................................... 3
Business Day........................................................... 3
Capital Stock.......................................................... 3
CEDEL.................................................................. 3
Commission............................................................. 4
Company................................................................ 4
Company Request........................................................ 4
Conversion Event....................................................... 4
Corporate Trust Office................................................. 4
Corporation............................................................ 4
Coupon................................................................. 4
Custodian.............................................................. 4
Debt or Indebtedness................................................... 4
Defaulted Interest..................................................... 4
DTC.................................................................... 5
Dollar or "$".......................................................... 5
ECU.................................................................... 5
Euroclear.............................................................. 5
European Community..................................................... 5
European Monetary System............................................... 5
European Union......................................................... 5
Event of Default....................................................... 5
Exchange Act........................................................... 5
Foreign Currency....................................................... 5
GAAP................................................................... 5
Government Obligations................................................. 6
Holder................................................................. 6
Indenture.............................................................. 6
Indexed Security....................................................... 6
Interest............................................................... 6
Interest Payment Date.................................................. 6
</TABLE>
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<TABLE>
<S> <C>
Legal Holiday....................................................... 6
Maturity............................................................ 7
Officers' Certificate............................................... 7
Opinion of Counsel.................................................. 7
Original Issue Discount Security.................................... 7
Outstanding......................................................... 7
Paying Agent........................................................ 8
Person.............................................................. 8
Place of Payment.................................................... 8
Predecessor Security................................................ 8
Recourse Indebtedness............................................... 8
Redemption Date..................................................... 8
Redemption Price.................................................... 8
Registered Security................................................. 8
Regular Record Date................................................. 9
Repayment Date...................................................... 9
Repayment Price..................................................... 9
Responsible Officer................................................. 9
Secured Debt........................................................ 9
Securities Act...................................................... 9
Security............................................................ 9
Security Register and Security Registrar............................ 9
Significant Subsidiary.............................................. 9
Special Record Date................................................. 9
Stated Maturity..................................................... 9
Subsidiary.......................................................... 10
Trust Indenture Act or TIA.......................................... 10
Trustee............................................................. 10
United States....................................................... 10
United States Person................................................ 10
Yield to Maturity................................................... 10
SECTION 102. Compliance Certificates and Opinions...................... 10
SECTION 103. Form of Documents Delivered to Trustee.................... 11
SECTION 104. Acts of Holders........................................... 11
SECTION 105. Notices, etc., to Trustee and Company..................... 12
SECTION 106. Notice to Holders; Waiver................................. 13
SECTION 107. Effect of Headings and Table of Contents.................. 13
SECTION 108. Successors and Assigns.................................... 14
SECTION 109. Separability Clause....................................... 14
SECTION 110. Benefits of Indenture..................................... 14
SECTION 111. No Personal Liability..................................... 14
SECTION 112. Governing Law............................................. 14
SECTION 113. Legal Holidays............................................ 14
ARTICLE TWO SECURITIES FORMS............................................... 14
SECTION 201. Forms of Securities....................................... 14
SECTION 202. Form of Trustee's Certificate of Authentication........... 15
SECTION 203. Securities Issuable in Global Form........................ 15
ARTICLE THREE THE SECURITIES............................................... 16
SECTION 301. Amount Unlimited, Issuable in Series...................... 16
SECTION 302. Denominations............................................. 19
</TABLE>
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<TABLE>
<S> <C>
SECTION 303. Execution, Authentication, Delivery and Dating.................... 19
SECTION 304. Temporary Securities.............................................. 21
SECTION 305. Registration, Registration of Transfer and Exchange............... 23
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.................. 25
SECTION 307. Payment of Interest; Interest Rights Preserved.................... 26
SECTION 308. Persons Deemed Owners............................................. 28
SECTION 309. Cancellation...................................................... 28
SECTION 310. Computation of Interest........................................... 29
SECTION 311: CUSIP Numbers..................................................... 29
ARTICLE FOUR SATISFACTION AND DISCHARGE............................................ 29
SECTION 401. Satisfaction and Discharge of Indenture........................... 29
SECTION 402. Application of Trust Funds........................................ 30
ARTICLE FIVE REMEDIES........................................................... 30
SECTION 501. Events of Default................................................. 30
SECTION 502. Acceleration of Maturity; Rescission and Annulment................ 32
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee........................................................... 32
SECTION 504. Trustee May File Proofs of Claim.................................. 33
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons............................................. 34
SECTION 506. Application of Money Collected.................................... 34
SECTION 507. Limitation on Suits............................................... 34
SECTION 508. Unconditional Right of Holders to Receive Principal (Premium,
if any) and Interest.............................................. 35
SECTION 509. Restoration of Rights and Remedies................................ 35
SECTION 510. Rights and Remedies Cumulative.................................... 35
SECTION 511. Delay or Omission Not Waiver...................................... 35
SECTION 512. Control by Holders of Securities.................................. 35
SECTION 513. Waiver of Past Defaults........................................... 36
SECTION 514. Waiver of Usury Stay or Extension Laws............................ 36
SECTION 515. Undertaking for Costs............................................. 36
ARTICLE SIX THE TRUSTEE........................................................... 37
SECTION 601. Notice of Defaults................................................ 37
SECTION 602. Certain Rights of Trustee......................................... 37
SECTION 603. Not Responsible for Recitals or Issuance of Securities............ 38
SECTION 604. May Hold Securities............................................... 38
SECTION 605. Money Held in Trust............................................... 38
SECTION 606. Compensation and Reimbursement.................................... 38
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests.... 39
SECTION 608. Resignation and Removal; Appointment of Successor................. 39
SECTION 609. Acceptance of Appointment by Successor............................ 40
SECTION 610. Merger, Conversion, Consolidation or Succession to Business....... 41
SECTION 611. Appointment of Authentication Agent............................... 41
SECTION 612. Trustee's Application for Instructions from the Company........... 43
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.................... 43
SECTION 701. Disclosure of Names and Addresses of Holders...................... 43
</TABLE>
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<TABLE>
<S> <C>
SECTION 702. Reports by Trustee.............................................. 43
SECTION 703. Reports by Company.............................................. 43
SECTION 704. The Company to Furnish Trustee Names and Addresses of Holders... 44
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE................... 45
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions......... 45
SECTION 802. Rights and Duties of Successor Entity........................... 45
SECTION 803. Officers' Certificate and Opinion of Counsel.................... 45
ARTICLE NINE SUPPLEMENTAL INDENTURES......................................... 46
SECTION 901. Supplemental Indentures Without Consent of Holders.............. 46
SECTION 902. Supplemental Indentures with Consent of Holders................. 47
SECTION 903. Execution of Supplemental Indentures............................ 48
SECTION 904. Effect of Supplemental Indentures............................... 48
SECTION 905. Conformity with Trust Indenture Act............................. 48
SECTION 906. Reference in Securities to Supplemental Indentures.............. 48
SECTION 907. Notice of Supplemental Indentures............................... 48
ARTICLE TEN COVENANTS....................................................... 49
SECTION 1001. Payment of Principal (and Premium, if any) and Interest........ 49
SECTION 1002. Maintenance of Office or Agency................................ 49
SECTION 1003. Money for Securities Payments to Be Held in Trust.............. 50
SECTION 1004. Existence...................................................... 51
SECTION 1005. Maintenance of Properties...................................... 51
SECTION 1006. Insurance...................................................... 52
SECTION 1007. Payment of Taxes and Other Claims.............................. 52
SECTION 1008. Statement as to Compliance..................................... 52
SECTION 1009. Additional Amounts............................................. 52
SECTION 1010. Waiver of Certain Covenants.................................... 53
SECTION 1011. Statement by Officers as to Default............................ 53
SECTION 1012. Calculation of Original Issue Discount......................... 53
ARTICLE ELEVEN REDEMPTION OF SECURITIES........................................ 53
SECTION 1101. Applicability of Article....................................... 53
SECTION 1102. Election to Redeem; Notice to Trustee.......................... 53
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.............. 54
SECTION 1104. Notice of Redemption........................................... 54
SECTION 1105. Deposit of Redemption Price.................................... 55
SECTION 1106. Securities Payable on Redemption Date.......................... 55
SECTION 1107. Securities Redeemed in Part.................................... 56
ARTICLE TWELVE REPAYMENT AT THE OPTION OF HOLDERS.............................. 56
SECTION 1201. Applicability of Article....................................... 56
SECTION 1202. Repayment of Securities........................................ 56
SECTION 1203. Exercise of Option............................................. 57
</TABLE>
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<TABLE>
<S> <C>
SECTION 1204. When Securities Presented for Repayment Become Due and Payable.............. 57
SECTION 1205. Securities Repaid in Part................................................... 58
ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE........................................... 58
SECTION 1301. Applicability of Article; Company's Option to Effect Defeasance or
Covenant Defeasance..................................................................... 58
SECTION 1302. Defeasance and Discharge.................................................... 59
SECTION 1303. Covenant Defeasance......................................................... 59
SECTION 1304. Conditions to Defeasance or Covenant Defeasance............................. 59
SECTION 1305. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions............................................... 61
</TABLE>
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<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939 (the "TIA"
or "Trust Indenture Act") and this Indenture, dated as of April 14, 1998.
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C> <C>
(S) 310 (a)(1)...........................................607
(a)(2)...........................................607
(b)..............................................607, 608
(S) 312 (c)..............................................701
(S) 313 (a)..............................................702
(c)..............................................702
(S) 314 (a)..............................................703
(a)(4)...........................................1006
(c)(1)...........................................102
(c)(2)...........................................102
(e)..............................................102
(S) 315 (b)..............................................601
(S) 316 (a) (last sentence)..............................101 ("Outstanding")
(a)(1)(A)........................................502, 512
(a)(1)(B)........................................513
(b)..............................................508
(S) 317 (a)(1)...........................................503
(a)(2)...........................................504
(S) 318 (a)..............................................111
(c)..............................................111
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of this Indenture.
Attention should also be directed to Section 318(c) of the Trust
Indenture Act, which provides that the provisions of Sections 310 to and
including 317 of the Trust Indenture Act are a part of and govern every
qualified indenture, whether or not physically contained therein.
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<PAGE>
Indenture (this "Indenture"), dated as of April 14, 1998, by and
between NVR, Inc., a Virginia corporation (the "Company") and The Bank of New
-------
York, a New York banking corporation, as Trustee hereunder (the "Trustee"),
-------
having its Corporate Trust Office (as defined below) at 101 Barclay Street,
Floor 21 West, New York, New York 10286.
RECITALS
The Company deems it necessary to issue from time to time for its
lawful purposes senior debt securities (the "Securities") evidencing its
unsecured senior indebtedness, and has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of the
Securities, unlimited as to principal amount, to bear interest at the rates or
formulas, to mature at such times and to have such other provisions as shall be
fixed for such Securities as hereinafter provided.
This Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, that are deemed to be incorporated into this Indenture and
shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture, except
-----------
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them therein,
and the terms "cash transaction" and "self-liquidating paper," as used in TIA
Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the TIA;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Three, Article Five,
Article Six and Article Ten, are defined in those Articles. In addition, the
following terms have the respective meanings indicated, except as otherwise
provided in any applicable supplemental indenture with respect to a series of
Securities issuable thereunder.
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<PAGE>
"Act," when used with respect to any Holder, has the meaning specified
---
in Section 104.
"Additional Amounts" means any additional amounts which are required
------------------
by a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Company in respect of certain taxes,
assessments or other governmental charges imposed on certain Holders and which
are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
--------------------
act on behalf of the Trustee to authenticate Securities of one or more series.
"Authorized Newspaper" means a newspaper, printed in the English
--------------------
language or in an official language of the place of publication, customarily
published on each day that is a Business Day in the place of publication,
whether or not published on days that are Legal Holidays in the place of
publication, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any day that is a Business Day in the place of publication.
"Bankruptcy Law" has the meaning specified in Section 501.
--------------
"Bearer Security" means any Security established pursuant to Section
---------------
201 which is payable to bearer.
"Board of Directors" means the board of directors of the Company or
------------------
any committee of that board duly authorized to act hereunder, as the case may
be.
"Board Resolution" means a copy of a resolution of the Company,
----------------
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment or any
------------
other location referred to in this Indenture or in the Securities, means, unless
otherwise specified with respect to any Securities pursuant to Section 301, any
day, other than a Saturday, Sunday or other day on which banking institutions in
that Place of Payment or location are authorized or required by law, regulation
or executive order to close.
"Capital Stock" means with respect to any Person, any and all shares,
-------------
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether now outstanding or
issued after the Closing Date, including, without limitation, all common stock
and preferred stock.
"CEDEL" means Central de Livraison de Valeurs Mobilieres, S.A., or its
-----
successor.
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<PAGE>
"Commission" means the U.S. Securities and Exchange Commission, as
----------
from time to time constituted, created under the Exchange Act, or, if at any
time after execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.
"Company" means the Person named as the "Company" in the first
-------
paragraph of this Indenture until a successor Company shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Company.
"Company Request" and "Company Order" mean, respectively, a written
--------------- -------------
request or order signed in the name of and on behalf of the Company by its
Chairman of the Board, the President or a Vice President, and by its Chief
Financial Officer, Treasurer or an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Conversion Event" means the cessation of use of (i) a Foreign
----------------
Currency both by the government of the country or confederation that issued such
currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii) the
ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Union or (iii) any
currency unit (or composite currency) other than the ECU for the purposes for
which it was established.
"Corporate Trust Office" means the principal corporate trust office
----------------------
of the Trustee at which, at any particular time, its corporate trust business
shall be administered principally, which office at the date hereof is located at
101 Barclay Street, Floor 21 West, New York, New York 10286, except for purposes
of Section 1002, such term shall mean the office or agency of The Bank of New
York, London Branch.
"corporation" includes corporations, limited liability companies,
-----------
partnerships, associations, companies and business and real estate investment
trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
------
"Custodian" has the meaning specified in Section 501.
---------
"Debt" or "Indebtedness" of the Company or any Subsidiary means any
---- ------------
indebtedness of the Company or any Subsidiary, whether or not contingent, in
respect of (i) borrowed money or evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness secured by any mortgage, pledge, lien,
charge, encumbrance or any security interest existing on property owned by the
Company or any Subsidiary, (iii) letters of credit or amounts representing the
balance deferred and unpaid of the purchase price of any property except any
such balance that constitutes an accrued expense or trade payable or (iv) any
lease of property by the Company or any Subsidiary as lessee which is reflected
on the Company's consolidated balance sheet as a capitalized lease in accordance
with GAAP, in the case of items of indebtedness under (i) through (iii) above to
the extent that any such items (other than letters of credit) would appear as a
liability on the Company's consolidated balance sheet in accordance with GAAP,
and also includes, to the extent not otherwise included, any obligation by the
Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or
otherwise (other than for purposes of collection in the ordinary course of
business), indebtedness of another person (other than the Company or any
Subsidiary) (it being understood that "Debt" shall be deemed to be incurred by
the Company and its Subsidiaries on a consolidated basis whenever the Company
and its Subsidiaries on a consolidated basis shall create, assume, guarantee or
otherwise become liable in respect thereof; Debt of a Subsidiary of the Company
existing prior to the time it became a Subsidiary of the Company shall be deemed
to be incurred upon such Subsidiary's becoming a Subsidiary of the Company; and
Debt of a Person existing prior to a merger or consolidation of such Person with
the Company or any Subsidiary of the Company in which such
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<PAGE>
Person is the successor of the Company or such Subsidiary shall be deemed to be
incurred upon the consummation of such merger or consolidation; provided,
--------
however, that the term "Debt" shall not include any indebtedness that has been
- -------
the subject of an "in substance" defeasance in accordance with GAAP.
"Defaulted Interest" has the meaning specified in Section 307.
------------------
"DTC" means The Depository Trust Company for so long as it shall be a
---
clearing agency registered under the Exchange Act, or such successor as the
Company shall designate from time to time in an Officer's Certificate delivered
to the Trustee.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
------ -
or currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"ECU" means European Currency Units as defined and revised from time
---
to time by the Council of the European Community.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
---------
Office, or its successor as operator of the Euroclear System.
"European Community" means the European Economic Community.
------------------
"European Monetary System" means the European Monetary System
------------------------
established by the Resolution of December 5, 1978 of the Council of the European
Community.
"European Union" means the European Community, the European Coal and
--------------
Steel Community, and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Article Five.
----------------
"Exchange Act" means the Securities Exchange Act of 1934 and any
------------
successor statute thereto, in each case as amended from time to time, and the
rules and regulations of the Commission thereunder.
"Foreign Currency" means any currency, currency unit or composite
----------------
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"GAAP" means generally accepted accounting principles, as in effect
----
from time to time, as used in the United States applied on a consistent basis;
provided that, solely for purposes of any calculation required by the financial
- --------
covenants contained herein, "GAAP" shall mean generally accepted accounting
principles as used in the United States on the date hereof, applied on a
consistent basis.
"Government Obligations" means securities which are (i) direct
----------------------
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the foreign
currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof,
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<PAGE>
and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository 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 depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
------
whose name such Security is registered in the Security Register and, in the case
of a Bearer Security, the bearer thereof and, when used with respect to any
coupon, shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
---------
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 30l; provided, however, that, if at any time more than
-------- -------
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
---------
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the particular series of Securities for which such Person is Trustee established
as contemplated by Section 331, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that
----------------
the principal amount thereof payable at Stated Maturity may be more or less than
the principal face amount thereof at original issuance.
"interest" when used with respect to an Original Issue Discount
--------
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security which
provides for the payment of Additional Amounts pursuant to Section 1007,
includes such Additional Amounts.
"Interest Payment Date" when used with respect to any Security, means
---------------------
the Stated Maturity of an installment of interest on such Security.
"Legal Holiday" means a day that is not a Business Day.
-------------
"Maturity," when used with respect to any Security, means the date on
--------
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption or repurchase, notice of
option to elect repayment or otherwise, and includes the Redemption Date.
"Officers' Certificate" means a certificate signed by the Chairman of
---------------------
the Board of Directors, the President or a Vice President and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
------------------
counsel for the Company or an employee of the Company.
-6-
<PAGE>
"Original Issue Discount Security" means any Security which provides
--------------------------------
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the
-----------
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
------
(i) Securities theretofore canceled by the Trustee or the Security
Registrar or delivered to the Trustee or Security Registrar for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such Securities
and any coupons appertaining thereto, provided that, if such Securities are to
--------
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1302 and
1303, with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article Thirteen; and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, (i) the
principal amount of an Original Issue Discount Security that may be counted in
making such determination or calculation and that shall be deemed to be
Outstanding for such purpose shall be equal to the amount of principal thereof
that would be (or shall have been declared to be) due and payable, at the time
of such determination or calculation, upon a declaration of acceleration of the
maturity thereof pursuant to Section 502, (ii) the principal amount of any
Security denominated in a Foreign Currency that may be counted in making such
determination or calculation and that shall be deemed Outstanding for such
purpose shall be equal to the Dollar equivalent, determined pursuant to Section
301 as of the date such Security is originally issued by the Company, of the
principal amount (or, in the case of an Original Issue Discount Security, the
Dollar equivalent as of such date of original issuance of the amount determined
as provided in clause (i) above) of such Security, (iii) the principal amount of
any Indexed Security that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the principal face amount of such Indexed Security at original issuance,
unless otherwise provided with respect to such Security pursuant to Section 301,
and (iv) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in making such determination or
calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
-7-
<PAGE>
"Paying Agent" means any Person authorized by the Company to pay the
------------
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"Person" means any individual, corporation, partnership, limited
------
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, real estate investment trust or government or any
agency or political subdivision thereof.
"Place of Payment" when used with respect to any Security, means the
----------------
place or places where the principal of (and premium, if any) and interest on
such Securities are payable as specified as contemplated by Sections 301 and
1002.
"Predecessor Security" of any particular Security means every previous
--------------------
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Recourse Indebtedness" means Debt other than Secured Debt as to which
---------------------
the liability of the obligor thereon is limited to its interest in the
collateral securing such Secured Debt; provided that no Debt shall constitute
--------
Recourse Indebtedness solely by reason of provisions therein for imposition of
full recourse liability on the obligor for certain wrongful acts, environmental
liabilities, or other customary exclusions from the scope of so-called "non-
recourse" provisions.
"Redemption Date," when used with respect to any Security to be
---------------
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture or such Security.
"Redemption Price," when used with respect to any Security to be
----------------
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture or such Security.
"Registered Security" means any Security which is registered in the
-------------------
Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
-------------------
Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301, whether or not a
Business Day.
"Repayment Date," when used with respect to any Security to be repaid
--------------
at the option of the Holder, means the date fixed for such repayment by or
pursuant to this Indenture.
"Repayment Price," when used with respect to any Security to be repaid
---------------
at the option of the Holder, means the price at which it is to be repaid by or
pursuant to this Indenture.
"Responsible Officer" when used with respect to the Trustee, means any
-------------------
vice president (whether or not designated by a number or a word or words added
before or after the title "vice president"), the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.
-8-
<PAGE>
"Secured Debt" means, without duplication, Debt that is secured by a
------------
mortgage, trust deed, deed of trust, deed to secure Debt, security agreement,
pledge, conditional sale or other title retention agreement, capitalized lease,
or other like agreement granting or conveying security title to or a security
interest in real property or other tangible assets.
"Securities Act" means the Securities Act of 1933 and any successor
--------------
statute thereto, in each case as amended from time to time, and the rules and
regulations of the Commission thereunder.
"Security" has the meaning stated in the first recital of this
--------
Indenture and, more particularly, means any Security or Securities authenticated
and delivered under this Indenture; provided, however, that, if at any time
--------- -------
there is more than one Person acting as Trustee under this Indenture,
"Securities" with respect to the Indenture as to which such Person is Trustee
shall have the meaning stated in the first recital of this Indenture and shall
more particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
----------------- ------------------
meanings specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a "significant
----------------------
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on the
-------------------
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
---------------
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation or a partnership a majority of the
----------
outstanding voting stock or partnership interests, as the case may be, of which
is owned, directly or indirectly, by the Company or by one or more other
Subsidiaries of the Company. For the purposes of this definition, "voting
stock" means stock having voting power for the election of directors, whether at
all times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
------------------- ---
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
-------
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
- -------- -------
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect to any
-------------
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
-9-
<PAGE>
"United States person" means, unless otherwise specified with respect
--------------------
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation or other entity created or
organized in or under the laws of the United States, or an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source.
"Yield to Maturity" means the yield to maturity, computed at the time
-----------------
of issuance of a Security (or, if applicable, at the most recent redetermination
of interest on such Security) and as set forth in such Security in accordance
with generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions. Upon any
------------------------------------
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
delivered pursuant to Section 1011) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable the
individual to express an informed opinion as to whether or not such condition or
covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case
--------------------------------------
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion as to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
-10-
<PAGE>
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders. (a) Any request, demand,
---------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders of the Outstanding Securities of
all series or one or more series, as the case may be, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and (subject to Section 602) conclusive in favor of the
Trustee and the Company and any agent of the Trustee or the Company, if made in
the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient. Subject to
Article Six, the execution of any instrument by a Holder or his agent may be
proved in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee.
(c) The ownership of Registered Securities shall be proved by the
Security Register.
(d) The ownership of Bearer Securities may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in
-11-
<PAGE>
connection therewith and not later than the date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on such record
date shall be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of Outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Outstanding Securities
shall be computed as of such record date; provided that no such authorization,
--------
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than eleven months after the record date.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Authenticating Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, etc., to Trustee and Company. Any request,
-------------------------------------
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
Indenture or at any other address previously furnished in writing to the Trustee
by the Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture
--------------------------
provides for notice of any event to Holders of Registered Securities by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each such Holder affected by such event, at his address as
it appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Holders of Registered Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders of Registered Securities or the sufficiency of any
notice to Holders of Bearer Securities given as provided herein. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given if published in an Authorized Newspaper in The City
of New York and in such other city or cities as may be specified in such
Securities on a Business Day, such publication to be not later than the latest
date, and not earlier
-12-
<PAGE>
than the earliest date, prescribed for the giving of such notice. Any such
notice shall be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first such publication.
If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents. The Article
----------------------------------------
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 108. Successors and Assigns. All covenants and agreements in
----------------------
this Indenture by the Company shall be binding on their successors and assigns,
whether so expressed or not.
SECTION 109. Separability Clause. In case any provision in this
-------------------
Indenture or in any Security or coupon shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture. Nothing in this Indenture, in
---------------------
the Securities or coupons, express or implied, shall give to any Person, other
than the Parties hereto, any Security Registrar, any Paying Agent, any
Authenticating Agent and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. No Personal Liability. No recourse under or upon any
---------------------
obligation, covenant or agreement contained in this Indenture, in any Security
or coupon appertaining thereto, or because of any indebtedness evidenced
thereby, shall be had against any promoter, as such, or against any past,
present or future shareholder, officer or director, as such, of the Company or
of any successor, either directly or through the Company or any successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders thereof and as part of the consideration for the issue
of the Securities.
SECTION 112. Governing Law. This Indenture and the Securities and
-------------
coupons shall be governed by and construed in accordance with the internal laws
of the State of New York. This Indenture is subject to the provisions of the
TIA that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
-13-
<PAGE>
SECTION 113. Legal Holidays. In any case where any Interest Payment
--------------
Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date, Redemption Date, Repayment Date or sinking fund payment date, or
at the Stated Maturity or Maturity, provided that no interest shall accrue on
--------
the amount so payable for the period from and after such Interest Payment Date,
Redemption Date, Repayment Date, sinking fund payment date, Stated Maturity or
Maturity, as the case may be.
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities, if any,
-------------------
of each series and the Bearer Securities, if any, of each series and related
coupons shall be in substantially the forms as shall be established in one or
more indentures supplemental hereto or approved from time to time by or pursuant
to a Board Resolution in accordance with this Indenture, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed
or engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced by
their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication. Subject
-----------------------------------------------
to Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:_________________ THE BANK OF NEW YORK, as Trustee
By:__________________________________
Authorized Signatory
SECTION 203. Securities Issuable in Global Form. If Securities of or
----------------------------------
within a series are issuable in global form, as specified as contemplated by
Section 301, then, notwithstanding clause (8) of Section 301 and the provisions
of Section 302, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby
-14-
<PAGE>
may from time to time be increased or decreased to reflect exchanges. Any
endorsement of a Security in global form to reflect the amount, or any increase
or decrease in the amount, of Outstanding Securities represented thereby shall
be made by the Trustee in such manner and upon instructions given by such Person
or Persons as shall be specified therein or in the Company Order to be delivered
to the Trustee pursuant to Section 303 or 304. Subject to the provisions of
Section 303 and, if applicable, Section 304, the Trustee shall deliver and
redeliver any Security in permanent global form in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of (and premium,
if any) and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (15) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(1) the title of the Securities of the series (which shall distinguish
the Securities of such series from all other series of Securities);
(2) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906, 1107 or 1305);
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(3) the date or dates, or the method by which such date or dates will
be determined, on which the principal of the Securities of the series shall be
payable;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest Payment
Dates on which such interest will be payable and the Regular Record Date, if
any, for the interest payable on any Registered Security on any Interest Payment
Date, or the method by which such date shall be determined, and the basis upon
which interest shall be calculated if other than that of a 360-day year of
twelve 30-day months;
(5) the place or places, if any, other than or in addition to the
Borough of Manhattan, the City of New York, where any principal of (and premium)
and interest payable in respect of Securities of the series shall be payable,
any Registered Securities of the series may be surrendered for registration of
transfer, exchange or conversion and notices or demands to or upon the Company
in respect of the Securities of the series and this Indenture may be served;
(6) the period or periods within which, the price or prices
(including, if any) at which, the currency or currencies, currency unit or units
or composite currency or currencies in which, and other terms and conditions
upon which Securities of the series may be redeemed, in whole or in part, at the
option of the Company, if the Company is to have the option;
(7) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series pursuant to any provision or at the option of
a Holder thereof, and the period or periods within which or the date or dates on
which, the price or prices at which, the currency or currencies, currency unit
or units or composite currency or currencies in which, and other terms and
conditions upon which Securities of the series shall be redeemed, repaid or
purchased (including without limitation whether, and the extent to which, the
premium shall be payable in connection therewith), in whole or in part, pursuant
to such obligation.
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Registered Securities of the series
shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer Securities of the series shall
be issuable;
(9) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or,
if applicable, the portion of the principal amount of Securities of the series
that is convertible in accordance with the provisions of this Indenture, or the
method by which such portion shall be determined;
(11) if other than Dollars, the Foreign Currency or Currencies in
which payment of the principal of (and premium, if any) or interest on the
Securities of the series shall be payable or in which the Securities of the
series shall be denominated;
(12) whether the amount of payments of principal of (and premium, if
any) or interest, if any, on the Securities of the series may be determined with
reference to an index, formula or other method (which index, formula or method
may be based, without limitation, on one or more currencies, currency units,
composite currencies, commodities, equity indices or other indices), and the
manner in which such amounts shall be determined;
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(13) whether the principal of (and premium, if any) or interest on the
Securities of the series are to be payable, at the election of the Company, or a
Holder thereof, in a currency or currencies, currency unit or units or composite
currency or currencies other than that in which such Securities are denominated
or stated to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made, and the time and manner of,
and identity of the exchange rate agent with responsibility for, determining the
exchange rate between the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are denominated or
stated to be payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are to be so payable;
(14) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be specified;
(15) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to Securities of the series,
whether or not such Events of Default or covenants are consistent with the
Events of Default or covenants set forth herein;
(16) if the Securities are to be issued other than as Registered
Securities in definitive form, whether Securities of the series are to be
issuable as Registered Securities, Bearer Securities (with or without coupons)
or both, any restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of the series may be
exchanged for Registered Securities of the series and vice versa (if permitted
by applicable laws and regulations), whether any Securities of the series are to
be issuable initially in temporary global form and whether any Securities of the
series are to be issuable in permanent global form with or without coupons and,
if so, whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Securities of such series and of like
tenor of any authorized form and denomination and the circumstances under which
any such exchanges may occur, if other than in the manner provided in Section
305, and, if Registered Securities of the series are to be issuable as a global
Security, the identity of the depositary for such series;
(17) the date as of which any Bearer Securities of the series and any
temporary global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first Security
of the series to be issued;
(18) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, the manner in which, or the Person
to whom, any interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the manner in
which, any interest payable on a temporary global Security on an Interest
Payment Date will be paid if other than in the manner provided in Section 304;
(19) the applicability, if any, of Sections 1302 and/or 1303 to the
Securities of the series and any provisions in modification of, in addition to
or in lieu of any of the provisions of Article Thirteen;
(20) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions;
(21) if the Securities of the series are to be issued upon the
exercise of warrants, the time, manner and place for such Securities to be
authenticated and delivered;
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(22) whether and under what circumstances the Company will pay
Additional Amounts as contemplated by Section 1009 on the Securities of the
series to any Holder who is not a United States person (including any
modification to the definition of such term) in respect of any tax, assessment
or governmental charge and, if so, whether the Company will have the option to
redeem such Securities rather than pay such Additional Amounts (and the terms of
any such option);
(23) whether and to what extent the Securities of the series are to be
guaranteed by one or more of the Subsidiaries of the Company or other Persons;
and
(24) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company on behalf of the Company and delivered to the Trustee
at or prior to the delivery of the Officers' Certificate setting forth the terms
of the Securities of such series.
SECTION 302. Denominations. The Securities of each series shall be
-------------
issuable in such denominations as shall be specified as contemplated by Section
301. With respect to Securities of any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series, other than Registered Securities issued in
global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in a denomination of
$5,000.
SECTION 303. Execution, Authentication, Delivery and Dating. The
----------------------------------------------
Securities and any coupons appertaining thereto shall be executed by the
Company's Chairman of the Board, its President or one of its Senior Vice
Presidents, and its Chief Financial Officer or Controller. The signature of any
of these officers on the Securities and coupons may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
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in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
----------------
that, unless otherwise specified with respect to any series of
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Securities pursuant to Section 301, a Bearer Security may be delivered in
connection with its original issuance only if the Person entitled to receive
such Bearer Security shall have furnished a certificate to Euroclear or CEDEL,
as the case may be, in the form set forth in Exhibit A-1 to this Indenture or
such other certificate as may be specified with respect to any series of
Securities pursuant to Section 301, dated no earlier than 15 days prior to the
earlier of the date on which such Bearer Security is delivered and the date on
which any temporary Security first becomes exchangeable for such Bearer Security
in accordance with the terms of such temporary Security and this Indenture. If
any Security shall be represented by a permanent global Bearer Security, then,
for purposes of this Section and Section 304, the notation of a beneficial
owner's interest therein upon original issuance of such Security or upon
exchange of a portion of a temporary global Security shall be deemed to be
delivery in connection with its original issuance of such beneficial owner's
interest in such permanent global Security. Except as permitted by Section 306,
the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and canceled.
If all the Securities of any series are not to be issued at one time
and if the Board Resolution or supplemental indenture establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate or formula, maturity
date, date of issuance and date from which interest shall accrue. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to TIA Section 315(a) through 315(d)) shall be
fully protected in relying upon,
(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and delivered by
the Company to the Trustee for authentication in accordance with this Indenture,
authenticated and delivered by the Trustee in accordance with this Indenture and
issued by the Company in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute legal, valid and binding obligations of
the Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles; and
(ii) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities have
been complied with and that, to the best of the knowledge of the signers of such
certificate, that no Event of Default with respect to any of the Securities
shall have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 301 or a Company Order, or an Opinion
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of Counsel or an Officers' Certificate otherwise required pursuant to the
preceding paragraph at the time of issuance of each Security of such series, but
such order, opinion and certificates, with appropriate modifications to cover
such future issuances, shall be delivered at or before the time of issuance of
the first Security of such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 301.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 304. Temporary Securities. (a) Pending the preparation of
--------------------
definitive Securities of any series, the Company may execute, and upon Company
Order, the Trustee shall authenticate and deliver, temporary Securities which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, in registered form, or, if
authorized, in bearer form with one or more coupons or without coupons, and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities. In the case of Securities of any series,
such temporary Securities may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with Section 304(b) or as otherwise provided in or
pursuant to a Board Resolution), if temporary Securities of any series are
issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security shall be
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delivered in exchange for a temporary Registered Security; and provided further
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that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 303.
Until so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.
(b) Unless otherwise provided in or pursuant to a Board Resolution,
this Section 304(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of The Depository Trust Company.
If any such temporary Security is issued in global form, then such temporary
global Security shall, unless otherwise provided therein, be delivered to the
London office of a depositary or common depositary (the "Common Depositary"),
for
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the benefit of Euroclear and CEDEL, for credit to the respective accounts of
the beneficial owners of such Securities (or to such other accounts as they may
direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 301, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
--------
however, that, unless otherwise specified in such temporary global Security,
- -------
upon such presentation by the Common Depositary, such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of such temporary global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 301; and provided further that definitive Bearer Securities
-------- -------
shall be delivered in exchange for a portion of a temporary global Security only
in compliance with the requirements of Section 303.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive
Securities in bearer form to be delivered in exchange for any portion of a
temporary global Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear and CEDEL on
such Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee
of a certificate or certificates in the form set forth in Exhibit A-2 to this
Indenture (or in such other forms as may be established pursuant to Section
301), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
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earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit A-1 to this Indenture (or in such
other forms as may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
SECTION 305. Registration, Registration of Transfer and Exchange. The
---------------------------------------------------
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment being herein sometimes
referred to collectively as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby initially appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers of Registered
Securities on such Security Register as herein provided. In the event that the
Trustee shall cease to be Security Registrar, it shall have the right to examine
the Security Register at all reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by Section 301, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and
(subject to Section 303) set forth in the applicable Officers' Certificate, or
in any indenture supplemental hereto, delivered as contemplated by Section 301,
at the option of the Holder, Bearer Securities of any series may be exchanged
for Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted
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exchange may be effected if the Bearer Securities are accompanied by payment in
funds acceptable to the Company in an amount equal to the face amount of such
missing coupon or coupons, or the surrender of such missing coupon or coupons
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in Section 1002,
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interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is "DTC," then, unless the terms of such global Security expressly
permit such global Security to be exchanged in whole or in part for definitive
Securities, a global Security may be transferred, in whole but not in part, only
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for
such global Security selected or approved by the Company or to a nominee of such
successor to DTC. If at any time DTC notifies the Company that it is unwilling
or unable to continue as depositary for the applicable global Security or
Securities or if at any time DTC ceases to be a clearing agency registered under
the Exchange Act if so required by applicable law or regulation, the Company
shall appoint a successor depositary with respect to such global Security or
Securities. If (x) a successor depositary for such global Security or
Securities is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such unwillingness, inability or
ineligibility, (y) an Event of Default has occurred and is continuing and the
beneficial owners representing a majority in principal amount of the applicable
series of Securities represented by such global Security or Securities advise
DTC to cease acting as depositary for such global Security or Securities or (z)
the Company, in its sole discretion, determines at any time that all Outstanding
Securities (but not less than all) of any series issued or issuable in the form
of one or more global Securities shall no longer be represented by such global
Security or Securities, then the Company shall execute, and the Trustee shall
authenticate and deliver definitive Securities of like series, rank, tenor and
terms in definitive form in an aggregate principal amount equal to the principal
amount of such global Security or Securities. If any beneficial owner of an
interest in a permanent global Security is otherwise entitled to exchange such
interest for Securities of such series and of like tenor and principal amount of
another authorized form and denomination, as specified as contemplated by
Section 301 and provided that any applicable notice provided in the permanent
global Security shall have been given, then without unnecessary delay but in any
event not later than the earliest date on which such interest may be so
exchanged, the Company shall execute, and the Trustee shall authenticate and
deliver definitive Securities in aggregate principal amount equal to the
principal amount of such beneficial owner's interest in such permanent global
Security. On or after the earliest date on which such interests may be so
exchanged, such permanent global Security shall be surrendered for exchange by
DTC or such other depositary as shall be specified in the Company Order with
respect thereto to the Trustee,
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as the Company's agent for such purpose; provided, however, that no such
-------- -------
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities to be redeemed and ending on the relevant
Redemption Date if the Security for which exchange is requested may be among
those selected for redemption; and provided further that no Bearer Security
-------- -------
delivered in exchange for a portion of a permanent global Security shall be
mailed or otherwise delivered to any location in the United States. If a
Registered Security is issued in exchange for any portion of a permanent global
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, interest or Defaulted Interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any transfer.
The Company, or the Trustee, as applicable, shall not be required (i)
to issue, register the transfer of or exchange any Security if such Security may
be among those selected for redemption during a period beginning at the opening
of business 15 days before selection of the Securities to be redeemed under
Section 1103 and ending at the close of business on (A) if such Securities are
issuable only as Registered Securities, the day of the mailing of the relevant
notice of redemption and (B) if such Securities are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication, the mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Registered Security so selected
for redemption in whole or in part, except, in the case of any Registered
Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except that
such a Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
--------
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If
------------------------------------------------
any mutilated Security or a Security with a mutilated coupon appertaining to it
is surrendered to the Trustee or the Company, together with, in proper cases,
such security or indemnity as may be required by the Company or the Trustee to
save each of them or any agent of either of them harmless, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and principal amount, containing identical terms
and provisions and bearing a
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number not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon, and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the absence
of notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of the principal of (and premium, if
--------- -------
any) and interest on Bearer Securities shall, except as otherwise provided in
Section 1002, be payable only at an office or agency located outside the United
States and, unless otherwise specified as contemplated by Section 301, any
interest on Bearer Securities shall be payable only upon presentation and
surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved. Except
----------------------------------------------
as otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 301, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 1002; provided, however, that, except as
-------- -------
otherwise provided with respect to any series of Securities, or as provided
below with respect to global Securities, each installment of interest on any
Registered Security may at the Company's option be paid by (i) mailing a check
for such interest, payable to or upon the written order of the Person entitled
thereto pursuant to Section 308, to the
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<PAGE>
address of such Person as it appears on the Security Register or (ii) transfer
to an account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest may be made, in the case of
a Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof and that all payments with respect to such permanent global
Security shall be made by wire transfer of immediately available funds.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on a
special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each Registered
Security of such series and the date of the proposed payment (which shall not be
less than 20 days after such notice is received by the Trustee), and at the same
time the Company shall deposit with the Trustee an amount of money in the
currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series)
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
on or prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of Registered
Securities of such series at his address as it appears in the Security Register
not less than 10 days prior to such Special Record Date. The Trustee may, in
its discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper in each place of
payment, but such publications shall not be a
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<PAGE>
condition precedent to the establishment of such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be paid
to the Persons in whose names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following clause (2). In case a Bearer Security of any series is surrendered at
the office or agency in a Place of Payment for such series in exchange for a
Registered Security of such series after the close of business at such office or
agency on any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
proposed date of payment and Defaulted Interest will not be payable on such
proposed date of payment in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
---------------------
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium, if any), and (subject to
Sections 305 and 307) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
none of the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the Holder of any Bearer Security and the Holder of any
coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and none of the
Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company, or the Trustee, from giving effect to any written certification or
other authorization furnished by any depositary, as a Holder, with respect to
such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
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<PAGE>
SECTION 309. Cancellation. All Securities and coupons surrendered
------------
for payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons and Securities and coupons surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. Canceled Securities and coupons held by
the Trustee shall be returned to the Company.
SECTION 310. Computation of Interest. Except as otherwise specified
-----------------------
as contemplated by Section 301 with respect to Securities of any series,
interest on the Securities of each series shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
SECTION 311. CUSIP Numbers. The Company in issuing the Securities
-------------
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
- --------
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall upon Company Request cease to be of further effect with respect to any
series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1007), and the Trustee, upon receipt of a
Company Order, and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series when,
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (i) coupons
appertaining to Bearer Securities surrendered for exchange for Registered
Securities and maturing after such exchange, whose surrender is not required or
has been waived as provided in Section 305, (ii) Securities and coupons of such
series which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 306, (iii) coupons appertaining to Securities called
for redemption and maturing after the relevant Redemption Date, whose surrender
has been waived as provided in Section 1106, and (iv) Securities and coupons of
such series for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter
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<PAGE>
repaid to the Company or discharged from such trust, as provided in Section
1003) have been delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or
(ii) below, any coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable, sufficient to pay and discharge the entire indebtedness on such
Securities and such coupons not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest to the date of
such deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture as to
such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive
such satisfaction and discharge.
SECTION 402. Application of Trust Funds. Subject to the provisions
--------------------------
of the last paragraph of Section 1003, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in accordance
with the provisions of the Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any), and any interest for
whose payment such money has deposited with or received by the Trustee, but such
money need not be segregated from other funds except to the extent required by
law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. Except as otherwise provided with
-----------------
respect to any series of Securities, "Event of Default," wherever used herein
with respect to any particular series of Securities, means any one of the
following events (whatever the reason for such Event of Default and
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whether or not it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body) unless such event
is specifically deleted or modified in or pursuant to the supplemental
indenture, Board Resolution or Officers' Certificate establishing the terms of
such series pursuant to this Indenture:
(1) default in the payment of any interest on any Security of that
series or of any coupon appertaining thereto, when such interest or coupon
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series when it becomes due and payable at its Maturity;
or
(3) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture with respect to any Security of that series
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with), 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 the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(4) a default under any evidence of Recourse Indebtedness of the
Company or under any mortgage, indenture or other instrument of the Company
(including a default with respect to Securities of any series other than that
series) under which there may be issued or by which there may be secured any
Recourse Indebtedness of the Company (or by any Subsidiary of the Company, the
repayment of which the Company has guaranteed or for which the Company is
directly responsible or liable as obligor or guarantor), whether such Recourse
Indebtedness now exists or shall hereafter be created, which default shall
constitute a failure to pay an aggregate principal amount exceeding $5,000,000
of Recourse Indebtedness of any or all such Persons when due and payable after
the expiration of any applicable grace period with respect thereto and shall
have resulted in such Recourse Indebtedness in an aggregate principal amount
exceeding $5,000,000 becoming or being declared due and payable before the date
on which it would otherwise have become due and payable, without such Recourse
Indebtedness having been discharged; or
(5) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
or
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
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(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of either of its
property, or
(C) orders the liquidation of the Company or any Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 90 days; or
(7) the guarantee of any Security by a guarantor thereof ceases to
be, or is asserted in writing by the Company or any Guarantor not to be, in full
force and effect or enforceable in accordance with its terms, or
(8) any other Event of Default provided with respect to Securities of
that series.
As used in this Section 501, the term "Bankruptcy Law" means Title 11,
U.S. Code, or any similar Federal or State law for the relief of debtors and the
term "Custodian" means any receiver, trustee, assignee, liquidator or other
similar official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
Except as otherwise provided with respect to any series of Securities, if an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal (or, if any Securities are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal as may be specified in the terms thereof) and premium (if any) of all
the Securities of that series to be due and payable immediately, by a notice in
writing to the Company, (and to the Trustee if given by the Holders), and upon
any such declaration such principal and premium (if any) or specified portion
thereof shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency, currency unit or composite currency in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series):
(A) all overdue installments of interest on all Outstanding
Securities of that series and any related coupons,
(B) the principal of (and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates borne by
or provided for in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate or rates borne by or
provided for in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of (or premium, if any) or interest
on Securities of that series which
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have become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The Company covenants that if:
- -------
(1) default is made in the payment of any installment of interest on
any Security of any series and any related coupon when such interest becomes due
and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security of any series at its Maturity, then the Company will,
upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders
of such Securities of such series and coupons, the whole amount then due and
payable on such Securities and coupons for principal (and premium, if any) and
interest, with interest upon any overdue principal (and premium, if any) and, to
the extent that payment of such interest shall be legally enforceable, upon any
overdue installments of interest, at the rate or rates borne by or provided for
in such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, 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, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company, or any other obligor upon such Securities of such series
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual 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 504. 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 any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(i) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of principal
(and premium, if any) and interest owing and unpaid in respect of the Securities
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
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(ii) 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 of Securities of such series and coupons 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 to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and any predecessor Trustee, their
agents and counsel, and any other amounts due the Trustee or any predecessor
Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities or Coupons. All rights of action and claims under this Indenture or
- ---------------------
any of the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by
------------------------------
the Trustee pursuant to this Article 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 (or premium, if any) or interest, upon
presentation of the Securities or coupons, or both, as the case may be, and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and interest payable,
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 aggregate
amounts due and payable on such Securities and coupons for principal (and
premium, if any) and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the Company or the
Person or Persons entitled thereto.
SECTION 507. Limitation on Suits. No Holder of any Security of any
-------------------
series or any related coupon shall have any right 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:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that series;
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(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series 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;
(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) 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 Securities of that series; it being
understood and intended that no one or more of such 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 of such
Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal
---------------------------------------------------
(Premium, if any) and Interest. Notwithstanding any other provision in this
- ------------------------------
Indenture, the Holder of any Security or coupon shall have the right which is
absolute and unconditional to receive payment of the principal of (and premium,
if any) and (subject to Sections 305 and 307) interest on such Security or
payment of such coupon on the respective due dates expressed in such Security or
coupon (or, in the case of redemption, on the Redemption Date) and to institute
suit for the enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or
----------------------------------
any Holder of a Security or coupon 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 such case, the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored 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.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Securities or coupons 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 511. Delay or Omission Not Waiver. No delay or omission of
----------------------------
the Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article 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 of Securities or coupons, as the
case may be.
SECTION 512. Control by Holders of Securities. The Holders of not
--------------------------------
less than a majority in principal amount of the Outstanding Securities of any
series shall have the right to direct
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the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Securities of such series, provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of such
series not joining therein.
SECTION 513. Waiver of Past Defaults. The Holders of not less than a
-----------------------
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series or any related coupons, or
(2) 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 Security of such series 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 Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The Company
---------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 515. Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of any undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply 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 principal
amount of the Outstanding Securities, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium, if any) or
interest on any Security on or after the respective Stated Maturities expressed
in such Security (or, in the case of redemption, on or after the Redemption
Date).
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the occurrence
------------------
of any default hereunder with respect to the Securities of any series, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
313(c), notice of such default hereunder actually known to a Responsible Officer
of the Trustee, unless such default shall have been cured or waived; provided,
--------
however, that, except in the case of a default in the payment of the principal
- -------
of (or premium, if any) or interest on any Security of such series, or in the
payment of any sinking fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Securities
and coupons of such series; and provided further that in the case of any default
----------------
or breach of the character specified in Section 501(3) with respect to the
Securities and coupons of such series, no such notice to Holders shall be given
until at least 60 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to the Securities
of such series.
SECTION 602. Certain Rights of Trustee. Subject to the provisions of
-------------------------
TIA Section 315(a) through 315(d):
(1) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon or other paper or document (whether in its original or
facsimile form) believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto, to the
Trustee for authentication and delivery pursuant to Section 303 which shall be
sufficiently evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders of Securities of any series or any related coupons pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which might be incurred by it in compliance with such request or
direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be
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entitled to examine the books, records and premises of the Company personally or
by agent or attorney at the sole cost of the Company and shall incur no
liability of any kind by reason of such inquiry or investigation;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying Agent,
-------------------
Security Registrar, Authenticating Agent or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and coupons and, subject to TIA Sections 310(b) and 311, may
otherwise deal with the Company with the same rights it would have if it were
not the Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in trust
-------------------
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company in writing.
SECTION 606. Compensation and Reimbursement. The Company agrees:
------------------------------
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder as agreed with the Company in writing
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
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<PAGE>
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability, claim, damage or expense
(including taxes other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on its own part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(5) or Section 501(6), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (or premium, if any) or interest
on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
----------------------------------------------------
Interests. There shall at all times be a Trustee hereunder which shall be
- ---------
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or the requirements of
Federal, State, Territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor. (a)
-------------------------------------------------
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 609.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition at the expense of the Company any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and the
Company If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the Trustee who is being removed may petition at the expense of the
Company any court of competent jurisdiction for the appointment of a successor
Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any Holder of
a Security who has been a bona fide Holder of a Security for at least six
months, or
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(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at least
six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i) the Company by or
pursuant to a Board Resolution may remove the Trustee and appoint a successor
Trustee with respect to all Securities, or (ii) subject to TIA Section 315(e),
any Holder of a Security who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). If, within one year
after such resignation, removal or incapacity, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
or such appointment, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner hereinafter provided, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
in the manner provided for notices to the Holders of Securities in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (a) In case of
--------------------------------------
the appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee shall execute, acknowledge and deliver to the
Company and the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an
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indenture supplemental hereto, pursuant to Article Nine hereof, wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company, or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Trustee may be merged or converted or
- --------
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities of coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
SECTION 611. Appointment of Authenticating Agent. At any time when
-----------------------------------
any of the Securities remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or
partial redemption or repayment thereof, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Any such
appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer of the Trustee, a copy of which instrument shall be promptly
furnished to the
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<PAGE>
Company. Wherever reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a bank or trust company or corporation organized and doing business and
in good standing under the laws of the United States of America or of any State
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authorities. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:____________________ THE BANK OF NEW YORK, as Trustee
By: _____________________________,
as Authenticating Agent
By: _____________________________,
Authorized Signatory
SECTION 612. Trustee's Application for Instructions from the Company.
-------------------------------------------------------
Any application by the Trustee for written instructions from the Company may, at
the option of the Trustee, set forth in writing any action proposed to be taken
or omitted by the Trustee under this Indenture and the date on and/or after
which such action shall be taken or such omission shall be effective. The
Trustee shall not be liable for any action taken by, or omission of, the Trustee
in accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders. Every
--------------------------------------------
Holder of Securities or coupons, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee. Within 60 days after October 1 of
------------------
each year commencing with the first October 1 after the first issuance of
Securities pursuant to this Indenture, the Trustee shall transmit by mail to all
Holders of Securities as provided in TIA Section 313(c) a brief report dated as
of such October 1 if required by TIA Section 313(a).
SECTION 703. Reports by Company. The Company will:
------------------
(1) deliver to the Trustee and each Holder, within 15 days after the
same are filed with the Commission, copies of all reports and information (or
copies of such portions of any of the foregoing as the Commission may by rules
and regulations prescribe), if any, exclusive of exhibits, which the Company and
any guarantors are required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange Act or pursuant to the immediately following sentence.
So long as any Securities remain outstanding, the Company and any Subsidiary
guarantors 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 or any Subsidiary
guarantors are 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 the Company and any
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Subsidiary guarantors would have been required to file such information with the
Commission were they 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 they would
have been required to include in such quarterly or annual reports, information,
documents or other reports if they had been subject to the requirements of
Section 13 or 15(d) of the Exchange Act. Notwithstanding the foregoing, to the
extent then permitted by federal securities laws or regulations or "no-action"
letters interpreting such laws or regulations, separate financial statements and
other information of any Subsidiary guarantors shall not be required. The
Company and any Subsidiary guarantors shall also comply with the other
provisions of TIA Section 314(a);
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations;
(3) transmit by mail to the Holders of Securities, within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and (2)
of this Section as may be required by rules and regulations prescribed from time
to time by the Commission; and
(4) delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 704. The Company to Furnish Trustee Names and Addresses of
-----------------------------------------------------
Holders. The Company will furnish or cause to be furnished to the Trustee:
- -------
(a) semi-annually, not later than 15 days after the Regular Record
Date for interest for each series of Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities, semi-
annually, upon such dates as are set forth in the Board Resolution or indenture
supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in Writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished, provided, however, that, so long as the Trustee is the Security
-------- -------
Registrar, no such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
-------------------------------------------------------
and Conveyances Permitted Subject to Certain Conditions. Except as otherwise
- -------------------------------------------------------
provided with respect to any series of Securities, the Company may consolidate
with, or sell, lease or convey all or substantially all of its assets to, or
merge with or into any other entity, provided that in any such case, (i) the
Company will be the continuing entity, or the successor entity will be an entity
organized
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and existing under the laws of the United States or a State thereof and such
successor entity expressly assumes the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company by supplemental indenture, complying with Article Nine
hereof, satisfactory to the Trustee, executed and delivered to the Trustee by
such entity and (ii) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result thereof as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or the lapse of time, or both, would become an Event of
Default, shall have occurred and be continuing.
SECTION 802. Rights and Duties of Successor Entity. In case of any
-------------------------------------
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor entity, such successor entity shall succeed to and
be substituted for the Company with the same effect as if it had been named
herein as the Company and the predecessor entity, except in the event of a
lease, shall be relieved of any further obligation under this Indenture and the
Securities. Any such successor entity of the Company thereupon may cause to be
signed, and may issue either in its own name or in the name of the Company any
or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor entity, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor entity thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. Any
--------------------------------------------
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor entity, complies
with the provisions of this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein and
in the Securities contained; or
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(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default are to
be for the benefit of less than all series of Securities, stating that such
Events of Default are expressly being included solely for the benefit of such
series); provided, however, that in respect of any such additional Events of
-------- -------
Default such supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon such default or
may limit the right of the Holders of a majority in aggregate principal amount
of that or those series of Securities to which such additional Events of Default
apply to waive such default; or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of or any premium or
interest on Bearer Securities, to permit Bearer Securities to be issued in
exchange for Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form, provided that any
such action shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series and
any related coupons as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of this
Indenture; or
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 1301, 1302 and 1303;
provided that any such action shall not adversely affect the interests of the
- --------
Holders of Securities of such series and any related coupons or any other series
of Securities in any material respect; or
(11) to make any change that does not adversely affect the legal
rights under this Indenture of any Holder of Debt Securities of any series; or
(12) to add a guarantor of the Securities.
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SECTION 902. Supplemental Indentures with Consent of Holders. With
-----------------------------------------------
the consent of the Holders of not less than a majority in principal amount of
all Outstanding Securities affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
-------- -------
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium, if
any, on) or any installment of principal of or interest on, any Security; or
reduce the principal amount thereof or the rate or amount of interest thereon,
or any premium payable upon the redemption thereof, or change any obligation of
the Company to pay Additional Amounts pursuant to Section 1007 (except as
contemplated by Section 801(1) and permitted by Section 901(1)), or reduce the
amount of the principal of an Original Issue Discount Security that would be due
and payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502 or the amount thereof provable in bankruptcy pursuant to Section
504, or adversely affect any right of repayment at the option of the Holder of
any Security, or change any Place of Payment where, or the currency or
currencies, currency unit or units or composite currency or currencies in which,
any Security or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof, (or, in the case of redemption or repayment at the
option of the Holder, on or after the Redemption Date or the Repayment Date, as
the case may be), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver with respect to such series (or compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or
(3) modify any of the provisions of this Section or Section 513,
except to increase the required percentage to effect such action or to provide
that certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected thereby,
or
(4) release any guarantors from their guarantees of the Securities,
or, except as contemplated in any supplemental indenture, make any change in a
guarantee of a Security that would adversely affect the interests of the
Holders, or
(5) modify the ranking or priority of the Securities.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In executing, or
------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive,
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and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution
---------------------------------
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect; and shall be deemed to include any
provisions of the Trust Indenture Act necessary to effect such conformity.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures. Promptly after the
---------------------------------
execution by the Company and the Trustee of any supplemental indenture pursuant
to the provisions of Section 902, the Company shall give notice thereof to the
Holders of each Outstanding Security affected, in the manner provided for in
Section 106, setting forth in general terms the substance of such supplemental
indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal (and Premium, if any) and
----------------------------------------------
Interest. The Company covenants and agrees for the benefit of the Holders of
- --------
each series of Securities that it will duly and punctually pay the principal of
(and premium, if any) and interest on the Securities of that series in
accordance with the terms of such series of Securities, any coupons appertaining
thereto and this Indenture. Unless otherwise specified as contemplated by
Section 301 with respect to any series of Securities, any interest due on and
any Additional Amounts payable in respect of Bearer Securities on or before
Maturity, other than Additional Amounts, if any, payable as provided in Section
1007 in respect of principal of (or premium, if any, on) such a Security, shall
be payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature. Unless
otherwise specified with respect to Securities of any series pursuant to Section
301, at the option of the Company, all payments of principal may be paid by
check to the registered Holder of the Registered Security or other person
entitled thereto against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of a
-------------------------------
series are issuable only as Registered Securities, the Company shall maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for
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registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served. If Securities of a series are issuable as Bearer Securities, the
Company will maintain: (A) in the Borough of Manhattan, The City of New York, an
office or agency where any Registered Securities of that series may be presented
or surrendered for payment or conversion, where any Registered Securities of
that series may be surrendered for registration of transfer, where Securities of
that series may be surrendered for exchange, where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served and where Bearer Securities of that series and related coupons may
be presented or surrendered for payment or conversion in the circumstances
described in the following paragraph (and not otherwise); (B) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States, an office or agency where Securities
of that series and related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Securities of that
series pursuant to Section 1007) or conversion; provided, however, that if the
-------- -------
Securities of that series are listed on the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent for the Securities of
that series in Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of that series are listed
on such exchange; and (C) subject to any laws or regulations applicable thereto,
in a Place of Payment for that series located outside the United States an
office or agency where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of each 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 Corporate Trust Office of the
Trustee, except that Bearer Securities of that series and the related coupons
may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Bearer Securities of that series pursuant to
Section 1007) or conversion at the offices specified in the Security, in London,
England, and the Company hereby appoint the same as its agent to receive such
respective presentations, surrenders, notices and demands, and the Company
hereby appoint the Trustee its agent to receive all such presentations,
surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that, if
-------- -------
the Securities of a series are payable in Dollars, payment of principal of and
any premium and interest on any Bearer Security (including any Additional
Amounts payable on Securities of such series pursuant to Section 1007) shall be
made at the office of the Company's Paying Agent in the Borough of Manhattan,
The City of New York, if (but only if) payment in Dollars of the full amount of
such principal, premium or interest, as the case may be, at all offices or
agencies outside the United States maintained for the purpose by the Company in
accordance with this Indenture, is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Company may from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all of 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 accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will 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. Unless otherwise specified with
respect to any Securities pursuant to Section 301 with respect to a series of
Securities,
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the Company hereby designates as a Place of Payment for each series of
Securities the office or agency of the Company in the Borough of Manhattan, The
City of New York, and initially appoints the Trustee at its Corporate Trust
Office as Paying Agent in such city and as its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust. If
-------------------------------------------------
the Company shall at any time act as its own Paying Agent with respect to any
series of any Securities and any related coupons, it will, on or before each due
date of the principal of (and premium, if any), or interest on, any of the
Securities of that series, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) sufficient to pay the principal (and premium, if any)
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities and any related coupons, it will, on or before each due
date of the principal of (and premium, if any) or interest on, any Securities of
that series, deposit with a Paying Agent a sum (in the currency or currencies,
currency unit or units or composite currency or currencies described in the
preceding paragraph) sufficient to pay the principal (and premium, if any) or
interest, so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal (and premium, if any) or interest and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest; and
(3) at any time during the continuance of any such default upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
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Except as otherwise provided in the Securities of any series, any
money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium, if any) or
interest on any Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) and interest has become due and
payable shall be paid to the Company upon Company Request or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment of such principal of (and premium, if any) or interest on
any Security, without interest thereon, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; 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 an Authorized
Newspaper, 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, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 1004. Existence. Subject to Article Eight, the Company will
---------
do or cause to be done all things necessary to preserve and keep in full force
and effect the existence, rights and franchises of itself and any guarantor of
the Securities; provided, however, that the Company shall not be required to
-------- -------
preserve any right or franchise if the Board of Directors determines that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and such guarantors taken as a whole and that the loss thereof is
not disadvantageous in any material respect to the Holders; and provided further
-------- -------
that any guarantor may consolidate with, merge into, or sell, convey, transfer,
lease or otherwise dispose of all or part of its property and assets to the
Company or any other guarantor and provided further that nothing contained
-------- -------
herein shall prohibit the substantially concurrent merger involving the Company,
NVR Homes, Inc. and NVR Financial Services, Inc.
SECTION 1005. Maintenance of Properties. The Company will cause all
-------------------------
of the properties of itself and of each Subsidiary used or useful in the conduct
of its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
--------
however, the Company and its Subsidiaries shall not be prevented from
- -------
discontinuing the operation and maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business and not disadvantageous in any material respect to the Holders.
SECTION 1006. Insurance. The Company will, and will cause each of
---------
its Subsidiaries to, keep all of its insurable properties insured against loss
or damage at least equal to their then full insurable value.
SECTION 1007. Payment of Taxes and Other Claims. The Company will
---------------------------------
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all material taxes, assessments and governmental charges levied
or imposed upon it or any Subsidiary or upon the income, profits or property of
the Company or any Subsidiary, and (2) all material lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
-------- -------
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
SECTION 1008. Statement as to Compliance. The Company will deliver
--------------------------
to the Trustee, within 120 days after the end of each fiscal year, a brief
certificate from its principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge
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of the Company's compliance with all conditions and covenants under this
Indenture and, in the event of any noncompliance, specifying such noncompliance
and the nature and status thereof. For purposes of this Section 1008, such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 1009. Additional Amounts. If any Securities of a series
------------------
provide for the payment of Additional Amounts, the Company will pay to the
Holder of any Security of such series or any coupon appertaining thereto
Additional Amounts as may be specified as contemplated by Section 301. Whenever
in this Indenture there is mentioned, in any context except in the case of
Section 502(1), the payment of the principal of or any premium or interest on,
or in respect of, any Security of any series or payment of any related coupon or
the net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established pursuant to Section 301
to the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to such terms and express mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall not
be construed as excluding Additional Amounts in those provisions hereof where
such express mention is not made.
Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such Securities. If the Trustee or any Paying Agent, as the case may be,
shall not so receive the above-mentioned certificate, then the Trustee or such
Paying Agent shall be entitled (i) to assume that no such withholding or
deduction is required with respect to any payment of principal or interest with
respect to any Securities of a series or related coupons until it shall have
received a certificate advising otherwise and (ii) to make all payments of
principal and interest with respect to the Securities of a series or related
coupons without withholding or deductions until otherwise advised. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section or in reliance on the Company's
not furnishing such an Officers' Certificate.
SECTION 1010. Waiver of Certain Covenants. The Company may omit in
---------------------------
any particular instance to comply with any term, provision or condition set
forth in Sections 1004 and 1005, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
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SECTION 1011. Statement by Officers as to Default. The Company shall
-----------------------------------
deliver to the Trustee, as soon as possible and in any event within ten days
after an officer of Company becomes aware of the occurrence of any Event of
Default or an event which, with notice or the lapse of time or both, would
constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or Default and the action which the Company
proposes to take with respect thereto.
SECTION 1012. Calculation of Original Issue Discount. The Company
--------------------------------------
shall file with the Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of original issue discount (including daily
rates and accrual periods) accrued on Outstanding Securities as of the end of
such year and (ii) such other specific information relating to such original
issue discount as may then be relevant under the Internal Revenue Code of 1986,
as amended from time to time.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any series
------------------------
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 or in any indenture supplemental hereto for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election of
-------------------------------------
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
less than all of the Securities of any series, the Company shall, at least 45
days prior to the giving of the notice of redemption in Section 1104 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such Securities
or elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. If
-------------------------------------------------
less than all the Securities of any series issued on the same day with the same
terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities of such series issued on such date with the same
terms not previously called for redemption, by lot or by such other method as
the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
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<PAGE>
SECTION 1104. Notice of Redemption. Notice of redemption shall be
--------------------
given in the manner provided in Section 106, not less than 30 days nor more than
60 days prior to the Redemption Date, unless a shorter period is specified by
the terms of such series established pursuant to Section 301, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall include a description of the
Securities and shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any, and Additional Amounts, if any,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without a
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if any,
will become due and payable upon each such Security, or the portion thereof, to
be redeemed and, if applicable, that interest thereon shall cease to accrue on
and after said date,
(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of the
Redemption Price and accrued interest, if any, or for conversion,
(7) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be accompanied
by all coupons maturing subsequent to the date fixed for redemption or the
amount of any such missing coupon or coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to the Company and
the Trustee for such series and any Paying Agent is furnished,
(8) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities not subject to redemption
on this Redemption Date pursuant to Section 305 or otherwise, the last date, as
determined by the Company, on which such exchanges may be made,
(9) the CUSIP number of such Security, if any, and
(10) if applicable, that a Holder of Securities who desires to convert
Securities for redemption must satisfy the requirements for conversion contained
in such Securities, the then existing conversion price or rate, and the date and
time when the option to convert shall expire.
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<PAGE>
Notice of redemption of Securities to be redeemed shall be given by
the Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1105. Deposit of Redemption Price. At least one Business Day
---------------------------
prior to any Redemption Date, the Company shall deposit with the Trustee or with
a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 1003) an amount of money in the
currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series)
sufficient to pay on the Redemption Date the Redemption Price of, and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date. Notice of
-------------------------------------
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
-------- -------
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further
----------------
that, installments of interest on Registered Securities whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
--------
however, that interest represented by coupons shall be payable only at an office
- -------
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption as a result of the failure by the Company to
fund such redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Security or at
such other rate as may be specified with respect to any series of Securities.
SECTION 1107. Securities Redeemed in Part. Any Registered Security
---------------------------
which is to be redeemed only in part (pursuant to the provisions of this
Article) shall be surrendered at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a
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written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing) and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge a new Security or
Securities of the same series, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1201. Applicability of Article. Repayment of Securities of
------------------------
any series before their Stated Maturity at the option of Holders thereof shall
be made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
301) in accordance with this Article.
SECTION 1202. Repayment of Securities. Securities of any series
-----------------------
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereon accrued to the Repayment Date specified in or pursuant to the terms of
such Securities. The Company covenants that at least one Business Day prior to
the Repayment Date it will deposit with the Trustee or with a Paying Agent (or,
if the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) sufficient to pay the principal
(or, if so provided by the terms of the Securities of any series, a percentage
of the principal) of, and (except if the Repayment Date shall be an Interest
Payment Date) accrued interest on, all the Securities or portions thereof, as
the case may be, to be repaid on such date.
SECTION 1203. Exercise of Option. Securities of any series subject
------------------
to repayment at the option of the Holders thereof will contain an "Option to
Elect Repayment" form on the reverse of such Securities. In order for any
Security to be repaid at the option of the Holder, the Trustee must receive at
the Place of Payment therefor specified in the terms of such Security (or at
such other place or places of which the Company shall from time to time notify
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (1) the Security so providing for such repayment
together with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder's attorney duly authorized in writing)
or (2) a facsimile transmission or a letter from a member of a national
securities exchange, or the National Association of Securities Dealers, Inc.
("NASD"), or a commercial bank or trust company in the United States setting
forth the name of the Holder of the Security, the principal amount of the
Security, the principal amount of the Security to be repaid, the CUSIP number,
if any, or a description of the tenor and terms of the Security, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the Security to be repaid, together with the duly completed form entitled
"Option to Elect Repayment" on the reverse of the Security, will be received by
the Trustee not later than the fifth Business Day after the date of such
facsimile transmission or letter; provided, however, that such facsimile
-------- -------
transmission or letter shall only be effective if such Security and form duly
completed are received by the Trustee by such fifth Business Day. If less than
the entire principal amount of such Security is to be repaid in accordance with
the terms of such Security, the principal amount of such Security to be repaid,
in increments of the minimum denomination for Securities of such series, and the
denomination or denominations of the Security or Securities to be issued to the
Holder for the portion of the principal amount of such Security surrendered that
is not to be repaid, must be specified. The principal amount of any Security
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providing for repayment at the option of the Holder thereof may not be repaid in
part if, following such repayment, the unpaid principal amount of such Security
would be less than the minimum authorized denomination of Securities of the
series of which such Security to be repaid is a part. Except as otherwise may
be provided by the terms of any Security providing for repayment at the option
of the Holder thereof, exercise of the repayment option by the Holder shall be
irrevocable unless waived by the Company.
SECTION 1204. When Securities Presented for Repayment Become Due and
------------------------------------------------------
Payable. If Securities of any series provide repayment at the option of the
- -------
Holders thereof shall have been surrendered as provided in this Article and as
provided by or pursuant to the terms of such Securities, such Securities or the
portion thereof, as the case may be, to be repaid shall become due and payable
and shall be paid by the Company on the Repayment Date therein specified, and on
and after such Repayment Date (unless the Company shall default in the payment
of such Securities on such Repayment Date) such Securities shall, if the same
were interest-bearing, cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be repaid, except to the extent
provided below, shall be void. Upon surrender of any such Security for
repayment in accordance with such provisions, together with coupons, if any,
appertaining thereto maturing after the Repayment Date, the principal amount of
such Security so to be repaid paid by the Company, together with accrued
interest, if any, Repayment Date; provided, however, that coupons whose Stated
-------- -------
Maturity is on or prior to the Repayment Date shall be payable at an office or
agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified pursuant to Section 301, only upon
presentation and surrender of such coupons; and provided further that, in the
-------- -------
case of Registered Securities, installments of interest, if any, whose Stated
Maturity is on or prior to the Repayment Date shall be payable (but with
interest thereon, unless the Company shall default in the payment thereof) to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business relevant Record Dates according to
their terms and the provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1202 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupons may be waived by the Company
and the Trustee if there be furnished to them such security or indemnity as they
may require to save it and any Paying Agent harmless. If thereafter the Holder
of such Security shall surrender to the Trustee or any Paying Agent any such
missing coupon in respect of which a deduction shall have been made as provided
in the preceding sentence, such Holder shall be entitled to receive the amount
so deducted; provided, however, that interest represented by coupons shall be
-------- -------
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only presentation and surrender of those coupons.
If the principal amount of any Security surrendered for repayment
shall not be so repaid upon surrender thereof, such principal amount (together
with interest, if any, thereon accrued to such Repayment Date) shall, until
paid, bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1205. Securities Repaid in Part. Upon surrender of any
-------------------------
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
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ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Applicability of Article; Company's Option to Effect
----------------------------------------------------
Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision is
- ---------------------------------
made for either or both of (a) defeasance of the Securities of or within a
series under Section 1302 or (b) covenant defeasance of the Securities of or
within a series under Section 1303, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 301
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto, and the Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 1302 (if applicable) or Section 1303
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
SECTION 1302. Defeasance and Discharge. Upon the Company's exercise
------------------------
of the above option applicable to this Section with respect to any Securities of
or within a series, the Company and any guarantors of the Securities shall be
deemed to have been discharged from their obligations with respect to such
Outstanding Securities and any coupons appertaining thereto on the date the
conditions set forth in Section 1304 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such Outstanding
Securities and any coupons appertaining thereto, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 1305 and the other
Sections of this Indenture referred to in clauses (A) and (B) below, and to have
satisfied all of its other obligations under such Securities and any coupons
appertaining thereto and this Indenture insofar as such Securities and any
coupons appertaining thereto are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of such Outstanding Securities and any
coupons appertaining thereto to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect of
the principal of (and premium, if any) and interest, if any, on such Securities
and any coupons appertaining thereto when such payments are due, (B) the
Company's obligations with respect to such Securities under Sections 305, 306,
1002 and 1003 and with respect to the payment of Additional Amounts, if any, on
such Securities as contemplated by Section 1007, (C) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (D) this Article. Subject to
compliance with this Article Thirteen, the Company may exercise its option under
this Section notwithstanding the prior exercise of its option under Section 1303
with respect to such Securities and any coupons appertaining thereto.
SECTION 1303. Covenant Defeasance. Upon the Company's exercise of
-------------------
the above option applicable to this Section with respect to any Securities of or
within a series, the Company and the guarantors of any Securities shall be
released from their obligations under Sections 1004 and 1005, inclusive and, if
specified pursuant to Section 301, their obligations under any other covenant,
with respect to such Outstanding Securities and coupons appertaining thereto on
and after the date the conditions set forth in Section 1304 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with Sections 1004 and 1005,
inclusive, or such other covenant, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to such Outstanding Securities and any coupons
appertaining thereto, the Company and the guarantors of any Securities may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section or such other covenant, whether
directly or indirectly, by reason of any reference elsewhere
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herein to any such Section or such other covenant or by reason of reference in
any Section or such other 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 501(3) or 501(7) otherwise, as the case may be, but,
except as specified above, remainder of this Indenture and such Securities and
any coupons appertaining thereto shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance. The
-----------------------------------------------
following shall be the conditions to application of Section 1302 or Section 1303
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Thirteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for; and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (1) an amount in such currency, currencies or currency unit in which
such Securities and any coupons appertaining thereto are then specified as
payable at Stated Maturity, or (2) Government Obligations applicable to such
Securities and coupons appertaining thereto (determined on the basis of the
currency, currencies or currency unit in which such Securities and coupons
appertaining thereto are then specified as payable at Stated Maturity) which
through the scheduled payment of principal and interest in respect thereof in
accordance with the terms will provide, not later than one day before the due
date of any payment of principal of (and premium, if any) and interest, if any,
on such Securities and any coupons appertaining thereto, money in an amount, or
(3) a combination thereof, any case, in an amount, sufficient, without
consideration of any reinvestment of such principal and interest, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, the principal of (and premium, if any) and interest, if any, on
such Outstanding Securities and any coupons, appertaining thereto on the Stated
Maturity of such principal or installment of principal or interest or analogous
payments applicable to such Outstanding Securities and any coupons appertaining
thereto on the day on which such payments are due and payable in accordance with
the terms of this Indenture and of such Securities and any coupons appertaining
thereto.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(c) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to such Securities and any
coupons appertaining thereto shall have occurred and be continuing on the date
of such deposit or, insofar as Sections 501(6) and 501(7) are concerned, at any
time during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until the
expiration of such period).
(d) In the case of an election under Section 1302, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling, or (ii) since the date of execution of this Indenture, there has been
a change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of such
Outstanding Securities and any coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
had not occurred.
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<PAGE>
(e) In the case of an election under Section 1303, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1302 or the covenant defeasance under
Section 1303 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 1302 or Section 1303 (as the case may be), registration is not required
under the Investment Company Act of 1940, as amended, by the Company with
respect to the trust funds representing such deposit or by the Trustee for such
trust funds or (ii) all necessary registrations under said Act have been
effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
SECTION 1305. Deposited Money and Government Obligations to Be Held
-----------------------------------------------------
in Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
- ----------------------------------------
paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1305, the "Trustee") pursuant to Section 1304 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent as the
Trustee may determine, to the Holders of such Securities and any coupons
appertaining thereto of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1304(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1304(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 1304(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium, if any), and
interest, if any, on such Security as the same becomes due out of the proceeds
yielded by converting (from time to time as specified below in the case of any
such election) the amount or other property deposited in respect of such
Security into the currency or currency unit in which such Security becomes
payable as a result of such election or Conversion Event based on the applicable
market exchange rate for such currency or currency unit in effect on the second
Business Day prior to each payment date, except, with respect to a Conversion
Event, for such currency or currency unit in effect (as nearly as feasible) at
the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or
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<PAGE>
other charge which by law is for the account of the Holders of such Outstanding
Securities and any coupons appertaining thereto.
Anything in this Article to the contrary notwithstanding, subject to
Section 606, the Trustee shall deliver or pay to the Company from time to time
upon the Company Request any money or Government Obligations (or other property
and any proceeds therefrom) held by it as provided in Section 1304 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article.
************
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
-60-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
NVR, INC.
By: ____________________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By: ____________________________________
Name:
Title: Assistant Vice President
-61-
<PAGE>
EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set
forth below, the above-captioned Securities held by you for our account (i) are
owned by person(s) that are not citizens or residents of the United States,
domestic companies, or any estate or trust the income of which is subject to
United States federal income taxation regardless of its source ("United States
person(s)"), (ii) are owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in United States Treasury Regulations Section 1.165-12(c)(1)(v) are
herein referred to as "financial institutions") purchasing for their own account
or for resale, or (b) United States person(s) who acquired the Securities
through foreign branches of United States financial institutions and who hold
the Securities through such United States financial institutions on the date
hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise NVR, Inc. or its agent that such financial institution will comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) are owned by United States or foreign financial institution(s) for
purposes of resale during the restricted period (as defined in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in addition, if the
owner is a United States or foreign financial institution described in clause
(iii) above (whether or not also described in clause (i) or (ii)), this is to
further certify that such financial institution has not acquired the Securities
for purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and "possessions" include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the above-
captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to [U.S. $] _________ of
such interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we understand an exchange for an interest in a
Permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
<PAGE>
Dated: _________________, 19__
[To be dated no earlier than the 15th day prior to (i)
the Exchange Date or (ii) the relevant Interest
Payment Date occurring prior to the Exchange Date,
as applicable]
[Name of Person Making
Certification]
_____________________________
(Authorized Signatory)
Name:
Title:
-2-
<PAGE>
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE
OF A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that
we have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S. $]____________________
principal amount of the above-captioned Securities (i) is owned by person(s)
that are not citizens or residents of the United States, domestic companies,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) are herein
referred to as "financial institutions") purchasing for their own account or for
resale, or (b) United States person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such financial institution has agreed, on
its own behalf or through its agent, that we may advise NVR, Inc. or its agent
that such financial institution will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) is owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, to the further effect, that financial institutions described in clause
(iii) above (whether or not also described in clause (i) or (ii)) have certified
that they have not acquired the Securities for purposes of resale directly or
indirectly to a United States person or to a person within the United States or
its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: ____________ 19__
<PAGE>
[To be dated no earlier than the Exchange Date or the
relevant Interest Payment Date occurring prior to the
Exchange Date, as applicable]
[Morgan Guaranty Trust Company of New
York, Brussels Office,] as Operator
of the Euroclear System [Cedel S.A.]
By:________________________________
-2-
<PAGE>
NVR, INC.
and
NVR HOMES, INC. (AS SUBSIDIARY GUARANTOR)
AND
THE BANK OF NEW YORK
as Trustee
_____________________________________
First Supplemental Indenture
Dated as of April 14, 1998
_____________________________________
8% Senior Notes Due 2005
<PAGE>
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of April 14, 1998, between NVR,
INC., a Virginia corporation (hereinafter called the "Company"), and NVR HOMES,
INC., a Virginia corporation ("Homes" ), as a Subsidiary Guarantor (as defined),
each having its principal office at 7601 Lewinsville Road, Suite 300, McLean,
Virginia, 22102 and THE BANK OF NEW YORK, a New York banking corporation (the
"Trustee"), having a Corporate Trust Office at 101 Barclay Street, 21st Floor,
New York, New York, as Trustee under the Base Indenture and this First
Supplemental Indenture (each as hereinafter defined). Capitalized terms used
and not otherwise defined herein shall have the meaning set forth in the Base
Indenture (as defined).
RECITALS
WHEREAS, the Company, and the Trustee have as of April 14, 1998
entered into an Indenture (the "Base Indenture") providing for the issuance by
the Company from time to time of its senior debt securities evidencing its
unsecured and unsubordinated indebtedness, which, pursuant to Section 301(23) of
the Base Indenture may be guaranteed by one or more of the Company's
subsidiaries;
WHEREAS, no Securities have been issued under the Base Indenture;
WHEREAS, the Company desires under this First Supplemental Indenture
to issue the Notes (as defined in Article III hereof) to be guaranteed on a
senior unsecured basis by Homes (and under certain circumstances defined herein,
by other Subsidiary Guarantors (as defined in Article III hereof)), and has duly
authorized the creation of the Notes and the execution and delivery of this
First Supplemental Indenture to modify and supplement the Base Indenture and
provide certain additional provisions as hereinafter described;
WHEREAS, Homes desires to guarantee the Notes on a senior unsecured
basis and, in accordance with Section 301(23) of the Base Indenture and this
First Supplemental Indenture, Homes has duly authorized the issuance of its
Subsidiary Guarantee (as defined) and the execution and delivery of this First
Supplemental Indenture and the Subsidiary Guarantee;
WHEREAS, in accordance with Section 901(7) of the Base Indenture, the
Company and the Trustee are authorized and permitted to amend and supplement the
Base Indenture as set forth herein, without the consent of any Holder, and all
requirements set forth in Article Nine of the Base Indenture to make this First
Supplemental Indenture effective have been satisfied; and
WHEREAS, the Company, Homes and the Trustee deem it advisable to enter
into this First Supplemental Indenture for the purposes of establishing the
terms of the Notes and the Subsidiary Guarantees and for providing for the
rights, obligations and duties of the Trustee with respect to the Notes and
Subsidiary Guarantees;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE
<PAGE>
WITNESSETH:
For and in consideration of the mutual premises and agreements herein
contained, the Company, Homes and the Trustee covenant and agree, for the equal
and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE I.
CREATION OF THE NOTES
SECTION 1.01. DESIGNATION OF SERIES. Pursuant to the terms hereof
and Sections 201 and 301 of the Base Indenture, the Company hereby creates a
series of its Notes known as the "8% Senior Notes due 2005," which shall be
guaranteed by Homes and such Notes (including the associated Subsidiary
Guarantees) shall be deemed "Securities" for all purposes under the Base
Indenture.
SECTION 1.02. FORM OF NOTES. The definitive form of the Notes shall
be substantially in the form set forth in Exhibit A attached hereto and the
---------
definitive form of the Subsidiary Guarantees to be attached to the Notes shall
be substantially in the form set forth in Exhibit B, each of which is
---------
incorporated herein and made part hereof. The Notes shall bear interest, be
payable and have such other terms as are stated in the form of definitive Note
or in the Base Indenture, as supplemented by this First Supplemental Indenture.
SECTION 1.03. LIMIT ON AMOUNT OF SERIES. The initial principal
amount of Notes issued under this First Supplemental Indenture shall be
$145,000,000 and the aggregate principal amount of Notes authorized to be issued
under this series shall not exceed $175,000,000. Additional Notes may, upon the
execution and delivery of this First Supplemental Indenture or from time to time
thereafter (subject to Section 5.02 hereof), be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes (which shall include the applicable
Subsidiary Guarantee) to or upon the written order of the Company, signed by its
Chairman of the Board, President or a Vice President and by its Chief Financial
Officer, Treasurer or an Assistant Treasurer or its Secretary or an Assistant
Secretary, without further action by the Company.
SECTION 1.04. CERTIFICATE OF AUTHENTICATION. The Trustee's
certificate of authentication to be borne on the Notes shall be substantially as
provided in the Base Indenture.
2
<PAGE>
SECTION 1.05. DESIGNATION OF RESTRICTED AND UNRESTRICTED
SUBSIDIARIES. As of the Issue Date, the Restricted Subsidiaries of the Company
shall be NVR Homes, Inc., NVR Financial Services, Inc., RVN, Inc. and Fox Ridge
Homes, Inc. As of the Issue Date, all other Subsidiaries of the Company shall
be Unrestricted Subsidiaries.
ARTICLE II.
APPOINTMENT OF THE TRUSTEE FOR THE NOTES
SECTION 2.01. APPOINTMENT OF TRUSTEE. Pursuant and subject to the
Base Indenture, the Company, Homes and the Trustee hereby constitute the Trustee
as trustee to act on behalf of the Holders of the Notes, and as the principal
Paying Agent and Security Registrar for the Notes, effective upon execution and
delivery of this First Supplemental Indenture. By execution, acknowledgment and
delivery of this First Supplemental Indenture, the Trustee hereby accepts
appointment as trustee, Paying Agent and Security Registrar with respect to the
Notes, and agrees to perform such trusts upon the terms and conditions in the
Base Indenture and in this First Supplemental Indenture set forth.
SECTION 2.02. RIGHTS, POWERS, DUTIES AND OBLIGATIONS OF THE TRUSTEE.
Any rights, powers, duties and obligations by any provisions of the Base
Indenture conferred or imposed upon the Trustee shall, insofar as permitted by
law, be conferred or imposed upon and exercised or performed by the Trustee with
respect to the Notes.
ARTICLE III.
DEFINITIONS
So long as any of the Notes are Outstanding, the following definitions
shall be applicable to the Notes, be included as defined terms for all purposes
under the Base Indenture with respect to the Notes and, to the extent
inconsistent with the definition of such term contained in Section 101 of the
Base Indenture, shall replace such definition for purposes of the Notes:
"1993 Notes" means the Company's 11% Senior Notes due April 15, 2003
issued under that certain Indenture dated as of September 30, 1993, as amended,
among the Company, Homes, NVR Financial Services, Inc., RVN, Inc. and Fox Ridge
Homes, Inc. and IBJ Schroeder Bank & Trust Company.
"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.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean
the lesser of (i) the amount by which the fair value of the property of such
Subsidiary Guarantor exceeds
3
<PAGE>
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under the
Subsidiary Guarantee, of such Subsidiary Guarantor at such date and (ii) the
amount by which the present fair salable value of the assets of such Subsidiary
Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Subsidiary Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities incurred or assumed on such
date and after giving effect to any collection from any Subsidiary of such
Subsidiary Guarantor in respect of the obligations of such Subsidiary under the
Subsidiary Guarantee), excluding debt in respect of the Subsidiary Guarantee, as
they become absolute and matured.
"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 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 20% 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" shall not include, with
respect to the Company or any Restricted Subsidiary, any Restricted Subsidiary
or, with respect to any Restricted Subsidiary, the Company.
"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) 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 transactions that results in a Change of Control; (ii)
dispositions of land, building lots, homes, infrastructure, other buildings,
improvements, appurtenances and entitlements in the ordinary course of business
and dispositions of obsolete equipment; (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 under Section
5.01 hereof; and (vi) dispositions of the Capital Stock of Ryan Mortgage
Acceptance Corporation IV.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
4
<PAGE>
"Bank Credit Facility" means the Amended and Restated Credit and
Security Agreement, dated as of May 5, 1995, among NVR Homes, as borrower, the
Company, as a guarantor, and the lenders named therein and BankBoston N.A., 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 Subsidiary
Guarantors thereunder that are Restricted Subsidiaries of 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.
"Base Indenture" has the meaning set forth in the Recitals.
"Board of Directors" means the board of directors of the Company or
any authorized committee thereof.
"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.
"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 shall be the capitalized amount thereof determined in
accordance with GAAP.
"Cash Equivalents" means (a) U.S. government obligations; (b) GNMA
securities; (c) debt issued by other agencies 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 a comparable rating by Thompson's Bank Watch, 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; (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
5
<PAGE>
Company's management; and (k) investments in mutual funds that are registered
under the Investment Company Act of 1940, as amended, which have net assets of
at least $100,000,000 and at least 85% of whose assets consist of securities
having a rating of not less than AAA or its equivalent by Moody's or investments
or other obligations of the type described in clauses (a) through (j) above
(without regard to maturities).
"Change of Control" means the occurrence of any of the following
events:
(i) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation) in one or more series of related
transactions of all or substantially all of the assets of the Company on a
consolidated basis;
(ii) any "person" or "group" (as such terms are used in Section 13(d)
of the Exchange Act) is or becomes the beneficial owner (as defined in Rules
13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50
percent of the total voting power of all securities generally entitled to vote
in the election of directors of the Company;
(iii) during any period of two consecutive calendar years, individuals
who at the beginning of such period constituted the Board of Directors (together
with any new directors whose election by such Board of Directors or whose
nominations for elections by the stockholders of the Company was approved by a
majority vote of the directors of the Company then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office; or
(iv) the merger or consolidation of the Company with or into another
person or the merger of another person with or into the Company in a transaction
with the effect that immediately after such transaction the stockholders of the
Company immediately prior to such transaction hold less than 50% of the total
voting power of all securities generally entitled to vote in the election of
directors of the Person surviving such merger or consolidation.
"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 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 (excluding any non-cash charges to the
extent they represent an accrual of or reserve for cash charges in any future
period or amortization of a prepaid cash charge that was paid in a prior period)
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.
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"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 times a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
local statutory tax rate of the Company; 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 shall 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) shall 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 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 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
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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 cash dividends or cash distributions during such period
that have been received by the Relevant Person; (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
that is an Unrestricted Subsidiary or prior to the date that such Person is
acquired by the Company as a Restricted Subsidiary or becomes a Restricted
Subsidiary); (d) the net income of any Restricted 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; (e) any expense related to the amortization of
reorganization value in excess of amounts allocable to identifiable assets (as
defined by GAAP) and (f) any noncash expense related to the issuance of
Qualified Capital Stock of the Company pursuant to the Company's 1994 Management
Incentive Plan.
"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.
"Designation Amount" has the meaning set forth in the definition of
"Unrestricted Subsidiary."
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"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 4.01 hereof
"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.
"First Supplemental Indenture" means the Base Indenture as modified
and supplemented by this First Supplemental Indenture, as either may be
modified, amended or supplemented in accordance with their terms.
"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 First
Supplemental 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"
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shall have meanings correlative to the 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, nor the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, nor the
payment of dividends on Disqualified Capital Stock in the form of additional
shares of the same class of Disqualified Capital Stock shall be deemed to be an
Incurrence of Indebtedness or an issuance of Disqualified Capital Stock for
purposes of this First Supplemental Indenture; provided, in each such case, that
the amount thereof is included for purposes of the Consolidated Fixed Charge
Coverage Ratio of the Company. 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 shall 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.
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"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 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 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 business, (c) the entering into by such Person of any
guaranty of, or other contingent obligation with respect to,
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Indebtedness or other liability of such other Person, or (d) the making of any
capital contribution by such Person to such other Person.
"Investment Grade" shall 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 the date of original issuance of the Notes.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind with respect to any Property.
"Moody's" means Moody's Investors Service, Inc. or any successor to
its debt rating 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 a Restricted 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.
"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% Senior Notes due 2005 issued hereunder, as
supplemented from time to time in accordance with the terms hereof.
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"Officer" means the Chairman of the Board, the President, the Chief
Executive Officer, any Vice President, the Treasurer or the Secretary of the
Company or, as applicable, any Restricted Subsidiary.
"Permitted Business" means any business primarily engaged in
homebuilding (including townhomes, condominiums and single family homes),
related financial services, or other activities reasonably related or incident
to the foregoing.
"Permitted Investment" means (a) Investments in Cash Equivalents, (b)
Investments in the Company or in its Restricted Subsidiaries, (c) Investments by
the Company or any Restricted Subsidiary of the Company in a Person, if as a
result of such Investment (i) such Person becomes a Restricted Subsidiary of the
Company or (ii) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is liquidated
into, the Company or a Restricted Subsidiary; (d) advances to Ryan Mortgage
Acceptance Corporation IV for the purpose of redeeming the bonds of such entity;
provided that (i) the net proceeds of the sale of the collateral securing such
bonds shall be used to repay such advance with any remaining net proceeds to be
distributed as a dividend to NVRFS, (ii) at the time of such Investment, a valid
written commitment shall be in place from an investor not affiliated with the
Company to purchase such collateral within a specified period of time, which
period shall in no event exceed 60 days, and at a specific price or yield and
(iii) each advance is repaid within two Business Days after the delivery of the
collateral pursuant to such written commitment; (e) loans or advances made in
the ordinary course of business to officers, directors or employees of the
Company or any of its Restricted Subsidiaries in an amount not to exceed
$2,000,000 at any one time outstanding, (f) Investments made prior to the Issue
Date, (g) Investments in the form of guaranties to the extent such guaranties
are permitted to be Incurred pursuant to Section 5.02 hereof, (h) net cash
Investments in and advances to Unrestricted Subsidiaries in an amount not to
exceed $20,000,000 at any one time outstanding, (i) Investments having an
aggregate fair market value (measured on the date each such Investment is made
and without giving effect to subsequent changes in value) not to exceed
$15,000,000 in any fiscal year and not to exceed $30,000,000 at any one time
outstanding, in any Permitted Business and (j) Investments in NVR Mortgage
Finance, Inc. to be used by NVR Mortgage Finance, Inc. solely for the purpose of
funding mortgage loans in the ordinary course of business in an amount not to
exceed $25,000,000; provided, however, that (i) a valid take-out commitment is
in place at the time of the closing of the mortgage loan from an investor not
affiliated with the Company, and (ii) any particular advance remains outstanding
for no more than 15 consecutive calendar days in any calendar month.
"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 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
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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, performance bonds,
completion bonds, performance guaranty 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) Liens on assets securing Refinancing
Indebtedness which refinanced Indebtedness that was previously secured by such
assets, (i) any interest in or title of a lessor to property subject to any
Capitalized Lease Obligation Incurred in compliance with this First Supplemental
Indenture, (j) Liens existing on the date of this First Supplemental Indenture,
including without limitation, Liens securing Existing Indebtedness, (k) 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, (l) Liens securing Non-Recourse
Indebtedness of the Company or a Restricted Subsidiary, (m) Liens on property or
assets of any Restricted Subsidiary securing Indebtedness of such Restricted
Subsidiary owing to the Company or one or more of its Restricted Subsidiaries,
(n) 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, (o) Liens in favor
of the Trustee arising pursuant to this First Supplemental Indenture, (p) 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, (q) letters of credit, bonds or other assets pledged
to secure insurance in the ordinary course of business, (r) Liens on property of
a person existing at the time such person is merged into or consolidated with
the Company or any Restricted Subsidiary of the Company; provided, that such
Liens were not incurred in connection with, or in contemplation of, such merger
or consolidation; (s) Liens on property existing at the time of acquisition
thereof by the Company or any Restricted Subsidiary of the Company; provided
that such Liens (a) were not incurred in connection with, or in contemplation
of, such acquisition and (b) do not extend to any assets of the Company or any
of its Restricted Subsidiaries other than the property so acquired; (t) Liens
incurred or pledges or deposits made in the ordinary course of business to
secure payment of workers' compensation, or to participate in any fund in
connection with workers' compensation, unemployment insurance, old age pensions
or other social security programs; (u) Liens created by special assessment
districts used to finance infrastructure improvements; (v) interests of
purchasers of housing units in such units arising under the applicable contracts
of sale or applicable law; (w) any pledge or deposit of cash or property in
conjunction with obtaining bonds or letters of credit required to engage in
constructing on-site and off-site improvements required by municipalities or
other governmental
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authorities in the ordinary course of business; (x) purchase money mortgages
(including, without limitation, Capitalized Lease Obligations and purchase money
security interests); and (y) any other Liens, provided, that the aggregate
amount of obligations secured by such other Liens outstanding at any one time
does not exceed 10% of the Company's Consolidated Net Worth at the time of
Incurrence thereof.
"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.
"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.
"Qualified Capital Stock" means Capital Stock other than Disqualified
Capital Stock.
"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).
"Rating Agencies" shall mean (i) S&P and (ii) Moody's.
"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
First Supplemental Indenture for which financial information is available.
"Refinancing Indebtedness" means Indebtedness that is an extension,
renewal, replacement or refunding of Indebtedness permitted to be Incurred by
this First Supplemental 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 (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 and any prepayment premium,
penalty, consent fees and accrued interest (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 to 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 First Supplemental Indenture, the Refinancing Indebtedness
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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 Subsidiary Guarantor, and a Subsidiary
Guarantor may Incur Refinancing Indebtedness only to refinance Indebtedness of
the Company or a Subsidiary Guarantor and a Restricted Subsidiary that is not a
Subsidiary Guarantor may incur Refinancing Indebtedness only to refinance
Indebtedness of such Restricted Subsidiary or another Restricted Subsidiary that
is not a Subsidiary Guarantor.
"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 or such Restricted Subsidiary, (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 owed to Subsidiary Guarantors
and Indebtedness of the Company that is subordinated in right of payment to the
Notes and owed to its Restricted Subsidiaries that are not Subsidiary
Guarantors, (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.
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"S&P" means Standard and Poor's Ratings Group or any successor to its
debt rating business.
"SEC" means the Securities and Exchange Commission or any successor
agency performing the duties now assigned to it under the TIA.
"Securities" has the meaning set forth in the Recitals.
"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 June 1,
2005.
"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.
"Subsidiary Guarantor" means NVR Homes, Inc. and any other Subsidiary
of the Company that is required to execute a Subsidiary Guarantee pursuant to
this First Supplemental Indenture.
"Subsidiary Guarantee" means the guarantee of the Notes by any
Subsidiary Guarantor as set forth in Exhibit B hereto.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in the Base Indenture and this
First Supplemental Indenture until a successor replaces it pursuant to the Base
Indenture and thereafter means the successor serving under the Base Indenture
and this First Supplemental Indenture.
"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.
"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)
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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 shall be deemed to be an Incurrence by
the Company and its Restricted Subsidiaries of the Indebtedness (if any) of such
redesignated Subsidiary for purposes of this First Supplemental Indenture 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 paragraph (b) of Section 5.02 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 shall be deemed to be made at the time of such designation
and such designation shall 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 paragraph (b) of Section 5.02
hereof. Any such designation or redesignation by the Board of Directors of the
Company shall 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.
"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.
ARTICLE IV.
EVENTS OF DEFAULT
SECTION 4.01. EVENTS OF DEFAULT. Pursuant to Section 301(15) of the
Base Indenture, so long as any Notes are outstanding, the Company covenants and
agrees that "Event of Default," wherever used herein, means any one of the
following events, which are applicable to the Notes instead of the Events of
Default specified in Section 501 of the Base Indenture:
(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,
redemption, by declaration of acceleration or otherwise;
(c) failure by the Company or a Restricted Subsidiary, as the case may be,
to comply with Sections 5.01, 5.02, 5.04, 5.08, 5.09, 5.10 or Article VI hereof;
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(d) default in the observance or performance of, or breach of, any
covenant, agreement or warranty of the Company contained in the Notes, the Base
Indenture or this First Supplemental 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;
(e) 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;
(f) 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;
(g) (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 $25,000,000 or more individually or
in the aggregate to be immediately due and payable; 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 $25,000,000 or more individually or
in the aggregate (after giving effect to any applicable grace period set forth
in the documents governing such Indebtedness);
(h) 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
$10,000,000 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
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competent jurisdiction and not bonded, satisfied or discharged for a period
(during which execution shall not be effectively stayed) of (i) 45 days after
the judgment (which, if there is more than one judgment, causes such judgments
to exceed $10,000,000 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; and
(i) any Subsidiary Guarantee of the Notes shall be held in a judicial
proceeding to be unenforceable or invalid or shall, except as permitted by this
First Supplemental Indenture, cease for any reason to be in full force and
effect, or any Subsidiary Guarantor, or any Person acting on behalf of a
Subsidiary Guarantor, shall deny or disaffirm its obligations in respect of the
Notes.
SECTION 4.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
The following shall replace Section 502 of the Base Indenture in its entirety:
If an Event of Default with respect to the Notes occurs and is
continuing (other than an Event of Default specified in sub-clauses (e) or (f)
above 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, to be due
and payable immediately. If an Event of Default specified in sub-clauses (e) or
(f) above occurs relating to the Company, all principal and accrued and unpaid
interest thereon shall be immediately due and payable on all outstanding Notes
without any declaration or other act on the part of the Trustee or the Holders.
The Holders of a majority in principal amount of the Notes then outstanding by
written notice to the Trustee and the Company may waive any Default or Event of
Default (other than any Default or Event of Default in payment of principal or
interest) on the Notes under this First Supplemental Indenture. Holders of a
majority in principal amount of the then outstanding Notes may rescind an
acceleration and its consequence (except an acceleration due to nonpayment of
principal or interest on the Notes) if the rescission would not conflict with
any judgment or decree and if all existing Events of Default (other than the
non-payment of accelerated principal) have been cured or waived.
ARTICLE V.
COVENANTS OF THE COMPANY
Pursuant to Section 301(15) of the Base Indenture, so long as any of
the Notes are Outstanding, the Company covenants and agrees, in addition to the
covenants and agreements contained in Article Ten of the Base Indenture, as
follows:
SECTION 5.01. LIMITATIONS ON RESTRICTED PAYMENTS. Until the Notes
are rated Investment Grade by both Rating Agencies, after which time the
following covenant no longer shall be binding on the Company or any Restricted
Subsidiary:
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(a) neither the Company nor any of its Restricted Subsidiaries shall,
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 paragraph (b) of Section 5.02 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 includes the Issue Date, to and including
the fiscal quarter ended immediately prior to the date of each
calculation for which internal financial statements are available (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 Incurred after the Issue Date that is converted
into or exchanged for Qualified Capital Stock of the Company after the
Issue Date; plus
(C) to the extent that any Restricted Investment made after the
date of this First Supplemental Indenture is sold for cash or
otherwise reduced or liquidated or repaid for cash, in whole or in
part, the lesser of (1) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and
(2) the initial amount of such Restricted Investment; 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 Subsidiary's
Investment in such Subsidiary, and (y) the Designation Amount at the
time of such Subsidiary's designation as an Unrestricted Subsidiary;
plus
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(F) 100% of tax benefits, if any, for the period (taken as one
accounting period), commencing with the first full fiscal quarter
which includes the Issue Date, realized by the Company from stock
option exercises and from the issuance of the Company's Qualified
Capital Stock pursuant to equity-based employee benefit plans that are
recorded as an increase to shareholders' equity in accordance with
GAAP; plus
(G) $50,000,000.
(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 or
joint venture 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 or joint venture 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
(or in the case of a joint venture that is a partnership or a limited
liability company, as provided for in the documentation governing such
joint venture), 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 in the
aggregate up to $3,000,000 during any calendar year (provided, however,
that any amounts not used in any calendar year may be used in any
subsequent year); or
(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, provided that, in each
case, the amount of any such proceeds is excluded for purposes of clause
(a)(iii)(D) above.
Any Restricted Payment made in accordance with clauses (i) and (iii)
of this paragraph 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 (D) shall be valued at fair market value as determined in
good faith by the Board of Directors, whose determination shall be conclusive
and whose resolution with respect thereto shall be delivered to the Trustee
promptly after the adoption thereof.
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SECTION 5.02. LIMITATIONS ON 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 and Subsidiary Guarantees issued on the Issue Date; (iii)
Indebtedness of the Company solely to any Subsidiary Guarantor, Indebtedness of
any Subsidiary Guarantor to any other Subsidiary Guarantor or to the Company or
Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor to
the Company or to any Restricted Subsidiary, provided that 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; (iv)
Refinancing Indebtedness (including any subsequent refinancing, extension,
renewal, replacement or refunding thereof that satisfies the conditions set
forth in the definition of "Refinancing Indebtedness") (A) of any Indebtedness
permitted to be Incurred pursuant to clauses (ii) or (iv) of this paragraph (a)
or the immediately following paragraph (b) or (B) of any Indebtedness to the
extent outstanding on the Issue Date (other than under the Bank Credit Facility,
the 1993 Notes or Capitalized Lease Obligations being repaid using proceeds from
the sale of the Notes); (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 incurred by
the Company or any Subsidiary Guarantor under the Bank Credit Facility in an
aggregate principal amount not to exceed $100,000,000 at any time, less the
aggregate amount of all proceeds of sales or dispositions of assets applied to
permanently reduce the outstanding amount (or, in the case of a revolving credit
facility the committed amount) of such Indebtedness pursuant to Section 5.04
hereof and guaranties thereof by Subsidiary Guarantors; (vii) (A) Indebtedness
which represents the assumption by the Company or a Restricted Subsidiary of
Indebtedness of a Restricted Subsidiary permitted to be Incurred pursuant to the
terms of this First Supplemental Indenture, and (B) Indebtedness of a Subsidiary
Guarantor represented by guaranties in respect of Indebtedness of the Company or
another Subsidiary Guarantor permitted to be Incurred pursuant to this First
Supplemental Indenture and (C) Indebtedness of the Company represented by
guaranties in respect of Indebtedness of a Subsidiary Guarantor permitted to be
Incurred pursuant to this First Supplemental Indenture; (viii) other
Indebtedness outstanding on the Issue Date, including the 1993 Notes; (ix)
purchase money obligations and Capitalized Lease Obligations; and (x)
Indebtedness of the Company or any Subsidiary Guarantor to any Unrestricted
Subsidiary or any Restricted Subsidiary that is not a Subsidiary Guarantor in an
aggregate amount not to exceed $20,000,000 at any one time outstanding.
(b) Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries that are Subsidiary Guarantors may Incur 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
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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 clause (i)
or clause (v) of the preceding paragraph), to Consolidated Net Worth of the
Company is less than 3.25 to 1.
Neither the Company nor any Restricted Subsidiary shall incur any
Indebtedness that is contractually subordinated in right of payment to any other
Indebtedness of the Company or such Restricted Subsidiary unless such
Indebtedness is also contractually subordinated in right of payment to the Notes
on substantially identical terms; provided, however, that no Indebtedness of the
Company or a Restricted Subsidiary shall be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Company solely
by virtue of being unsecured.
Furthermore, for purposes of determining compliance with this covenant
in the event that an item of proposed Indebtedness meets the criteria of more
than one of the categories described in clauses (i) through (x) of paragraph (a)
above as of the date of incurrence thereof, or is entitled to be Incurred
pursuant to paragraph (b) of this covenant as of the date of incurrence thereof,
the Company shall, in its sole discretion, classify such item of Indebtedness on
the date of its Incurrence in any manner that complies with this covenant.
SECTION 5.03. LIMITATIONS ON TRANSACTIONS WITH AFFILIATES. Until the
Notes are rated Investment Grade by both Rating Agencies, after which time the
following covenant no longer shall be binding on the Company or any Restricted
Subsidiary:
(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 (each an "Affiliate
Transaction"), except for (i) Restricted Payments otherwise permitted under this
First Supplemental Indenture, 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 investment banking firm of national reputation as to the
fairness from a financial point of view of such transaction to the Company or
such Restricted Subsidiary, as the case may be, or with respect to transactions
involving real property, a determination of value by a licensed real estate
appraisal firm that is of regional standing in the region in which the subject
property is located and which has professionals that are MAI certified.
(c) Notwithstanding the foregoing, Affiliate Transactions shall not
include (i) transactions exclusively between or among the Company and one or
more Restricted Subsidiaries
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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, officers or directors of the Company or any Restricted
Subsidiary (in their capacity as such) that has been approved by the Board of
Directors (or a committee thereof) or is in the ordinary course of business and
consistent with past practice, (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 (or a committee thereof) or is in the ordinary course of
business and consistent with past practice of the Company, (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 members of the Board of Directors
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 loans or advances in respect thereof, (vi) contractual
arrangements in effect on the Issue Date and renewals and extensions thereof not
involving modifications materially adverse to the Company or any Restricted
Subsidiary, (vii) Restricted Payments or Permitted Investments otherwise made in
compliance with this First Supplemental Indenture or (viii) the advancement of
general and administrative expenses of the Company and its Subsidiaries that are
reimbursed in the ordinary course of business.
SECTION 5.04. LIMITATIONS ON ASSET SALES. Subject to Article VI
hereof and until the Notes are rated Investment Grade by both Rating Agencies,
after which time the following covenant no longer shall be binding on the
Company, 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 or the board of directors or
comparable governing body of such Restricted Subsidiary, whose resolution shall
be conclusive) 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 shall 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 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.
Within 180 days after the receipt of any Net Cash Proceeds from an
Asset Sale, the Company may apply such Net Cash Proceeds in its sole discretion
(a) to permanently repay Indebtedness under the Bank Credit Facility (and to
permanently reduce the commitment thereunder for purposes of clause (a)(vi) of
Section 5.02 hereof) or (b) to acquire all or
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<PAGE>
substantially all of the assets of, or Capital Stock representing a majority of
the voting power in the election of directors or other governing body of,
another Permitted Business, (c) to make a capital expenditure or (d) to acquire
other assets not classified as current under GAAP that are used or useful in a
Permitted Business. Pending the final application of any such Net Cash Proceeds,
the Company may temporarily reduce revolving credit borrowings or otherwise
invest such Net Cash Proceeds in any manner that is not prohibited by this First
Supplemental Indenture. Any Net Cash Proceeds from Asset Sales that are not
applied or invested as provided in the first sentence of this paragraph shall be
deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $10,000,000, the Company shall be required to make an offer to
all Holders of Notes and all holders of other Indebtedness that is pari passu
with the Notes containing provisions similar to those set forth in this First
Supplemental Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds, at an offer price for the Notes in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of purchase, in accordance with the
procedures set forth in this First Supplemental Indenture and such other pari
passu Indebtedness. To the extent that any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds
for any purpose not otherwise prohibited by this First Supplemental Indenture.
If the aggregate principal amount of Notes and such other pari passu
Indebtedness tendered into such Asset Sale Offer surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
such other pari passu Indebtedness to be purchased on a pro rata basis. Upon
completion of such offer to purchase (and without regard to whether all Excess
Proceeds are used therefor), the amount of Excess Proceeds shall be reset at
zero.
Any Asset Sale Offer shall 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.
SECTION 5.05. LIMITATIONS ON RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a)(i) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits,
or (ii) pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries, (b) make loans or advances to the Company or any of is Restricted
Subsidiaries, (c) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries, or (d) guarantee the Notes or any Indebtedness
issued in exchange for, or the proceeds of which are used to extend, refinance,
renew, replace, or refund the Notes, except for such encumbrances or
restrictions described in (a) through (d) above existing under or by reasons of
(i) Existing Indebtedness as in effect on the date of this First Supplemental
Indenture, (ii) applicable law or regulation, (iii) any instrument governing
Acquired Indebtedness as in effect at the time of acquisition, which encumbrance
or restriction is not applicable to any person, or the properties or assets of
any person, other than the person, or the properties or assets of the person, so
acquired, provided that the Consolidated Net
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Income of such person shall not be taken into account in determining whether
such acquisition was permitted by the terms of this First Supplemental
Indenture, (iv) by reason of customary non-assignment provisions or prohibitions
on subletting in leases or other contracts entered into in the ordinary course
of business, (v) Refinancing Indebtedness permitted under clause (iv) of
paragraph (a) of Section 5.02 hereof, provided that the restrictions contained
in the agreements governing such Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced, or (vi) with respect to clause (c) above, (A) purchase money
obligations, Non-Recourse Indebtedness and Capital Lease Obligations for
property acquired or leased in the ordinary course of business, (B) any
agreement restricting the sale or other disposition of properties securing
Indebtedness permitted by this First Supplemental Indenture if such agreement
does not expressly restrict the ability of a Restricted Subsidiary to pay
dividends or make loans or advances to the Company, (C) restrictions or
encumbrances contained in any security agreements permitted by this First
Supplemental Indenture securing Indebtedness permitted by this First
Supplemental Indenture to the extent that such restrictions or encumbrances
restrict the transfer of assets (or proceeds thereof) subject to such security
agreement, or (D) 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 by this First
Supplemental Indenture, including in connection with any Asset Sale, as
applicable only to such assets or Capital Stock to be sold, or (vii) 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.
SECTION 5.06. LIMITATIONS ON LIENS. The Company may not and may not
permit any Restricted Subsidiary to 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 5.07. PAYMENTS FOR CONSENT. Neither the Company nor any of
its Subsidiaries shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
the Notes for or as an inducement to any consent, waiver or amendment of any
terms or provisions of this First Supplemental Indenture or the Notes unless
such consideration is offered and paid to all Holders of the Notes that so
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
SECTION 5.08. GUARANTEES OF CERTAIN INDEBTEDNESS. The Company shall
not permit any of its Restricted Subsidiaries other than the Subsidiary
Guarantors, directly or indirectly, to guarantee the payment of any Indebtedness
under the Bank Credit Facility, any other credit facility, or any other
Indebtedness of the Company or any other Restricted Subsidiary, unless such
Restricted Subsidiary, the Company and the Trustee execute and deliver a
supplemental indenture evidencing a Subsidiary Guarantee of the Notes. Neither
the Company nor any Subsidiary Guarantor shall be required to make a notation on
the Notes to reflect any such subsequent Subsidiary Guarantee. Nothing in this
covenant shall be construed to permit any
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<PAGE>
Restricted Subsidiary of the Company to incur Indebtedness otherwise prohibited
by Section 5.02 hereof.
SECTION 5.09. MAINTENANCE OF CONSOLIDATED NET WORTH. The Company is
required to furnish to the Trustee an Officers' Certificate within 55 days after
the end of any fiscal quarter (100 days after the end of any fiscal year)
notifying the Trustee that the Company's Consolidated Net Worth has declined
below $80.0 million (the "Minimum Required Net Worth") at the end of any fiscal
quarter in which the Company's Consolidated Net Worth has so declined. If, on
the last day of each of any two consecutive fiscal quarters (the last day of the
second fiscal quarter being referred to herein as a "Deficiency Date"), the
Company's Consolidated Net Worth is less than the Minimum Required Net Worth,
then the Company is required, no later than 65 days after each such Deficiency
Date (110 days if such Deficiency Date is the last day of the Company's fiscal
year), to make an offer to all Holders of Notes to purchase (a "Purchase Offer")
10% of the aggregate principal amount of the Notes theretofore issued under this
First Supplemental Indenture (the "Offer Amount") at a purchase price equal to
100% of the principal amount of the Notes, plus accrued interest to the date of
purchase. The Purchase Offer is required to remain open for a period of 20
Business Days following its commencement, except to the extent otherwise
permitted by applicable law (as extended, the "Offer Period") and the Company is
required to purchase the Offer Amount of the Notes on a designated date no later
than one Business Day after the termination of the Offer Period, or if less than
the Offer Amount of Notes shall have been tendered, all Notes then tendered;
provided, however, that the Company shall not be obligated to purchase any of
such Notes unless Holders of Notes of at least 10% of the Offer Amount shall
have tendered and not subsequently withdrawn their Notes for repurchase. If the
aggregate principal amount of Notes tendered exceeds the Offer Amount, the
Company is required to purchase the Notes tendered to it pro rata among the
Notes tendered (with such adjustments as may be appropriate so that only Notes
in denominations of $1,000 and integral multiples thereof shall be purchased).
The Company shall comply with all applicable federal and state securities laws
in connection with each Purchase Offer. In no event shall the failure of the
Company's Consolidated Net Worth to equal or exceed the Minimum Required Net
Worth at the end of the fiscal quarter be counted toward the making of more than
one Purchase Offer. The Company may reduce the principal amount of Notes to be
purchased pursuant to the Purchase Offer by subtracting 100% of the principal
amount (excluding premium) of Notes acquired by the Company subsequent to the
Deficiency Date through purchase (otherwise than pursuant to this Section 5.09
or Section 5.04 or Section 5.10 hereof), optional redemption or exchange and
surrender for cancellation.
SECTION 5.10. REPURCHASE OF NOTES UPON CHANGE OF CONTROL. In the
event that a Change of Control has occurred, each Holder shall have the right,
at such Holder's option, subject to the terms and conditions of this First
Supplemental 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 60
Business Days (unless a later date is required by applicable law) after the
occurrence of such Change of Control (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.
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The Company shall notify the Trustee within ten Business Days after
the Company becomes aware of the occurrence of a Change of Control. Within 20
Business Days after the occurrence of a Change of Control, the Company shall
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.
On or before the Change of Control Payment Date, the Company shall (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 shall 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 shall 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 shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
The Change of Control purchase feature of the Notes may make more
difficult or discourage a takeover of the Company, and, thus, the removal of
incumbent management. To the extent applicable and if required by law, the
Company shall comply with Section 14 of the Exchange Act and the provisions of
Regulation 14E and any other tender offer rules under the Exchange Act and other
securities laws, rules and regulations which may then be applicable to any offer
by the Company to purchase the Notes at the option of Holders upon a Change of
Control.
SECTION 5.11. USE OF CERTAIN PROCEEDS. The Company shall commence a
tender offer to repurchase the remaining 1993 Notes as promptly as practicable
following the Issue Date. The Company shall redeem all remaining untendered
outstanding 1993 Notes in December 1998 at a purchase price of 105.5% of the
principal amount thereof in accordance with the terms of the indenture governing
the 1993 Notes, and shall maintain, at all times prior to completion of such
redemption, Investments in Cash Equivalents at least equal to the lesser of (i)
$80.0 million, and (ii) the outstanding principal amount of 1993 Notes not
theretofore redeemed or repurchased. In addition, the Company shall, as
promptly as practicable, deposit in escrow with an escrow agent that is not an
Affiliate of the Company, $12,000,000 pending the Company's use of such funds to
exercise its purchase option under that certain Lease Agreement dated May 15,
1989 by and among Corporate Property Associates 9, L.P., as landlord and NVHomes
L.P., Ryan Operations G.P. and Ryan Homes, Inc., as amended, or as otherwise
permitted in accordance with the terms of the escrow agreement. The Company
shall use its commercially reasonable efforts to effect such purchase option in
accordance with its terms.
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ARTICLE VI.
MERGER, CONSOLIDATION OR SALE OF ASSETS
Pursuant to Section 301(15) of the Base Indenture, so long as any of the
Notes are outstanding, the following provision shall replace Section 801 of the
Base Indenture for purposes of the Notes:
(a) The Company shall not consolidate with or merge with or into, any
other Person, 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 or the District of Columbia, assumes by supplemental indenture, in
a form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Notes and this First Supplemental 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 paragraph (b) under Section 5.02 hereof.
The provisions of clause (iii) or 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 one or more of its Restricted Subsidiaries, subject to any limitations on
mergers involving Subsidiary Guarantors.
(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 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.
ARTICLE VII.
REDEMPTION
The Notes shall be redeemable at the option of the Company, in whole
or in part, at any time on or after June 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 June 1 of the years indicated below:
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<TABLE>
<CAPTION>
REDEMPTION YEAR PRICE
--------------------------- ----------
<S> <C>
2003....................... 104.000
2004....................... 102.000
2005....................... 100.000
</TABLE>
In addition, prior to June 1, 2001, the Company may redeem up to 35%
of the aggregate principal amount of the Notes issued under this First
Supplemental Indenture at a redemption price equal to 108% 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 $113,750,000 aggregate
principal amount of all Notes issued under the Indenture remains 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.
Selection of the Notes or portions thereof for redemption pursuant to
the foregoing shall be made by the Trustee pro rata or by lot. Notice of
redemption shall be mailed via courier guaranteeing overnight delivery at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at the registered address of such Holder. On and
after the redemption date, interest shall cease to accrue on the Notes or
portions thereof called for redemption.
ARTICLE VIII.
GUARANTEES
Pursuant to Section 301(23) of the Base Indenture, and until the 91st
day after the Notes have been paid in full, the following provisions shall be a
part of this First Supplemental Indenture.
SECTION 8.01. UNCONDITIONAL SUBSIDIARY GUARANTEE. Each Subsidiary
Guarantor hereby unconditionally, jointly and severally, guarantees (such
guarantee to be referred to herein as the "Subsidiary Guarantee") to each Holder
of a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
First Supplemental Indenture, the Notes or the obligations of the Company
hereunder or thereunder, that: (i) the principal of, interest and premium, if
any, on the Notes will be promptly paid in full when due, subject to any
applicable grace period, whether at stated maturity, by acceleration or
otherwise and interest on the overdue principal of, and interest on any
interest, to the extent lawful, and premium, if any, on the Notes and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full, all in accordance with the terms hereof and
thereof; and (ii) in case of any extension of time of payment or renewal of any
Notes or of any such other obligations, the same will be promptly paid in full
when due in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration or
otherwise, subject, however, in the case of clauses (i) and (ii) above, to the
limitations set forth in Section 8.04. Each Subsidiary Guarantor hereby agrees
that its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this First
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Supplemental Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstances which might otherwise constitute
a legal or equitable discharge or defense of a guarantor (other than
indefeasable payment in full of the Notes). Each Subsidiary Guarantor hereby
waives diligence, presentment, demand for payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that this Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes, this First
Supplemental Indenture and in the Subsidiary Guarantee. If any Holder or the
Trustee is required by any court or otherwise to return to the Company, any
Subsidiary Guarantor, or any Custodian, trustee, liquidator or other similar
official acting in relation to the Company or any Subsidiary Guarantor, any
amount paid by the Company or any Subsidiary Guarantor to the Trustee or such
Holder, this Subsidiary Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect as to such amount only. Each Subsidiary
Guarantor further agrees that, as between each Subsidiary Guarantor, on the one
hand, and the Holders and the Trustee, on the other hand, (x) the maturity of
the obligations guaranteed hereby may be accelerated as provided in this First
Supplemental Indenture for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in this First
Supplemental Indenture, such obligations (whether or not due and payable) shall
forthwith become due and payable by each Subsidiary Guarantor for the purpose of
the Subsidiary Guarantee.
SECTION 8.02. RELEASE OF A SUBSIDIARY GUARANTOR. Upon (i) a sale or
other disposition of all or substantially all of the assets of any Subsidiary
Guarantor, by way of merger, consolidation or otherwise, or (ii) a sale,
distribution or other disposition of all of the capital stock of any Subsidiary
Guarantor, including, without limitation, a distribution of all of the capital
stock of any Subsidiary Guarantor to stockholders of the Company in a
transaction that complies with Section 5.01 hereof, such Subsidiary Guarantor
(in the event of a sale or other disposition, by way of such a merger,
consolidation, distribution or otherwise, of all of the capital stock of such
Subsidiary Guarantor) or the Person acquiring the property (in the event of a
sale or disposition of all or substantially all of the assets of such Subsidiary
Guarantor) will be released and relieved of any obligations under its Subsidiary
Guarantee; provided that the Net Cash Proceeds of such sale or other disposition
are applied in accordance with the provisions of Section 5.04 hereof.
SECTION 8.03. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY. Each
Subsidiary Guarantor and by its acceptance hereof each Holder hereby confirms
that it is the intention of all such parties that the guarantee by such
Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the
Holders and such Subsidiary Guarantor hereby irrevocably agree that the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee shall be
limited to the maximum amount as will, after giving
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effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to
Section 8.05, result in the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee not constituting such fraudulent transfer or conveyance.
SECTION 8.04. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS. No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person) another
corporation, Person or entity (other than the Company or another Subsidiary
Guarantor), unless (i) subject to the provisions of Section 8.02 hereof, the
Person formed by or surviving any such consolidation or merger (if other than
the Subsidiary Guarantor) assumes all of the obligations of such Subsidiary
Guarantor under the Notes (including the Subsidiary Guarantee) and this First
Supplemental Indenture pursuant to a supplemental indenture, in form and
substance reasonably satisfactory to the Trustee, together with an Officers'
Certificate of the Company and an Opinion of Counsel stating that the
transaction and such supplemental indenture comply with this First Supplemental
Indenture (provided that this requirement will not apply to a substantially
concurrent merger involving the Company, Homes and NVR Financial Services,
Inc.), and (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists.
SECTION 8.05. CONTRIBUTION. In order to provide for just and
equitable contribution among the Subsidiary Guarantors, the Subsidiary
Guarantors agree, inter se, that in the event any payment or distribution is
made by any Subsidiary Guarantor (a "Funding Subsidiary Guarantor") under this
Subsidiary Guarantee, such Funding Subsidiary Guarantor shall be entitled to a
contribution from all other Subsidiary Guarantors in a pro rata amount based on
the Adjusted Net Assets of each Subsidiary Guarantor (including the Funding
Subsidiary Guarantor) for all payments, damages and expenses incurred by that
Funding Subsidiary Guarantor in discharging the Company's obligations with
respect to the Notes or any other Subsidiary Guarantor's obligations with
respect to this Subsidiary Guarantee.
SECTION 8.06. WAIVER OF SUBROGATION. Until the Notes are paid in
full, each Subsidiary Guarantor hereby irrevocably waives any claim or other
rights which it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of such Subsidiary
Guarantor's obligations under this Subsidiary Guarantee and this First
Supplemental Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any Holder of Notes against the Company, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Subsidiary Guarantor in violation of the
preceding sentence and the Notes shall not have been paid in full, such amount
shall have been deemed to have been paid to such Subsidiary Guarantor for the
benefit of, and held in trust for the benefit of, the Holders of the Notes, and
shall forthwith be paid to the Trustee for the benefit of such Holders to be
credited and applied upon the Notes, whether matured or unmatured, in accordance
with the terms of this
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<PAGE>
First Supplemental Indenture. Each Subsidiary Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by this First Supplemental Indenture and that the waiver set forth
in this Section 8.06 is knowingly made in contemplation of such benefits.
SECTION 8.07. EXECUTION OF SUBSIDIARY GUARANTEE. To evidence their
guarantee to the Holders specified in Section 8.01, the Subsidiary Guarantors
hereby agree to execute the Subsidiary Guarantee in substantially the form of
Exhibit B recited to be endorsed on each Note ordered to be authenticated and
delivered by the Trustee. Each Subsidiary Guarantor hereby agrees that its
guarantee set forth in Section 8.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee. Each such Subsidiary Guarantee shall be signed on behalf
of each Subsidiary Guarantor by one Officer (who shall have been duly authorized
by all requisite corporate actions) prior to the authentication of the Note on
which it is endorsed, and the delivery of such Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of such
Subsidiary Guarantee on behalf of such Subsidiary Guarantor. Such signatures
upon the Subsidiary Guarantee may be by manual or facsimile signature of such
duly authorized Officer and may be imprinted or otherwise reproduced on the
Subsidiary Guarantee, and in case any such Officer who shall have signed the
Subsidiary Guarantee shall cease to be such Officer before the Note on which
such Subsidiary Guarantee is endorsed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, such Note nevertheless
may be authenticated and delivered or disposed of as though the person who
signed the Subsidiary Guarantee had not ceased to be such Officer of the
Subsidiary Guarantor.
SECTION 8.08. OBLIGATIONS OF EACH SUBSIDIARY GUARANTOR UNCONDITIONAL.
Nothing contained in this Article VIII or elsewhere in this First Supplemental
Indenture or in the Notes or the Subsidiary Guarantees is intended to or shall
impair, as among any Subsidiary Guarantor, its creditors, and the Holders of the
Notes, the obligation of such Subsidiary Guarantor, which is absolute and
unconditional, to pay to the Holders of the Notes the principal of and any
interest on the Notes as and when the same shall become due and payable in
accordance with the terms of the Subsidiary Guarantees, or is intended to or
shall affect the relative rights of the Holders of the Notes and creditors of
any Subsidiary Guarantor, nor shall anything herein or therein prevent the
Holder of any Note or the Trustee on its behalf from exercising all remedies
otherwise permitted by applicable law upon default under this First Supplemental
Indenture, subject to the rights, if any, in respect of cash, property or
securities of any Subsidiary Guarantor received upon the exercise of such
remedy.
SECTION 8.09. NOTICE TO TRUSTEE. The Company or any Subsidiary
Guarantor shall give prompt written notice to the Trustee of any fact known to
the Company or any such Subsidiary Guarantor which would prohibit the making of
any payment to or by the Trustee in respect of the Subsidiary Guarantees
pursuant to the provisions of this Article VIII. Regardless of anything to the
contrary contained in this Article VIII or elsewhere in this First Supplemental
Indenture, the Trustee shall not be charged with knowledge of the existence of
any Default or Event of Default with respect to any facts which would prohibit
the making of any payment to or by the Trustee unless and until a Responsible
Officer of the Trustee shall have received notice in
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<PAGE>
writing from the Company or a Subsidiary Guarantor, and, prior to receipt of any
such written notice, the Trustee shall be entitled to assume (in the absence of
actual knowledge of a Responsible Officer to the contrary) that no such facts
exist.
SECTION 8.10. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATING AGENT. Upon any payment or distribution of assets of any Subsidiary
Guarantor referred to in this Article VIII, the Trustee, subject to the
provisions of this First Supplemental Indenture, and the Holders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or the Holders, for the
purpose of ascertaining the persons entitled to participate in such
distribution, the amount thereof or payable thereon, the amount or amounts paid
or distribution thereon and all other facts pertinent thereto or to this Article
VIII.
ARTICLE IX
OFFER TO REPURCHASE PURSUANT TO SECTION 5.04 OR 5.09 HEREOF
In the event that, pursuant to Section 5.04 or Section 5.09 hereof,
the Company shall be required to commence an Asset Sale Offer or a Purchase
Offer (a "Repurchase Offer"), it shall follow the procedures specified below.
The Repurchase Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (as extended, the "Offer Period").
No later than one Business Day after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 5.04 or Section 5.09 hereof (the
"Offer Amount") or, subject to the terms of Section 5.09 (if such repurchase is
pursuant to Section 5.09 hereof), if less than the Offer Amount has been
tendered, all Notes tendered in response to the Repurchase Offer. Payment for
any Notes so purchased shall be made in the same manner as interest payments are
made.
If the Purchase Date is on or after an interest payment record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders. The
notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Repurchase Offer. The Repurchase Offer
shall be made to all Holders. The notice, which shall govern the terms of the
Repurchase Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this Article IX
and, as
35
<PAGE>
applicable, Section 5.04 or Section 5.09 hereof and the length of time the
Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date and in the
case of a Repurchase Offer being made pursuant to Section 5.09 hereof that the
Company shall not be obligated to purchase any of such Notes unless Holders of
Notes of at least 10% of the Offer Amount shall have tendered and not
subsequently withdrawn their Notes for repurchase;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Repurchase Offer shall cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may only elect to have all of such Note purchased and may not elect
to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Repurchase Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Repurchase
Offer or, subject to the terms of Section 5.09 hereof in the case of a
Repurchase Offer made pursuant thereto, if less than the Offer Amount has been
tendered, all Notes tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Article IX. The
Company, the Depository Trust Company or the Paying Agent,
36
<PAGE>
as the case may be, shall promptly (but in any case not later than one Business
Day after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Repurchase Offer on the Repurchase
Date.
Other than as specifically provided in this Article IX, any purchase pursuant to
this Article IX shall be made pursuant to the provisions of Article Eleven of
the Base Indenture.
ARTICLE X
MISCELLANEOUS
SECTION. 10.01. DISCHARGE; DEFEASANCE. Articles 4 and 13 of the Base
Indenture relating to Satisfaction and Discharge and to Defeasance and Covenant
Defeasance, respectively, shall be applicable to the Notes issued under this
First Supplemental Indenture.
SECTION 10.02. APPLICATION OF FIRST SUPPLEMENTAL INDENTURE. Each and
every term and condition contained in this First Supplemental Indenture that
modifies, amends or supplements the terms and conditions of the Base Indenture
shall apply only to the Notes created hereby and not to any future series of
Securities established under the Base Indenture.
SECTION 10.11. BENEFITS OF FIRST SUPPLEMENTAL INDENTURE. Nothing
contained in this First Supplemental Indenture shall or shall be construed to
confer upon any person other than a Holder of the Notes, the Company and the
Trustee any right or interest to avail itself or himself, as the case may be, of
any benefit under any provision of this First Supplemental Indenture.
SECTION 10.04. DEFINED TERMS. All capitalized terms which are used
herein and not otherwise defined herein are defined in the Base Indenture and
are used herein with the same meanings as in the Base Indenture.
SECTION 10.05. EFFECTIVE DATE. This First Supplemental Indenture
shall be effective as of the date first above written and upon the execution and
delivery hereof by each of the parties hereto.
SECTION 10.06. GOVERNING LAW. This First Supplemental Indenture
shall be governed by, and construed in accordance with, the internal laws of the
State of New York.
SECTION 10.07. COUNTERPARTS. This First Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
37
<PAGE>
SECTION 10.08. SATISFACTION AND DISCHARGE. This First Supplemental
Indenture shall cease to be of further force and effect upon compliance with
Section 401 of the Indenture with respect to the Notes created hereby.
38
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their respective officers hereunto
duly authorized, all as of the day and year first above written.
NVR, INC.
Dated: April 14, 1998 By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Attest:
NVR HOMES, INC.
Dated: April 14, 1998 By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Attest:
THE BANK OF NEW YORK
as Trustee
Dated: April 14, 1998 By:________________________________
Name:
Title:
S-1
<PAGE>
EXHIBIT A
FORM OF NOTE
NVR, INC.
8% Senior Notes due 2005
Principal Amount
CUSIP No. 62944TAB1 $145,000,000
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION 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.
UNLESS AND UNTIL THIS CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR
NOTES IN CERTIFICATED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER
NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE
OF SUCH SUCCESSOR.
NVR, Inc., a Virginia corporation (the "Issuer," which term includes any
successor under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal sum
of One Hundred Forty Five Million Dollars on June 1, 2005 (the "Maturity Date"),
and to pay interest thereof from April 14, 1998 (or from the most recent
Interest Payment Date to which interest has been paid or duly provided for),
semiannually in arrears on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing on June 1, 1998, and on the Maturity Date,
at a rate of 8% per annum, until payment of said principal sum has been made or
duly provided for.
The interest so payable and punctually paid or duly provided for on an
Interest Payment Date and on the Maturity Date will be paid to the Holder in
whose name this Note (or one or more predecessor Notes) is registered at the
close of business on the "Regular Record Date" for such payment, which will be
the May 15 and November 15 (regardless of whether such day is a Business Day (as
defined below)) next preceding such payment date or the Maturity Date, as the
case may be. Any interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and
shall be paid to the Holder in whose
A-1
<PAGE>
name this Note (or one or more predecessor Notes) is registered at the close of
business on a subsequent record date for the payment of such defaulted interest
(which shall not be less than five Business Days prior to the date of the
payment of such defaulted interest) established by notice given by mail or by on
behalf of the Issuer to the Holders of the Notes not less than 15 days preceding
such subsequent record date. Interest on this Note will be computed on the basis
of a 360-day year of twelve 30-day months.
The principal of this Note payable on the Maturity Date will be paid
against presentation and surrender of this Note at the office or agency of the
Issuer maintained for that purpose in New York, New York. The Issuer hereby
initially designates the Corporate Trust Office of the Trustee in New York, New
York as the office to be maintained by it where Notes may be presented for
payment, registration of transfer, or exchange and where notices or demands to
or upon the Issuer in respect of the Notes or the Indenture referred to on the
reverse hereof may be served.
Interest payable on this Note on any Interest Payment Date and on the
Maturity Date, as the case may be, will be the amount of interest accrued during
the applicable Interest Period (as defined below).
An "Interest Period" is each period from and including the immediately
preceding Interest Payment Date (or from and including April 14, 1998, in the
case of the initial Interest Period) to but excluding the applicable Interest
Payment Date or the Maturity Date, as the case may be. If any Interest Payment
Date other than the Maturity Date would otherwise be a day that is not a
Business Day, any amounts payable on such Interest Payment Date will be paid on
the succeeding Business Day with the same force and effect as if it were paid on
the date such payment was due. If the Maturity Date falls on a day that is not
a Business Day, principal and interest payable on the Maturity Date will be paid
on the succeeding Business Day with the same force and effect as if paid on the
date such payment was due, and no interest will accrue on the amount so payable
for the period from and after the Maturity Date.
Payments of principal and interest in respect of this Note will be made by
wire transfer of immediately available funds (or with respect to any Note not
held in global form, by a U.S. dollar check or by wire transfer of immediately
available funds) in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place. Capitalized terms used herein,
including on the reverse hereof, and not defined herein or on the reverse hereof
shall have the respective meanings given to such terms in the Indenture.
This Note shall not be entitled to the benefits of the Indenture referred
to on the reverse hereof or be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee under such Indenture.
A-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed
manually or by facsimile by its duly authorized officers.
Dated: April __, 1998 NVR, INC., as Issuer
By:_________________________________
Name:
Its:
By:_________________________________
Name:
Its:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to in the
within-mentioned Indenture.
Dated: April __, 1998 THE BANK OF NEW YORK
By:_________________________________
Authorized Signatory
A-3
<PAGE>
[REVERSE OF NOTE]
NVR, INC.
8% Senior Notes due 2005
This security is one of a duly authorized issue of debentures, notes,
bonds, or other evidences of indebtedness of the Issuer (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an Indenture dated as of April 14, 1998, between the
Issuer and The Bank of New York, as trustee (the "Trustee") as supplemented by
the First Supplemental Indenture dated as of April 14, 1998 among the Issuer,
NVR Homes, Inc. as a subsidiary guarantor and the Trustee (as so supplemented,
herein called the "Indenture"), duly executed and delivered by the Issuer to The
Bank of New York, as Trustee (herein called the "Trustee," which term includes
any successor trustee under the Indenture with respect to the series of
Securities of which this Note is a part), to which Indenture and all Indentures
supplemental thereto that are applicable to the Notes (as defined below)
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties, and immunities thereunder of the Trustee, the Issuer, and
the Holders of the Securities, and of the terms upon which the Securities are,
and are to be, authenticated and delivered. The Securities may be issued in one
or more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest (if any) at
different rates, may be subject to different redemption provisions (if any), and
may otherwise vary as provided in the Indenture. This Security is one of a
series designated as the 8% Senior Notes due 2005 of the Issuer (the "Notes"),
limited in aggregate principal amount to $175,000,000.
In case an Event of Default with respect to the 8% Senior Notes due 2005
shall have occurred and be continuing, the principal hereof and premium (if any)
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect, and subject to the conditions provided in the
Indenture.
The Notes shall be redeemable at the option of the Company, in whole or in
part, at any time on or after June 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 June 1 of the years indicated below:
<TABLE>
<CAPTION>
REDEMPTION YEAR PRICE
--------------------------- ----------
<S> <C>
2003....................... 104.000%
2004....................... 102.000%
2005....................... 100.000%
</TABLE>
In addition, prior to June 1, 2001, the Company may redeem up to 35% of the
aggregate principal amount of the Notes issued under this First Supplemental
Indenture at a redemption price equal to 108% 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 $113,750,000 aggregate principal
amount of all Notes issued under the Indenture remains outstanding immediately
after giving effect to
A-4
<PAGE>
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.
Selection of the Notes or portions thereof for redemption pursuant to the
foregoing shall be made by the Trustee pro rata or by lot. Notice of redemption
shall be mailed via courier guaranteeing overnight delivery at least 30 days but
not more than 60 days before the redemption date to each Holder whose Notes are
to be redeemed at the registered address of such Holder. On and after the
redemption date, interest shall cease to accrue on the Notes or portions thereof
called for redemption.
The covenants set forth in Article V of the First Supplemental Indenture
shall be fully applicable to the Notes.
The First Supplemental Indenture provides that, subject to certain
conditions, (i) if a Change of Control (as defined in the First Supplemental
Indenture) occurs, the Issuer shall be required to make a Change of Control
Offer , (ii) in the event of certain Asset Sales, the Company shall be required
to make an Asset Sale Offer (in each case as such terms are defined in the First
Supplemental Indenture) and (iii) if the Company does not maintain a Minimum
Required Net Worth (as defined in the First Supplemental Indenture), the Company
shall be required to make a Purchase Offer (as defined in the First Supplemental
Indenture), in certain circumstances, for all or a portion of the Notes.
The Indenture contains provisions permitting the Issuer and the Trustee,
with the consent of the Holders of not less than a majority of the aggregate
principal amount of the Securities at the time Outstanding of all series to be
affected (voting as one class), evidenced as provided in the Indenture, to
execute supplemental Indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental Indenture or modifying in any manner the rights of the Holders of
the Securities of each series; provided, however, that no such supplemental
Indenture shall, without the consent of the Holder of each Security so affected,
among other things (i) change the final maturity of any Security, or reduce the
principal amount thereof or any premium thereon, or reduce the rate or extend
the time of payment of any interest thereof, or impair or affect the rights of
any Holder to institute suit for the payment on any Security, or (ii) reduce the
percentage of Securities, the Holders of which are required to consent to any
such supplemental Indenture, (iii) reduce the percentage of Securities, the
Holders of which are required to consent to any waiver of compliance with
certain provisions of the Indenture or any waiver of certain defaults thereunder
or (iv) modify the ranking or priority of the Securities. It is also provided
in the Indenture that, with respect to certain defaults or Events of Default
regarding the Securities of any series, the Holders of a majority in aggregate
principal amount outstanding of the Securities of such series (or, in the case
of certain defaults or Events of Default, all series of Securities) may on
behalf of the Holders of all the Securities of such series (or all of the
Securities, as the case may be) waive any such past default or Event of Default
and its consequences, prior to any declaration accelerating the maturity of such
Securities, or, subject to certain conditions, may rescind a declaration of
acceleration and its consequences with respect to such Securities. The
preceding sentence shall not, however, apply to a default in the payment of the
principal of or premium, if any, or interest on any of the
A-5
<PAGE>
Securities. Any such consent or waiver by the Holder of this Security (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Security and any
securities that may be issued in exchange or substitution herefor, irrespective
of whether or not any notation thereof is made upon this Security or such other
securities.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless (a) such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, (b) the Holders of
not less than 25% in aggregate principal amount of the Securities Outstanding
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity and the Trustee shall not have received from the Holders of a majority
in aggregate principal amount of the Securities Outstanding a direction
inconsistent with such request, and (c) the Trustee shall have failed to
institute any such proceeding, for 60 days after receipt of such notice, request
and offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof, premium, if any, or interest hereon on or after the respective due dates
expressed herein.
No references herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal, premium, if any, and interest
on this Security in the manner, at the respective times, at the rate and in the
coin or currency herein prescribed.
This Security is issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof. Securities may be
exchanged for a like aggregate principal amount of Securities of this series of
other authorized denominations at the office or agency of the Issuer in New
York, New York, in the manner and subject to the limitations provided in the
Indenture, but without the payment of any service charge except for any tax or
other governmental charge imposed in connection therewith.
This Security is not subject to a sinking fund requirement.
Upon due presentment for registration of transfer of Securities at the
office or agency of the Issuer in New York, New York, a new Security or
Securities of the same series of authorized denominations in an equal aggregate
principal amount will be issued to the transferee in exchange therefor, subject
to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture, in any Security or coupon appertaining thereto, or because of
any indebtedness evidenced hereby or thereby (including, without limitation, any
obligation or indebtedness relating to the principal of, or premium, if any, or
interest or any other amounts due, or claimed to be due, on this Security), or
for any claim based thereon or otherwise in respect thereof, shall be had
against any promoter, as such, or against any past, present or future
shareholder, office or
A-6
<PAGE>
director, as such, of the Issuer or of any successor, either directly or through
the Issuer or any successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance hereof and as part of the consideration for the issue hereof.
Prior to due presentation of a Security for registration of transfer, the
Issuer, the Trustee, and any authorized agent of the Issuer or the Trustee may
deem and treat the Person in whose name this Security is registered as the
absolute owner of this Security (whether or not this Security shall be overdue
and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and subject to the provisions herein and on the face hereof;
interest hereon, and for all other purposes, and neither the Issuer nor the
Trustee nor any authorized agent of the Issuer or the Trustee shall be affected
by any notice to the contrary.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused "CUSIP" numbers to be
printed on the Securities of this series as a convenience to the Holders of such
Securities. No representation is made as to the correctness or accuracy of such
CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.
A-7
<PAGE>
ASSIGNMENT FORM AND CERTIFICATE OF TRANSFER
To assign this Security fill in the form below:
(I) or (we) assign and transfer this Security to
________________________________________________________________________________
(Insert assignee's social security or tax identification number, if any)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
Your signature:_________________________________________________________________
(Sign exactly as your name appears on the other side of this
Security)
Date:_________________________
Signature Guarantee:_______________________________________
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Trustee, 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 Trustee in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934,
as amended
A-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to
Section 5.04, 5.09 or 5.10 of the First Supplemental Indenture, check here____.
If you want to elect to have only a part of this Note purchased by the
Issuer pursuant to Section 5.04, 5.09 or 5.10 of the First Supplemental
Indenture, state the amount:
$________________
Dated:_________________ Your Signature:_________________________
(sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee:___________________________________
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Trustee, 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 Trustee in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934,
as amended.
A-9
<PAGE>
EXHIBIT B
FORM OF SUBSIDIARY GUARANTEE
NVR Homes, Inc., a Virginia corporation (hereinafter referred to as
the "Subsidiary Guarantor," which term includes any successor Subsidiary
Guarantor under the Indenture dated as of April 14, 1998 between NVR, Inc. and
The Bank of New York as Trustee (the "Trustee") as supplemented by the First
Supplemental Indenture dated as of April 14, 1998 between NVR, Inc., the
Subsidiary Guarantor and the Trustee (the "Indenture") referred to in the Note
upon which this notation is endorsed), (i) has unconditionally guaranteed that
(a) the principal of, interest and premium, if any, on the Notes will be
promptly paid in full when due, subject to any applicable grace period, whether
at stated maturity, by acceleration or otherwise and interest on the overdue
principal of, and interest on interest, to the extent lawful, and premium, if
any, on the Notes and all other obligations of the Company to the Holders or the
Trustee under the Indenture or the Notes will be promptly paid in full, all in
accordance with the terms set forth in the Indenture and Notes; and (b) in case
of any extension of time of payment or renewal of the Notes or of any such other
obligations, the same will be promptly paid in full when due in accordance with
the terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration or otherwise, (ii) has agreed to pay
any and all costs and expenses (including reasonable attorneys' fees) incurred
by the Trustee or any Holder in enforcing any rights under this Subsidiary
Guarantee; provided, however, that this Subsidiary Guarantee is limited as to
the Subsidiary Guarantor to the extent necessary not to constitute a fraudulent
conveyance or fraudulent transfer.
No stockholder, officer, director or incorporator, as such, past,
present or future, of any Subsidiary Guarantor shall have any personal liability
under this Subsidiary Guarantee by reason of his or its status as such
stockholder, officer, director or incorporator.
This Subsidiary Guarantee shall be binding upon the undersigned and,
to the extent provided in the Indenture, its successors and assigns and shall
inure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
B-1
<PAGE>
IN WITNESS WHEREOF, the Subsidiary Guarantor has caused this
Subsidiary Guarantee to be signed manually or by facsimile by its duly
authorized officer.
NVR HOMES, INC., as Subsidiary Guarantor
By:_______________________________________________
Name:
Title:
B-2
<PAGE>
FORM OF NOTE
NVR, INC.
8% Senior Notes due 2005
Principal Amount
CUSIP No. 62944TAB1 $145,000,000
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION 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.
UNLESS AND UNTIL THIS CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR
NOTES IN CERTIFICATED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER
NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE
OF SUCH SUCCESSOR.
NVR, Inc., a Virginia corporation (the "Issuer," which term includes any
successor under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal sum
of One Hundred Forty Five Million Dollars on June 1, 2005 (the "Maturity Date"),
and to pay interest thereof from April 14, 1998 (or from the most recent
Interest Payment Date to which interest has been paid or duly provided for),
semiannually in arrears on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing on June 1, 1998, and on the Maturity Date,
at a rate of 8% per annum, until payment of said principal sum has been made or
duly provided for.
The interest so payable and punctually paid or duly provided for on an
Interest Payment Date and on the Maturity Date will be paid to the Holder in
whose name this Note (or one or more predecessor Notes) is registered at the
close of business on the "Regular Record Date" for such payment, which will be
the May 15 and November 15 (regardless of whether such day is a Business Day (as
defined below)) next preceding such payment date or the Maturity Date, as the
case may be.
<PAGE>
Any interest not so punctually paid or duly provided for shall forthwith cease
to be payable to the Holder on such Regular Record Date, and shall be paid to
the Holder in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on a subsequent record date for the payment
of such defaulted interest (which shall not be less than five Business Days
prior to the date of the payment of such defaulted interest) established by
notice given by mail or by on behalf of the Issuer to the Holders of the Notes
not less than 15 days preceding such subsequent record date. Interest on this
Note will be computed on the basis of a 360-day year of twelve 30-day months.
The principal of this Note payable on the Maturity Date will be paid
against presentation and surrender of this Note at the office or agency of the
Issuer maintained for that purpose in New York, New York. The Issuer hereby
initially designates the Corporate Trust Office of the Trustee in New York, New
York as the office to be maintained by it where Notes may be presented for
payment, registration of transfer, or exchange and where notices or demands to
or upon the Issuer in respect of the Notes or the Indenture referred to on the
reverse hereof may be served.
Interest payable on this Note on any Interest Payment Date and on the
Maturity Date, as the case may be, will be the amount of interest accrued during
the applicable Interest Period (as defined below).
An "Interest Period" is each period from and including the immediately
preceding Interest Payment Date (or from and including April 14, 1998, in the
case of the initial Interest Period) to but excluding the applicable Interest
Payment Date or the Maturity Date, as the case may be. If any Interest Payment
Date other than the Maturity Date would otherwise be a day that is not a
Business Day, any amounts payable on such Interest Payment Date will be paid on
the succeeding Business Day with the same force and effect as if it were paid on
the date such payment was due. If the Maturity Date falls on a day that is not
a Business Day, principal and interest payable on the Maturity Date will be paid
on the succeeding Business Day with the same force and effect as if paid on the
date such payment was due, and no interest will accrue on the amount so payable
for the period from and after the Maturity Date.
Payments of principal and interest in respect of this Note will be made by
wire transfer of immediately available funds (or with respect to any Note not
held in global form, by a U.S. dollar check or by wire transfer of immediately
available funds) in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place. Capitalized terms used herein,
including on
<PAGE>
the reverse hereof, and not defined herein or on the reverse hereof shall have
the respective meanings given to such terms in the Indenture.
This Note shall not be entitled to the benefits of the Indenture referred
to on the reverse hereof or be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee under such Indenture.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed
manually or by facsimile by its duly authorized officers.
Dated: April __, 1998 NVR, INC., as Issuer
By:_____________________________________
Name:
Its:
By:_____________________________________
Name:
Its:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to in the
within-mentioned Indenture.
Dated: April __, 1998 THE BANK OF NEW YORK
By:________________________________________________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
NVR, INC.
8% Senior Notes due 2005
This security is one of a duly authorized issue of debentures, notes,
bonds, or other evidences of indebtedness of the Issuer (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an Indenture dated as of April 14, 1998, between the
Issuer and The Bank of New York, as trustee (the "Trustee") as supplemented by
the First Supplemental Indenture dated as of April 14, 1998 among the Issuer,
NVR Homes, Inc. as a subsidiary guarantor and the Trustee (as so supplemented,
herein called the "Indenture"), duly executed and delivered by the Issuer to The
Bank of New York, as Trustee (herein called the "Trustee," which term includes
any successor trustee under the Indenture with respect to the series of
Securities of which this Note is a part), to which Indenture and all Indentures
supplemental thereto that are applicable to the Notes (as defined below)
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties, and immunities thereunder of the Trustee, the Issuer, and
the Holders of the Securities, and of the terms upon which the Securities are,
and are to be, authenticated and delivered. The Securities may be issued in one
or more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest (if any) at
different rates, may be subject to different redemption provisions (if any), and
may otherwise vary as provided in the Indenture. This Security is one of a
series designated as the 8% Senior Notes due 2005 of the Issuer (the "Notes"),
limited in aggregate principal amount to $175,000,000.
In case an Event of Default with respect to the 8% Senior Notes due 2005
shall have occurred and be continuing, the principal hereof and premium (if any)
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect, and subject to the conditions provided in the
Indenture.
The Notes shall be redeemable at the option of the Company, in whole or in
part, at any time on or after June 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 June 1 of the years indicated below:
<TABLE>
<CAPTION>
REDEMPTION YEAR PRICE
--------------------------- ----------
<S> <C>
2003....................... 104.000%
2004....................... 102.000%
2005....................... 100.000%
</TABLE>
<PAGE>
In addition, prior to June 1, 2001, the Company may redeem up to 35% of the
aggregate principal amount of the Notes issued under this First Supplemental
Indenture at a redemption price equal to 108% 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 $113,750,000 aggregate principal
amount of all Notes issued under the Indenture remains 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.
Selection of the Notes or portions thereof for redemption pursuant to the
foregoing shall be made by the Trustee pro rata or by lot. Notice of redemption
shall be mailed via courier guaranteeing overnight delivery at least 30 days but
not more than 60 days before the redemption date to each Holder whose Notes are
to be redeemed at the registered address of such Holder. On and after the
redemption date, interest shall cease to accrue on the Notes or portions thereof
called for redemption.
The covenants set forth in Article V of the First Supplemental Indenture
shall be fully applicable to the Notes.
The First Supplemental Indenture provides that, subject to certain
conditions, (i) if a Change of Control (as defined in the First Supplemental
Indenture) occurs, the Issuer shall be required to make a Change of Control
Offer , (ii) in the event of certain Asset Sales, the Company shall be required
to make an Asset Sale Offer (in each case as such terms are defined in the First
Supplemental Indenture) and (iii) if the Company does not maintain a Minimum
Required Net Worth (as defined in the First Supplemental Indenture), the Company
shall be required to make a Purchase Offer (as defined in the First Supplemental
Indenture), in certain circumstances, for all or a portion of the Notes.
The Indenture contains provisions permitting the Issuer and the Trustee,
with the consent of the Holders of not less than a majority of the aggregate
principal amount of the Securities at the time Outstanding of all series to be
affected (voting as one class), evidenced as provided in the Indenture, to
execute supplemental Indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental Indenture or modifying in any manner the rights of the Holders of
the Securities of each series; provided, however, that no such supplemental
Indenture shall, without the consent of the Holder of each Security so affected,
among other things (i) change the final maturity of any Security, or reduce the
principal amount thereof or any premium thereon, or reduce the rate or extend
the time of payment of any interest thereof, or impair or affect the rights of
any Holder to institute suit for the payment
<PAGE>
on any Security, or (ii) reduce the percentage of Securities, the Holders of
which are required to consent to any such supplemental Indenture, (iii) reduce
the percentage of Securities, the Holders of which are required to consent to
any waiver of compliance with certain provisions of the Indenture or any waiver
of certain defaults thereunder or (iv) modify the ranking or priority of the
Securities. It is also provided in the Indenture that, with respect to certain
defaults or Events of Default regarding the Securities of any series, the
Holders of a majority in aggregate principal amount outstanding of the
Securities of such series (or, in the case of certain defaults or Events of
Default, all series of Securities) may on behalf of the Holders of all the
Securities of such series (or all of the Securities, as the case may be) waive
any such past default or Event of Default and its consequences, prior to any
declaration accelerating the maturity of such Securities, or, subject to certain
conditions, may rescind a declaration of acceleration and its consequences with
respect to such Securities. The preceding sentence shall not, however, apply to
a default in the payment of the principal of or premium, if any, or interest on
any of the Securities. Any such consent or waiver by the Holder of this Security
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Security and any
securities that may be issued in exchange or substitution herefor, irrespective
of whether or not any notation thereof is made upon this Security or such other
securities.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless (a) such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, (b) the Holders of
not less than 25% in aggregate principal amount of the Securities Outstanding
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity and the Trustee shall not have received from the Holders of a majority
in aggregate principal amount of the Securities Outstanding a direction
inconsistent with such request, and (c) the Trustee shall have failed to
institute any such proceeding, for 60 days after receipt of such notice, request
and offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof, premium, if any, or interest hereon on or after the respective due dates
expressed herein.
No references herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal, premium, if any, and interest
on this Security in the manner, at the respective times, at the rate and in the
coin or currency herein prescribed.
This Security is issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof. Securities may be
<PAGE>
exchanged for a like aggregate principal amount of Securities of this series of
other authorized denominations at the office or agency of the Issuer in New
York, New York, in the manner and subject to the limitations provided in the
Indenture, but without the payment of any service charge except for any tax or
other governmental charge imposed in connection therewith.
This Security is not subject to a sinking fund requirement.
Upon due presentment for registration of transfer of Securities at the
office or agency of the Issuer in New York, New York, a new Security or
Securities of the same series of authorized denominations in an equal aggregate
principal amount will be issued to the transferee in exchange therefor, subject
to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture, in any Security or coupon appertaining thereto, or because of
any indebtedness evidenced hereby or thereby (including, without limitation, any
obligation or indebtedness relating to the principal of, or premium, if any, or
interest or any other amounts due, or claimed to be due, on this Security), or
for any claim based thereon or otherwise in respect thereof, shall be had
against any promoter, as such, or against any past, present or future
shareholder, office or director, as such, of the Issuer or of any successor,
either directly or through the Issuer or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance hereof and as part of the
consideration for the issue hereof.
Prior to due presentation of a Security for registration of transfer, the
Issuer, the Trustee, and any authorized agent of the Issuer or the Trustee may
deem and treat the Person in whose name this Security is registered as the
absolute owner of this Security (whether or not this Security shall be overdue
and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and subject to the provisions herein and on the face hereof;
interest hereon, and for all other purposes, and neither the Issuer nor the
Trustee nor any authorized agent of the Issuer or the Trustee shall be affected
by any notice to the contrary.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused "CUSIP" numbers to be
printed on the Securities of this series as a convenience to the Holders of such
Securities. No representation is made as to the correctness or accuracy of such
<PAGE>
CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.
<PAGE>
FORM OF NOTE
NVR, INC.
8% Senior Notes due 2005
Principal Amount
CUSIP No. 62944TAB1 $145,000,000
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION 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.
UNLESS AND UNTIL THIS CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES
IN CERTIFICATED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF
DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH
SUCCESSOR.
NVR, Inc., a Virginia corporation (the "Issuer," which term includes any
successor under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co., or registered assigns, the principal sum
of One Hundred Forty Five Million Dollars on June 1, 2005 (the "Maturity Date"),
and to pay interest thereof from April 14, 1998 (or from the most recent
Interest Payment Date to which interest has been paid or duly provided for),
semiannually in arrears on June 1 and December 1 of each year (each, an
"Interest Payment Date"), commencing on June 1, 1998, and on the Maturity Date,
at a rate of 8% per annum, until payment of said principal sum has been made or
duly provided for.
The interest so payable and punctually paid or duly provided for on an
Interest Payment Date and on the Maturity Date will be paid to the Holder in
whose name this Note (or one or more predecessor Notes) is registered at the
close of business on the "Regular Record Date" for such payment, which will be
the May 15 and November 15 (regardless of whether such day is a Business Day (as
defined below)) next preceding such payment date or the Maturity Date, as the
case may be.
<PAGE>
Any interest not so punctually paid or duly provided for shall forthwith cease
to be payable to the Holder on such Regular Record Date, and shall be paid to
the Holder in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on a subsequent record date for the payment
of such defaulted interest (which shall not be less than five Business Days
prior to the date of the payment of such defaulted interest) established by
notice given by mail or by on behalf of the Issuer to the Holders of the Notes
not less than 15 days preceding such subsequent record date. Interest on this
Note will be computed on the basis of a 360-day year of twelve 30-day months.
The principal of this Note payable on the Maturity Date will be paid against
presentation and surrender of this Note at the office or agency of the Issuer
maintained for that purpose in New York, New York. The Issuer hereby initially
designates the Corporate Trust Office of the Trustee in New York, New York as
the office to be maintained by it where Notes may be presented for payment,
registration of transfer, or exchange and where notices or demands to or upon
the Issuer in respect of the Notes or the Indenture referred to on the reverse
hereof may be served.
Interest payable on this Note on any Interest Payment Date and on the Maturity
Date, as the case may be, will be the amount of interest accrued during the
applicable Interest Period (as defined below).
An "Interest Period" is each period from and including the immediately
preceding Interest Payment Date (or from and including April 14, 1998, in the
case of the initial Interest Period) to but excluding the applicable Interest
Payment Date or the Maturity Date, as the case may be. If any Interest Payment
Date other than the Maturity Date would otherwise be a day that is not a
Business Day, any amounts payable on such Interest Payment Date will be paid on
the succeeding Business Day with the same force and effect as if it were paid on
the date such payment was due. If the Maturity Date falls on a day that is not
a Business Day, principal and interest payable on the Maturity Date will be paid
on the succeeding Business Day with the same force and effect as if paid on the
date such payment was due, and no interest will accrue on the amount so payable
for the period from and after the Maturity Date.
Payments of principal and interest in respect of this Note will be made by
wire transfer of immediately available funds (or with respect to any Note not
held in global form, by a U.S. dollar check or by wire transfer of immediately
available funds) in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place. Capitalized terms used herein,
including on
<PAGE>
the reverse hereof, and not defined herein or on the reverse hereof shall have
the respective meanings given to such terms in the Indenture.
This Note shall not be entitled to the benefits of the Indenture referred to
on the reverse hereof or be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the
Trustee under such Indenture.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed
manually or by facsimile by its duly authorized officers.
Dated: April __, 1998 NVR, INC., as Issuer
By:_____________________________________________
Name:
Its:
By:_____________________________________________
Name:
Its:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to in the
within-mentioned Indenture.
Dated: April __, 1998 THE BANK OF NEW YORK
By:___________________________________________________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
NVR, INC.
8% Senior Notes due 2005
This security is one of a duly authorized issue of debentures, notes, bonds,
or other evidences of indebtedness of the Issuer (hereinafter called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an Indenture dated as of April 14, 1998, between the
Issuer and The Bank of New York, as trustee (the "Trustee") as supplemented by
the First Supplemental Indenture dated as of April 14, 1998 among the Issuer,
NVR Homes, Inc. as a subsidiary guarantor and the Trustee (as so supplemented,
herein called the "Indenture"), duly executed and delivered by the Issuer to The
Bank of New York, as Trustee (herein called the "Trustee," which term includes
any successor trustee under the Indenture with respect to the series of
Securities of which this Note is a part), to which Indenture and all Indentures
supplemental thereto that are applicable to the Notes (as defined below)
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties, and immunities thereunder of the Trustee, the Issuer, and
the Holders of the Securities, and of the terms upon which the Securities are,
and are to be, authenticated and delivered. The Securities may be issued in one
or more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest (if any) at
different rates, may be subject to different redemption provisions (if any), and
may otherwise vary as provided in the Indenture. This Security is one of a
series designated as the 8% Senior Notes due 2005 of the Issuer (the "Notes"),
limited in aggregate principal amount to $175,000,000.
In case an Event of Default with respect to the 8% Senior Notes due 2005 shall
have occurred and be continuing, the principal hereof and premium (if any) may
be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect, and subject to the conditions provided in the
Indenture.
The Notes shall be redeemable at the option of the Company, in whole or in
part, at any time on or after June 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 June 1 of the years indicated below:
<TABLE>
<CAPTION>
REDEMPTION YEAR PRICE
--------------------------- ----------
<S> <C>
2003....................... 104.000%
2004....................... 102.000%
2005....................... 100.000%
</TABLE>
<PAGE>
In addition, prior to June 1, 2001, the Company may redeem up to 35% of the
aggregate principal amount of the Notes issued under this First Supplemental
Indenture at a redemption price equal to 108% 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 $113,750,000 aggregate principal
amount of all Notes issued under the Indenture remains 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.
Selection of the Notes or portions thereof for redemption pursuant to the
foregoing shall be made by the Trustee pro rata or by lot. Notice of redemption
shall be mailed via courier guaranteeing overnight delivery at least 30 days but
not more than 60 days before the redemption date to each Holder whose Notes are
to be redeemed at the registered address of such Holder. On and after the
redemption date, interest shall cease to accrue on the Notes or portions thereof
called for redemption.
The covenants set forth in Article V of the First Supplemental Indenture shall
be fully applicable to the Notes.
The First Supplemental Indenture provides that, subject to certain conditions,
(i) if a Change of Control (as defined in the First Supplemental Indenture)
occurs, the Issuer shall be required to make a Change of Control Offer , (ii) in
the event of certain Asset Sales, the Company shall be required to make an Asset
Sale Offer (in each case as such terms are defined in the First Supplemental
Indenture) and (iii) if the Company does not maintain a Minimum Required Net
Worth (as defined in the First Supplemental Indenture), the Company shall be
required to make a Purchase Offer (as defined in the First Supplemental
Indenture), in certain circumstances, for all or a portion of the Notes.
The Indenture contains provisions permitting the Issuer and the Trustee, with
the consent of the Holders of not less than a majority of the aggregate
principal amount of the Securities at the time Outstanding of all series to be
affected (voting as one class), evidenced as provided in the Indenture, to
execute supplemental Indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental Indenture or modifying in any manner the rights of the Holders of
the Securities of each series; provided, however, that no such supplemental
Indenture shall, without the consent of the Holder of each Security so affected,
among other things (i) change the final maturity of any Security, or reduce the
principal amount thereof or any premium thereon, or reduce the rate or extend
the time of payment of any interest thereof, or impair or affect the rights of
any Holder to institute suit for the payment
<PAGE>
on any Security, or (ii) reduce the percentage of Securities, the Holders of
which are required to consent to any such supplemental Indenture, (iii) reduce
the percentage of Securities, the Holders of which are required to consent to
any waiver of compliance with certain provisions of the Indenture or any waiver
of certain defaults thereunder or (iv) modify the ranking or priority of the
Securities. It is also provided in the Indenture that, with respect to certain
defaults or Events of Default regarding the Securities of any series, the
Holders of a majority in aggregate principal amount outstanding of the
Securities of such series (or, in the case of certain defaults or Events of
Default, all series of Securities) may on behalf of the Holders of all the
Securities of such series (or all of the Securities, as the case may be) waive
any such past default or Event of Default and its consequences, prior to any
declaration accelerating the maturity of such Securities, or, subject to certain
conditions, may rescind a declaration of acceleration and its consequences with
respect to such Securities. The preceding sentence shall not, however, apply to
a default in the payment of the principal of or premium, if any, or interest on
any of the Securities. Any such consent or waiver by the Holder of this Security
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Security and any
securities that may be issued in exchange or substitution herefor, irrespective
of whether or not any notation thereof is made upon this Security or such other
securities.
As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless (a) such Holder shall have previously given the
Trustee written notice of a continuing Event of Default, (b) the Holders of not
less than 25% in aggregate principal amount of the Securities Outstanding shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of the Securities Outstanding a direction
inconsistent with such request, and (c) the Trustee shall have failed to
institute any such proceeding, for 60 days after receipt of such notice, request
and offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof, premium, if any, or interest hereon on or after the respective due dates
expressed herein.
No references herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal, premium, if any, and interest
on this Security in the manner, at the respective times, at the rate and in the
coin or currency herein prescribed.
This Security is issuable only in registered form without coupons in
denominations of $1,000 and integral multiples thereof. Securities may be
<PAGE>
exchanged for a like aggregate principal amount of Securities of this series of
other authorized denominations at the office or agency of the Issuer in New
York, New York, in the manner and subject to the limitations provided in the
Indenture, but without the payment of any service charge except for any tax or
other governmental charge imposed in connection therewith.
This Security is not subject to a sinking fund requirement.
Upon due presentment for registration of transfer of Securities at the office
or agency of the Issuer in New York, New York, a new Security or Securities of
the same series of authorized denominations in an equal aggregate principal
amount will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Indenture, without charge except for any tax or
other governmental charge imposed in connection therewith.
No recourse under or upon any obligation, covenant or agreement contained in
the Indenture, in any Security or coupon appertaining thereto, or because of any
indebtedness evidenced hereby or thereby (including, without limitation, any
obligation or indebtedness relating to the principal of, or premium, if any, or
interest or any other amounts due, or claimed to be due, on this Security), or
for any claim based thereon or otherwise in respect thereof, shall be had
against any promoter, as such, or against any past, present or future
shareholder, office or director, as such, of the Issuer or of any successor,
either directly or through the Issuer or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance hereof and as part of the
consideration for the issue hereof.
Prior to due presentation of a Security for registration of transfer, the
Issuer, the Trustee, and any authorized agent of the Issuer or the Trustee may
deem and treat the Person in whose name this Security is registered as the
absolute owner of this Security (whether or not this Security shall be overdue
and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and subject to the provisions herein and on the face hereof;
interest hereon, and for all other purposes, and neither the Issuer nor the
Trustee nor any authorized agent of the Issuer or the Trustee shall be affected
by any notice to the contrary.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK, UNITED STATES OF AMERICA.
Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused "CUSIP" numbers to be printed
on the Securities of this series as a convenience to the Holders of such
Securities. No representation is made as to the correctness or accuracy of such
<PAGE>
CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.
<PAGE>
Exhibit 5.1
HOGAN & HARTSON L.L.P
Columbia Square
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004-1109
(202) 637-5600
(202) 637-5910
April 23, 1998
The Respective Boards of Directors of
NVR, Inc. and NVR Homes, Inc.
7601 Lewinsville Road, Suite 300
McLean, Virginia 22102
Ladies and Gentlemen:
We are acting as counsel to NVR, Inc., a Virginia corporation (the
"Company"), and to NVR Homes, Inc., a Virginia corporation ("NVR Homes"), in
connection with the registration statement on Form S-3 of the Company, NVR Homes
and certain other subsidiary guarantors (SEC File No. 333-44515)(the
"Registration Statement") previously declared effective by the U.S. Securities
and Exchange Commission, relating to the proposed public offering and sale, from
time to time on a delayed or continuous basis pursuant to Rule 415 under the
1933 Act, of up to $400,000,000 in aggregate principal amount of the Company's
unsecured, nonconvertible debt securities (the "Debt Securities"), which may be
guaranteed by one or more of the subsidiary guarantors. This opinion letter is
rendered in connection with the offering of $145 million of 8% Senior Notes due
2005 of the Company and guaranteed by NVR Homes (the "Notes"), as described in a
Prospectus dated April 6, 1998 (the "Prospectus"), and a Prospectus Supplement
dated April 8, 1998 (the "Prospectus Supplement"). This opinion letter is
furnished to you at your request to enable you to fulfill the requirements of
Item 601(b)(5) of Regulation S-K, 17 C.F.R. (S) 229.601(b)(5), in connection
with the Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Prospectus and the Prospectus Supplement.
3. The Restated Articles of Incorporation of the Company, as
certified by the State Corporation Commission of the Common-wealth
of Virginia on April 7, 1998 and by the Assistant Secretary
<PAGE>
The Respective Boards of Directors of
NVR, Inc. and NVR Homes, Inc.
April 23, 1998
Page 2
of the Company on the date hereof as being complete, accurate and
in effect.
4. The Bylaws of the Company, as certified by the Assistant Secretary
of the Company on the date hereof as being complete, accurate and
in effect.
5. The Restated Articles of Incorporation of NVR Homes, as certified
by the State Corporation Commission of the Commonwealth of
Virginia on April 7, 1998 and by the Assistant Secretary of NVR
Homes on the date hereof as being complete, accurate and in
effect.
6. The Bylaws of NVR Homes, as certified by the Assistant Secretary
of NVR Homes on the date hereof as being complete, accurate and in
effect.
7. Executed copy of the Indenture (the "Base Indenture") dated as of
April 14, 1998 between the Company and The Bank of New York, as
trustee (the "Trustee").
8. Executed copy of the First Supplemental Indenture dated as of
April 14, 1998 among the Company, NVR Homes and the Trustee
(together with the Base Indenture, the "Indenture").
9. Executed copy of the Underwriting Agreement dated April 8, 1998
among the Company, NVR Homes and the underwriters named therein.
10. Executed copy of the global certificate representing the Notes.
11. Executed copy of the Guarantee of the Notes executed by NVR Homes
(the "Guarantee").
12. Resolutions of the Board of Directors of the Company duly adopted
at a meeting held on December 16, 1997 and at a telephonic meeting
held on April 6, 1998, as certified by the Assistant Secretary of
the Company on the date hereof as being complete, accurate and in
effect, relating to the filing of the Registration Statement, the
issuance of the Notes and arrange-ments in connection therewith.
<PAGE>
The Respective Boards of Directors of
NVR, Inc. and NVR Homes, Inc.
April 23, 1998
Page 3
13. Resolutions of the Board of Directors of NVR Homes adopted by
unanimous written consent on January 19, 1998 and April 13, 1998,
as certified by the Assistant Secretary of NVR Homes on the date
hereof as being complete, accurate and in effect, relating to the
filing of the Registration Statement, the execution of the
Guarantee and arrangements in connection therewith.
In our examination of these documents, we have assumed the genuineness
of all signatures, the legal capacity of natural persons, the authenticity,
accuracy and completeness of all documents submitted to us, and the conformity
with original documents of all documents submitted to us as copies (including
telecopies). This opinion letter is delivered, and all statements herein are
made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on applicable
provisions of (i) the Virginia Stock Corporation Act, and (ii) New York contract
law (but not including any statutes, ordinances, administrative decisions, rules
or regulations of any political subdivision of the State of New York). We
express no opinion herein as to any other laws, statutes, regulations or
ordinances.
For purposes of this opinion letter, we have assumed that (i) the
Trustee has all requisite power and authority under all applicable laws,
regulations and governing documents to execute, deliver and perform its
obligations under the Indenture, (ii) the Trustee has duly authorized, executed
and delivered the Indenture, (iii) the Trustee is validly existing and in good
standing in all necessary jurisdictions, (iv) the Indenture constitutes a valid
and binding obligation, enforceable against the Trustee in accordance with its
terms and (v) there has been no material mutual mistake of fact or
misunderstanding or fraud, duress or undue influence, in connection with the
negotiation, execution or delivery of the Indenture.
Based upon, subject to and limited by the foregoing, we are of the
opinion that the Notes and the Guarantee constitute valid and binding
obligations of the Company and NVR Homes, as applicable, enforceable in
accordance with their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights (including,
without limitation, the effect of statutory and other law regarding fraudulent
conveyances, fraudulent transfers and preferential transfers) and as may be
limited by the exercise of judicial discretion and the application of principles
of equity including, without limitation, requirements of good faith, fair
dealing, conscionability and materiality (regardless of whether the matter is
considered in a proceeding in equity or at law).
<PAGE>
The Respective Boards of Directors of
NVR, Inc. and NVR Homes, Inc.
April 23, 1998
Page 4
The opinion expressed in the preceding paragraph shall be understood
to mean only that if there is a default in performance of an obligation, (i) if
a failure to pay or other damage can be shown and (ii) if the defaulting party
can be brought into a court that will hear the case and apply the governing law,
then, subject to the availability of defenses and to the exceptions set forth in
such opinion, the court will provide a money damage (or perhaps injunctive or
specific performance) remedy.
We assume no obligation to advise you of any changes in the foregoing
after the delivery of this opinion letter. This opinion letter has been
prepared solely for your use in connection with the filing of the Registration
Statement on the date hereof and should not be quoted in whole or in part or
otherwise be referred to, or filed with or furnished to any governmental agency
or other person or entity, without the prior written consent of this firm.
We hereby consent to the filing of this opinion letter as Exhibit 5.1
to a Form 8-K of the Company and to the reference to this firm under the
caption "Legal Matters" in the Prospectus and Prospectus Supplement. In giving
this consent, we do not thereby admit that we are an "expert" within the meaning
of the 1933 Act.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
