AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1999
REGISTRATION NO. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Jurisdiction of
Names of Incorporation I.R.S. Employer
Co-Registrants or Organization Identification No.
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RICHMOND AMERICAN HOMES OF CALIFORNIA, INC. COLORADO 77-0084376
RICHMOND AMERICAN HOMES OF MARYLAND, INC. MARYLAND 52-0814857
RICHMOND AMERICAN HOMES OF NEVADA, INC. COLORADO 88-0227698
RICHMOND AMERICAN HOMES OF VIRGINIA, INC. VIRGINIA 54-0570445
RICHMOND AMERICAN HOMES OF ARIZONA, INC. DELAWARE 86-0277026
RICHMOND AMERICAN HOMES OF COLORADO, INC. DELAWARE 84-1256155
RICHMOND AMERICAN HOMES OF NORTHERN
CALIFORNIA, INC. COLORADO 68-0422210
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3600 S. YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(303) 773-1100
(Address, including zip code and telephone number, including area code,
of registrant's principal executive office)
DANIEL S. JAPHA, ESQ.
SECRETARY AND GENERAL COUNSEL - CORPORATE
3600 S. YOSEMITE STREET, SUITE 900
DENVER, COLORADO 80237
(303) 773-1100
(Name, address, including zip code and telephone number, including area code,
of agent for service)
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COPIES TO:
NICK NIMMO, ESQ. DANIEL J. ZUBKOFF, ESQ.
HOLME ROBERTS & OWEN LLP CAHILL GORDON & REINDEL
1700 LINCOLN STREET, SUITE 4100 EIGHTY PINE STREET
DENVER, COLORADO 80203 NEW YORK, NY 10005
(303) 861-7000 (212) 701-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
promptly as practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
Title of each class of Proposed maximum Amount of
securities to be aggregate offering registration fee(1)
registered price
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Guarantees of Debt Securities
of M.D.C. Holdings, Inc. --- ---
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(1) M.D.C. Holdings, Inc. has registered $300,000,000 of debt securities
under an effective registration statement on Form S-3, File No.
333-70381, for which it paid a registration fee of $90,909.09. The
co-registrants are wholly-owned subsidiaries of MDC and are
registering their guarantees of MDC's debt securities. Pursuant to
Rule 457(n) under the Securities Act of 1933, no separate fee for the
guarantees is payable.
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The co-registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the co-registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933, as amended, or until this registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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[OBJECT OMITTED]
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting offers to buy these
securities in any state where the offer is not permitted.
Prospectus subject to completion,
_____________, 1999
M.D.C. HOLDINGS, INC.
3600 S. YOSEMITE STREET
SUITE 900
DENVER, COLORADO 80237
(303) 773-1100
$300,000,000
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The following are types of securities that we may offer and sell under this
prospectus:
- common stock - debt securities
- preferred stock
We may offer these securities separately or as units which may include
other securities. We will describe in a prospectus supplement, which must
accompany this prospectus, the securities we are offering and selling, as well
as the specific terms of the securities. Those terms may include:
- Maturity - Redemption terms
- Interest rate - Listing on a securities exchange
- Sinking fund terms - Amount payable at maturity
- Currency of payments - Guarantees by some of our subsidiaries
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The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
- - ------------------------------------------------------------------------------
We may offer the securities in amounts, at prices and on terms determined
at the time of offering. We may sell the securities directly to you, through
agents we select, or through underwriters and dealers we select. If we use
agents, underwriters or dealers to sell the securities, we will name them and
describe their compensation in a prospectus supplement.
___________ , 1999
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TABLE OF CONTENTS
M.D.C. Holdings, Inc.........................................................5
Use of Proceeds..............................................................6
Ratio of Earnings to Fixed Charges...........................................7
Description of Common Stock..................................................7
Description of Preferred Stock...............................................9
Description of the Debt Securities..........................................10
Book-Entry Issuance.........................................................13
Plan of Distribution........................................................15
Legal Matters...............................................................17
Experts.....................................................................17
Where You Can Find More Information.........................................17
Incorporation of Certain Documents by Reference.............................18
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M.D.C. Holdings, Inc.
M.D.C. Holdings, Inc. is a Delaware corporation which was formed in
1972. MDC's primary business is owning and managing subsidiary companies which
build homes under the name "Richmond American Homes." MDC also owns and manages
HomeAmerican Mortgage Corporation which originates mortgage loans, primarily for
our homebuyers.
The Homebuilding Companies
Richmond American Homes builds homes in several growth markets,
including Denver where we are the largest homebuilder. We also build homes in
the suburban Washington, D.C. area in both Virginia and Maryland and rank as the
second largest builder in that market. We are also one of the larger
homebuilders in Phoenix, Tucson, Las Vegas and Colorado Springs. We have a
growing presence in several Southern California counties as well as the San
Francisco Bay area.
Our Homebuilding Strategy
We focus on building quality homes at affordable prices. Most of our
home buyers are buying either their first or second home.
Home Selling Prices
Most of our homes range in price from approximately $80,000 to $330,000,
although some homes we build cost as much as $900,000. In 1997, the average
selling price of our homes was $179,800 compared with $193,700 in 1998.
HomeAmerican Mortgage Corporation
Our mortgage company provides mortgage loans to most of our home buyers.
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For the convenience of the home buyers, we have loan offices in all of the
locations where we build homes.
Location of Executive Offices
The principal executive offices of MDC are at 3600 South Yosemite Street,
Suite 900, Denver, Colorado 80237 (telephone (303) 773-1100). We also offer
homes and mortgages through our Internet web site.
You can obtain additional information about us in the reports and other
documents incorporated by reference in this prospectus. See "Where You Can Find
More Information" and "Incorporation of Certain Documents by Reference."
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Use of Proceeds
Except as may otherwise be described in the prospectus supplement
relating to an offering of securities, we will use the net proceeds from the
sale of the securities offered under this prospectus and the prospectus
supplement primarily in our real estate acquisition and development and
home-building activities. We will use the remainder of the net proceeds for
general corporate purposes. We will determine any specific allocation of the net
proceeds of an offering of securities to a specific purpose at the time of the
offering and will describe the allocation in the related prospectus supplement.
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Ratios of Earnings to Fixed Charges
The following table sets forth our consolidated ratios of earnings to fixed
charges for the periods shown. In computing the ratio of earnings to fixed
charges, fixed charges consist of homebuilding and corporate interest expense
plus:
o amortization and expensing of debt expenses;
o amortization of discount or premium relating to indebtedness; and
o capitalized interest.
Earnings are computed by adding fixed charges, except capitalized interest, and
amortization of previously capitalized interest during the period to pretax
earnings from continuing operations. To date we have not issued any preferred
stock. Therefore, the ratios of earnings to combined fixed charges and preferred
stock dividend requirements are the same as the ratios of earnings to fixed
charges presented below.
Fiscal Year Ended December 31,
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1998 1997 1996 1995 1994
--------- -------- --------- -------- --------
Ratio of earnings to fixed
charges(unaudited) 5.07 2.55 2.02 1.79 1.81
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Description of Common Stock
MDC has authorized 100,000,000 shares of common stock. At December 31,
1998, MDC had approximately 21,982,000 shares outstanding. Common stockholders
have one vote for each share held of record in any stockholder vote. Common
stockholders do not have cumulative voting rights in the election of directors.
The board of directors is divided into three classes. The members of each class
serve a three-year term.
MDC is subject to Section 203 of the Delaware General Corporation Law,
which limits the ability of a publicly held Delaware corporation to consummate a
"business combination" with an "interested stockholder" for a period of three
years after the date such person became an "interested stockholder" unless:
o before such person became an interested stockholder, the board of
directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved the
business combination;
o upon consummation of the transaction that resulted in the interested
stockholder's becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding shares
held by directors who are also officers of the corporation and certain
shares held by employee stock plans); or
o following the transaction in which such person became an interested
stockholder, the business combination is approved by the board of
directors of the corporation and authorized at a meeting of
stockholders by the affirmative vote of the holders of 66 2/3% of the
outstanding voting stock of the corporation not owned by the interested
stockholder.
An "interested stockholder" generally is defined as a person who, together with
affiliates and associates, owns (or, within the prior three years, owned) 15% or
more of a corporation's outstanding voting stock.
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For purposes of Section 203, the term "business combination" is defined broadly
to include:
o mergers with or caused by the interested stockholder;
o sales or other dispositions to the interested stockholder (except
proportionately with the corporation's other stockholders) of assets of the
corporation or a subsidiary equal to 10% or more of the aggregate market
value of the corporation's consolidated assets or its outstanding stock;
o the issuance or transfer by the corporation or a subsidiary of stock of the
corporation or such subsidiary to the interested stockholder (except for
transfers in a conversion or exchange or a pro rata distribution or other
transactions that do not increase the interested stockholder's
proportionate ownership of any class or series of the corporation's or such
subsidiary's stock); or
o receipt by the interested stockholder (except proportionately as a
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stockholder), directly or indirectly, of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation
or a subsidiary.
MDC's Certificate of Incorporation contains provisions similar to
Section 203 of the Delaware General Corporation Law. These provisions require
that the holders of 80% of the shares of outstanding voting stock must approve
business combinations with or proposed by an interested stockholder, which
includes a beneficial owner of 10% of the outstanding shares of voting stock of
MDC. This approval is not required if the transaction is approved by a majority
of the continuing directors, which means those directors unaffiliated with the
interested stockholder and serving prior to the interested stockholder becoming
an interested stockholder, or if minimum price requirements are met.
The types of business combinations covered by these provisions include:
o mergers and consolidations with an interested stockholder;
o the transfer by MDC of $15,000,000 or more of assets or securities to an
interested stockholder;
o any proposal for the liquidation or dissolution of MDC; or
o any transaction which has the effect of increasing an interested
stockholder's proportionate ownership of MDC's capital stock.
The same provisions also apply to any amendment to MDC's bylaws that is proposed
by an interested stockholder.
In the case of any business combination with an interested stockholder
involving payments to holders of common stock, the fair market value per share
of the payments would have to be at least equal to the highest of the following:
o the highest price per share of the common stock paid by the interested
stockholder during the two years before the public announcement of the
proposed business combination or in the transaction in which it became an
interested stockholder, whichever is higher; and
o the fair market value per share of the common stock on the date of the
public announcement of the proposed business combination or on the date on
which the interested stockholder became an interested stockholder,
whichever is higher.
"Fair market value" is the highest stock exchange closing price or closing bid
in the 30 days preceding the date in question, and, in the case of other
property, the fair market value as determined by a majority of the continuing
directors.
All other action by the common stockholders requires:
o that a majority of the shares be present at a meeting and
o that a majority of the shares present vote for the action.
Larry A. Mizel, Chairman of the board of directors, president and chief
executive officer of MDC, beneficially owns more than 20% of the outstanding
common stock and so has the ability to veto any 80% stockholder vote.
MDC will pay dividends on the common stock when declared by the board of
directors of MDC from funds legally available. MDC's board of directors declared
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a dividend of $.05 per share on April 26, 1999, payable on May 21, 1999 to
stockholders of record on May 3, 1999. On liquidation of MDC, holders of common
stock will share in all assets remaining after payment of liabilities, subject
to the rights of any outstanding preferred stock. The shares of common
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stock are not redeemable or convertible, and the holders of common stock have no
preemptive or subscription rights to purchase any securities of MDC.
The transfer agent for the common stock is Continental Stock Transfer &
Trust Company, New York, New York.
Description of Preferred Stock
MDC has authorized 25,000,000 shares of preferred stock, none of which
were outstanding as of December 31, 1998. Shares of preferred stock may be
issued in one or more series, as authorized by MDC's board of directors with any
rights and restrictions that are specified by MDC's board of directors and
permitted by Delaware law. When MDC's board of directors specifies the terms of
the preferred stock, the terms will be set forth in a certificate of
designations to be filed with the secretary of state of Delaware. Upon filing,
the certificate of designations will be an amendment to the certificate of
incorporation under Delaware law. The preferred stock will have no preemptive
rights. MDC's board of directors may authorize preferred stock with terms and
conditions that could have the effect of discouraging a takeover or other
transaction that holders of common stock might believe to be in their best
interests or in which holders of some, or a majority, of the shares of common
stock might receive a premium for their shares over the then market price of the
shares of common stock.
The terms of each series of preferred stock will be described in any
prospectus supplement related to the series of preferred stock and may include
the following:
o the title and stated value of the preferred stock;
o the number of shares of the preferred stock offered and the offering
price and liquidation preference per share of the preferred stock;
o the dividend rates, periods and payment dates or methods of calculation
applicable to the preferred stock;
o the date from which any dividends on the preferred stock will
accumulate;
o the procedures for any auction and remarketing for the preferred stock;
o any provision for a sinking fund for the preferred stock;
o any provision for redemption of the preferred stock;
o any voting rights of holders of the preferred stock;
o any rights to convert the preferred stock into common stock or
participate in dividends paid on the common stock;
o the relative ranking and preference of the preferred stock as to
dividend rights and rights on liquidation of MDC;
o any limitations on issuing any series of preferred stock ranking senior
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to or on a parity with the series of preferred stock as to dividend
rights and rights on liquidation of MDC; and
o any other specific rights or restrictions of the preferred stock.
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The transfer agent for the preferred stock will be identified in the
prospectus supplement.
Description of the Debt Securities
The debt securities will be direct unsecured obligations of MDC and may
be senior debt securities, senior subordinated debt securities or junior
subordinated debt securities. The total amount of additional debt securities
that MDC may issue is limited by covenants in MDC's existing debt instruments to
approximately $400 million as of December 31, 1998, assuming no additional cash
flow.
The debt securities will be issued under one or more indentures in the
form that has been filed as an exhibit to the registration statement of which
this prospectus is a part. The indentures will be subject to and governed by the
Trust Indenture Act of 1939.
MDC may issue the debt securities in one or more series. Specific terms
of each series of debt securities will be contained in resolutions of MDC's
board of directors or in a supplemental indenture. The specific terms will be
described in a prospectus supplement.
All debt securities of one series need not be issued at the same time
and, unless otherwise provided in the prospectus supplement, MDC may issue
additional debt securities of the series without the consent of the holders.
The specific terms of the debt securities may include any of the
following:
o the title of the debt securities and whether the debt securities are
senior debt securities, senior subordinated debt securities or junior
subordinated debt securities;
o the aggregate principal amount of the debt securities and any limit on
the aggregate principal amount;
o the price at which the debt securities will be issued;
o any right of the holders to convert the debt securities into stock,
including the initial conversion price and rate and the conversion
period and any limitations on the transferability of the stock received
on conversion;
o the dates on which the principal of the debt securities will be
payable;
o the interest rates, which may be fixed or variable;
o the dates from which any interest will accrue, the dates on which the
interest will be payable, the record dates for the interest payments,
the persons to whom the interest will be payable, and the manner of
calculating interest;
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o any right of MDC to extend the dates on which principal or interest
will be payable;
o the places where the principal and any interest will be payable, where
the debt securities may be surrendered for registration of transfer and
where
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notices to MDC regarding the debt securities and the indenture may be
served;
o any right of MDC to elect to redeem the debt securities, including the
redemption prices and redemption periods;
o any obligation of MDC to redeem the debt securities under any sinking
fund or similar provision or at the option of a holder, including the
of redemption prices and redemption periods;
o any guarantees by subsidiaries of MDC that may guarantee the debt
securities, including the terms of any subordination of any guarantee
to other obligations of MDC;
o the events that would cause MDC to be in default and the consequences
default; and
o any discharge and release provisions of the indenture.
The debt securities may be issued at a discount below their principal
amount and provide for less than the entire principal amount to be payable on
acceleration of the maturity. In that case, all material U.S. federal income
tax, accounting and other considerations applicable to the securities will be
described in the prospectus supplement.
Except as may be set forth in any prospectus supplement, the debt
securities will not contain any provisions that would limit the ability of MDC
to incur debt or that would protect holders of debt securities in the event of a
change of control of MDC. The prospectus supplement will contain information
with respect to any changes to the events of default of MDC that are described
below.
Covenants
The prospectus supplement will describe any material covenants of a
series of debt securities.
Events of Default, Notice and Waiver
The prospectus supplement and each indenture will describe the events
that would cause MDC to be in default and the consequences of default, including
the following:
o failure to pay any interest when due that continues for a period of 30
days;
o failure to pay the principal when due;
o breach of any other covenant or warranty of MDC in the indenture that
continues for a period of 90 days after written notice as provided in
the indenture; and
o any other event of default provided in the indenture.
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If an event of default under any indenture occurs and is continuing,
then the trustee or the holders of not less than 25% in principal amount of the
debt securities of that series will have the right to declare the principal
amount of all the debt securities of that series to be due and payable
immediately by written notice to MDC and to the trustee if given by the holders.
If the debt securities of that series were issued at a discount or are indexed
securities, only the portion of the principal amount specified in the terms of
the securities may be declared due and payable. However, at any time after the
declaration of acceleration with respect to debt securities of the series has
been made, but
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before a judgment for payment of the money due has been obtained by the trustee,
the holders of a majority of the principal amount of outstanding debt securities
of the series may rescind the acceleration if all conditions set forth in the
indenture are met.
The indentures also will provide that the holders of a majority of the
principal amount of the outstanding debt securities of any series may waive any
past default and its consequences, except a default:
o in the payment of the principal or interest or
o of a provision contained in the indenture that cannot be amended
without the consent of the holder of each outstanding debt security
affected.
The indentures will provide for other procedures that may be followed
by holders of debt securities, the trustee of any series of debt securities, or
both, if an event of default occurs.
Amendment of the Indentures
Amendments of an indenture are permitted with the consent of the
holders of a majority in principal amount of all outstanding debt securities
issued under the indenture affected by the modification or amendment. However,
no amendment may, without the consent of each holder of debt securities
affected:
o reduce the amount of debt securities whose holders must consent to an
amendment, supplement or waiver;
o reduce the rate of interest or change the time for payment of interest,
including defaulted interest, on any debt security;
o reduce the principal or change the fixed maturity or alter any
redemption provision or any obligations of MDC to offer to purchase or
to redeem debt securities;
o modify the ranking or priority of the debt securities or any guarantee;
o release any guarantor from any of its obligations under its guarantee,
except as described in the indenture;
o waive a continuing default in the payment of principal or interest; or
o make any debt security payable at a different place or in different
currency, or impair the right of any holder to bring suit.
The holders of a majority in principal amount of the outstanding debt
securities of each series may, on behalf of all holders, waive compliance by MDC
with restrictive covenants of the series.
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MDC and the trustee may amend the indenture to, among other things,
correct errors and ambiguities without the consent of any holder of debt
securities as set forth in the indenture and as described in the prospectus
supplement.
Subordination
The prospectus supplement will describe any subordination provisions
and will define the senior debt to which the debt securities may be subordinated
and will set forth the approximate amount of senior debt outstanding as of the
end of MDC's most recent fiscal quarter.
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Discharge
Except as otherwise specified in the prospectus supplement, when (1)
all debt securities of a series have become due and payable or will become due
and payable at their stated maturity within one year, and (2) MDC deposits with
the trustee funds to pay all amounts due on the entire outstanding series of
debt securities, then MDC will have satisfied the indenture with respect to the
series.
Except as otherwise specified in the prospectus supplement, the
indentures will provide that MDC may elect either (a) to be discharged from any
series of debt securities or (b) to be released from certain obligations with
respect to the debt securities under the indenture, in either case after
depositing with the trustee enough money to pay all amounts due on the debt
securities on the scheduled due dates.
In addition, MDC must have delivered to the trustee an opinion of
counsel that the holders of the debt securities (1) will not recognize income,
gain or loss for U.S. federal income tax purposes as a result of the discharge
or release from obligations and (2) will be subject to U.S. federal income tax
on the same amounts, in the same manner and at the same times as would have been
the case if the discharge or release had not occurred. After a discharge, the
holders of the debt securities would be able to look only to the trust fund for
payment of principal and interest.
Payment and Paying Agents
Unless otherwise specified in the applicable prospectus supplement,
principal and interest will be payable at the corporate trust office of the
trustee, the address of which will be stated in the applicable prospectus
supplement. However, at the option of MDC, payment of interest may be made by
check mailed to the address of the person entitled to payment as it appears in
the register for the debt securities or by wire transfer of funds to the person
at an account maintained within the United States.
All moneys paid by MDC to a paying agent or a trustee for the payment
of principal or interest which remain unclaimed at the end of two years after
the payment has become due will be repaid to MDC, and the holder of the debt
security then may look only to MDC for payment.
Book-Entry Issuance
Unless otherwise specified in the applicable prospectus supplement, DTC
will act as depositary for securities issued in the form of global securities.
The securities will be issued only as fully-registered securities registered in
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the name of Cede & Co., DTC's nominee. One or more fully-registered global
securities will be issued for the securities representing in the aggregate the
total number of the securities, and will be deposited with or on behalf of DTC.
DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the provisions of Section 17A of the Exchange Act. DTC holds
securities that its participants deposit with DTC. DTC also facilitates the
settlement among participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts. This eliminates the need for physical
movement of securities certificates. Direct participants include securities
brokers and
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dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its direct participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships with direct
participants, either directly or through others. The rules applicable to DTC and
its participants are on file with the SEC.
Purchases of securities within the DTC system must be made by or
through direct participants, which will receive a credit for the securities on
DTC's records. The beneficial ownership interest of each actual purchaser of
each security is in turn recorded on the direct and indirect participants'
records. Beneficial owners will not receive written confirmation from DTC of
their purchases. However, beneficial owners are expected to receive written
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the direct or indirect participants through
which the beneficial owners purchased securities. Transfers of ownership
interests in securities issued in the form of global securities are to be
accomplished by entries made on the books of participants acting on behalf of
beneficial owners. Beneficial owners will not receive certificates representing
their ownership interests in the securities, except if use of the book-entry
system for the securities is discontinued.
DTC has no knowledge of the actual beneficial owners of the securities
issued in the form of global securities. DTC's records reflect only the identity
of the direct participants to whose accounts the securities are credited, which
may or may not be the beneficial owners. The participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder
of securities issued in the form of global securities. If less than all of a
series of the securities are being redeemed, DTC's current practice is to
determine by lot the amount of the interest of each direct participant to be
redeemed.
Although voting with respect to securities issued in the form of global
securities is limited to the holders of record of the securities, in those
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instances in which a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to the securities. Under its usual procedures, DTC
would mail an omnibus proxy to the issuer of the securities as soon as possible
after the record date. The omnibus proxy assigns Cede & Co.'s consenting or
voting rights to those direct participants to whose accounts the securities are
credited on the record date, identified in a listing attached to the omnibus
proxy.
Payments for securities issued in the form of global securities will be
made by the issuer of the securities to DTC. DTC's practice is to credit direct
participants' accounts on the payment date in accordance with their holdings
shown on DTC's records unless DTC has reason to believe that it will not receive
payments on the payment date. Payments by participants to beneficial owners will
be governed by standing instructions and customary practices and will be the
responsibility of the participant and not of DTC, the trustee or MDC, subject to
any statutory or regulatory requirements. Payments to DTC are the responsibility
14
<PAGE>
of the issuer of the securities, disbursements of the payments to direct
participants are the responsibility of DTC, and disbursements of the payments to
the beneficial owners are the responsibility of direct and indirect
participants.
DTC may discontinue providing its services as depository with respect
to any securities at any time by giving reasonable notice to the issuer of the
securities. In the event that a successor depositary is not obtained, individual
security certificates representing the securities are required to be printed and
delivered. MDC may decide to discontinue use of the system of book-entry
transfers through DTC or a successor depositary.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that MDC believes to be accurate, but MDC
assumes no responsibility for the accuracy of the information. MDC has no
responsibility for the performance by DTC or its participants of their
respective obligations as described in this prospectus or under the rules and
procedures governing their operations.
Plan of Distribution
Any of the securities being offered may be sold in any one or more of
the following ways from time to time:
o through agents;
o to or through underwriters;
o through dealers; and
o directly by MDC.
The distribution of the securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to the
prevailing market prices or at negotiated prices.
Offers to purchase securities may be solicited by agents designated by
MDC. Any agent involved in the offer or sale of the securities will be named,
and any commissions payable by MDC to the agent will be set forth, in the
prospectus supplement. Unless otherwise indicated in the prospectus supplement,
the agent will be acting on a reasonable best efforts basis for the period of
<PAGE>
its appointment. The agent may be deemed to be an underwriter, as that term is
defined in the Securities Act of 1933, of the securities so offered and sold.
If securities are sold by means of an underwritten offering, MDC will
execute an underwriting agreement with underwriters at the time an agreement for
the sale is reached. In that case, the names of the specific managing
underwriter or underwriters, as well as any other underwriters, the amounts
underwritten and the terms of the transaction, including commissions, discounts
and any other compensation of the underwriters and dealers, will be set forth in
the prospectus supplement which will be used by the underwriters to make resales
of the securities. The underwriters will acquire securities for their own
account and may resell them from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at varying
prices determined by the underwriters at the time of sale. Securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters or directly by one or more underwriters. Unless otherwise
indicated
15
<PAGE>
in the prospectus supplement, the underwriting agreement will provide that the
obligations of the underwriters are subject to conditions precedent and that the
underwriters will be obligated to purchase all the securities if any are
purchased.
MDC may grant to the underwriters options to purchase additional
securities to cover any over-allotments at the initial public offering price,
with additional underwriting commissions or discounts, as may be set forth in
the prospectus supplement.
If a dealer is used in the sale of the securities, MDC will sell the
securities to the dealer as principal. The dealer may then resell the securities
to the public at varying prices to be determined by the dealer at the time of
resale. The dealer may be deemed to be an underwriter, as the term is defined in
the Securities Act, of the securities so offered and sold. The name of the
dealer and the terms of the transaction will be set forth in the prospectus
supplement.
Offers to purchase securities may be solicited directly by MDC and may
be sold by MDC directly to institutional investors or others, who may be deemed
to be underwriters within the meaning of the Securities Act with respect to any
resale. The terms of the sales will be described in the prospectus supplement.
If described in the prospectus supplement, securities may also be
offered and sold, in connection with a remarketing on their purchase, in
accordance with a redemption or repayment under their terms, or otherwise, by
one or more remarketing firms, acting as principals for their own accounts or as
agents for MDC. Any remarketing firm will be identified and its compensation and
the terms of any agreement with MDC will be described in the prospectus
supplement. Remarketing firms may be deemed to be underwriters, as that term is
defined in the Securities Act, in connection with the securities remarketed.
If described in the prospectus supplement, MDC may authorize agents and
underwriters to solicit offers by certain institutions to purchase securities
from MDC at the public offering price set forth in the prospectus supplement
under delayed delivery contracts providing for payment and delivery on the date
or dates stated in the prospectus supplement. The delayed delivery contracts
will be subject to only those conditions set forth in the prospectus supplement.
A commission indicated in the prospectus supplement will be paid to underwriters
and agents soliciting purchases of securities under delayed delivery contracts
accepted by MDC.
<PAGE>
Agents, underwriters, dealers and remarketing firms may be entitled
under agreements with MDC to indemnification by MDC against certain liabilities,
including liabilities under the Securities Act, or to contribution for payments
that the agents, underwriters, dealers and remarketing firms may be required to
make.
Each series of securities will be a new issue. Other than the common
stock, which is listed on the New York Stock Exchange, new securities will have
no established trading market. MDC may elect to list any series of securities on
an exchange, and in the case of the common stock, on any additional exchange,
but, unless otherwise specified in the prospectus supplement, MDC will not be
obligated to do so. No assurance can be given as to the liquidity of the trading
market for any of the securities.
Agents, underwriters, dealers and remarketing firms may be customers
of, engage in transactions with, or perform services for, MDC and its
subsidiaries in the ordinary course of business.
16
<PAGE>
Legal Matters
The validity of the common stock and the preferred stock and the status
of the debt securities as binding obligations of MDC will be passed on for MDC
by Holme Roberts & Owen LLP, Denver, Colorado. Certain legal matters will be
passed on for any underwriters, agents and dealers by Cahill Gordon & Reindel (a
partnership including a professional corporation), New York, New York. MDC will
identify in a prospectus supplement the legal matters that Cahill Gordon &
Reindel will pass on for any underwriters.
Experts
The financial statements incorporated in this prospectus by reference
to the Annual Report on Form 10-K for the year ended December 31, 1998, have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission under the
Securities Exchange Act of 1934. You may read and copy this information at the
following locations of the SEC:
Judiciary Plaza, Room 10024 Seven World Trade Center,
450 Fifth Street, N.W. Street Suite 1300
Washington, D.C. 20549 New York, New York 10048
Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60661
You can also obtain copies of this information by mail from the Public
Reference Room of the SEC, 450 Fifth Street, N.W., Room 10024, Washington D.C.
20549, at prescribed rates. You may obtain information on the operation of the
Public Reference Room by calling the SEC at (800) SEC-0330.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, like MDC, that
<PAGE>
file electronically with the SEC. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information
about us at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005.
We have filed with the SEC a registration statement on Form S-3 that
registers the securities we are offering. The registration statement, including
the attached exhibits and schedules, contains additional relevant information
about us and our securities. The rules and regulations of the SEC allow us to
omit certain information included in the registration statement from this
prospectus.
17
<PAGE>
Incorporation of Certain Documents by Reference
The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus, except
for any information that is superseded by information that is included directly
in this document.
This prospectus includes by reference the documents listed below that
we have previously filed with the SEC and that are not included in or delivered
with this document. They contain important information about our company and its
financial condition.
FILING PERIOD
===============================================================================
Annual Report on Form 10-K Year ended December 31, 1998
Quarterly Report on Form 10-Q Quarter ended March 31, 1999
Current Reports on Form 8-K April 20 and June 3, 1999
We incorporate by reference additional documents that we may file with
the SEC between the date of this prospectus and the date of the closing of this
offering. These documents include periodic reports, such as Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
You can obtain any of the documents incorporated by reference in this
document from us without charge, excluding any exhibits to those documents
unless the exhibit is specifically incorporated by reference as an exhibit to
this prospectus. You can obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from us at the
following address:
Daniel S. Japha
Secretary
M.D.C. Holdings, Inc.
3600 South Yosemite Street
Suite 900
Denver, Colorado 80237
(303) 773-1100.
We have not authorized anyone to give any information or make any
<PAGE>
representation about us that is different from, or in addition to, that
contained in this prospectus or in any of the materials that we have
incorporated by reference into this document. Therefore, if anyone does give you
information of this sort, you should not rely on it. If you are in a
jurisdiction where offers to sell, or solicitations of offers to purchase, the
securities offered by this document is unlawful, or if you are a person to whom
it is unlawful to direct these types of activities, then the offer presented in
this document does not extend to you. The information contained in this document
speaks only as of the date of this document, unless the information specifically
indicates that another date applies.
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by MDC in
connection with the issuance and distribution of the securities, other than
underwriting discounts and commissions. MDC will bear all of such expenses. All
the amounts shown are estimates, except the registration fee.
Registration Fee...............................................................$
Fees and expenses of accountants................................................
Fees and expenses of counsel to MDC.............................................
Fees and expenses of trustee and counsel........................................
Printing and engraving..........................................................
Blue Sky fees and expenses (including counsel)..................................
NYSE Listing fee................................................................
Rating agency fees..............................................................
Miscellaneous...................................................................
Total..........................................................................$
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The By-Laws and Certificates of Incorporation of Richmond American
Homes of Arizona, Inc. and Richmond American Homes of Colorado, Inc. provide for
indemnification of the officers and directors of those corporations to the
fullest extent permitted by applicable law. The governing documents of the other
Co-Registrants do not provide for the indemnification of directors or officers
against any liability which they may incur in their capacities as such.
Section 145 of the Delaware General Corporation Law provides in part
that a corporation shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to
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<PAGE>
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. Similar indemnity is authorized for such persons against
expenses (including attorneys's fees) actually and reasonably incurred in
defense or settlement of any threatened, pending or completed action or suit by
or in the right of the corporation, if such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and provided further (unless a court of competent jurisdiction
otherwise provides) such person shall not have been adjudged liable to the
corporation. Any such indemnification may be made only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct.
Additionally, the Certificate of Incorporation of Richmond American
Homes of Colorado, Inc. eliminates in certain circumstances the monetary
liability of directors for breach of their fiduciary duty as directors. This
provision does not eliminate the liability of a director (i) for a breach of the
director's duty of loyalty to the respective corporation or its stockholders;
(ii) for acts or omissions by the director not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) for liability
arising under Section 174 of the Delaware General Corporation Law (relating to
the declaration of dividends and purchase or redemption of shares in violation
of the Delaware General Corporation Law); or (iv) for any transaction from which
the director derived an improper personal benefit.
Section 7-109-102 of the Colorado Business Corporation Act permits
indemnification of a director of a Colorado corporation, in the case of a third
party action, if the director (a) conducted himself in good faith, (b)
reasonably believed that (i) in the case of conduct in his official capacity,
his conduct was in the corporation's best interest, or (ii) in all other cases,
his conduct was not opposed to the corporation's best interest, and (c) in the
case of any criminal proceeding, had no reasonable cause to believe that his
conduct was unlawful. The section further provides for mandatory indemnification
of directors and officers who are successful on the merits or otherwise in
litigation. The statute limits the indemnification that a corporation may
provide to its directors in two key respects. A corporation may not indemnify a
director in a derivative action in which the director is held liable to the
corporation, or in any proceeding in which the director is held liable on the
basis of his improper receipt of a personal benefit. The statute permits a
corporation to indemnify and advance litigation expenses to officers, employees
and agents who are not directors to a greater extent than directors if
consistent with law and provided for by the articles of incorporation, the
bylaws, a resolution of directors or shareholders, or a contract between the
corporation and the officer, employee or agent.
Sections 13.1-697, -698, -699, -701, -702, -703 and -704 of the
Virginia Stock Corporation Act ("VSCA") provide, generally and in part, that a
corporation may indemnify an individual made a party to a proceeding because he
is or was a director, against liability incurred in the proceeding if he
conducted himself in good faith and reasonably believed, in
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<PAGE>
the case of conduct in his official capacity with the corporation, that his
conduct was in its best interests, or in all other cases, that his conduct was
at least not opposed to its best interests and, in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful;
provided, however, that a corporation may not indemnify a director in connection
with a proceeding by or in the right of the corporation in which the director
was adjudged liable to the corporation or in connection with any other
proceeding charging improper personal benefit to him in which he was adjudged
liable. Such indemnification in connection with a proceeding by or in the right
of the corporation is limited to reasonable expenses incurred in connection
therewith. Unless limited by a corporation's certificate of incorporation,
similar indemnity with respect to expenses incurred is mandatory under the
above-referenced Sections of the VSCA for a director or officer who was wholly
successful on the merits or otherwise, in defense of any proceedings to which he
was a party because he is or was a director or officer, as the case may be. Any
such indemnification may be made only as authorized in each specific case after
a determination by disinterested directors, special legal counsel or
disinterested shareholders that indemnification is permissible because the
indemnitee has met the applicable standard of conduct. Directors and officers
may also apply for court-ordered indemnification. Pursuant to Section 13.1-704
of the VSCA, a corporation may also indemnify and advance expenses to any
director, officer, employee or agent to the extent provided by the corporation's
certificate of incorporation, any by-law made by the shareholders or any
resolution adopted by the shareholders, except an indemnity against willful
misconduct or a knowing violation of the criminal law.
Section 2-418 of the Maryland General Corporation Law ("MGCL")
provides, generally and in part, that a corporation may indemnify any director
made a party to a proceeding by reason of the individual's service in that
capacity unless it is established that the director's act or omission (1) was
material to the matter giving rise to the proceeding; (2) was committed in bad
faith; or (3) was the result of active and deliberate dishonesty; or unless it
is established that the director actually received an improper personal benefit
in money, property or services. In the case of a criminal proceeding, indemnity
is permissible unless it is established that the director had reasonable cause
to believe that the act or omission was unlawful. Indemnification may be against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by the director in connection with the proceeding, but if the
proceeding was one by or in the right of the corporation, indemnification may
not be made in respect of any proceeding in which at the director shall have
been adjudged liable to the corporation or in connection with any other
proceeding charging improper personal benefit to him in which he was adjudged
liable. Unless limited by a corporation's certificate of incorporation, similar
indemnity with respect to expenses incurred is mandatory under Section 2-418 of
the MGCL for a director or officer who was wholly successful in the defense of
any proceeding referred to in the first sentence of this paragraph to which he
was a party because he is or was a director or officer, as the case may be. Any
such indemnification may be made only as authorized in each specific case after
a determination by disinterested directors,
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<PAGE>
special legal counsel or disinterested shareholders that indemnification is
permissible because the indemnitee has met the applicable standard of conduct.
Directors and officers may also apply for court-ordered indemnification.
MDC has obtained directors and officers liability insurance that
provides insurance coverage for certain liabilities that may be incurred by the
directors and officers of MDC and the co-registrants in their capacity as such.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER EXHIBITS
1.1* Form of Underwriting Agreement.
4.2(a)+ Form of Senior Indenture by and between M.D.C. Holdings, Inc.
and ____________________, as trustee.
4.2(b)+ Form of Senior Subordinated Indenture by and between M.D.C.
Holdings, Inc. and ___________________, as trustee.
4.2(c)+ Form of Junior Subordinated Indenture by and between M.D.C.
Holdings, Inc. and ___________________, as trustee.
5.1+ Opinion of Holme Roberts & Owen LLP.
12.1+ Computation of ratios of earnings to fixed charges.
23.1+ Consent of Independent Accountants.
23.2 Consent of Holme Roberts & Owen LLP (included in Exhibit 5.1).
24 Powers of Attorney (included on the signature pages of the
original filing).
* MDC will file any underwriting agreement that it may enter into as an
exhibit to a Current Report on Form 8-K which is incorporated by reference
into this registration statement.
+ Filed with this registration statement.
ITEM 17. UNDERTAKINGS.
(a) MDC hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
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(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table
in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
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<PAGE>
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(5) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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<PAGE>
(b) MDC hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of MDC's
annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of MDC pursuant to any charter provision, by-law,
contract, arrangement, statute, or otherwise, MDC has been
advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
MDC of expenses incurred or paid by a director, officer or
controlling person of MDC in the successful defense of any
action, suit or proceeding) is asserted against MDC by such
director, officer or controlling person in connection with the
securities being registered, MDC will, unless in the opinion of
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
MDC hereby undertakes to file an application for the purpose of determining
the eligibility of the applicable trustee to act under subsection (a) of Section
310 of the Trust Indenture Act of 1939 ("Act") in accordance with the rules and
regulations of the Commission under Section 305(b)(2) of the Act.
<PAGE>
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
M.D.C. Holdings, Inc. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado, on the 15th
day of June, 1999.
M.D.C. HOLDINGS, INC.
By: /s/ Paris G. Reece III
----------------------------
Paris G. Reece III
Senior Vice President
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
person in the capacity indicated, on the 15th day of June, 1999.
/s/ GILBERT GOLDSTEIN
---------------------------------
Gilbert Goldstein
Director of M.D.C. Holdings, Inc.
POWER OF ATTORNEY
Each of the undersigned constitutes and appoints Paris G. Reece III,
Michael Touff and Daniel S. Japha, and each of them, as attorneys for him and in
his name, place, and stead, and in his capacity as a Director, Officer, or both,
of M.D.C. Holdings, Inc., to execute and file any amended registration statement
or statements or supplements thereto, with all exhibits thereto and other
documents in connection therewith, with the Securities Exchange Commission,
hereby giving and granting to said attorneys full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in and about the premises as fully, to all intents and purposes, as he or
she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities indicated, on the 15th day of June, 1999.
MDC OFFICERS AND DIRECTORS
Principal Executive Officer:
/s/ Larry A. Mizel
---------------------------------
Larry A. Mizel,
Chairman of the Board of Directors,
President and Chief Executive Officer
Chief Operating Officer:
/s/ David D. Mandarich
---------------------------------
David D. Mandarich,
Director, Executive Vice President -
Real Estate and Chief
Operating Officer
Principal Financial and Accounting
Officer:
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<PAGE>
/s/ Paris G. Reece III
---------------------------------
Paris G. Reece III,
Senior Vice President,
Chief Financial Officer and
Principal Accounting Officer
Other Directors:
/s/ Steven J. Borick
---------------------------------
Steven J. Borick
/s/ William B. Kemper
---------------------------------
William B. Kemper
/s/ Herbert T. Buchwald
---------------------------------
Herbert T. Buchwald
CO-REGISTRANT OFFICERS AND DIRECTORS
RICHMOND AMERICAN HOMES OF CALIFORNIA,
INC.
RICHMOND AMERICAN HOMES OF MARYLAND,
INC.
RICHMOND AMERICAN HOMES OF NEVADA, INC.
RICHMOND AMERICAN HOMES OF VIRGINIA, INC.
RICHMOND AMERICAN HOMES OF NORTHERN
CALIFORNIA, INC.
Principal Executive, Financial and
Accounting Officer:
/s/ Paris G. Reece III
---------------------------
Paris G. Reece III,
Executive Vice President, Director
RICHMOND AMERICAN HOMES OF ARIZONA, INC.
Principal Executive, Financial and
Accounting Officer:
/s/ Paris G. Reece III
---------------------------
Paris G. Reece III,
Vice President, Treasurer, Director
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<PAGE>
RICHMOND AMERICAN HOMES OF COLORADO,
INC.
Principal Executive Officer:
/s/ David D. Mandarich
---------------------------
David D. Mandarich,
Chairman of the Board of Directors,
President
Principal Financial and Accounting
Officer:
/s/ Paris G. Reece III
---------------------------
Paris G. Reece III,
Vice President
Other Directors:
/s/ Steven J. Borick
-----------------------------
Steven J. Borick
/s/ Larry A. Mizel
-----------------------------
Larry A. Mizel
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<PAGE>
EXHIBIT 4.2(a)
M.D.C. HOLDINGS, INC.
Issuer
AND
-----------------------------
Trustee
SENIOR DEBT SECURITIES
----------------------
INDENTURE
DATED AS OF , 1999
------------
----------------------
<PAGE>
ARTICLE ONE - Definitions and Incorporation by Reference
Section 1.01. Definitions................................1
Section 1.02. Other Definitions..........................6
Section 1.03. Incorporation by Reference of Trust
Indenture Act............................7
Section 1.04. Rules of Construction......................7
ARTICLE TWO - The Securities
Section 2.01. Form and Dating............................8
Section 2.02. Execution and Authentication...............9
Section 2.03. Registrar and Paying Agent................10
Section 2.04. Paying Agent to Hold Money in Trust.......10
Section 2.05. Securityholder Lists......................11
Section 2.06. Transfer and Exchange.....................11
Section 2.07. Replacement Securities....................11
Section 2.08. Outstanding Securities....................12
Section 2.09. Temporary Securities......................12
Section 2.10. Cancellation..............................12
Section 2.11. Defaulted Interest........................13
Section 2.12. Treasury Securities.......................13
Section 2.13. CUSIP Numbers.............................13
<PAGE>
Section 2.14. Deposit of Moneys.........................13
Section 2.15. Book-Entry Provisions for Global
Security................................14
ARTICLE THREE - Redemption
Section 3.01. Notices to Trustee........................15
Section 3.02. Selection of Securities to be Redeemed....15
Section 3.03. Notice of Redemption......................16
Section 3.04. Effect of Notice of Redemption............16
Section 3.05. Deposit of Redemption Price...............17
Section 3.06. Securities Redeemed in Part...............17
ARTICLE FOUR - Covenants
Section 4.01. Payment of Securities.....................17
Section 4.02. Maintenance of Office or Agency...........17
Section 4.03. Compliance Certificate....................17
Section 4.04. Payment of Taxes; Maintenance of
Corporate Existence;
Maintenance of Properties...............18
i
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ARTICLE FIVE - Successor Corporation
Section 5.01. When Company May Merge, etc...............19
ARTICLE SIX - Defaults and Remedies
Section 6.01. Events of Default.........................19
Section 6.02. Acceleration..............................21
Section 6.03. Other Remedies............................22
Section 6.04. Waiver of Existing Defaults...............22
Section 6.05. Control by Majority.......................22
Section 6.06. Limitation on Suits.......................23
Section 6.07. Rights of Holders to Receive Payment......23
Section 6.08. Collection Suit by Trustee................23
Section 6.09. Trustee May File Proofs of Claim..........24
Section 6.10. Priorities................................24
Section 6.11. Undertaking for Costs.....................24
ARTICLE SEVEN - Trustee
Section 7.01. Duties of Trustee.........................25
Section 7.02. Rights of Trustee.........................26
Section 7.03. Individual Rights of Trustee..............27
Section 7.04. Trustee's Disclaimer......................27
Section 7.05. Notice of Defaults........................27
Section 7.06. Reports by Trustee to Holders.............28
Section 7.07. Compensation and Indemnity................28
Section 7.08. Replacement of Trustee....................28
Section 7.09. Successor Trustee by Merger, etc..........29
Section 7.10. Eligibility; Disqualification.............29
Section 7.11. Preferential Collection of Claims
<PAGE>
Against Company.........................30
ARTICLE EIGHT - Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys or
U.S. Government Obligations.............30
Section 8.02. Survival of the Company's Obligations.....33
Section 8.03. Application of Trust Money................33
Section 8.04. Repayment to the Company..................34
Section 8.05. Reinstatement.............................34
ii
<PAGE>
ARTICLE NINE - Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders................35
Section 9.02. With Consent of Holders...................35
Section 9.03. Compliance with Trust Indenture Act.......36
Section 9.04. Revocation and Effect of Consents.........36
Section 9.05. Notation on or Exchange of Securities.....37
Section 9.06. Trustee to Sign Amendments, etc...........37
ARTICLE TEN - Miscellaneous
Section 10.01. Trust Indenture Act Controls..............38
Section 10.02. Notices...................................38
Section 10.03. Communications by Holders with Other
Holders.................................39
Section 10.04. Certificate and Opinion as to Conditions
Precedent...............................39
Section 10.05. Statements Required in Certificate or
Opinion.................................39
Section 10.06. Rules by Trustee and Agents...............40
Section 10.07. Legal Holidays............................40
Section 10.08. Governing Law.............................40
Section 10.09. No Adverse Interpretation of Other
Agreements..............................40
Section 10.10. No Recourse Against Others................40
Section 10.11. Successors and Assigns....................40
Section 10.12. Duplicate Originals.......................41
Section 10.13. Severability..............................41
iii
<PAGE>
CROSS-REFERENCE TABLE
This Cross-Reference Table is not a part of the
Indenture.
TIA Indenture
Section Section
--------- ---------
310(a)(1).......................................... 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(b)................................................ 7.08; 7.10; 10.02
311(a)............................................. 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)............................................. 2.05
(b)................................................ 10.03
(c)................................................ 10.03
313(a)............................................. 7.06
(b)(1)............................................. N.A.
(b)(2)............................................. 7.06
(c)................................................ 10.02
(d)................................................ 7.06
314(a)............................................. 7.06; 10.02
(b)................................................ N.A.
(c)(1)............................................. 10.04
(c)(2)............................................. 10.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 10.05
(f)................................................ N.A.
315(a)............................................. 7.01(b)
(b)................................................ 7.05; 10.02
(c)................................................ 7.01(a)
(d)................................................ 7.01(c)
(e)................................................ 6.11
316(a)(last sentence).............................. 2.12
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.07
(c)................................................ 9.04
317(a)(1).......................................... 6.08
(a)(2)............................................. 6.09
(b)................................................ 2.04
318(a)............................................. 10.01
- -----------------------------
N.A. means Not Applicable.
iv
<PAGE>
INDENTURE dated as of , 1999, by and among M.D.C.
------------
<PAGE>
HOLDINGS, INC., a Delaware corporation (the "Company"), and , (the
-------------
"Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's debt securities
issued under this Indenture (the "Securities"):
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person, or (ii) any officer,
director, a Person acting with respect to such Person in a similar capacity, or
controlling shareholder of such other Person. For purposes of this definition,
the term "control" means (a) the power to direct the management and policies of
a Person, either directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise, or (b) without
limiting the foregoing, the beneficial ownership of 10% or more of the voting
power of the voting common equity of such Person (on a fully diluted basis).
Notwithstanding the foregoing, the term "Affiliate" will not include, with
respect to the Company or any Restricted Subsidiary of the Company, any
Restricted Subsidiary of the Company, or the Company, with respect to any
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.
"Bankruptcy Law" means title 11 of the United States Code, as amended,
or any similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
authorized committee thereof.
1
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"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person's capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other equity interests, whether now
outstanding or issued after the applicable Issue Date, including, without
limitation, all Preferred Stock.
"Capitalized Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under a lease that is required to be
<PAGE>
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.
"Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means the
successor.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect such Person or any of its Subsidiaries or Affiliates against
fluctuations in currency values.
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, unless otherwise timely cured, an Event of
Default.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indebtedness" of any Person means, without duplication, (i) any
liability of such Person (other than accounts payable, other trade payables and
accrued expenses incurred in the ordinary course of such Person's business) (a)
for borrowed money or under any reimbursement obligation relating to a letter of
credit or other similar instruments (other than standby letters of credit issued
for the benefit of or surety, performance, completion or payment bonds, earnest
money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business, general contingency and tax reserves,
liabilities for deposits and deferred income which in accordance with GAAP is
recorded as a liability), (b) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind or with services
incurred in connection with capital expenditures (other than any obligation to
pay a contingent
2
<PAGE>
purchase price which, as of the date of incurrence thereof is not required to be
recorded as a liability in accordance with GAAP), or (c) in respect of
Capitalized Lease Obligations (to the extent of the Attributable Debt in respect
thereof), (ii) any Indebtedness of others that such Person has guaranteed to the
extent of the guarantee, (iii) to the extent not otherwise included, the
obligations of such Person under Currency Agreements or Interest Protection
Agreements to the extent recorded as liabilities not constituting Interest
Incurred, net of amounts recorded as assets in respect of such agreements, in
accordance with GAAP, and (iv) all Indebtedness of others secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person. The amount of Indebtedness of any Person at any date shall be (a) the
outstanding balance at such date of all unconditional obligations as described
above, net of any unamortized discount to be accounted for as Interest Expense,
<PAGE>
in accordance with GAAP, (b) the maximum liability of such Person for any
contingent obligations under clause (ii) above at such date, net of, any
unamortized discount to be accounted for as Interest Expense in accordance with
GAAP and (c) in the case of clause (iv) above, the lesser of (1) the fair market
value of any asset subject to a Lien securing the Indebtedness of others on the
date that the Lien attaches and (2) the amount of the Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time
to time, including pursuant to any Authorizing Resolution or supplemental
indenture pertaining to any Series.
"Interest Expense" of any Person for any period means, without
duplication, the aggregate amount of (i) interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like caption
on an income statement for such Person (including, without limitation, imputed
interest included in Capitalized Lease Obligations, all commissions, discounts
and other fees and charges owned with respect to letters of credit and bankers'
acceptance financing, the net costs (but reduced by net gains) associated with
Currency Agreements and Interest Protection Agreements, amortization of other
financing fees and expenses; with respect to the Company and its Restricted
Subsidiaries, but excluding its Unrestricted Subsidiaries, the interest portion
of any deferred payment obligation, amortization of discount or premium, if any,
and all other noncash interest expense other than interest and other charges
amortized to cost of sales), and (ii) all interest actually paid by the Company
or a Restricted Subsidiary under any guarantee of Indebtedness (including,
without limitation, a guarantee of principal, interest or any combination
thereof) of any Person other than the Company or any Restricted Subsidiary
during such period; provided, that Interest Expense shall exclude any expense
associated with the complete write-off of financing fees and expenses in
connection with the repayment or repurchase of any Indebtedness.
"Interest Protection Agreement" of any Person means any interest rate
swap agreement, interest rate collar agreement, option or futures contract or
other similar agreement or arrangement designed to protect such Person or any of
its Subsidiaries
3
<PAGE>
against fluctuations in interest rates with respect to Indebtedness permitted to
be incurred under this Indenture.
"Investments" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
all guarantees of Indebtedness or other obligations of any other Person by such
person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments in any other
Person (including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
"Issue Date" means, with respect to any Series of Securities, the date
on which the Securities of such Series are originally issued under this
Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such Property
<PAGE>
(other than an obligation to share revenues or profits upon the sale or
liquidation of Property to which such obligation relates). For purposes of this
definition, a Person shall be deemed to own, subject to a Lien, any Property
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person for which (i) the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments evidencing or securing such Indebtedness and such
property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within 90 days after the acquisition of such property
and (ii) no other assets of such Person may be realized upon in collection of
principal or interest on such Indebtedness. Indebtedness which is otherwise
Non-Recourse Indebtedness will not lose its character as Non-Recourse
Indebtedness because there is recourse to the borrower or any other Person for
(i) environmental warranties and indemnities, or (ii) indemnities for and
liabilities arising from fraud, misrepresentation, misapplication or non-payment
of rents, profits, insurance and condemnation proceeds and other sums actually
received by the borrower from secured assets to be paid to the lender, waste and
mechanics' liens.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company.
4
<PAGE>
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or with respect to the payment of
dividends.
"Principal" of a debt security means the principal of the security
plus, when appropriate, the premium, if any, on the security.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person, whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Subsidiary" means any Subsidiary of the Company which is
not an Unrestricted Subsidiary.
<PAGE>
"SEC" means the Securities and Exchange Commission or any successor
agency performing the duties now assigned to it under the TIA.
"Securities" means any Securities that are issued under this Indenture.
"Series" means a series of Securities established under this Indenture.
"Significant Subsidiary" means any Subsidiary of the Company which
would constitute a "significant subsidiary" as defined in Rule 1.02 of
Regulation S-X under the Securities Act and the Exchange Act.
"Subsidiary" of any Person means any corporation or other entity (other
than political subdivisions or enterprises thereof or governmental agencies) of
which a majority of the Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time directly or indirectly owned or controlled by such Person.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor serving hereunder.
5
<PAGE>
"Trust Officer" means the Chairman of the Board, the President, any
Vice President or any other officer or assistant officer of the Trustee assigned
by the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
"U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt issued
by a bank or trust company as custodian with respect to any such U.S. government
obligations or a specific payment of interest on or principal of any such U.S.
government obligation held by such custodian for the account of the holder of a
depositary receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. government obligation or the specific payment of interest on or
principal of the U.S. government obligation evidenced by such depositary
receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company so
designated by a resolution adopted by the Board of Directors of the Company.
Section 1.02. Other Definitions.
Term Defined in
Section
<PAGE>
"Agent Members"....................................... 2.15
"Business Day"........................................ 10.07
"Custodian"........................................... 6.01
"Depositary".......................................... 2.15
"Event of Default".................................... 6.01
"Legal Holiday"....................................... 10.07
"Paying Agent"........................................ 2.03
"Registrar"........................................... 2.03
6
<PAGE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities of a Series thereof.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term, not otherwise defined, has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
7
<PAGE>
<PAGE>
ARTICLE TWO
The Securities
Section 2.01. Form and Dating.
The aggregate principal amount of Securities that may be issued under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more Series. Each Series shall be created by an Authorizing Resolution or
a supplemental indenture that establishes the terms of the Series, which may
include the following:
(1) the title of the Series;
(2) the aggregate principal amount (or any limit on the aggregate
principal amount) of the Series and, if any Securities of a
Series are to be issued at a discount from their face amount,
the method of computing the accretion of such discount;
(3) the interest rate or method of calculation of the interest
rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Securities of the
Series;
(6) the dates when, places where and manner in which principal and
interest are payable;
(7) the Registrar and Paying Agent;
(8) the terms of any mandatory (including any sinking fund
requirements) or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form
and the terms of any such forms of Securities;
(12) whether any Securities will be represented by a global
Security and the terms of any such global Security;
8
<PAGE>
(13) if payments of principal or interest may be made in a currency
other than that in which Securities are denominated, the
manner for determining such payments;
<PAGE>
(14) provisions for electronic issuance of Securities or issuance
of Securities in uncertificated form;
(15) any Events of Default, covenants and/or defined terms in
addition to or in lieu of those set forth in this Indenture;
(16) whether and upon what terms Securities may be defeased if
different from the provisions set forth in this Indenture;
(17) the form of the Securities, which, unless the Authorizing
Resolution or supplemental indenture otherwise provides, shall
be in the form of Exhibit A;
(18) any terms that may be required by or advisable under
applicable law;
(19) the percentage of the principal amount of the Securities which
is payable if the maturity of the Securities is accelerated in
the case of Securities issued at a discount from their face
amount; and
(20) any other terms in addition to or different from those
contained in this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and
delivery thereof are not subject to any conditions precedent.
Section 2.02. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
9
<PAGE>
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon
receipt of an Officers' Certificate of the Company. Each Security shall be dated
the date of its authentication.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
<PAGE>
or agency where Securities may be presented for payment ("Paying Agent) and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such Agent
and the Trustee shall have the right to inspect the Securities register at all
reasonable times to obtain copies thereof, and the Trustee shall have the right
to rely upon such register as to the names and addresses of the Holders and the
principal amounts and certificate numbers thereof. If the Company fails to
maintain a Registrar or Paying Agent or fails to give the foregoing notice, the
Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
Section 2.04. Paying Agent to Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of
Securityholders and the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money and hold it
as a separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon doing so the Paying Agent shall
have no further liability for the money.
10
<PAGE>
Section 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least 5 Business Days before each semi-annual interest payment
date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
Section 2.06. Transfer and Exchange.
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
<PAGE>
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.
Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
Section 2.07. Replacement Securities.
If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security; provided, however, in the case of a lost, destroyed or
wrongfully taken Security, that the requirements of Section 8-405 of the New
York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof. An indemnity bond must be sufficient in the judgment of the
Company and the
11
<PAGE>
Trustee to protect the Company, the Trustee or any Agent from any loss which any
of them may suffer if a Security is replaced, including the acquisition of such
Security by a bona fide purchaser. The Company or the Trustee may charge the
Holder for expenses in replacing a Security.
Section 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by it and those described in this Section.
A Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If, on a redemption date or maturity date, the Paying Agent holds money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.09. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
<PAGE>
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.
Section 2.10. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
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cancellation. Unless the Authorizing Resolution so provides, the Company may not
issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record date and a payment date which
shall be reasonably satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest to
be paid. On or before the date such notice is mailed, the Company shall deposit
with the Paying Agent money sufficient to pay the amount of defaulted interest
to be so paid. The Company may pay defaulted interest in any other lawful manner
if, after notice given by the Company to the Trustee of the proposed payment,
such manner of payment shall be deemed practicable by the Trustee.
Section 2.12. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Subsidiaries shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so considered.
Section 2.13. CUSIP Numbers.
The Company in issuing the Securities of any Series may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
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such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.
Section 2.14. Deposit of Moneys.
Prior to 11:00 a.m. New York City time on each interest payment date
and maturity date with respect to each Series of Securities, the Company shall
have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments due on such interest payment date or maturity
date, as the case may be, in a timely manner
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which permits the Paying Agent to remit payment to the Holders on such interest
payment date or maturity date, as the case may be.
Section 2.15. Book-Entry Provisions for Global Security.
(a) Any global Security of a Series initially shall (i) be registered
in the name of the depository who shall be identified in the Authorizing
Resolution or supplemental indenture relating to such Securities (the
"Depository") or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear any required legends.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any global
Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of any global Security shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the global Security may be
transferred or exchanged for definitive Securities in accordance with the rules
and procedures of the Depository. In addition, definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue definitive
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
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the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.
(d) In connection with the transfer of an entire global Security to
beneficial owners pursuant to paragraph (b), the global Security shall be deemed
to be surrendered
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to the Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the global Security, an
equal aggregate principal amount of definitive Securities of authorized
denominations.
(e) The Holder of any global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities of such Series.
ARTICLE THREE
Redemption
Section 3.01. Notices to Trustee.
Securities of a Series that are redeemable prior to maturity shall be
redeemable in accordance with their terms and, unless the Authorizing Resolution
or supplemental indenture provides otherwise, in accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the Redemption Date
and the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed,
retired or acquired against any redemption pursuant to Paragraph 6 of the
Securities, it shall notify the Trustee of the amount of the credit and it shall
deliver any Securities not previously delivered to the Trustee for cancellation
with such notice.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed.
If fewer than all of the Securities of a Series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger
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than the minimum denomination for the Series. Securities and portions of them it
selects shall be in amounts equal to the minimum denomination for the Series or
an integral multiple thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(6) that the Securities are being redeemed pursuant to the
mandatory redemption or the optional redemption provisions, as
applicable.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall deliver to the Trustee at least 15 days prior to the date on which
notice of redemption is to be mailed or such shorter period as may be
satisfactory to the Trustee, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price as set
forth in the notice of redemption. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.
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Section 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Paying Agent immediately available funds sufficient to pay the redemption price
of and accrued interest on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for each Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a Series on the
dates and in the manner provided in the Securities of the Series. An installment
of principal or interest shall be considered paid on the date it is due, if on
that date the Paying Agent holds money designated for and sufficient to pay the
installment.
The Company shall pay interest on overdue principal at the rate borne
by the Series; it shall pay interest on overdue installments of interest at the
same rate.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee.
Section 4.03. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating whether or
not the signers know of any Default by the Company in performing any of its
obligations under this Indenture. If they do know of such a Default, the
certificate shall describe the Default.
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Section 4.04. Payment of Taxes; Maintenance of Corporate Existence;
Maintenance of Properties.
The Company will:
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(a) cause to be paid and discharged all lawful taxes, assessments
and governmental charges or levies imposed upon the Company
and its Restricted Subsidiaries or upon the income or profits
of the Company and its Restricted Subsidiaries or upon
property or any part thereof belonging to the Company and its
Restricted Subsidiaries before the same shall be in default,
as well as all lawful claims for labor, materials and supplies
which, if unpaid, might become a lien or charge upon such
property or any part thereof; provided, however, that the
Company shall not be required to cause to be paid or
discharged any such tax, assessment, charge, levy or claim so
long as the validity or amount thereof shall be contested in
good faith by appropriate proceedings and the nonpayment
thereof does not, in the judgment of the Company, materially
adversely affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due; and provided further, that the Company shall not be
required to cause to be paid or discharged any such tax,
assessment, charge, levy or claim if, in the judgment of the
Company, such payment shall not be advantageous to the Company
in the conduct of its business and if the failure so to pay or
discharge does not, in its judgment, materially adversely
affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due;
(b) cause to be done all things necessary to preserve and keep in
full force and effect the corporate existence of the Company
and each of its Restricted Subsidiaries; provided, however,
that nothing in this subsection (b) shall prevent a
consolidation or merger of the Company or any Restricted
Subsidiary not prohibited by the provisions of Article Five or
any other provision or the Authorizing Resolution or
supplemental indenture pertaining to a Series, and the Company
need not maintain the corporate existence of an immaterial
Restricted Subsidiary ; and
(c) at all times keep, maintain and preserve the property of the
Company and the Restricted Subsidiaries in good repair,
working order and condition (reasonable wear and tear
excepted) and from time to time make all needful and proper
repairs, renewals, replacements, betterments and improvements
thereto, so that the business carried on in connection
therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this subsection
(c) shall prevent the Company from discontinuing the operation
and maintenance of any such properties if such discontinuance
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is, in the judgment of the Company, desirable in the conduct
of its business and not disadvantageous in any material
respect to the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due.
<PAGE>
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge with or into, any other
corporation, or transfer all or substantially all of its assets to, any entity
unless permitted by law and unless (1) the resulting, surviving or transferee
entity, which shall be a corporation organized and existing under the laws of
the United States or a State thereof, assumes by supplemental indenture, in a
form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture and (2) immediately after giving
effect to, and as a result of, such transaction, no Default or Event of Default
shall have occurred and be continuing. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the "Company" and all such obligations
of the predecessor corporation shall terminate.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
To the extent that an Authorizing Resolution or supplemental indenture
pertaining to any Series provides for different provisions relating to the
subject matter of this Article Five, the provisions in such Authorizing
Resolution or supplemental indenture shall govern for purposes of such Series.
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.
An "Event of Default" on a Series occurs if, voluntarily or
involuntarily, whether by operation of law or otherwise, any of the following
occurs:
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(1) the failure by the Company to pay interest on any Security of such
Series when the same becomes due and payable and the continuance of any such
failure for a period of 30 days;
(2) the failure by the Company to pay the principal or premium of any
Security of such Series when the same becomes due and payable at maturity, upon
acceleration or otherwise;
(3) the failure by the Company or any Restricted Subsidiary to comply
in all material respects with any of its agreements or covenants in, or
provisions of, the Securities of such Series, or this Indenture (as they relate
thereto) and such failure continues for the period and after the notice
specified below (except in the case of a default with respect to Article Five
(or any replacement provisions as contemplated by Article Five), which will
constitute an Event of Default with notice but without passage of time);
<PAGE>
(4) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary in an amount of $30
million or more, individually or in the aggregate, and such acceleration does
not cease to exist, or such Indebtedness is not satisfied, in either case within
30 days after such acceleration;
(5) the failure by the Company or any Restricted Subsidiary to make any
principal or interest payment in an amount of $30 million or more, individually
or in the aggregate, in respect of Indebtedness for borrowed money (other than
Non-Recourse Indebtedness) of the Company or any Restricted Subsidiary within 30
days of such principal or interest becoming due and payable (after giving effect
to any applicable grace period set forth in the documents governing such
Indebtedness);
(6) a final judgment or judgments in an amount of $30 million or more,
individually or in the aggregate, for the payment of money having been entered
by a court or courts of competent jurisdiction against the Company or any of its
Restricted Subsidiaries and such judgment or judgments is not covered by a
policy of insurance, satisfied, stayed, annulled or rescinded within 90 days of
being entered;
(7) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or
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(D) makes a general assignment (except in the case of a
Restricted Subsidiary, to the Company) for the
benefit of its creditors; or
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary as debtor
in an involuntary case,
(B) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or a
Custodian for all or substantially all of the
property of the Company or any Restricted Subsidiary
that is a Significant Subsidiary, or
(C) orders the liquidation of the Company or any
Restricted Subsidiary that is a Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 90 days.
<PAGE>
A Default as described in sub-clause (3) above will not be deemed an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25 percent in principal amount of the then outstanding Securities of the
applicable Series notify the Company and the Trustee, of the Default and (except
in the case of a default with respect to Article Five (or any replacement
provisions as contemplated by Article Five)) the Company does not cure the
Default within 90 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." If such a Default is cured within such time period, it ceases.
The term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default with respect to
the Company resulting from sub-clauses (7) or (8) above), shall have occurred
and be continuing under the Indenture, the Trustee by notice to the Company, or
the Holders of at least 25 percent in principal amount of the Securities of the
applicable Series then outstanding by notice to the Company and the Trustee, may
declare all Securities of such Series to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Securities
of such Series will be due and payable immediately. If an Event of Default with
respect to the Company specified in sub-clauses (7) or (8) above occurs, all
amounts due and payable on the Securities of such Series will ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the
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Trustee and the Company or any Holder. The Holders of a majority in principal
amount of the Securities of such Series then outstanding by written notice to
the Trustee and the Company may waive any Default or Event of Default (other
than any Default or Event of Default in payment of principal or interest) with
respect to such Series of Securities under the Indenture. Holders of a majority
in principal amount of the then outstanding Securities of such Series may
rescind an acceleration with respect to such Series and its consequence (except
an acceleration due to nonpayment of principal or interest on the Securities of
such Series) if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived.
No such rescission shall extend to or shall affect any subsequent Event
of Default, or shall impair any right or power consequent thereon.
Section 6.03. Other Remedies.
If an Event of Default on a Series occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on the Series or to enforce the
performance of any provision in the Securities or this Indenture applicable to
the Series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
<PAGE>
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Existing Defaults.
Subject to Section 9.02, the Holders of a majority in principal amount
of the outstanding Securities of a Series on behalf of all the Holders of the
Series by notice to the Trustee may waive an existing Default on such Series and
its consequences. When a Default is waived, it is cured and stops continuing,
and any Event of Default arising therefrom shall be deemed to have been cured;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding
Securities of a Series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to such Series. The Trustee, however, may
refuse to follow any direction (i) that conflicts with law or this Indenture,
(ii) that, subject to Section 7.01, the Trustee determines is unduly
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prejudicial to the rights of other Securityholders, or (iii) that would involve
the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Securityholder of a Series may not pursue any remedy with respect to
this Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default on the Series;
(2) the Holders of at least a majority in principal amount of the
outstanding Securities of the Series make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 90 days
after receipt of the request and the offer of indemnity; and
(5) no written request inconsistent with such written request
shall have been given to the Trustee pursuant to this Section
6.06.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Security, on or
<PAGE>
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal and interest remaining unpaid.
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Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property, and unless prohibited by applicable law or regulation, may vote on
behalf of the Holders in any election of a Custodian, and shall be entitled and
empowered to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder to make
such payments to the Trustee. Nothing herein shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to authorize
the Trustee to vote in respect of the claim of any Securityholder except as
aforesaid for the election of the Custodian.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Securityholders of the Series for amounts due and unpaid on
the Series for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Series for principal and
interest, respectively; and
Third: to the Company as its interests may appear.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
<PAGE>
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having the due regard
to the merits and good faith of the claims or defenses made by the party
litigant. This Section
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does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in principal amount of the Series.
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall, prior to the receipt of directions from the Holders of a majority in
principal amount of the Securities, exercise its rights and powers and use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no
others and no implied covenants or obligations shall
be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of his Indenture. The Trustee, however,
shall examine the certificates and opinions to
determine whether or not they conform to the
requirements of this Indenture but need not confirm
or investigate the accuracy of mathematical
calculations or other facts or matters stated herein.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in
accordance with a direction received by
<PAGE>
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it pursuant to Section 6.05 or any other direction of
the Holders permitted hereunder.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held in trust by
the Trustee need not be segregated from other funds except to the extent
required by law.
(g) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
Section 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting on any document, resolution, certificate, instrument, report, or
direction believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document, resolution, certificate, instrument, report, or direction.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both, which shall conform to
Sections 10.04 and 10.05 hereof and containing such other statements as the
Trustee reasonably deems necessary to perform its duties hereunder. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officers' Certificate, Opinion of Counsel or any other direction
of the Company permitted hereunder.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
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(e) The Trustee may consult with counsel, and the written advice of
such counsel or any Opinion of Counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Unless otherwise specifically provided in the Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(g) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default (other than under
Section 6.01(1) or 6.01(2)) unless a Trust Officer assigned to and working in
the Trustee's corporate trust office has actual knowledge thereof or unless
written notice of any Event of Default is received by the Trustee at its address
specified in Section 10.02 hereof and such notice references the Securities
generally, the Company or this Indenture.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture, the Securities or of any prospectus used to sell the Securities;
it shall not be accountable for the Company's use of the proceeds from the
Securities; it shall not be accountable for any money paid to the Company, or
upon the Company's direction, if made under and in accordance with any provision
of this Indenture; it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee; and it shall not be
responsible for any statement of the Company in this Indenture or in the
Securities other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default on a Series occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Securityholder of the Series notice
of the Default (which shall specify any uncured Default known to it) within 90
days after it occurs. Except in the case of a default in payment of principal of
or interest on a Series, the Trustee may withhold the notice if and so long as
the board of directors of the Trustee, the executive or any trust committee of
such directors and/or responsible officers of the Trustee in good faith
determine(s) that withholding the notice is in the interests of Holders of the
Series.
27
<PAGE>
Section 7.06. Reports by Trustee to Holders.
<PAGE>
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA ss. 313(a) (but if
no event described in TIA ss. 313(2) has occurred within the twelve months
preceding the reporting date no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be delivered to the Company and filed by the Trustee with the SEC and each
national securities exchange on which the Securities are listed. The Company
agrees to notify the Trustee of each national securities exchange on which the
Securities are listed.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee or predecessor trustee from time
to time reasonable compensation for their respective services subject to any
written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith.
To ensure the Company's payment obligations in this Section, the
Trustee shall have a claim prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities. When the Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 6.01 or in
connection with Article 6 hereof, the expenses (including the reasonable fees
and expenses of its counsel) and the compensation for services in connection
therewith are to constitute expenses of administration under any bankruptcy law.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the
28
<PAGE>
removed Trustee in writing and may appoint a successor trustee with the
Company's consent. Such resignation or removal shall not take effect until the
appointment by the Securityholders or the Company as hereinafter provided of a
successor trustee and the acceptance of such appointment by such successor
trustee. The Company may remove the Trustee and any Securityholder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee for any or no reason, including if:
(1) the Trustee fails to comply with Section 7.10 after written
<PAGE>
request by the Company or any bona fide Securityholder who has
been a Securityholder for at least six months;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for the appointment of a
successor trustee.
A successor trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor trustee shall mail
notice of its succession to each Securityholder.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges with or into or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.310(a)(1). The Trustee shall have a combined capital and
surplus of at least $10,000,000
29
<PAGE>
as set forth in its most recent published annual report of condition. The
Trustee shall comply with TIA ss.310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b). A Trustee who has resigned or been removed
shall be subject to TIA ss.311(a) to the extent indicated therein.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government
Obligations.
(a) The Company may, at its option and at any time, elect to have
<PAGE>
either paragraph (b) or paragraph (c) below be applied to the outstanding
Securities of any Series upon compliance with the applicable conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its respective obligations with respect to the
outstanding Securities of a Series on the date the applicable conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Securities of
a Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of the Sections and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned, except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities of a Series to
receive solely from the trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii) obligations
listed in Section 8.02, subject to compliance with this Section 8.01. The
Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) below with respect to such
Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from the obligations under any covenant contained in Article Five and any other
covenant contained in the Authorizing Resolution or supplemental indenture
relating to such Series to the extent provided for therein, on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities of such Series shall thereafter
30
<PAGE>
be deemed to be not "outstanding" for the purpose of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities of a Series, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(3), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities of the
applicable Series:
(1) The Company shall have irrevocably deposited in trust
with the Trustee, pursuant to an irrevocable trust
and security agreement in form and substance
reasonably satisfactory to the Trustee, money in U.S.
dollars or U.S. government obligations or a
<PAGE>
combination thereof in such amounts and at such times
as are sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to
pay the principal of and interest on the outstanding
Securities of such Series to maturity or redemption;
provided, however, that the Trustee (or other
qualifying trustee) shall have received an
irrevocable written order from the Company
instructing the Trustee (or other qualifying trustee)
to apply such money or the proceeds of such U.S.
government obligations to said payments with respect
to the Securities of such Series to maturity or
redemption;
(2) No Default or Event of Default shall have occurred
and be continuing on the date of such deposit;
(3) Such deposit will not result in a Default under this
Indenture or a breach or violation of, or constitute
a default under, any other material instrument or
agreement to which the Company or any of its
Subsidiaries is a party or by which it or any of
their property is bound;
(4) (i) In the event the Company elects paragraph (b)
hereof, the Company shall deliver to the Trustee an
Opinion of Counsel in the United States, in form and
substance reasonably satisfactory to the Trustee, to
the effect that (A) the Company has received from, or
there has been published by, the Internal Revenue
Service a ruling or (B) since the Issue Date
pertaining to such Series, there has been a
31
<PAGE>
change in the applicable federal income tax law, in
either case to the effect that, and based thereon
such Opinion of Counsel shall state that, or (ii) in
the event the Company elects paragraph (c) hereof,
the Company shall deliver to the Trustee an Opinion
of Counsel in the United States, in form and
substance reasonably satisfactory to the Trustee, to
the effect that, in the case of clauses (i) and (ii),
Holders of the Securities of such Series will not
recognize income, gain or loss for United States
federal income tax purposes as a result of such
deposit and the defeasance contemplated hereby and
will be subject to federal income tax in the same
amounts and in the same manner and at the same times
as would have been the case if such deposit and
defeasance had not occurred;
(5) The Company shall have delivered to the Trustee an
Officers' Certificate, stating that the deposit under
clause (1) was not made by the Company with the
intent of preferring the Holders of the Securities of
such Series over any other creditors of the Company
<PAGE>
or with the intent of defeating, hindering, delaying
or defrauding any other creditors of the Company or
others;
(6) The Company shall have delivered to the Trustee an
Opinion of Counsel, reasonably satisfactory to the
Trustee, to the effect that, (A) the trust funds will
not be subject to the rights of Holders of
Indebtedness of the Company other than the Securities
of such Series and (B) assuming no intervening
bankruptcy of the Company between the date of deposit
and the 91st day following the deposit and that no
Holder of Securities of such Series is an insider of
the Company, after the 91st day following the
deposit, the trust funds will not be subject to any
applicable bankruptcy, insolvency, reorganization or
similar law affecting creditors' rights generally;
and
(7) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating
that all conditions precedent specified herein
relating to the defeasance contemplated by this
Section 8.01 have been complied with.
In the event all or any portion of the Securities of a Series are to be
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
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<PAGE>
(e) In addition to the Company's rights above under this Section 8.01,
the Company may terminate all of its obligations under this Indenture with
respect to a Series when:
(1) All Securities of such Series theretofore
authenticated and delivered (other than Securities
which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section
2.07 and Securities for whose payment money has
theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or all such
Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the
Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust
solely for that purpose an amount of money sufficient
to pay and discharge the entire Indebtedness on the
Securities not theretofore delivered to the Trustee
for cancellation, for principal of and interest;
(2) The Company has paid or caused to be paid all other
<PAGE>
sums payable hereunder by the Company;
(3) The Company has delivered irrevocable instructions to
the Trustee to apply the deposited money toward the
payment of the Securities at maturity or redemption,
as the case may be; and
(4) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that
all conditions precedent specified herein relating to
the satisfaction and discharge of this Indenture have
been complied with.
Section 8.02. Survival of the Company's Obligations.
Notwithstanding the satisfaction and discharge of the Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Securities and
Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).
Section 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. government obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S.
33
<PAGE>
government obligations in accordance with this Indenture to the payment of
principal of and interest on the Securities of the defeased Series.
Section 8.04. Repayment to the Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person and all liability of the Trustee or such Paying Agent with respect to
such money shall cease.
Section 8.05. Reinstatement.
If the Trustee is unable to apply any money or U.S. government
obligations in accordance with Section 8.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
<PAGE>
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities relating to the Series shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee is permitted to apply all such money or U.S.
government obligations in accordance with Section 8.01; provided, however, that
(a) if the Company has made any payment of interest on or principal of any
Securities of the Series because of the reinstatement of their obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. government obligations held by the
Trustee and (b) unless otherwise required by any legal proceeding or any order
or judgment of any court or governmental authority, the Trustee shall return all
such money or U.S. government obligations to the Company promptly after
receiving a written request therefor at any time, if such reinstatement of the
Company's obligations has occurred and continues to be in effect.
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<PAGE>
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to or consent of any Securityholder of
such Series:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article Five;
(3) to provide that specific provisions of this Indenture shall
not apply to a Series not previously issued;
(4) to create a Series and establish its terms;
(5) to provide for uncertificated Securities in addition to or in
place of certificated Securities; and
(6) to make any other change that does not adversely affect the
rights of Securityholders.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail notice of such amendment to the Securityholders.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to any Securityholder of such Series
but with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each such Series affected by the
amendment. Each such Series shall vote as a separate class. The Holders of a
majority in principal amount of the outstanding Securities of any Series may
waive compliance by the Company with any provision of the Securities of such
Series or of this Indenture relating to such Series without notice to any
Securityholder. Without the consent of each Securityholder of a Series affected,
<PAGE>
however, an amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may not:
(1) reduce the amount of Securities of such Series whose Holders
must consent to an amendment, supplement or waiver;
35
<PAGE>
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any
Security or alter the provisions (including related
definitions) with respect to redemption of Securities pursuant
to Article Three hereof or with respect to any obligations on
the part of the Company to offer to purchase or to redeem
Securities of a Series pursuant to the Authorizing Resolution
or supplemental indenture pertaining to such Series;
(4) modify the ranking or priority of the Securities of any
Series;
(5) make any change in Sections 6.04, 6.07 or this Section 9.02;
(6) waive a continuing Default or Event of Default in the payment
of the principal of or interest on any Security; or
(7) make any Security payable at a place or in money other than
that stated in the Security, or impair the right of any
Securityholder to bring suit as permitted by Section 6.07.
An amendment of a provision included solely for the benefit of one or
more Series does not affect the interests of Securityholders of any other
Series.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplement, but it shall
be sufficient if such consent approves the substance thereof.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder shall bind
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. Subject to the following
paragraph, any such Holder or subsequent Holder, however, may revoke the consent
as to his Security or portion of a Security. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
<PAGE>
36
<PAGE>
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Securities of any Series entitled to
consent to any amendment, supplement or waiver, which record date shall be at
least 10 days prior to the first solicitation of such consent. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security; provided, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal of
and interest on a Security, on or after the respective due dates expressed in
such Security, or to bring suit for the enforcement of any such payment on or
after such respective dates without the consent of such Holder.
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Company may require the Holder of the Security to deliver it to the Trustee,
at which time the Trustee shall place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
Section 9.06. Trustee to Sign Amendments, etc.
Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
37
<PAGE>
<PAGE>
ARTICLE TEN
Miscellaneous
Section 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 10.02. Notices.
Any order, consent, notice or communication shall be sufficiently given
if in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
if to the Company:
M.D.C. Holdings, Inc.
3600 South Yosemite
Suite 900
Denver, CO 80237
Telecopy No.: (303) 793-2760
Attention: Chief Financial Officer
if to the Trustee:
-----------------------
-----------------------
Telecopy No.:
----------------
Attention:
-------------------
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail at his address as it appears on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee
38
<PAGE>
receives it except that notice to the Trustee shall only be effective upon
receipt thereof by the Trustee.
If the Company mails notice or communications to the Securityholders,
it shall mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders.
<PAGE>
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss.
312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 10.05) stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of such
counsel, all such conditions precedent and covenants,
compliance with which constitutes a condition precedent, if
any, provided for in this Indenture relating to the proposed
action or inaction, have been complied with and that any such
section does not conflict with the terms of the Indenture.
Section 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
39
<PAGE>
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section 10.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
<PAGE>
which banking institutions in Denver, Colorado and New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. A "Business
Day" is any day other than a Legal Holiday.
Section 10.08. Governing Law.
The laws of the State of New York shall govern this Indenture and the
Securities of each Series.
Section 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.10. No Recourse Against Others.
All liability described in paragraph 12 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
Section 10.11. Successors and Assigns.
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
40
<PAGE>
Section 10.12. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 10.13. Severability.
In case any one or more of the provisions contained in this Indenture
or in the Securities of a Series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Securities.
SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
Dated: , 1999 M.D.C. HOLDINGS, INC.
--------------
By:
Name:
Title:
<PAGE>
Dated: , 1999 , as Trustee
--------------- -----------------------
By:
Name:
Title:
(SEAL)
41
<PAGE>
Exhibit A
No. CUSIP No.:
-----------
[Title of Security]
M.D.C. HOLDINGS, INC.
a Delaware corporation
promises to pay to
or registered assigns
the principal sum of [Dollars] on
[Title of Security]
Interest Payment Dates: and
Record Dates and
Authenticated: Dated:
M.D.C. HOLDINGS, INC.
[Seal]
By
--------------------------
Title:
By
--------------------------
Title:
- ------------------------------,
as Trustee, certifies that this is one of the
Securities referred to in the within mentioned
Indenture.
By:
----------------------------
- --------------------------------
Authorized Signatory
<PAGE>
A-1
<PAGE>
M.D.C. HOLDINGS, INC.
[Title of Security]
1. Interest.
M.D.C. HOLDINGS, INC. (the "Company"), a Delaware corporation, promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company will pay interest semiannually on
------------------
and of each year until the principal is paid or made available
---------------
for payment. Interest on the Securities will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid, from 19 ; provided that, if there is no existing default
---------------, --
in the payment of interest, and if this Security is authenticated between a
record date referred to on the face hereof and the next succeeding interest
payment date, interest shall accrue from such interest payment date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities (except
defaulted interest, if any, which will be paid on such special payment date to
Holders of record on such special record date as may be fixed by the Company) to
the persons who are registered Holders of Securities at the close of business on
the [Insert record dates]. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.
3. Paying Agent and Registrar.
Initially, (the "Trustee") will act as Paying Agent and
--------------
Registrar. The Company may change or appoint any Paying Agent, Registrar or
co-Registrar without notice. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
, 199 ("Indenture") among the Company and the Trustee. The terms
- ------------- --
of the Securities include those stated in the Indenture (including those terms
set forth in the Authorizing Resolution or supplemental indenture pertaining to
the Securities of the Series of which this Security is a part) and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 ("TIA") as
in effect on the date of the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the Act for a
statement of them.
A-2
<PAGE>
<PAGE>
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture and the applicable Authorizing
Resolution or supplemental indenture. Requests may be made to: M.D.C. Holdings,
Inc., 3600 S. Yosemite, Suite 900, Denver, Colorado 80237, Attention: Secretary.
5. Optional Redemption.
The Company may redeem the Securities at any time on or
after , in whole or in part, at the following redemption prices
--------------
(expressed as a percentage of their principal amount) together with interest
accrued and unpaid to the date fixed for redemption:
If redeemed during the Twelve-Month period commencing
on and ending on in each of the
---------- ------------
following years Percentage
------- ------
------- ------
------- ------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date, interest ceases to accrue on
Securities or portions of them called for redemption; provided, that if the
Company shall default in the payment of such Security at the redemption price
together with accrued interest, interest shall continue to accrue at the rate
borne by the Securities.
[Insert provisions relating to redemption at option of Holders, if any]
6. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange
Securities by presentation of such Securities to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Securities of other denominations. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any
A-3
<PAGE>
Security selected for redemption, except the unredeemed part thereof if the
<PAGE>
Security is redeemed in part, or transfer or exchange any Securities for a
period of 15 days before a selection of Securities to be redeemed.
7. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of
it for all purposes.
8. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its request. After that, Holders entitled to the money must look to the Company
for payment unless an abandoned property law designates another person.
9. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Securities of each Series affected by the
amendment and any past default or compliance with any provision relating to any
Series of the Securities may be waived in a particular instance with the consent
of the Holders of a majority in principal amount of the outstanding Securities
of such Series. Without the consent of any Securityholder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Securities in
addition to or in place of certificated Securities, to create a Series and
establish its terms, or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
10. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor corporation
will be released from those obligations.
11. Trustee Dealings With Company.
, the Trustee under the Indenture, in its individual or
--------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
A-4
<PAGE>
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
13. Discharge of Indenture.
<PAGE>
The Indenture contains certain provisions pertaining to defeasance,
which provisions shall for all purposes have the same effect as if set forth
herein.
14. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
15. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
A-5
<PAGE>
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form
below:
I or we assign and transfer this Security to:
- --------------------------------------------------------------------
- --------------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- --------------------------------------------------------------------
- --------------------------------------------------------------------
- --------------------------------------------------------------------
(Print or type assignee's name, address, and zip code)
and irrevocably appoint:
- --------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
- -------------------------------------------------------------------
Date: Your signature:
------------------- --------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature
Guarantee:
----------------------------------------------------------------
<PAGE>
EXHIBIT 4.2(b)
SCHEDULE OF MATERIAL DETAILS IN WHICH THE FORM OF SENIOR SUBORDINATED DEBT
INDENTURE (INCLUDING FORM OF SENIOR SUBORDINATED DEBENTURE) DIFFERS FROM EXHIBIT
4.2(a), THE FORM OF SENIOR DEBT INDENTURE (INCLUDING FORM OF SENIOR DEBENTURE)
The form of Senior Subordinated Debt Indenture (including the form of
Senior Subordinated Debenture) (the "Senior Subordinated Debt Indenture")
differs from Exhibit 4.2(a), the form of Senior Debt Indenture (including the
form of Senior Debenture) (the "Senior Debt Indenture"), in the following
respects:
(1) The word "Senior" in the Senior Debt Indenture is changed to
the words "Senior Subordinated" in the Senior Subordinated
Debt Indenture; and
(2) Article 11 and the reference to Article 11 in the Table of
Contents in the Senior Subordinated Debt Indenture and
paragraph 16 of the form of Senior Subordinated Debenture are
not present in the form of Senior Debt Indenture and the form
of Senior Debenture; and
In addition, other provisions concerning subordination of the Senior
Subordinated Debentures, which are included in the Senior Subordinated Debt
Indenture, are not applicable to, and do not appear in, the Indenture for the
Senior Debentures.
<PAGE>
EXHIBIT 4.2(b)
M.D.C. HOLDINGS, INC.
Issuer
AND
-----------------------------
Trustee
SENIOR SUBORDINATED DEBT SECURITIES
<PAGE>
----------------------
INDENTURE
DATED AS OF , 1999
-------------
----------------------
<PAGE>
ARTICLE ONE - Definitions and Incorporation by Reference
Section 1.01. Definitions....................... 1
Section 1.02. Other Definitions................. 6
Section 1.03. Incorporation by Reference of
Trust Indenture Act............. 7
Section 1.04. Rules of Construction............. 7
ARTICLE TWO - The Securities
Section 2.01. Form and Dating................... 8
Section 2.02. Execution and Authentication...... 9
Section 2.03. Registrar and Paying Agent........ 10
Section 2.04. Paying Agent to Hold Money in
Trust........................... 10
Section 2.05. Securityholder Lists.............. 11
Section 2.06. Transfer and Exchange............. 11
Section 2.07. Replacement Securities............ 11
Section 2.08. Outstanding Securities............ 12
Section 2.09. Temporary Securities.............. 12
Section 2.10. Cancellation...................... 12
Section 2.11. Defaulted Interest................ 13
Section 2.12. Treasury Securities............... 13
Section 2.13. CUSIP Numbers..................... 13
Section 2.14. Deposit of Moneys................. 13
Section 2.15. Book-Entry Provisions for Global
Security........................ 14
ARTICLE THREE - Redemption
Section 3.01. Notices to Trustee................ 15
Section 3.02. Selection of Securities to be
Redeemed........................ 15
Section 3.03. Notice of Redemption.............. 16
Section 3.04. Effect of Notice of Redemption.... 16
Section 3.05. Deposit of Redemption Price....... 17
Section 3.06. Securities Redeemed in Part....... 17
ARTICLE FOUR - Covenants
Section 4.01. Payment of Securities............. 17
Section 4.02. Maintenance of Office or Agency... 17
Section 4.03. Compliance Certificate............ 17
Section 4.04. Payment of Taxes; Maintenance of
<PAGE>
Corporate Existence; Maintenance
of Properties................... 18
i
<PAGE>
ARTICLE FIVE - Successor Corporation
Section 5.01. When Company May Merge, etc....... 19
ARTICLE SIX - Defaults and Remedies
Section 6.01. Events of Default................. 20
Section 6.02. Acceleration...................... 22
Section 6.03. Other Remedies.................... 22
Section 6.04. Waiver of Existing Defaults....... 22
Section 6.05. Control by Majority............... 23
Section 6.06. Limitation on Suits............... 23
Section 6.07. Rights of Holders to Receive
Payment......................... 23
Section 6.08. Collection Suit by Trustee........ 24
Section 6.09. Trustee May File Proofs of Claim.. 24
Section 6.10. Priorities........................ 24
Section 6.11. Undertaking for Costs............. 25
ARTICLE SEVEN - Trustee
Section 7.01. Duties of Trustee................. 25
Section 7.02. Rights of Trustee................. 26
Section 7.03. Individual Rights of Trustee...... 27
Section 7.04. Trustee's Disclaimer.............. 27
Section 7.05. Notice of Defaults................ 28
Section 7.06. Reports by Trustee to Holders..... 28
Section 7.07. Compensation and Indemnity........ 28
Section 7.08. Replacement of Trustee............ 29
Section 7.09. Successor Trustee by Merger, etc. 30
Section 7.10. Eligibility; Disqualification..... 30
Section 7.11. Preferential Collection of Claims
Against Company................. 30
ARTICLE EIGHT - Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys
or U.S. Government Obligations. 30
Section 8.02. Survival of the Company's
Obligations..................... 34
Section 8.03. Application of Trust Money........ 34
Section 8.04. Repayment to the Company.......... 34
Section 8.05. Reinstatement..................... 34
ii
<PAGE>
<PAGE>
ARTICLE NINE - Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders......... 35
Section 9.02. With Consent of Holders............ 35
Section 9.03. Compliance with Trust Indenture
Act.............................. 37
Section 9.04. Revocation and Effect of Consents.. 37
Section 9.05. Notation on or Exchange of
Securities....................... 37
Section 9.06. Trustee to Sign Amendments, etc.... 38
ARTICLE TEN - Miscellaneous
Section 10.01. Trust Indenture Act Controls....... 38
Section 10.02. Notices............................ 38
Section 10.03. Communications by Holders with
Other Holders.................... 39
Section 10.04. Certificate and Opinion as to
Conditions Precedent............. 39
Section 10.05. Statements Required in
Certificate or Opinion........... 40
Section 10.06. Rules by Trustee and Agents........ 40
Section 10.07. Legal Holidays..................... 40
Section 10.08. Governing Law...................... 40
Section 10.09. No Adverse Interpretation of
Other Agreements................. 41
Section 10.10. No Recourse Against Others......... 41
Section 10.11. Successors and Assigns............. 41
Section 10.12. Duplicate Originals................ 41
Section 10.13. Severability....................... 41
ARTICLE ELEVEN - Subordination
Section 11.01. Agreement to Subordinate........... 41
Section 11.02. Certain Definitions................ 42
Section 11.03. Liquidation; Dissolution;
Bankruptcy....................... 42
Section 11.04. Default on Senior Indebtedness..... 42
Section 11.05. Acceleration of Securities......... 43
Section 11.06. When Distributions Must Be Paid
over............................. 43
Section 11.07. Notice by the Company.............. 44
Section 11.08. Subrogation........................ 44
Section 11.09. Relative Rights.................... 44
Section 11.10. Subordination May Not Be Impaired
by the Company................... 45
Section 11.11. Distribution or Notice to the
Representative................... 45
Section 11.12. Rights of the Trustee and Paying
Agent............................ 45
Section 11.13. No Fiduciary Duty to Holders of
Senior Indebtedness.............. 46
iii
<PAGE>
<PAGE>
CROSS-REFERENCE TABLE
This Cross-Reference Table is not a part of the
Indenture.
TIA Indenture
Section Section
- ------------ --------
310(a)(1).......................................... 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(b)................................................ 7.08; 7.10; 10.02
311(a)............................................. 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)............................................. 2.05
(b)................................................ 10.03
(c)................................................ 10.03
313(a)............................................. 7.06
(b)(1)............................................. N.A.
(b)(2)............................................. 7.06
(c)................................................ 10.02
(d)................................................ 7.06
314(a)............................................. 7.06; 10.02
(b)................................................ N.A.
(c)(1)............................................. 10.04
(c)(2)............................................. 10.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 10.05
(f)................................................ N.A.
315(a)............................................. 7.01(b)
(b)................................................ 7.05; 10.02
(c)................................................ 7.01(a)
(d)................................................ 7.01(c)
(e)................................................ 6.11
316(a)(last sentence).............................. 2.12
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.07
(c)................................................ 9.04
317(a)(1).......................................... 6.08
(a)(2)............................................. 6.09
(b)................................................ 2.04
318(a)............................................. 10.01
- -----------------------------
N.A. means Not Applicable.
iv
<PAGE>
<PAGE>
INDENTURE dated as of , 1999, by and among M.D.C.
-------------
HOLDINGS, INC., a Delaware corporation (the "Company"), and , (the
------------
"Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's debt securities
issued under this Indenture (the "Securities"):
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person, or (ii) any officer,
director, a Person acting with respect to such Person in a similar capacity, or
controlling shareholder of such other Person. For purposes of this definition,
the term "control" means (a) the power to direct the management and policies of
a Person, either directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise, or (b) without
limiting the foregoing, the beneficial ownership of 10% or more of the voting
power of the voting common equity of such Person (on a fully diluted basis).
Notwithstanding the foregoing, the term "Affiliate" will not include, with
respect to the Company or any Restricted Subsidiary of the Company, any
Restricted Subsidiary of the Company, or the Company, with respect to any
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.
"Bankruptcy Law" means title 11 of the United States Code, as amended,
or any similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or
any authorized committee thereof.
1
<PAGE>
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person's capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other equity interests, whether now
outstanding or issued after the applicable Issue Date, including, without
limitation, all Preferred Stock.
"Capitalized Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under a lease that is required to be
<PAGE>
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.
"Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means the
successor.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect such Person or any of its Subsidiaries or Affiliates against
fluctuations in currency values.
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, unless otherwise timely cured, an Event of
Default.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indebtedness" of any Person means, without duplication, (i) any
liability of such Person (other than accounts payable, other trade payables and
accrued expenses incurred in the ordinary course of such Person's business) (a)
for borrowed money or under any reimbursement obligation relating to a letter of
credit or other similar instruments (other than standby letters of credit issued
for the benefit of or surety, performance, completion or payment bonds, earnest
money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business, general contingency and tax reserves,
liabilities for deposits and deferred income which in accordance with GAAP is
recorded as a liability), (b) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind or with services
incurred in connection with capital expenditures (other than any obligation to
pay a contingent
2
<PAGE>
purchase price which, as of the date of incurrence thereof is not required to be
recorded as a liability in accordance with GAAP), or (c) in respect of
Capitalized Lease Obligations (to the extent of the Attributable Debt in respect
thereof), (ii) any Indebtedness of others that such Person has guaranteed to the
extent of the guarantee, (iii) to the extent not otherwise included, the
obligations of such Person under Currency Agreements or Interest Protection
Agreements to the extent recorded as liabilities not constituting Interest
Incurred, net of amounts recorded as assets in respect of such agreements, in
accordance with GAAP, and (iv) all Indebtedness of others secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person. The amount of Indebtedness of any Person at any date shall be (a) the
outstanding balance at such date of all unconditional obligations as described
above, net of any unamortized discount to be accounted for as Interest Expense,
in accordance with GAAP, (b) the maximum liability of such Person for any
<PAGE>
contingent obligations under clause (ii) above at such date, net of, any
unamortized discount to be accounted for as Interest Expense in accordance with
GAAP and (c) in the case of clause (iv) above, the lesser of (1) the fair market
value of any asset subject to a Lien securing the Indebtedness of others on the
date that the Lien attaches and (2) the amount of the Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time
to time, including pursuant to any Authorizing Resolution or supplemental
indenture pertaining to any Series.
"Interest Expense" of any Person for any period means, without
duplication, the aggregate amount of (i) interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like caption
on an income statement for such Person (including, without limitation, imputed
interest included in Capitalized Lease Obligations, all commissions, discounts
and other fees and charges owned with respect to letters of credit and bankers'
acceptance financing, the net costs (but reduced by net gains) associated with
Currency Agreements and Interest Protection Agreements, amortization of other
financing fees and expenses; with respect to the Company and its Restricted
Subsidiaries, but excluding its Unrestricted Subsidiaries, the interest portion
of any deferred payment obligation, amortization of discount or premium, if any,
and all other noncash interest expense other than interest and other charges
amortized to cost of sales), and (ii) all interest actually paid by the Company
or a Restricted Subsidiary under any guarantee of Indebtedness (including,
without limitation, a guarantee of principal, interest or any combination
thereof) of any Person other than the Company or any Restricted Subsidiary
during such period; provided, that Interest Expense shall exclude any expense
associated with the complete write-off of financing fees and expenses in
connection with the repayment or repurchase of any Indebtedness.
"Interest Protection Agreement" of any Person means any interest rate
swap agreement, interest rate collar agreement, option or futures contract or
other similar agreement or arrangement designed to protect such Person or any of
its Subsidiaries
3
<PAGE>
against fluctuations in interest rates with respect to Indebtedness permitted to
be incurred under this Indenture.
"Investments" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
all guarantees of Indebtedness or other obligations of any other Person by such
person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments in any other
Person (including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
"Issue Date" means, with respect to any Series of Securities, the date
on which the Securities of such Series are originally issued under this
Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such Property
(other than an obligation to share revenues or profits upon the sale or
liquidation of Property to which such obligation relates). For purposes of this
<PAGE>
definition, a Person shall be deemed to own, subject to a Lien, any Property
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person for which (i) the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments evidencing or securing such Indebtedness and such
property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within 90 days after the acquisition of such property
and (ii) no other assets of such Person may be realized upon in collection of
principal or interest on such Indebtedness. Indebtedness which is otherwise
Non-Recourse Indebtedness will not lose its character as Non-Recourse
Indebtedness because there is recourse to the borrower or any other Person for
(i) environmental warranties and indemnities, or (ii) indemnities for and
liabilities arising from fraud, misrepresentation, misapplication or non-payment
of rents, profits, insurance and condemnation proceeds and other sums actually
received by the borrower from secured assets to be paid to the lender, waste and
mechanics' liens.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company.
4
<PAGE>
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or with respect to the payment of
dividends.
"Principal" of a debt security means the principal of the security
plus, when appropriate, the premium, if any, on the security.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person, whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Subsidiary" means any Subsidiary of the Company which is
not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission or any successor
agency performing the duties now assigned to it under the TIA.
"Securities" means any Securities that are issued under this Indenture.
<PAGE>
"Series" means a series of Securities established under this Indenture.
"Significant Subsidiary" means any Subsidiary of the Company which
would constitute a "significant subsidiary" as defined in Rule 1.02 of
Regulation S-X under the Securities Act and the Exchange Act.
"Subsidiary" of any Person means any corporation or other entity (other
than political subdivisions or enterprises thereof or governmental agencies) of
which a majority of the Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time directly or indirectly owned or controlled by such Person.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor serving hereunder.
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"Trust Officer" means the Chairman of the Board, the President, any
Vice President or any other officer or assistant officer of the Trustee assigned
by the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
"U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt issued
by a bank or trust company as custodian with respect to any such U.S. government
obligations or a specific payment of interest on or principal of any such U.S.
government obligation held by such custodian for the account of the holder of a
depositary receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. government obligation or the specific payment of interest on or
principal of the U.S. government obligation evidenced by such depositary
receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company so
designated by a resolution adopted by the Board of Directors of the Company.
Section 1.02. Other Definitions
Term Defined in
Section
"Agent Members"........................................ 2.15
"Business Day"......................................... 10.07
"Custodian"............................................ 6.01
"Depositary"........................................... 2.15
"Event of Default"..................................... 6.01
"Legal Holiday"........................................ 10.07
<PAGE>
"Paying Agent"......................................... 2.03
"Registrar"............................................ 2.03
"Senior Indebtedness".................................. 11.02
"Representative"....................................... 11.02
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Section 1.03. Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities of a Series thereof.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings so assigned to them.
Section 1.04. Rules of Construction
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term, not otherwise defined, has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
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ARTICLE TWO
<PAGE>
The Securities
Section 2.01. Form and Dating
The aggregate principal amount of Securities that may be issued under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more Series. Each Series shall be created by an Authorizing Resolution or
a supplemental indenture that establishes the terms of the Series, which may
include the following:
(1) the title of the Series;
(2) the aggregate principal amount (or any limit on the aggregate
principal amount) of the Series and, if any Securities of a
Series are to be issued at a discount from their face amount,
the method of computing the accretion of such discount;
(3) the interest rate or method of calculation of the interest
rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Securities of the
Series;
(6) the dates when, places where and manner in which principal and
interest are payable;
(7) the Registrar and Paying Agent;
(8) the terms of any mandatory (including any sinking fund
requirements) or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form
and the terms of any such forms of Securities;
(12) whether any Securities will be represented by a global
Security and the terms of any such global Security;
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(13) if payments of principal or interest may be made in a currency
other than that in which Securities are denominated, the
manner for determining such payments;
(14) provisions for electronic issuance of Securities or issuance
of Securities in uncertificated form;
(15) any Events of Default, covenants and/or defined terms in
addition to or in lieu of those set forth in this Indenture;
(16) whether and upon what terms Securities may be defeased if
different from the provisions set forth in this Indenture;
<PAGE>
(17) the form of the Securities, which, unless the Authorizing
Resolution or supplemental indenture otherwise provides, shall
be in the form of Exhibit A;
(18) any terms that may be required by or advisable under
applicable law;
(19) the percentage of the principal amount of the Securities which
is payable if the maturity of the Securities is accelerated in
the case of Securities issued at a discount from their face
amount; and
(20) any other terms in addition to or different from those
contained in this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and
delivery thereof are not subject to any conditions precedent.
Section 2.02. Execution and Authentication
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
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A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon
receipt of an Officers' Certificate of the Company. Each Security shall be dated
the date of its authentication.
Section 2.03. Registrar and Paying Agent
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent) and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
<PAGE>
promptly notify the Trustee in writing of the name and address of any such Agent
and the Trustee shall have the right to inspect the Securities register at all
reasonable times to obtain copies thereof, and the Trustee shall have the right
to rely upon such register as to the names and addresses of the Holders and the
principal amounts and certificate numbers thereof. If the Company fails to
maintain a Registrar or Paying Agent or fails to give the foregoing notice, the
Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
Section 2.04. Paying Agent to Hold Money in Trust
Each Paying Agent shall hold in trust for the benefit of
Securityholders and the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money and hold it
as a separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon doing so the Paying Agent shall
have no further liability for the money.
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Section 2.05. Securityholder Lists
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least 5 Business Days before each semi-annual interest payment
date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
Section 2.06. Transfer and Exchange
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.
Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
<PAGE>
Section 2.07. Replacement Securities
If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security; provided, however, in the case of a lost, destroyed or
wrongfully taken Security, that the requirements of Section 8-405 of the New
York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof. An indemnity bond must be sufficient in the judgment of the
Company and the
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Trustee to protect the Company, the Trustee or any Agent from any loss which any
of them may suffer if a Security is replaced, including the acquisition of such
Security by a bona fide purchaser. The Company or the Trustee may charge the
Holder for expenses in replacing a Security.
Section 2.08. Outstanding Securities
Securities outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by it and those described in this Section.
A Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If, on a redemption date or maturity date, the Paying Agent holds money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 2.09. Temporary Securities
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.
Section 2.10. Cancellation
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
<PAGE>
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
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<PAGE>
cancellation. Unless the Authorizing Resolution so provides, the Company may not
issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record date and a payment date which
shall be reasonably satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest to
be paid. On or before the date such notice is mailed, the Company shall deposit
with the Paying Agent money sufficient to pay the amount of defaulted interest
to be so paid. The Company may pay defaulted interest in any other lawful manner
if, after notice given by the Company to the Trustee of the proposed payment,
such manner of payment shall be deemed practicable by the Trustee.
Section 2.12. Treasury Securities
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Subsidiaries shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so considered.
Section 2.13. CUSIP Numbers
The Company in issuing the Securities of any Series may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.
Section 2.14. Deposit of Moneys
Prior to 11:00 a.m. New York City time on each interest payment date
and maturity date with respect to each Series of Securities, the Company shall
have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments due on such interest payment date or maturity
date, as the case may be, in a timely manner
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<PAGE>
which permits the Paying Agent to remit payment to the Holders on such interest
payment date or maturity date, as the case may be.
Section 2.15. Book-Entry Provisions for Global Security
(a) Any global Security of a Series initially shall (i) be registered
in the name of the depository who shall be identified in the Authorizing
Resolution or supplemental indenture relating to such Securities (the
"Depository") or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear any required legends.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Security.
(b) Transfers of any global Security shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the global Security may be
transferred or exchanged for definitive Securities in accordance with the rules
and procedures of the Depository. In addition, definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue definitive
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.
(d) In connection with the transfer of an entire global Security to
beneficial owners pursuant to paragraph (b), the global Security shall be deemed
to be surrendered
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to the Trustee for cancellation, and the Company shall execute, and the Trustee
<PAGE>
shall authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the global Security, an
equal aggregate principal amount of definitive Securities of authorized
denominations.
(e) The Holder of any global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities of such Series.
ARTICLE THREE
Redemption
Section 3.01. Notices to Trustee
Securities of a Series that are redeemable prior to maturity shall be
redeemable in accordance with their terms and, unless the Authorizing Resolution
or supplemental indenture provides otherwise, in accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the Redemption Date
and the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed,
retired or acquired against any redemption pursuant to Paragraph 6 of the
Securities, it shall notify the Trustee of the amount of the credit and it shall
deliver any Securities not previously delivered to the Trustee for cancellation
with such notice.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed
If fewer than all of the Securities of a Series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger
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<PAGE>
than the minimum denomination for the Series. Securities and portions of them it
selects shall be in amounts equal to the minimum denomination for the Series or
an integral multiple thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
Section 3.03. Notice of Redemption
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail, postage
<PAGE>
prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(6) that the Securities are being redeemed pursuant to the
mandatory redemption or the optional redemption provisions, as
applicable.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall deliver to the Trustee at least 15 days prior to the date on which
notice of redemption is to be mailed or such shorter period as may be
satisfactory to the Trustee, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price as set
forth in the notice of redemption. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.
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Section 3.05. Deposit of Redemption Price
On or before the redemption date, the Company shall deposit with the
Paying Agent immediately available funds sufficient to pay the redemption price
of and accrued interest on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for each Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities
The Company shall pay the principal of and interest on a Series on the
<PAGE>
dates and in the manner provided in the Securities of the Series. An installment
of principal or interest shall be considered paid on the date it is due, if on
that date the Paying Agent holds money designated for and sufficient to pay the
installment; provided, however, that money held by the Paying Agent for the
benefit of holders of Senior Indebtedness pursuant to the provisions of Article
11 hereof shall not be considered paid within the meaning of this Section 4.01.
The Company shall pay interest on overdue principal at the rate borne
by the Series; it shall pay interest on overdue installments of interest at the
same rate.
Section 4.02. Maintenance of Office or Agency
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee.
Section 4.03. Compliance Certificate
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating whether or
not the signers know
17
<PAGE>
of any Default by the Company in performing any of its
obligations under this Indenture. If they do know of such a Default, the
certificate shall describe the Default.
Section 4.04. Payment of Taxes; Maintenance of Corporate Existence;
Maintenance of Properties
The Company will:
(a) cause to be paid and discharged all lawful taxes,
assessments and governmental charges or levies imposed upon
the Company and its Restricted Subsidiaries or upon the
income or profits of the Company and its Restricted
Subsidiaries or upon property or any part thereof belonging
to the Company and its Restricted Subsidiaries before the
same shall be in default, as well as all lawful claims for
labor, materials and supplies which, if unpaid, might
become a lien or charge upon such property or any part
thereof; provided, however, that the Company shall not be
required to cause to be paid or discharged any such tax,
assessment, charge, levy or claim so long as the validity
or amount thereof shall be contested in good faith by
appropriate proceedings and the nonpayment thereof does not,
in the judgment of the Company, materially adversely
affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture
when due; and provided further, that the Company shall not
be required to cause to be paid or discharged any such tax,
<PAGE>
assessment, charge, levy or claim if, in the judgment of the
Company, such payment shall not be advantageous to the Company
in the conduct of its business and if the failure so to pay or
discharge does not, in its judgment, materially adversely
affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due;
(b) cause to be done all things necessary to preserve and keep in
full force and effect the corporate existence of the Company
and each of its Restricted Subsidiaries; provided, however,
that nothing in this subsection (b) shall prevent a
consolidation or merger of the Company or any Restricted
Subsidiary not prohibited by the provisions of Article Five or
any other provision or the Authorizing Resolution or
supplemental indenture pertaining to a Series, and the Company
need not maintain the corporate existence of an immaterial
Restricted Subsidiary ; and
(c) at all times keep, maintain and preserve the property of the
Company and the Restricted Subsidiaries in good repair,
working order and condition (reasonable wear and tear
excepted) and from time to time make all needful and proper
repairs, renewals, replacements, betterments and improvements
thereto, so that the business carried on in connection
therewith may be
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properly and advantageously conducted at all times; provided,
however, that nothing in this subsection (c) shall prevent the
Company from discontinuing the operation and maintenance of
any such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business and
not disadvantageous in any material respect to the ability of
the Company and the Restricted Subsidiaries to pay all
obligations under this Indenture when due.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc
The Company shall not consolidate with or merge with or into, any other
corporation, or transfer all or substantially all of its assets to, any entity
unless permitted by law and unless (1) the resulting, surviving or transferee
entity, which shall be a corporation organized and existing under the laws of
the United States or a State thereof, assumes by supplemental indenture, in a
form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture and (2) immediately after giving
effect to, and as a result of, such transaction, no Default or Event of Default
shall have occurred and be continuing. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the "Company" and all such obligations
of the predecessor corporation shall terminate.
<PAGE>
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
To the extent that an Authorizing Resolution or supplemental indenture
pertaining to any Series provides for different provisions relating to the
subject matter of this Article Five, the provisions in such Authorizing
Resolution or supplemental indenture shall govern for purposes of such Series.
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<PAGE>
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default
An "Event of Default" on a Series occurs if, voluntarily or
involuntarily, whether by operation of law or otherwise, any of the following
occurs:
(1) the failure by the Company to pay interest on any Security of such
Series when the same becomes due and payable and the continuance of any such
failure for a period of 30 days;
(2) the failure by the Company to pay the principal or premium of any
Security of such Series when the same becomes due and payable at maturity, upon
acceleration or otherwise;
(3) the failure by the Company or any Restricted Subsidiary to comply
in all material respects with any of its agreements or covenants in, or
provisions of, the Securities of such Series, or this Indenture (as they relate
thereto) and such failure continues for the period and after the notice
specified below (except in the case of a default with respect to Article Five
(or any replacement provisions as contemplated by Article Five), which will
constitute an Event of Default with notice but without passage of time);
(4) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary in an amount of $30
million or more, individually or in the aggregate, and such acceleration does
not cease to exist, or such Indebtedness is not satisfied, in either case within
30 days after such acceleration;
(5) the failure by the Company or any Restricted Subsidiary to make any
principal or interest payment in an amount of $30 million or more, individually
or in the aggregate, in respect of Indebtedness for borrowed money (other than
Non-Recourse Indebtedness) of the Company or any Restricted Subsidiary within 30
days of such principal or interest becoming due and payable (after giving effect
to any applicable grace period set forth in the documents governing such
Indebtedness);
(6) a final judgment or judgments in an amount of $30 million or more,
individually or in the aggregate, for the payment of money having been entered
by a court or courts of competent jurisdiction against the Company or any of its
Restricted Subsidiaries and such judgment or judgments is not covered by a
<PAGE>
policy of insurance, satisfied, stayed, annulled or rescinded within 90 days of
being entered;
20
<PAGE>
(7) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment (except in the case of a
Restricted Subsidiary, to the Company) for the
benefit of its creditors; or
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary as debtor
in an involuntary case,
(B) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or a
Custodian for all or substantially all of the
property of the Company or any Restricted Subsidiary
that is a Significant Subsidiary, or
(C) orders the liquidation of the Company or any
Restricted Subsidiary that is a Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 90 days.
A Default as described in sub-clause (3) above will not be deemed an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25 percent in principal amount of the then outstanding Securities of the
applicable Series notify the Company and the Trustee, of the Default and (except
in the case of a default with respect to Article Five (or any replacement
provisions as contemplated by Article Five)) the Company does not cure the
Default within 90 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." If such a Default is cured within such time period, it ceases.
The term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
21
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<PAGE>
Section 6.02. Acceleration
If an Event of Default (other than an Event of Default with respect to
the Company resulting from sub-clauses (7) or (8) above), shall have occurred
and be continuing under the Indenture, the Trustee by notice to the Company, or
the Holders of at least 25 percent in principal amount of the Securities of the
applicable Series then outstanding by notice to the Company and the Trustee, may
declare all Securities of such Series to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Securities
of such Series will be due and payable immediately. If an Event of Default with
respect to the Company specified in sub-clauses (7) or (8) above occurs, all
amounts due and payable on the Securities of such Series will ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee and the Company or any Holder. The Holders of a
majority in principal amount of the Securities of such Series then outstanding
by written notice to the Trustee and the Company may waive any Default or Event
of Default (other than any Default or Event of Default in payment of principal
or interest) with respect to such Series of Securities under the Indenture.
Holders of a majority in principal amount of the then outstanding Securities of
such Series may rescind an acceleration with respect to such Series and its
consequence (except an acceleration due to nonpayment of principal or interest
on the Securities of such Series) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived.
No such rescission shall extend to or shall affect any subsequent Event
of Default, or shall impair any right or power consequent thereon.
Section 6.03. Other Remedies
If an Event of Default on a Series occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on the Series or to enforce the
performance of any provision in the Securities or this Indenture applicable to
the Series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Existing Defaults
Subject to Section 9.02, the Holders of a majority in principal amount
of the outstanding Securities of a Series on behalf of all the Holders of the
Series by notice to the
22
<PAGE>
Trustee may waive an existing Default on such Series and its consequences. When
a Default is waived, it is cured and stops continuing, and any Event of Default
arising therefrom shall be deemed to have been cured; but no such waiver shall
<PAGE>
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.05. Control by Majority
The Holders of a majority in principal amount of the outstanding
Securities of a Series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to such Series. The Trustee, however, may
refuse to follow any direction (i) that conflicts with law or this Indenture,
(ii) that, subject to Section 7.01, the Trustee determines is unduly prejudicial
to the rights of other Securityholders, or (iii) that would involve the Trustee
in personal liability.
Section 6.06. Limitation on Suits
A Securityholder of a Series may not pursue any remedy with respect to
this Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default on the Series;
(2) the Holders of at least a majority in principal amount of the
outstanding Securities of the Series make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 90 days
after receipt of the request and the offer of indemnity; and
(5) no written request inconsistent with such written request
shall have been given to the Trustee pursuant to this Section
6.06.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. Rights of Holders to Receive Payment
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Security, on or
after the respective due
23
<PAGE>
dates expressed in the Security, or to bring suit for the enforcement of any
such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
<PAGE>
for the whole amount of principal and interest remaining unpaid.
Section 6.09. Trustee May File Proofs of Claim
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property, and unless prohibited by applicable law or regulation, may vote on
behalf of the Holders in any election of a Custodian, and shall be entitled and
empowered to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder to make
such payments to the Trustee. Nothing herein shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to authorize
the Trustee to vote in respect of the claim of any Securityholder except as
aforesaid for the election of the Custodian.
Section 6.10. Priorities
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Indebtedness to the extent required by
Article 11;
Third: to Securityholders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable
on the Securities for principal and interest, respectively; and
Fourth: to the Company as its interests may appear. The Trustee may fix
a record date and payment date for any payment to Securityholders
pursuant to this Section 6.10.
24
<PAGE>
Section 6.11. Undertaking for Costs
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having the due regard
to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Series.
ARTICLE SEVEN
Trustee
<PAGE>
Section 7.01. Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the Trustee
shall, prior to the receipt of directions from the Holders of a majority in
principal amount of the Securities, exercise its rights and powers and use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no
others and no implied covenants or obligations shall
be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of his Indenture. The Trustee, however,
shall examine the certificates and opinions to
determine whether or not they conform to the
requirements of this Indenture but need not confirm
or investigate the accuracy of mathematical
calculations or other facts or matters stated herein.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
25
<PAGE>
(1) This paragraph does not limit the effect of paragraph
(b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in
accordance with a direction received by it pursuant
to Section 6.05 or any other direction of the Holders
permitted hereunder.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held in trust by
the Trustee need not be segregated from other funds except to the extent
required by law.
<PAGE>
(g) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
Section 7.02. Rights of Trustee
Subject to Section 7.01:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting on any document, resolution, certificate, instrument, report, or
direction believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document, resolution, certificate, instrument, report, or direction.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both, which shall conform to
Sections 10.04 and 10.05 hereof and containing such other statements as the
Trustee reasonably deems necessary to perform its duties hereunder. The Trustee
shall not be liable for any action
26
<PAGE>
it takes or omits to take in good faith in reliance on the Officers'
Certificate, Opinion of Counsel or any other direction of the Company permitted
hereunder.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
(e) The Trustee may consult with counsel, and the written advice of
such counsel or any Opinion of Counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Unless otherwise specifically provided in the Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(g) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default (other than under
Section 6.01(1) or 6.01(2)) unless a Trust Officer assigned to and working in
the Trustee's corporate trust office has actual knowledge thereof or unless
written notice of any Event of Default is received by the Trustee at its address
specified in Section 10.02 hereof and such notice references the Securities
generally, the Company or this Indenture.
Section 7.03. Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
<PAGE>
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer
The Trustee makes no representation as to the validity or adequacy of
this Indenture, the Securities or of any prospectus used to sell the Securities;
it shall not be accountable for the Company's use of the proceeds from the
Securities; it shall not be accountable for any money paid to the Company, or
upon the Company's direction, if made under and in accordance with any provision
of this Indenture; it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee; and it shall not be
responsible for any statement of the Company in this Indenture or in the
Securities other than its certificate of authentication.
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<PAGE>
Section 7.05. Notice of Defaults
If a Default on a Series occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Securityholder of the Series notice
of the Default (which shall specify any uncured Default known to it) within 90
days after it occurs. Except in the case of a default in payment of principal of
or interest on a Series, the Trustee may withhold the notice if and so long as
the board of directors of the Trustee, the executive or any trust committee of
such directors and/or responsible officers of the Trustee in good faith
determine(s) that withholding the notice is in the interests of Holders of the
Series.
Section 7.06. Reports by Trustee to Holders
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA ss. 313(a) (but if
no event described in TIA ss. 313(2) has occurred within the twelve months
preceding the reporting date no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be delivered to the Company and filed by the Trustee with the SEC and each
national securities exchange on which the Securities are listed. The Company
agrees to notify the Trustee of each national securities exchange on which the
Securities are listed.
Section 7.07. Compensation and Indemnity
The Company shall pay to the Trustee or predecessor trustee from time
to time reasonable compensation for their respective services subject to any
written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
<PAGE>
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith.
To ensure the Company's payment obligations in this Section, the
Trustee shall have a claim prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.
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<PAGE>
When the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 6.01 or in connection with Article 6 hereof, the
expenses (including the reasonable fees and expenses of its counsel) and the
compensation for services in connection therewith are to constitute expenses of
administration under any bankruptcy law.
Section 7.08. Replacement of Trustee
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the removed Trustee in writing and may appoint a
successor trustee with the Company's consent. Such resignation or removal shall
not take effect until the appointment by the Securityholders or the Company as
hereinafter provided of a successor trustee and the acceptance of such
appointment by such successor trustee. The Company may remove the Trustee and
any Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee for any or no
reason, including if:
(1) the Trustee fails to comply with Section 7.10 after written
request by the Company or any bona fide Securityholder who has
been a Securityholder for at least six months;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for the appointment of a
successor trustee.
A successor trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor trustee shall mail
notice of its succession to each Securityholder.
29
<PAGE>
<PAGE>
Section 7.09. Successor Trustee by Merger, etc
If the Trustee consolidates with, merges with or into or converts into,
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor trustee.
Section 7.10. Eligibility; Disqualification
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.310(a)(1). The Trustee shall have a combined capital and
surplus of at least $10,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA ss.310(b).
Section 7.11. Preferential Collection of Claims Against Company
The Trustee shall comply with TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b). A Trustee who has resigned or been removed
shall be subject to TIA ss.311(a) to the extent indicated therein.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government
Obligations
(a) The Company may, at its option and at any time, elect to have
either paragraph (b) or paragraph (c) below be applied to the outstanding
Securities of any Series upon compliance with the applicable conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its respective obligations with respect to the
outstanding Securities of a Series on the date the applicable conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Securities of
a Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of the Sections and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned, except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities of a Series to
receive solely from the trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii)
30
<PAGE>
<PAGE>
obligations listed in Section 8.02, subject to compliance with this Section
8.01. The Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) below with
respect to such Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from the obligations under any covenant contained in Article Five and any other
covenant contained in the Authorizing Resolution or supplemental indenture
relating to such Series to the extent provided for therein, on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities of such Series shall thereafter be deemed to be
not "outstanding" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities of a Series, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(3), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities of the
applicable Series:
(1) The Company shall have irrevocably deposited in trust
with the Trustee, pursuant to an irrevocable trust
and security agreement in form and substance
reasonably satisfactory to the Trustee, money in U.S.
dollars or U.S. government obligations or a
combination thereof in such amounts and at such times
as are sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to
pay the principal of and interest on the outstanding
Securities of such Series to maturity or redemption;
provided, however, that the Trustee (or other
qualifying trustee) shall have received an
irrevocable written order from the Company
instructing the Trustee (or other qualifying trustee)
to apply such money or the proceeds of such U.S.
government obligations to said payments with respect
to the Securities of such Series to maturity or
redemption;
(2) No Default or Event of Default shall have occurred
and be continuing on the date of such deposit;
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<PAGE>
(3) Such deposit will not result in a Default under this
Indenture or a breach or violation of, or constitute
a default under, any other material instrument or
agreement to which the Company or any of its
Subsidiaries is a party or by which it or any of
<PAGE>
their property is bound;
(4) (i) In the event the Company elects paragraph (b)
hereof, the Company shall deliver to the Trustee an
Opinion of Counsel in the United States, in form and
substance reasonably satisfactory to the Trustee, to
the effect that (A) the Company has received from, or
there has been published by, the Internal Revenue
Service a ruling or (B) since the Issue Date
pertaining to such Series, there has been a change in
the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of
Counsel shall state that, or (ii) in the event the
Company elects paragraph (c) hereof, the Company
shall deliver to the Trustee an Opinion of Counsel in
the United States, in form and substance reasonably
satisfactory to the Trustee, to the effect that, in
the case of clauses (i) and (ii), Holders of the
Securities of such Series will not recognize income,
gain or loss for United States federal income tax
purposes as a result of such deposit and the
defeasance contemplated hereby and will be subject to
federal income tax in the same amounts and in the
same manner and at the same times as would have been
the case if such deposit and defeasance had not
occurred;
(5) The Company shall have delivered to the Trustee an
Officers' Certificate, stating that the deposit under
clause (1) was not made by the Company with the
intent of preferring the Holders of the Securities of
such Series over any other creditors of the Company
or with the intent of defeating, hindering, delaying
or defrauding any other creditors of the Company or
others;
(6) The Company shall have delivered to the Trustee an
Opinion of Counsel, reasonably satisfactory to the
Trustee, to the effect that, (A) the trust funds will
not be subject to the rights of Holders of
Indebtedness of the Company other than the Securities
of such Series and (B) assuming no intervening
bankruptcy of the Company between the date of deposit
and the 91st day following the deposit and that no
Holder of Securities of such Series is an insider of
the Company, after the 91st day following the
deposit, the trust funds will not be subject to any
applicable bankruptcy, insolvency, reorganization or
similar law affecting creditors' rights generally;
and
32
<PAGE>
(7) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating
that all conditions precedent specified herein
relating to the defeasance contemplated by this
Section 8.01 have been complied with.
<PAGE>
In the event all or any portion of the Securities of a Series are to be
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
(e) In addition to the Company's rights above under this Section 8.01,
the Company may terminate all of its obligations under this Indenture with
respect to a Series when:
(1) All Securities of such Series theretofore
authenticated and delivered (other than Securities
which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section
2.07 and Securities for whose payment money has
theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or all such
Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the
Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust
solely for that purpose an amount of money sufficient
to pay and discharge the entire Indebtedness on the
Securities not theretofore delivered to the Trustee
for cancellation, for principal of and interest;
(2) The Company has paid or caused to be paid all other
sums payable hereunder by the Company;
(3) The Company has delivered irrevocable instructions to
the Trustee to apply the deposited money toward the
payment of the Securities at maturity or redemption,
as the case may be; and
(4) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that
all conditions precedent specified herein relating to
the satisfaction and discharge of this Indenture have
been complied with.
33
<PAGE>
Section 8.02. Survival of the Company's Obligations
Notwithstanding the satisfaction and discharge of the Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Securities and
Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).
Section 8.03. Application of Trust Money
The Trustee shall hold in trust money or U.S. government obligations
<PAGE>
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. government obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities of the defeased
Series.
Section 8.04. Repayment to the Company
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person and all liability of the Trustee or such Paying Agent with respect to
such money shall cease.
Section 8.05. Reinstatement
If the Trustee is unable to apply any money or U.S. government
obligations in accordance with Section 8.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities relating to the Series shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee is permitted to apply all such money or U.S.
government obligations in accordance with Section 8.01; provided, however, that
(a) if the Company has made any payment of interest on or principal of any
34
<PAGE>
Securities of the Series because of the reinstatement of their obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. government obligations held by the
Trustee and (b) unless otherwise required by any legal proceeding or any order
or judgment of any court or governmental authority, the Trustee shall return all
such money or U.S. government obligations to the Company promptly after
receiving a written request therefor at any time, if such reinstatement of the
Company's obligations has occurred and continues to be in effect.
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to or consent of any Securityholder of
such Series:
<PAGE>
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article Five;
(3) to provide that specific provisions of this Indenture shall
not apply to a Series not previously issued;
(4) to create a Series and establish its terms;
(5) to provide for uncertificated Securities in addition to or
in place of certificated Securities; and
(6) to make any other change that does not adversely affect the
rights of Securityholders.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail notice of such amendment to the Securityholders.
Section 9.02. With Consent of Holders
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to any Securityholder of such Series
but with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each such Series affected by the
amendment. Each such Series shall vote
35
<PAGE>
as a separate class. The Holders of a majority in principal amount of the
outstanding Securities of any Series may waive compliance by the Company with
any provision of the Securities of such Series or of this Indenture relating to
such Series without notice to any Securityholder. Without the consent of each
Securityholder of a Series affected, however, an amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities of such Series whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any
Security or alter the provisions (including related
definitions) with respect to redemption of Securities pursuant
to Article Three hereof or with respect to any obligations on
the part of the Company to offer to purchase or to redeem
Securities of a Series pursuant to the Authorizing Resolution
or supplemental indenture pertaining to such Series;
(4) modify the ranking or priority of the Securities of any
Series;
(5) make any change in Sections 6.04, 6.07 or this Section 9.02;
(6) waive a continuing Default or Event of Default in the payment
of the principal of or interest on any Security; or
(7) make any Security payable at a place or in money other than
<PAGE>
that stated in the Security, or impair the right of any
Securityholder to bring suit as permitted by Section 6.07.
An amendment of a provision included solely for the benefit of one or
more Series does not affect the interests of Securityholders of any other
Series.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplement, but it shall
be sufficient if such consent approves the substance thereof.
After the issuance of any Securities, an amendment under this Section
or under Section 9.01 may not make any change that adversely affects in any
material respect the rights under Article 11 of the holders of Senior
Indebtedness, unless such holders of Senior Indebtedness consent to the change.
36
<PAGE>
Section 9.03. Compliance with Trust Indenture Act
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents
A consent to an amendment, supplement or waiver by a Holder shall bind
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. Subject to the following
paragraph, any such Holder or subsequent Holder, however, may revoke the consent
as to his Security or portion of a Security. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Securities of any Series entitled to
consent to any amendment, supplement or waiver, which record date shall be at
least 10 days prior to the first solicitation of such consent. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security; provided, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal of
and interest on a Security, on or after the respective due dates expressed in
such Security, or to bring suit for the enforcement of any such payment on or
after such respective dates without the consent of such Holder.
Section 9.05. Notation on or Exchange of Securities
<PAGE>
If an amendment, supplement or waiver changes the terms of a Security,
the Company may require the Holder of the Security to deliver it to the Trustee,
at which time the Trustee shall place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Section 9.06. Trustee to Sign Amendments, etc
37
<PAGE>
Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE TEN
Miscellaneous
Section 10.01. Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 10.02. Notices
Any order, consent, notice or communication shall be sufficiently given
if in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
if to the Company:
M.D.C. Holdings, Inc.
3600 South Yosemite
Suite 900
Denver, CO 80237
Telecopy No.: (303) 793-2760
Attention: Chief Financial Officer
38
<PAGE>
if to the Trustee:
<PAGE>
-----------------------
-----------------------
-----------------------
Telecopy No.:
----------
Attention:
-------------
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail at his address as it appears on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it except that
notice to the Trustee shall only be effective upon receipt thereof by the
Trustee.
If the Company mails notice or communications to the Securityholders,
it shall mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders
Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA ss. 312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 10.05) stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of such
counsel, all such conditions
39
<PAGE>
precedent and covenants, compliance with which constitutes a
condition precedent, if any, provided for in this Indenture
relating to the proposed action or inaction, have been
complied with and that any such section does not conflict with
the terms of the Indenture.
Section 10.05. Statements Required in Certificate or Opinion
<PAGE>
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section 10.07. Legal Holidays
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in Denver, Colorado and New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. A "Business
Day" is any day other than a Legal Holiday.
Section 10.08. Governing Law
The laws of the State of New York shall govern this Indenture and the
Securities of each Series.
40
<PAGE>
Section 10.09. No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.10. No Recourse Against Others
All liability described in paragraph 12 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
Section 10.11. Successors and Assigns
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
<PAGE>
Section 10.12. Duplicate Originals
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 10.13. Severability
In case any one or more of the provisions contained in this Indenture
or in the Securities of a Series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Securities.
ARTICLE ELEVEN
Subordination
Section 11.01. Agreement to Subordinate
The Company agrees, and each Securityholder by accepting a Security
agrees, that the indebtedness evidenced by the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article, to
the prior payment in full of all Senior Indebtedness and that the subordination
is for the benefit of the holders of Senior Indebtedness.
41
<PAGE>
Section 11.02. Certain Definitions
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
"Senior Indebtedness" means all Indebtedness (present or future)
created, incurred, assumed or guaranteed by the Company (and all renewals,
extensions or refundings thereof), unless the instrument under which such
Indebtedness is created, incurred, assumed or guaranteed provides that such
Indebtedness is not senior or superior in right of payment to the Securities.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
shall not include (i) any Indebtedness of the Company to any of its
subsidiaries, (ii) any trade payables of the Company or (iii) guarantees by the
Company or any of its Subsidiaries of Indebtedness (a) outstanding at the date
hereof or (b) which may be outstanding in the future, except that Senior
Indebtedness shall include any guarantees as may be listed in a supplemental
indenture and any other present and future guarantees that provide by their
terms that they constitute Senior Indebtedness.
Section 11.03. Liquidation; Dissolution; Bankruptcy
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its Property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of the principal of and interest
(including interest accruing after the commencement of any
such proceeding) to the date of payment on the Senior
Indebtedness before Securityholders shall be entitled to
<PAGE>
receive any payment of principal of or interest on Securities;
and
(2) until the Senior Indebtedness is paid in full in cash, any
distribution to which Securityholders would be entitled but
for this Article shall be made to holders of Senior
Indebtedness as their interests may appear, except that
Securityholders may receive securities that are subordinated
to Senior Indebtedness to at least the same extent as the
Securities.
For purposes of this Article 11, a distribution may consist of cash,
securities or other property, by set-off or otherwise.
Section 11.04. Default on Senior Indebtedness
Upon the final maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all such Senior Indebtedness shall first be paid in
full, or such payment duly provided for in cash or in a manner satisfactory to
the holders of such Senior
42
<PAGE>
Indebtedness, before any payment is made by the Company or any person acting on
behalf of the Company on account of the principal or interest of the Securities.
The Company may not pay principal of or interest on the Securities and
may not acquire any Securities for cash or property (other than capital stock of
the Company or other securities of the Company that are subordinated to Senior
Indebtedness to at least the same extent as the Securities) if a default on
Senior Indebtedness occurs and is continuing that permits holders of such Senior
Indebtedness to accelerate its maturity.
The Company shall resume payments on the Securities and may acquire
them, if this Article otherwise permits the payment or acquisition at that time,
when the default is cured or waived.
Section 11.05. Acceleration of Securities
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness of the
acceleration. The Company shall pay the Securities when 180 days pass after the
acceleration occurs if this Article permits the payment at that time; provided,
however, that if no Senior Indebtedness is outstanding at the time of such
acceleration, the Company shall pay the Securities in accordance with the
provisions of Article 6.
Section 11.06. When Distributions Must Be Paid Over
In the event that the Company shall make any payment to the Trustee on
account of the principal or interest on the Securities at a time when such
payment is prohibited by Section 11.03 or 11.04, such payment shall be held by
the Trustee in trust for the benefit of, and shall forthwith be paid over and
delivered to, the holders of Senior Indebtedness (pro rata as to each of such
holders on the basis of the respective amounts of Senior Indebtedness held by
them) or their Representative under the indenture or other agreement (if any)
<PAGE>
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
If a distribution is made to Securityholders that because of this
Article should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
43
<PAGE>
Section 11.07. Notice by the Company
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of principal of or
interest on the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior
Indebtedness provided in this Article. Nothing in this Article shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07.
Section 11.08. Subrogation
After all Senior Indebtedness is paid in full and until the Securities
are paid in full, Securityholders shall be subrogated to the rights of holders
of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the
Securityholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior Indebtedness which
otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on Senior Indebtedness.
Section 11.09. Relative Rights
This Article defines the relative rights of Securityholders and holders
of Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the
Securities in accordance with their terms;
(2) affect the relative rights of Securityholders and creditors of
the Company, other than holders of Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject
to the rights of holders of Senior Indebtedness to receive
distributions otherwise payable to Securityholders.
If the Company fails to pay principal of or interest on a Security on
the due date because of this Article, the failure is still a Default or Event of
Default.
44
<PAGE>
<PAGE>
Section 11.10. Subordination May Not Be Impaired by the Company
No right of any holder of Senior Indebtedness to enforce the
subordination of the indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.
Section 11.11. Distribution or Notice to the Representative
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness pursuant to this Article 11, the distribution may be made
and the notice given to their Representative.
Section 11.12. Rights of the Trustee and Paying Agent
Notwithstanding any provision of this Article 11 or any other provision
of this Indenture, the Trustee and Paying Agent shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment to or by the Trustee or a Paying Agent or the taking of any other
action (pursuant to this Article 11) by the Trustee or a Paying Agent unless and
until the Trustee or such Paying Agent, as the case may be, shall have received
at its office specified in Section 10.02 written notice thereof from the
Company, a Representative or a holder of Senior Indebtedness and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, and such Paying Agent, shall be entitled in all respects
conclusively to assume that no such facts exist. The Trustee or Paying Agent may
continue to make payments on the Securities unless it receives such a notice at
least three business days prior to the date upon which payment is due.
The Trustee shall be entitled to rely reasonably in good faith on the
delivery to it of a written notice by a person representing himself, herself or
itself to be a Representative or a holder of Senior Indebtedness to establish
that such notice has been given by a Representative or a holder of such Senior
Indebtedness. Only the Company, a Representative or a holder of Senior
Indebtedness that has no Representative may give the notice.
In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article 11, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the
45
<PAGE>
benefit of such person pursuant to the terms of this Indenture pending judicial
determination as to the rights of such person to receive such payment.
<PAGE>
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
Custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 11.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 11.13. No Fiduciary Duty to Holders of Senior Indebtedness
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee or Paying Agent. Neither the Trustee nor
the Paying Agent shall be deemed to owe any fiduciary duty to the holders of
such Senior Indebtedness and, subject to the provisions of Section 7.02, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall, in the absence of bad faith, pay over or deliver to holders of
Securities, the Company or any other person monies or assets to which any holder
of such Senior Indebtedness shall be entitled by virtue of this Article 11 or
otherwise.
46
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
Dated: , 1999 M.D.C. HOLDINGS, INC
----------------
By:
Name:
Title:
Dated: , 1999 , as Trustee
------------------ ---------------------
By:
Name:
Title:
(SEAL)
<PAGE>
47
<PAGE>
Exhibit A
No. CUSIP No.:
---------
[Title of Security]
M.D.C. HOLDINGS, INC.
a Delaware corporation
promises to pay to
or registered assigns
the principal sum of [Dollars] on
[Title of Security]
Interest Payment Dates: and
Record Dates and
Authenticated: Dated:
M.D.C. HOLDINGS, INC.
[Seal]
By
----------------------------
Title:
By
----------------------------
Title:
- ------------------------------,
as Trustee, certifies that this is one of the
Securities referred to in the within mentioned
Indenture.
By:
-----------------------------
- --------------------------------
Authorized Signatory
M.D.C. HOLDINGS, INC.
[Title of Security]
A-1
<PAGE>
<PAGE>
1. Interest.
M.D.C. HOLDINGS, INC. (the "Company"), a Delaware corporation, promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company will pay interest semiannually on
-------------------
and of each year until the principal is paid or made available
----------------
for payment. Interest on the Securities will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid, from , 19 ; provided that, if there is no existing default
-------------- --
in the payment of interest, and if this Security is authenticated between a
record date referred to on the face hereof and the next succeeding interest
payment date, interest shall accrue from such interest payment date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Securities (except
defaulted interest, if any, which will be paid on such special payment date to
Holders of record on such special record date as may be fixed by the Company) to
the persons who are registered Holders of Securities at the close of business on
the [Insert record dates]. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.
3. Paying Agent and Registrar.
Initially, (the "Trustee") will act as Paying Agent and
---------------
Registrar. The Company may change or appoint any Paying Agent, Registrar or
co-Registrar without notice. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
, 199 ("Indenture") among the Company and the Trustee. The terms
- ------------- --
of the Securities include those stated in the Indenture (including those terms
set forth in the Authorizing Resolution or supplemental indenture pertaining to
the Securities of the Series of which this Security is a part) and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 ("TIA") as
in effect on the date of the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the Act for a
statement of them.
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture and the applicable Authorizing
Resolution or supplemental indenture. Requests may be made to: M.D.C. Holdings,
Inc., 3600 S. Yosemite, Suite 900, Denver, Colorado 80237, Attention: Secretary.
A-2
<PAGE>
5. Optional Redemption.
<PAGE>
The Company may redeem the Securities at any time on or
after , in whole or in part, at the following redemption prices
--------------
(expressed as a percentage of their principal amount) together with interest
accrued and unpaid to the date fixed for redemption:
If redeemed during the Twelve-Month period commencing
on and ending on in each of the
------------ ----------
following years Percentage
------- ------
------- ------
------- ------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date, interest ceases to accrue on
Securities or portions of them called for redemption; provided, that if the
Company shall default in the payment of such Security at the redemption price
together with accrued interest, interest shall continue to accrue at the rate
borne by the Securities.
[Insert provisions relating to redemption at option of Holders, if any]
6. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange
Securities by presentation of such Securities to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Securities of other denominations. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Security selected for
redemption, except the unredeemed part thereof if the Security is redeemed in
part, or transfer or exchange any Securities for a period of 15 days before a
selection of Securities to be redeemed.
A-3
<PAGE>
7. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of
it for all purposes.
8. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its request. After that, Holders entitled to the money must look to the Company
for payment unless an abandoned property law designates another person.
<PAGE>
9. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Securities of each Series affected by the
amendment and any past default or compliance with any provision relating to any
Series of the Securities may be waived in a particular instance with the consent
of the Holders of a majority in principal amount of the outstanding Securities
of such Series. Without the consent of any Securityholder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Securities in
addition to or in place of certificated Securities, to create a Series and
establish its terms, or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
10. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor corporation
will be released from those obligations.
11. Trustee Dealings With Company.
, the Trustee under the Indenture, in its individual or
--------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for
A-4
<PAGE>
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
13. Discharge of Indenture.
The Indenture contains certain provisions pertaining to defeasance,
which provisions shall for all purposes have the same effect as if set forth
herein.
14. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
15. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
<PAGE>
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
16. Subordination.
To the extent set forth in Article 11 of the Indenture, the Securities
are subordinated to Senior Indebtedness, which generally is any Indebtedness
outstanding on the date of the Indenture or Indebtedness thereafter created,
incurred, assumed or guaranteed by the Company and all renewals, extensions and
refundings thereof except Indebtedness that expressly provides that it is not
senior to or superior in right of payment to the Securities. Senior Indebtedness
does not include Indebtedness of the Company to any of its subsidiaries, trade
payables of the Company and certain Indebtedness of others guaranteed by the
Company. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination and
authorizes the Trustee to give it effect.
A-5
<PAGE>
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form
below:
I or we assign and transfer this Security to:
- ------------------------------------------------------------
- ------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
(Print or type assignee's name, address, and zip code)
and irrevocably appoint:
- ------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
- ------------------------------------------------------------
Date: Your signature:
---------------- --------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature
<PAGE>
Guarantee:
----------------------------------------------------------
EXHIBIT 4.2(c)
SCHEDULE OF MATERIAL DETAILS IN WHICH THE FORM OF JUNIOR SUBORDINATED DEBT
INDENTURE (INCLUDING FORM OF JUNIOR SUBORDINATED DEBENTURE) DIFFERS FROM EXHIBIT
4.2(b), THE FORM OF SENIOR SUBORDINATED DEBT INDENTURE (INCLUDING FORM OF SENIOR
SUBORDINATED DEBENTURE)
The form of Junior Subordinated Debt Indenture (including the form of
Junior Subordinated Debenture) (the "Junior Subordinated Debt Indenture")
differs from Exhibit 4.2(b), the form of Senior Subordinated Debt Indenture
(including the form of Senior Subordinated Debenture) (the "Senior Subordinated
Debt Indenture"), in the following respects:
(1) The words "Senior Subordinated" in the Senior Subordinated
Debt Indenture are changed to the word "Junior Subordinated"
in the Junior Subordinated Debt Indenture, and there are
references to Junior Subordinated Debt in the Junior
Subordinated Debt Indenture, but not in the Senior
Subordinated Debt Indenture; and
(3) Provision for the possible right of the Registrant to defer
interest are included in the Junior Subordinated Debt
Indenture, but not in the Senior Subordinated Debt Indenture.
<PAGE>
EXHIBIT 4.2(c)
M.D.C. HOLDINGS, INC.
Issuer
AND
-----------------------------
Trustee
JUNIOR SUBORDINATED DEBT SECURITIES
----------------------
<PAGE>
INDENTURE
DATED AS OF , 1999
-------------
----------------------
<PAGE>
ARTICLE ONE - Definitions and Incorporation by Reference
Section 1.01. Definitions...................................1
Section 1.02. Other Definitions.............................6
Section 1.03. Incorporation by Reference of Trust Indenture
Act.........................................7
Section 1.04. Rules of Construction.........................7
ARTICLE TWO - The Securities
Section 2.01. Form and Dating...............................8
Section 2.02. Execution and Authentication..................9
Section 2.03. Registrar and Paying Agent...................10
Section 2.04. Paying Agent to Hold Money in Trust..........10
Section 2.05. Securityholder Lists.........................11
Section 2.06. Transfer and Exchange........................11
Section 2.07. Replacement Securities.......................11
Section 2.08. Outstanding Securities.......................12
Section 2.09. Temporary Securities.........................12
Section 2.10. Cancellation.................................12
Section 2.11. Defaulted Interest...........................13
Section 2.12. Treasury Securities..........................13
Section 2.13. CUSIP Numbers................................13
Section 2.14. Deposit of Moneys............................13
Section 2.15. Book-Entry Provisions for Global Security....14
ARTICLE THREE - Redemption
Section 3.01. Notices to Trustee...........................15
Section 3.02. Selection of Securities to be Redeemed.......15
Section 3.03. Notice of Redemption.........................16
Section 3.04. Effect of Notice of Redemption...............16
Section 3.05. Deposit of Redemption Price..................17
Section 3.06. Securities Redeemed in Part..................17
ARTICLE FOUR - Covenants
Section 4.01. Payment of Securities........................17
Section 4.02. Maintenance of Office or Agency..............17
Section 4.03. Compliance Certificate.......................17
Section 4.04. Payment of Taxes; Maintenance of Corporate
Existence; Maintenance of Properties.......18
<PAGE>
i
<PAGE>
ARTICLE FIVE - Successor Corporation
Section 5.01. When Company May Merge, etc..................19
ARTICLE SIX - Defaults and Remedies
Section 6.01. Events of Default............................20
Section 6.02. Acceleration.................................22
Section 6.03. Other Remedies...............................22
Section 6.04. Waiver of Existing Defaults..................22
Section 6.05. Control by Majority..........................23
Section 6.06. Limitation on Suits..........................23
Section 6.07. Rights of Holders to Receive Payment.........23
Section 6.08. Collection Suit by Trustee...................24
Section 6.09. Trustee May File Proofs of Claim.............24
Section 6.10. Priorities...................................24
Section 6.11. Undertaking for Costs........................25
ARTICLE SEVEN - Trustee
Section 7.01. Duties of Trustee............................25
Section 7.02. Rights of Trustee............................26
Section 7.03. Individual Rights of Trustee.................27
Section 7.04. Trustee's Disclaimer.........................27
Section 7.05. Notice of Defaults...........................28
Section 7.06. Reports by Trustee to Holders................28
Section 7.07. Compensation and Indemnity...................28
Section 7.08. Replacement of Trustee.......................29
Section 7.09. Successor Trustee by Merger, etc.............30
Section 7.10. Eligibility; Disqualification................30
Section 7.11. Preferential Collection of Claims Against
Company......................................30
ARTICLE EIGHT - Discharge of Indenture
Section 8.01. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations.....................30
Section 8.02. Survival of the Company's Obligations........34
Section 8.03. Application of Trust Money...................34
Section 8.04. Repayment to the Company.....................34
Section 8.05. Reinstatement................................34
ii
<PAGE>
<PAGE>
ARTICLE NINE - Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders...................35
Section 9.02. With Consent of Holders......................35
Section 9.03. Compliance with Trust Indenture Act..........37
Section 9.04. Revocation and Effect of Consents............37
Section 9.05. Notation on or Exchange of Securities........37
Section 9.06. Trustee to Sign Amendments, etc..............38
ARTICLE TEN - Miscellaneous
Section 10.01. Trust Indenture Act Controls.................38
Section 10.02. Notices......................................38
Section 10.03. Communications by Holders with Other Holders.39
Section 10.04. Certificate and Opinion as to Conditions
Precedent...................................39
Section 10.05. Statements Required in Certificate or
Opinion.....................................40
Section 10.06. Rules by Trustee and Agents..................40
Section 10.07. Legal Holidays...............................40
Section 10.08. Governing Law................................40
Section 10.09. No Adverse Interpretation of Other
Agreements.................................41
Section 10.10. No Recourse Against Others...................41
Section 10.11. Successors and Assigns.......................41
Section 10.12. Duplicate Originals..........................41
Section 10.13. Severability.................................41
ARTICLE ELEVEN - Subordination
Section 11.01. Agreement to Subordinate.....................41
Section 11.02. Certain Definitions..........................42
Section 11.03. Liquidation; Dissolution; Bankruptcy.........42
Section 11.04. Default on Senior Indebtedness...............42
Section 11.05. Acceleration of Securities...................43
Section 11.06. When Distributions Must Be Paid over.........43
Section 11.07. Notice by the Company........................44
Section 11.08. Subrogation..................................44
Section 11.09. Relative Rights..............................44
Section 11.10. Subordination May Not Be Impaired by the
Company....................................45
Section 11.11. Distribution or Notice to the
Representative.............................45
Section 11.12. Rights of the Trustee and Paying Agent.......45
Section 11.13. No Fiduciary Duty to Holders of Senior
Indebtedness...............................46
iii
<PAGE>
CROSS-REFERENCE TABLE
This Cross-Reference Table is not a part
<PAGE>
of the Indenture.
------------------------------------------
TIA Indenture
Section Section
310(a)(1).......................................... 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(b)................................................ 7.08; 7.10; 10.02
311(a)............................................. 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)............................................. 2.05
(b)................................................ 10.03
(c)................................................ 10.03
313(a)............................................. 7.06
(b)(1)............................................. N.A.
(b)(2)............................................. 7.06
(c)................................................ 10.02
(d)................................................ 7.06
314(a)............................................. 7.06; 10.02
(b)................................................ N.A.
(c)(1)............................................. 10.04
(c)(2)............................................. 10.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 10.05
(f)................................................ N.A.
315(a)............................................. 7.01(b)
(b)................................................ 7.05; 10.02
(c)................................................ 7.01(a)
(d)................................................ 7.01(c)
(e)................................................ 6.11
316(a)(last sentence).............................. 2.12
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.07
(c)................................................ 9.04
317(a)(1).......................................... 6.08
(a)(2)............................................. 6.09
(b)................................................ 2.04
318(a)............................................. 10.01
- -----------------------------
N.A. means Not Applicable.
iv
<PAGE>
INDENTURE dated as of , 1999, by and among M.D.C.
-------------
HOLDINGS, INC., a Delaware corporation (the "Company"), and , (the
-------------
"Trustee").
<PAGE>
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's debt securities
issued under this Indenture (the "Securities"):
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person, or (ii) any officer,
director, a Person acting with respect to such Person in a similar capacity, or
controlling shareholder of such other Person. For purposes of this definition,
the term "control" means (a) the power to direct the management and policies of
a Person, either directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise, or (b) without
limiting the foregoing, the beneficial ownership of 10% or more of the voting
power of the voting common equity of such Person (on a fully diluted basis).
Notwithstanding the foregoing, the term "Affiliate" will not include, with
respect to the Company or any Restricted Subsidiary of the Company, any
Restricted Subsidiary of the Company, or the Company, with respect to any
Restricted Subsidiary.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notices and demands.
"Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.
"Authorizing Resolution" means a resolution adopted by the Board of
Directors or by an Officer or committee of Officers pursuant to Board delegation
authorizing a Series of Securities.
"Bankruptcy Law" means title 11 of the United States Code, as amended,
or any similar federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
authorized committee thereof.
1
<PAGE>
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of or in
such Person's capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other equity interests, whether now
outstanding or issued after the applicable Issue Date, including, without
limitation, all Preferred Stock.
"Capitalized Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligations will be the capitalized amount thereof determined in
accordance with GAAP.
<PAGE>
"Company" means the Person named as such in this Indenture until a
successor replaces it pursuant to the Indenture and thereafter means the
successor.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect such Person or any of its Subsidiaries or Affiliates against
fluctuations in currency values.
"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, unless otherwise timely cured, an Event of
Default.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Indenture.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indebtedness" of any Person means, without duplication, (i) any
liability of such Person (other than accounts payable, other trade payables and
accrued expenses incurred in the ordinary course of such Person's business) (a)
for borrowed money or under any reimbursement obligation relating to a letter of
credit or other similar instruments (other than standby letters of credit issued
for the benefit of or surety, performance, completion or payment bonds, earnest
money notes or similar purpose undertakings or indemnifications issued by, such
Person in the ordinary course of business, general contingency and tax reserves,
liabilities for deposits and deferred income which in accordance with GAAP is
recorded as a liability), (b) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind or with services
incurred in connection with capital expenditures (other than any obligation to
pay a contingent
2
<PAGE>
purchase price which, as of the date of incurrence thereof is not required to be
recorded as a liability in accordance with GAAP), or (c) in respect of
Capitalized Lease Obligations (to the extent of the Attributable Debt in respect
thereof), (ii) any Indebtedness of others that such Person has guaranteed to the
extent of the guarantee, (iii) to the extent not otherwise included, the
obligations of such Person under Currency Agreements or Interest Protection
Agreements to the extent recorded as liabilities not constituting Interest
Incurred, net of amounts recorded as assets in respect of such agreements, in
accordance with GAAP, and (iv) all Indebtedness of others secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person. The amount of Indebtedness of any Person at any date shall be (a) the
outstanding balance at such date of all unconditional obligations as described
above, net of any unamortized discount to be accounted for as Interest Expense,
in accordance with GAAP, (b) the maximum liability of such Person for any
contingent obligations under clause (ii) above at such date, net of, any
unamortized discount to be accounted for as Interest Expense in accordance with
<PAGE>
GAAP and (c) in the case of clause (iv) above, the lesser of (1) the fair market
value of any asset subject to a Lien securing the Indebtedness of others on the
date that the Lien attaches and (2) the amount of the Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time
to time, including pursuant to any Authorizing Resolution or supplemental
indenture pertaining to any Series.
"Interest Expense" of any Person for any period means, without
duplication, the aggregate amount of (i) interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like caption
on an income statement for such Person (including, without limitation, imputed
interest included in Capitalized Lease Obligations, all commissions, discounts
and other fees and charges owned with respect to letters of credit and bankers'
acceptance financing, the net costs (but reduced by net gains) associated with
Currency Agreements and Interest Protection Agreements, amortization of other
financing fees and expenses; with respect to the Company and its Restricted
Subsidiaries, but excluding its Unrestricted Subsidiaries, the interest portion
of any deferred payment obligation, amortization of discount or premium, if any,
and all other noncash interest expense other than interest and other charges
amortized to cost of sales), and (ii) all interest actually paid by the Company
or a Restricted Subsidiary under any guarantee of Indebtedness (including,
without limitation, a guarantee of principal, interest or any combination
thereof) of any Person other than the Company or any Restricted Subsidiary
during such period; provided, that Interest Expense shall exclude any expense
associated with the complete write-off of financing fees and expenses in
connection with the repayment or repurchase of any Indebtedness.
"Interest Protection Agreement" of any Person means any interest rate
swap agreement, interest rate collar agreement, option or futures contract or
other similar agreement or arrangement designed to protect such Person or any of
its Subsidiaries
3
<PAGE>
against fluctuations in interest rates with respect to Indebtedness permitted to
be incurred under this Indenture.
"Investments" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
all guarantees of Indebtedness or other obligations of any other Person by such
person, (iii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iv) all other items that would be classified as investments in any other
Person (including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
"Issue Date" means, with respect to any Series of Securities, the date
on which the Securities of such Series are originally issued under this
Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such Property
(other than an obligation to share revenues or profits upon the sale or
<PAGE>
liquidation of Property to which such obligation relates). For purposes of this
definition, a Person shall be deemed to own, subject to a Lien, any Property
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person for which (i) the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments evidencing or securing such Indebtedness and such
property was acquired with the proceeds of such Indebtedness or such
Indebtedness was incurred within 90 days after the acquisition of such property
and (ii) no other assets of such Person may be realized upon in collection of
principal or interest on such Indebtedness. Indebtedness which is otherwise
Non-Recourse Indebtedness will not lose its character as Non-Recourse
Indebtedness because there is recourse to the borrower or any other Person for
(i) environmental warranties and indemnities, or (ii) indemnities for and
liabilities arising from fraud, misrepresentation, misapplication or non-payment
of rents, profits, insurance and condemnation proceeds and other sums actually
received by the borrower from secured assets to be paid to the lender, waste and
mechanics' liens.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or an Assistant Secretary of the
Company.
4
<PAGE>
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or with respect to the payment of
dividends.
"Principal" of a debt security means the principal of the security
plus, when appropriate, the premium, if any, on the security.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person, whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Subsidiary" means any Subsidiary of the Company which is
not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission or any successor
<PAGE>
agency performing the duties now assigned to it under the TIA.
"Securities" means any Securities that are issued under this Indenture.
"Series" means a series of Securities established under this Indenture.
"Significant Subsidiary" means any Subsidiary of the Company which
would constitute a "significant subsidiary" as defined in Rule 1.02 of
Regulation S-X under the Securities Act and the Exchange Act.
"Subsidiary" of any Person means any corporation or other entity (other
than political subdivisions or enterprises thereof or governmental agencies) of
which a majority of the Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time directly or indirectly owned or controlled by such Person.
"TIA" means the Trust Indenture Act of 1939, as in effect from time to
time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means the
successor serving hereunder.
5
<PAGE>
"Trust Officer" means the Chairman of the Board, the President, any
Vice President or any other officer or assistant officer of the Trustee assigned
by the Trustee to administer its corporate trust matters.
"United States" means the United States of America.
"U.S. government obligations" means securities which are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt issued
by a bank or trust company as custodian with respect to any such U.S. government
obligations or a specific payment of interest on or principal of any such U.S.
government obligation held by such custodian for the account of the holder of a
depositary receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. government obligation or the specific payment of interest on or
principal of the U.S. government obligation evidenced by such depositary
receipt.
"Unrestricted Subsidiary" means any Subsidiary of the Company so
designated by a resolution adopted by the Board of Directors of the Company.
Section 1.02. Other Definitions.
Term Defined in
Section
<PAGE>
"Agent Members"....................................... 2.15
"Business Day"........................................ 10.07
"Custodian"........................................... 6.01
"Depositary".......................................... 2.15
"Event of Default".................................... 6.01
"Legal Holiday"....................................... 10.07
"Paying Agent"........................................ 2.03
"Registrar"........................................... 2.03
"Senior Indebtedness"................................. 11.02
"Representative"...................................... 11.02
6
<PAGE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities of a Series thereof.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term, not otherwise defined, has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
7
<PAGE>
<PAGE>
ARTICLE TWO
The Securities
Section 2.01. Form and Dating.
The aggregate principal amount of Securities that may be issued under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more Series. Each Series shall be created by an Authorizing Resolution or
a supplemental indenture that establishes the terms of the Series, which may
include the following:
(1) the title of the Series;
(2) the aggregate principal amount (or any limit on the aggregate
principal amount) of the Series and, if any Securities of a
Series are to be issued at a discount from their face amount,
the method of computing the accretion of such discount;
(3) the interest rate or method of calculation of the interest
rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Securities of the
Series;
(6) the dates when, places where and manner in which principal and
interest are payable;
(7) the Registrar and Paying Agent;
(8) the terms of any mandatory (including any sinking fund
requirements) or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders;
(10) the denominations in which Securities are issuable;
(11) whether Securities will be issued in registered or bearer form
and the terms of any such forms of Securities;
(12) whether any Securities will be represented by a global
Security and the terms of any such global Security;
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<PAGE>
(13) if payments of principal or interest may be made in a currency
other than that in which Securities are denominated, the
manner for determining such payments;
(14) provisions for electronic issuance of Securities or issuance
of Securities in uncertificated form;
(15) any Events of Default, covenants and/or defined terms in
addition to or in lieu of those set forth in this Indenture;
(16) whether and upon what terms Securities may be defeased if
different from the provisions set forth in this Indenture;
(17) the form of the Securities, which, unless the Authorizing
Resolution or supplemental indenture otherwise provides, shall
be in the form of Exhibit A;
(18) any terms that may be required by or advisable under
applicable law;
(19) the percentage of the principal amount of the Securities which
is payable if the maturity of the Securities is accelerated in
the case of Securities issued at a discount from their face
amount; and
(20) any other terms in addition to or different from those
contained in this Indenture.
All Securities of one Series need not be issued at the same time and,
unless otherwise provided, a Series may be reopened for issuances of additional
Securities of such Series pursuant to an Authorizing Resolution, an Officers'
Certificate or in any indenture supplemental hereto.
The creation and issuance of a Series and the authentication and
delivery thereof are not subject to any conditions precedent.
Section 2.02. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.
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A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon
receipt of an Officers' Certificate of the Company. Each Security shall be dated
the date of its authentication.
<PAGE>
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), an office
or agency where Securities may be presented for payment ("Paying Agent) and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-Registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
promptly notify the Trustee in writing of the name and address of any such Agent
and the Trustee shall have the right to inspect the Securities register at all
reasonable times to obtain copies thereof, and the Trustee shall have the right
to rely upon such register as to the names and addresses of the Holders and the
principal amounts and certificate numbers thereof. If the Company fails to
maintain a Registrar or Paying Agent or fails to give the foregoing notice, the
Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying
Agent.
Section 2.04. Paying Agent to Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of
Securityholders and the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money and hold it
as a separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon doing so the Paying Agent shall
have no further liability for the money.
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Section 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least 5 Business Days before each semi-annual interest payment
date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
Section 2.06. Transfer and Exchange.
Where a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(1) of the New York Uniform
Commercial Code are met. Where Securities are presented to the Registrar or a
co-Registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
<PAGE>
requested if the same requirements are met. To permit transfers and exchanges,
the Trustee shall authenticate Securities at the Registrar's request. The
Registrar need not transfer or exchange any Security selected for redemption,
except the unredeemed part thereof if the Security is redeemed in part, or
transfer or exchange any Securities for a period of 15 days before a selection
of Securities to be redeemed. Any exchange or transfer shall be without charge,
except that the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto except in
the case of exchanges pursuant to 2.09, 3.06, or 9.05 not involving any
transfer.
Any Holder of a global Security shall, by acceptance of such global
Security, agree that transfers of beneficial interests in such global Security
may be effected only through a book entry system maintained by the Holder of
such global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
Section 2.07. Replacement Securities.
If the Holder of a Security claims that the Security has been lost,
destroyed, mutilated or wrongfully taken, the Company shall issue and, upon
written request of any Officer of the Company, the Trustee shall authenticate a
replacement Security; provided, however, in the case of a lost, destroyed or
wrongfully taken Security, that the requirements of Section 8-405 of the New
York Uniform Commercial Code are met. If any such lost, destroyed, mutilated or
wrongfully taken Security shall have matured or shall be about to mature, the
Company may, instead of issuing a substitute Security therefor, pay such
Security without requiring (except in the case of a mutilated Security) the
surrender thereof. An indemnity bond must be sufficient in the judgment of the
Company and the
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Trustee to protect the Company, the Trustee or any Agent from any loss which any
of them may suffer if a Security is replaced, including the acquisition of such
Security by a bona fide purchaser. The Company or the Trustee may charge the
Holder for expenses in replacing a Security.
Section 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by it and those described in this Section.
A Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If, on a redemption date or maturity date, the Paying Agent holds money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
<PAGE>
Section 2.09. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and, upon surrender for
cancellation of the temporary Security, the Company shall execute and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
authenticated and delivered hereunder.
Section 2.10. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel and destroy, or
retain in accordance with its standard retention policy, all Securities
surrendered for registration or transfer, exchange, redemption, paying or
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cancellation. Unless the Authorizing Resolution so provides, the Company may not
issue new Securities to replace Securities that it has previously paid or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest plus any interest payable on the defaulted
interest to the persons who are Securityholders on a subsequent special record
date. The Company shall fix such special record date and a payment date which
shall be reasonably satisfactory to the Trustee. At least 15 days before such
special record date, the Company shall mail to each Securityholder a notice that
states the record date, the payment date and the amount of defaulted interest to
be paid. On or before the date such notice is mailed, the Company shall deposit
with the Paying Agent money sufficient to pay the amount of defaulted interest
to be so paid. The Company may pay defaulted interest in any other lawful manner
if, after notice given by the Company to the Trustee of the proposed payment,
such manner of payment shall be deemed practicable by the Trustee.
Section 2.12. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any direction, waiver, consent or
notice, Securities owned by the Company or any of its Subsidiaries shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee actually knows
are so owned shall be so considered.
Section 2.13. CUSIP Numbers.
<PAGE>
The Company in issuing the Securities of any Series may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders of such Securities; provided
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of any such CUSIP number printed in the notice or on
such Securities, and that reliance may be placed only on the other
identification numbers printed on such Securities. The Company shall promptly
notify the Trustee of any change in any CUSIP number.
Section 2.14. Deposit of Moneys.
Prior to 11:00 a.m. New York City time on each interest payment date
and maturity date with respect to each Series of Securities, the Company shall
have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments due on such interest payment date or maturity
date, as the case may be, in a timely manner
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which permits the Paying Agent to remit payment to the Holders on such interest
payment date or maturity date, as the case may be.
Section 2.15. Book-Entry Provisions for Global Security.
(a) Any global Security of a Series initially shall (i) be registered
in the name of the depository who shall be identified in the Authorizing
Resolution or supplemental indenture relating to such Securities (the
"Depository") or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear any required legends.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any global
Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of any global Security shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the global Security may be
transferred or exchanged for definitive Securities in accordance with the rules
and procedures of the Depository. In addition, definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a global Security if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue definitive
Securities.
<PAGE>
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the global Security in an amount equal to the principal
amount of the beneficial interest in the global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more definitive Securities of like tenor and amount.
(d) In connection with the transfer of an entire global Security to
beneficial owners pursuant to paragraph (b), the global Security shall be deemed
to be surrendered
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to the Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the global Security, an
equal aggregate principal amount of definitive Securities of authorized
denominations.
(e) The Holder of any global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities of such Series.
ARTICLE THREE
Redemption
Section 3.01. Notices to Trustee.
Securities of a Series that are redeemable prior to maturity shall be
redeemable in accordance with their terms and, unless the Authorizing Resolution
or supplemental indenture provides otherwise, in accordance with this Article.
If the Company wants to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the Redemption Date
and the principal amount of Securities to be redeemed. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to Holders.
Any such canceled notice shall be void and of no effect.
If the Company wants to credit any Securities previously redeemed,
retired or acquired against any redemption pursuant to Paragraph 6 of the
Securities, it shall notify the Trustee of the amount of the credit and it shall
deliver any Securities not previously delivered to the Trustee for cancellation
with such notice.
The Company shall give each notice provided for in this Section 3.01 at
least 30 days before the notice of any such redemption is to be mailed to
Holders (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to be Redeemed.
If fewer than all of the Securities of a Series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
<PAGE>
Securities outstanding not previously called for redemption and shall promptly
notify the Company of the serial numbers or other identifying attributes of the
Securities so selected. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger
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than the minimum denomination for the Series. Securities and portions of them it
selects shall be in amounts equal to the minimum denomination for the Series or
an integral multiple thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(6) that the Securities are being redeemed pursuant to the
mandatory redemption or the optional redemption provisions, as
applicable.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall deliver to the Trustee at least 15 days prior to the date on which
notice of redemption is to be mailed or such shorter period as may be
satisfactory to the Trustee, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price as set
forth in the notice of redemption. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price, plus accrued interest to the
redemption date.
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<PAGE>
Section 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Paying Agent immediately available funds sufficient to pay the redemption price
of and accrued interest on all Securities to be redeemed on that date.
Section 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for each Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a Series on the
dates and in the manner provided in the Securities of the Series. An installment
of principal or interest shall be considered paid on the date it is due, if on
that date the Paying Agent holds money designated for and sufficient to pay the
installment; provided, however, that money held by the Paying Agent for the
benefit of holders of Senior Indebtedness pursuant to the provisions of Article
11 hereof shall not be considered paid within the meaning of this Section 4.01.
The Company shall pay interest on overdue principal at the rate borne
by the Series; it shall pay interest on overdue installments of interest at the
same rate.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee.
Section 4.03. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating whether or
not the signers know
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<PAGE>
of any Default by the Company in performing any of its obligations under this
Indenture. If they do know of such a Default, the certificate shall describe the
Default.
Section 4.04. Payment of Taxes; Maintenance of Corporate Existence;
Maintenance of Properties.
The Company will:
(a) cause to be paid and discharged all lawful taxes, assessments
and governmental charges or levies imposed upon the Company
and its Restricted Subsidiaries or upon the income or profits
of the Company and its Restricted Subsidiaries or upon
property or any part thereof belonging to the Company and its
Restricted Subsidiaries before the same shall be in default,
as well as all lawful claims for labor, materials and supplies
which, if unpaid, might become a lien or charge upon such
property or any part thereof; provided, however, that the
Company shall not be required to cause to be paid or
discharged any such tax, assessment, charge, levy or claim so
long as the validity or amount thereof shall be contested in
good faith by appropriate proceedings and the nonpayment
thereof does not, in the judgment of the Company, materially
adversely affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due; and provided further, that the Company shall not be
required to cause to be paid or discharged any such tax,
assessment, charge, levy or claim if, in the judgment of the
Company, such payment shall not be advantageous to the Company
in the conduct of its business and if the failure so to pay or
discharge does not, in its judgment, materially adversely
affect the ability of the Company and the Restricted
Subsidiaries to pay all obligations under this Indenture when
due;
(b) cause to be done all things necessary to preserve and keep in
full force and effect the corporate existence of the Company
and each of its Restricted Subsidiaries; provided, however,
that nothing in this subsection (b) shall prevent a
consolidation or merger of the Company or any Restricted
Subsidiary not prohibited by the provisions of Article Five
or any other provision or the Authorizing Resolution or
supplemental indenture pertaining to a Series, and the Company
need not maintain the corporate existence of an immaterial
Restricted Subsidiary ; and
(c) at all times keep, maintain and preserve the property of the
Company and the Restricted Subsidiaries in good repair,
working order and condition (reasonable wear and tear
excepted) and from time to time make all needful and proper
repairs, renewals, replacements, betterments and improvements
thereto, so that the business carried on in connection
therewith may be
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<PAGE>
properly and advantageously conducted at all times; provided,
however, that nothing in this subsection (c) shall prevent the
Company from discontinuing the operation and maintenance of
any such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business and
not disadvantageous in any material respect to the ability of
the Company and the Restricted Subsidiaries to pay all
obligations under this Indenture when due.
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge with or into, any other
corporation, or transfer all or substantially all of its assets to, any entity
unless permitted by law and unless (1) the resulting, surviving or transferee
entity, which shall be a corporation organized and existing under the laws of
the United States or a State thereof, assumes by supplemental indenture, in a
form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture and (2) immediately after giving
effect to, and as a result of, such transaction, no Default or Event of Default
shall have occurred and be continuing. Thereafter such successor corporation or
corporations shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the "Company" and all such obligations
of the predecessor corporation shall terminate.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
To the extent that an Authorizing Resolution or supplemental indenture
pertaining to any Series provides for different provisions relating to the
subject matter of this Article Five, the provisions in such Authorizing
Resolution or supplemental indenture shall govern for purposes of such Series.
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<PAGE>
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.
An "Event of Default" on a Series occurs if, voluntarily or
involuntarily, whether by operation of law or otherwise, any of the following
occurs:
(1) the failure by the Company to pay interest on any Security of such
<PAGE>
Series when the same becomes due and payable and the continuance of any such
failure for a period of 30 days;
(2) the failure by the Company to pay the principal or premium of any
Security of such Series when the same becomes due and payable at maturity, upon
acceleration or otherwise;
(3) the failure by the Company or any Restricted Subsidiary to comply
in all material respects with any of its agreements or covenants in, or
provisions of, the Securities of such Series, or this Indenture (as they relate
thereto) and such failure continues for the period and after the notice
specified below (except in the case of a default with respect to Article Five
(or any replacement provisions as contemplated by Article Five), which will
constitute an Event of Default with notice but without passage of time);
(4) the acceleration of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary in an amount of $30
million or more, individually or in the aggregate, and such acceleration does
not cease to exist, or such Indebtedness is not satisfied, in either case within
30 days after such acceleration;
(5) the failure by the Company or any Restricted Subsidiary to make any
principal or interest payment in an amount of $30 million or more, individually
or in the aggregate, in respect of Indebtedness for borrowed money (other than
Non-Recourse Indebtedness) of the Company or any Restricted Subsidiary within 30
days of such principal or interest becoming due and payable (after giving effect
to any applicable grace period set forth in the documents governing such
Indebtedness);
(6) a final judgment or judgments in an amount of $30 million or more,
individually or in the aggregate, for the payment of money having been entered
by a court or courts of competent jurisdiction against the Company or any of its
Restricted Subsidiaries and such judgment or judgments is not covered by a
policy of insurance, satisfied, stayed, annulled or rescinded within 90 days of
being entered;
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(7) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or
(D) makes a general assignment (except in the case of a
Restricted Subsidiary, to the Company) for the
benefit of its creditors; or
(8) a court of competent jurisdiction enters an order or decree under
<PAGE>
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary as debtor
in an involuntary case,
(B) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or a
Custodian for all or substantially all of the
property of the Company or any Restricted Subsidiary
that is a Significant Subsidiary, or
(C) orders the liquidation of the Company or any
Restricted Subsidiary that is a Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 90 days.
A Default as described in sub-clause (3) above will not be deemed an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25 percent in principal amount of the then outstanding Securities of the
applicable Series notify the Company and the Trustee, of the Default and (except
in the case of a default with respect to Article Five (or any replacement
provisions as contemplated by Article Five)) the Company does not cure the
Default within 90 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." If such a Default is cured within such time period, it ceases.
The term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
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Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default with respect to
the Company resulting from sub-clauses (7) or (8) above), shall have occurred
and be continuing under the Indenture, the Trustee by notice to the Company, or
the Holders of at least 25 percent in principal amount of the Securities of the
applicable Series then outstanding by notice to the Company and the Trustee, may
declare all Securities of such Series to be due and payable immediately. Upon
such declaration of acceleration, the amounts due and payable on the Securities
of such Series will be due and payable immediately. If an Event of Default with
respect to the Company specified in sub-clauses (7) or (8) above occurs, all
amounts due and payable on the Securities of such Series will ipso facto become
and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee and the Company or any Holder. The Holders of a
majority in principal amount of the Securities of such Series then outstanding
by written notice to the Trustee and the Company may waive any Default or Event
of Default (other than any Default or Event of Default in payment of principal
or interest) with respect to such Series of Securities under the Indenture.
Holders of a majority in principal amount of the then outstanding Securities of
such Series may rescind an acceleration with respect to such Series and its
consequence (except an acceleration due to nonpayment of principal or interest
on the Securities of such Series) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
<PAGE>
waived.
No such rescission shall extend to or shall affect any subsequent Event
of Default, or shall impair any right or power consequent thereon.
Section 6.03. Other Remedies.
If an Event of Default on a Series occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on the Series or to enforce the
performance of any provision in the Securities or this Indenture applicable to
the Series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Existing Defaults.
Subject to Section 9.02, the Holders of a majority in principal amount
of the outstanding Securities of a Series on behalf of all the Holders of the
Series by notice to the
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Trustee may waive an existing Default on such Series and its consequences. When
a Default is waived, it is cured and stops continuing, and any Event of Default
arising therefrom shall be deemed to have been cured; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding
Securities of a Series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to such Series. The Trustee, however, may
refuse to follow any direction (i) that conflicts with law or this Indenture,
(ii) that, subject to Section 7.01, the Trustee determines is unduly prejudicial
to the rights of other Securityholders, or (iii) that would involve the Trustee
in personal liability.
Section 6.06. Limitation on Suits.
A Securityholder of a Series may not pursue any remedy with respect to
this Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default on the Series;
(2) the Holders of at least a majority in principal amount of the
outstanding Securities of the Series make a written request to
the Trustee to pursue the remedy;
<PAGE>
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 90 days
after receipt of the request and the offer of indemnity; and
(5) no written request inconsistent with such written request
shall have been given to the Trustee pursuant to this Section
6.06.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Security, on or
after the respective due
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dates expressed in the Security, or to bring suit for the enforcement of any
such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal and interest remaining unpaid.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property, and unless prohibited by applicable law or regulation, may vote on
behalf of the Holders in any election of a Custodian, and shall be entitled and
empowered to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder to make
such payments to the Trustee. Nothing herein shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder or to authorize
the Trustee to vote in respect of the claim of any Securityholder except as
aforesaid for the election of the Custodian.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall
<PAGE>
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to holders of Senior Indebtedness to the extent required by
Article 11;
Third: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
Fourth: to the Company as its interests may appear.
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<PAGE>
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having the due regard
to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Series.
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall, prior to the receipt of directions from the Holders of a majority in
principal amount of the Securities, exercise its rights and powers and use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no
others and no implied covenants or obligations shall
be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
<PAGE>
furnished to the Trustee and conforming to the
requirements of his Indenture. The Trustee, however,
shall examine the certificates and opinions to
determine whether or not they conform to the
requirements of this Indenture but need not confirm
or investigate the accuracy of mathematical
calculations or other facts or matters stated herein.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
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(1) This paragraph does not limit the effect of paragraph
(b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in
accordance with a direction received by it pursuant
to Section 6.05 or any other direction of the Holders
permitted hereunder.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held in trust by
the Trustee need not be segregated from other funds except to the extent
required by law.
(g) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
Section 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting on any document, resolution, certificate, instrument, report, or
direction believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document, resolution, certificate, instrument, report, or direction.
<PAGE>
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both, which shall conform to
Sections 10.04 and 10.05 hereof and containing such other statements as the
Trustee reasonably deems necessary to perform its duties hereunder. The Trustee
shall not be liable for any action
26
<PAGE>
it takes or omits to take in good faith in reliance on the Officers'
Certificate, Opinion of Counsel or any other direction of the Company permitted
hereunder.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
(e) The Trustee may consult with counsel, and the written advice of
such counsel or any Opinion of Counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Unless otherwise specifically provided in the Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(g) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Event of Default (other than under
Section 6.01(1) or 6.01(2)) unless a Trust Officer assigned to and working in
the Trustee's corporate trust office has actual knowledge thereof or unless
written notice of any Event of Default is received by the Trustee at its address
specified in Section 10.02 hereof and such notice references the Securities
generally, the Company or this Indenture.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture, the Securities or of any prospectus used to sell the Securities;
it shall not be accountable for the Company's use of the proceeds from the
Securities; it shall not be accountable for any money paid to the Company, or
upon the Company's direction, if made under and in accordance with any provision
of this Indenture; it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee; and it shall not be
responsible for any statement of the Company in this Indenture or in the
Securities other than its certificate of authentication.
<PAGE>
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<PAGE>
Section 7.05. Notice of Defaults.
If a Default on a Series occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Securityholder of the Series notice
of the Default (which shall specify any uncured Default known to it) within 90
days after it occurs. Except in the case of a default in payment of principal of
or interest on a Series, the Trustee may withhold the notice if and so long as
the board of directors of the Trustee, the executive or any trust committee of
such directors and/or responsible officers of the Trustee in good faith
determine(s) that withholding the notice is in the interests of Holders of the
Series.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA ss. 313(a) (but if
no event described in TIA ss. 313(2) has occurred within the twelve months
preceding the reporting date no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be delivered to the Company and filed by the Trustee with the SEC and each
national securities exchange on which the Securities are listed. The Company
agrees to notify the Trustee of each national securities exchange on which the
Securities are listed.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee or predecessor trustee from time
to time reasonable compensation for their respective services subject to any
written agreement between the Trustee and the Company. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel. The Company shall indemnify the
Trustee and each predecessor trustee, its officers, directors, employees and
agents and hold it harmless against any loss, liability or expense incurred or
made by or on behalf of it in connection with the administration of this
Indenture or the trust hereunder and its duties hereunder including the costs
and expenses of defending itself against or investigating any claim in the
premises. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through the Trustee's, or
its officers', directors', employees' or agents' negligence or bad faith.
To ensure the Company's payment obligations in this Section, the
Trustee shall have a claim prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.
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<PAGE>
<PAGE>
When the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 6.01 or in connection with Article 6 hereof, the
expenses (including the reasonable fees and expenses of its counsel) and the
compensation for services in connection therewith are to constitute expenses of
administration under any bankruptcy law.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the removed Trustee in writing and may appoint a
successor trustee with the Company's consent. Such resignation or removal shall
not take effect until the appointment by the Securityholders or the Company as
hereinafter provided of a successor trustee and the acceptance of such
appointment by such successor trustee. The Company may remove the Trustee and
any Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee for any or no
reason, including if:
(1) the Trustee fails to comply with Section 7.10 after written
request by the Company or any bona fide Securityholder who has
been a Securityholder for at least six months;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
trustee. If a successor trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or any
Holder may petition any court of competent jurisdiction for the appointment of a
successor trustee.
A successor trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor trustee shall mail
notice of its succession to each Securityholder.
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<PAGE>
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges with or into or converts into,
<PAGE>
or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.310(a)(1). The Trustee shall have a combined capital and
surplus of at least $10,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA ss.310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b). A Trustee who has resigned or been removed
shall be subject to TIA ss.311(a) to the extent indicated therein.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations.
(a) The Company may, at its option and at any time, elect to have
either paragraph (b) or paragraph (c) below be applied to the outstanding
Securities of any Series upon compliance with the applicable conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its respective obligations with respect to the
outstanding Securities of a Series on the date the applicable conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
such Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Securities of
a Series, which shall thereafter be deemed to be "outstanding" only for the
purposes of the Sections and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned, except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Securities of a Series to
receive solely from the trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due and (ii)
30
<PAGE>
obligations listed in Section 8.02, subject to compliance with this Section
8.01. The Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) below with
respect to such Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
<PAGE>
from the obligations under any covenant contained in Article Five and any other
covenant contained in the Authorizing Resolution or supplemental indenture
relating to such Series to the extent provided for therein, on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities of such Series shall thereafter be deemed to be
not "outstanding" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities of a Series, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(3), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities of the
applicable Series:
(1) The Company shall have irrevocably deposited in trust
with the Trustee, pursuant to an irrevocable trust
and security agreement in form and substance
reasonably satisfactory to the Trustee, money in U.S.
dollars or U.S. government obligations or a
combination thereof in such amounts and at such times
as are sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to
pay the principal of and interest on the outstanding
Securities of such Series to maturity or redemption;
provided, however, that the Trustee (or other
qualifying trustee) shall have received an
irrevocable written order from the Company
instructing the Trustee (or other qualifying trustee)
to apply such money or the proceeds of such U.S.
government obligations to said payments with respect
to the Securities of such Series to maturity or
redemption;
(2) No Default or Event of Default shall have occurred
and be continuing on the date of such deposit;
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<PAGE>
(3) Such deposit will not result in a Default under this
Indenture or a breach or violation of, or constitute
a default under, any other material instrument or
agreement to which the Company or any of its
Subsidiaries is a party or by which it or any of
their property is bound;
(4) (i) In the event the Company elects paragraph (b)
hereof, the Company shall deliver to the Trustee an
<PAGE>
Opinion of Counsel in the United States, in form and
substance reasonably satisfactory to the Trustee, to
the effect that (A) the Company has received from, or
there has been published by, the Internal Revenue
Service a ruling or (B) since the Issue Date
pertaining to such Series, there has been a change in
the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of
Counsel shall state that, or (ii) in the event the
Company elects paragraph (c) hereof, the Company
shall deliver to the Trustee an Opinion of Counsel in
the United States, in form and substance reasonably
satisfactory to the Trustee, to the effect that, in
the case of clauses (i) and (ii), Holders of the
Securities of such Series will not recognize income,
gain or loss for United States federal income tax
purposes as a result of such deposit and the
defeasance contemplated hereby and will be subject to
federal income tax in the same amounts and in the
same manner and at the same times as would have been
the case if such deposit and defeasance had not
occurred;
(5) The Company shall have delivered to the Trustee an
Officers' Certificate, stating that the deposit under
clause (1) was not made by the Company with the
intent of preferring the Holders of the Securities of
such Series over any other creditors of the Company
or with the intent of defeating, hindering, delaying
or defrauding any other creditors of the Company or
others;
(6) The Company shall have delivered to the Trustee an
Opinion of Counsel, reasonably satisfactory to the
Trustee, to the effect that, (A) the trust funds will
not be subject to the rights of Holders of
Indebtedness of the Company other than the Securities
of such Series and (B) assuming no intervening
bankruptcy of the Company between the date of deposit
and the 91st day following the deposit and that no
Holder of Securities of such Series is an insider of
the Company, after the 91st day following the
deposit, the trust funds will not be subject to any
applicable bankruptcy, insolvency, reorganization or
similar law affecting creditors' rights generally;
and
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<PAGE>
(7) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating
that all conditions precedent specified herein
relating to the defeasance contemplated by this
Section 8.01 have been complied with.
In the event all or any portion of the Securities of a Series are to be
<PAGE>
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
(e) In addition to the Company's rights above under this Section 8.01,
the Company may terminate all of its obligations under this Indenture with
respect to a Series when:
(1) All Securities of such Series theretofore
authenticated and delivered (other than Securities
which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section
2.07 and Securities for whose payment money has
theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or all such
Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the
Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust
solely for that purpose an amount of money sufficient
to pay and discharge the entire Indebtedness on the
Securities not theretofore delivered to the Trustee
for cancellation, for principal of and interest;
(2) The Company has paid or caused to be paid all other
sums payable hereunder by the Company;
(3) The Company has delivered irrevocable instructions to
the Trustee to apply the deposited money toward the
payment of the Securities at maturity or redemption,
as the case may be; and
(4) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that
all conditions precedent specified herein relating to
the satisfaction and discharge of this Indenture have
been complied with.
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<PAGE>
Section 8.02. Survival of the Company's Obligations.
Notwithstanding the satisfaction and discharge of the Indenture under
Section 8.01, the Company's obligations in paragraph 9 of the Securities and
Sections 2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall
survive until the Securities of an applicable Series are no longer outstanding.
Thereafter, the Company's obligations in paragraph 9 of the Securities of such
Series and Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such
Series).
Section 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. government obligations
<PAGE>
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. government obligations in accordance with this Indenture
to the payment of principal of and interest on the Securities of the defeased
Series.
Section 8.04. Repayment to the Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time. The Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless applicable abandoned property law designates another
person and all liability of the Trustee or such Paying Agent with respect to
such money shall cease.
Section 8.05. Reinstatement.
If the Trustee is unable to apply any money or U.S. government
obligations in accordance with Section 8.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities relating to the Series shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.01 until such time as the Trustee is permitted to apply all such money or U.S.
government obligations in accordance with Section 8.01; provided, however, that
(a) if the Company has made any payment of interest on or principal of any
34
<PAGE>
Securities of the Series because of the reinstatement of their obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. government obligations held by the
Trustee and (b) unless otherwise required by any legal proceeding or any order
or judgment of any court or governmental authority, the Trustee shall return all
such money or U.S. government obligations to the Company promptly after
receiving a written request therefor at any time, if such reinstatement of the
Company's obligations has occurred and continues to be in effect.
ARTICLE NINE
Amendments, Supplements and Waivers
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to or consent of any Securityholder of
such Series:
<PAGE>
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article Five;
(3) to provide that specific provisions of this Indenture shall
not apply to a Series not previously issued;
(4) to create a Series and establish its terms;
(5) to provide for uncertificated Securities in addition to or in
place of certificated Securities; and
(6) to make any other change that does not adversely affect the
rights of Securityholders.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail notice of such amendment to the Securityholders.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Securities of a Series without notice to any Securityholder of such Series
but with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each such Series affected by the
amendment. Each such Series shall vote
35
<PAGE>
as a separate class. The Holders of a majority in principal amount of the
outstanding Securities of any Series may waive compliance by the Company with
any provision of the Securities of such Series or of this Indenture relating to
such Series without notice to any Securityholder. Without the consent of each
Securityholder of a Series affected, however, an amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities of such Series whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Security;
(3) reduce the principal of or change the fixed maturity of any
Security or alter the provisions (including related
definitions) with respect to redemption of Securities pursuant
to Article Three hereof or with respect to any obligations on
the part of the Company to offer to purchase or to redeem
Securities of a Series pursuant to the Authorizing Resolution
or supplemental indenture pertaining to such Series;
(4) modify the ranking or priority of the Securities of any
Series;
(5) make any change in Sections 6.04, 6.07 or this Section 9.02;
(6) waive a continuing Default or Event of Default in the payment
of the principal of or interest on any Security; or
<PAGE>
(7) make any Security payable at a place or in money other than
that stated in the Security, or impair the right of any
Securityholder to bring suit as permitted by Section 6.07.
An amendment of a provision included solely for the benefit of one or
more Series does not affect the interests of Securityholders of any other
Series.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplement, but it shall
be sufficient if such consent approves the substance thereof.
After the issuance of any Securities, an amendment under this Section
or under Section 9.01 may not make any change that adversely affects in any
material respect the rights under Article 11 of the holders of Senior
Indebtedness, unless such holders of Senior Indebtedness consent to the change.
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<PAGE>
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder shall bind
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. Subject to the following
paragraph, any such Holder or subsequent Holder, however, may revoke the consent
as to his Security or portion of a Security. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Securities of any Series entitled to
consent to any amendment, supplement or waiver, which record date shall be at
least 10 days prior to the first solicitation of such consent. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security; provided, that any such waiver shall
not impair or affect the right of any Holder to receive payment of principal of
and interest on a Security, on or after the respective due dates expressed in
such Security, or to bring suit for the enforcement of any such payment on or
after such respective dates without the consent of such Holder.
<PAGE>
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Company may require the Holder of the Security to deliver it to the Trustee,
at which time the Trustee shall place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
37
<PAGE>
Section 9.06. Trustee to Sign Amendments, etc.
Subject to Section 7.02(b), the Trustee shall sign any amendment,
supplement or waiver authorized pursuant to this Article if the amendment,
supplement or waiver does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE TEN
Miscellaneous
Section 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 10.02. Notices.
Any order, consent, notice or communication shall be sufficiently given
if in writing and delivered in person or mailed by first class mail, postage
prepaid, addressed as follows:
if to the Company:
M.D.C. Holdings, Inc.
3600 South Yosemite
Suite 900
Denver, CO 80237
Telecopy No.: (303) 793-2760
Attention: Chief Financial Officer
38
<PAGE>
<PAGE>
if to the Trustee:
-----------------------
-----------------------
-----------------------
Telecopy No.:
------------
Attention:
--------------
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail at his address as it appears on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it except that
notice to the Trustee shall only be effective upon receipt thereof by the
Trustee.
If the Company mails notice or communications to the Securityholders,
it shall mail a copy to the Trustee at the same time.
Section 10.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss.
312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 10.05) stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of such
counsel, all such conditions
39
<PAGE>
<PAGE>
precedent and covenants, compliance with which constitutes a
condition precedent, if any, provided for in this Indenture
relating to the proposed action or inaction, have been
complied with and that any such section does not conflict with
the terms of the Indenture.
Section 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules for its
functions.
Section 10.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
which banking institutions in Denver, Colorado and New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. A "Business
Day" is any day other than a Legal Holiday.
Section 10.08. Governing Law.
The laws of the State of New York shall govern this Indenture and the
Securities of each Series.
40
<PAGE>
Section 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.10. No Recourse Against Others.
<PAGE>
All liability described in paragraph 12 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
Section 10.11. Successors and Assigns.
All covenants and agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in this Indenture shall bind its successors and assigns.
Section 10.12. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 10.13. Severability.
In case any one or more of the provisions contained in this Indenture
or in the Securities of a Series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Securities.
ARTICLE ELEVEN
Subordination
Section 11.01. Agreement to Subordinate.
The Company agrees, and each Securityholder by accepting a Security
agrees, that the indebtedness evidenced by the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article, to
the prior payment in full of all Senior Indebtedness and that the subordination
is for the benefit of the holders of Senior Indebtedness.
41
<PAGE>
Section 11.02. Certain Definitions.
"Representative" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
"Senior Indebtedness" means all Indebtedness (present or future)
created, incurred, assumed or guaranteed by the Company (and all renewals,
extensions or refundings thereof), unless the instrument under which such
Indebtedness is created, incurred, assumed or guaranteed provides that such
Indebtedness is not senior or superior in right of payment to the Securities.
Notwithstanding anything to the contrary in the foregoing, Senior Indebtedness
shall not include (i) any Indebtedness of the Company to any of its
subsidiaries, (ii) any trade payables of the Company or (iii) guarantees by the
Company or any of its Subsidiaries of Indebtedness (a) outstanding at the date
hereof or (b) which may be outstanding in the future, except that Senior
Indebtedness shall include any guarantees as may be listed in a supplemental
indenture and any other present and future guarantees that provide by their
terms that they constitute Senior Indebtedness.
<PAGE>
Section 11.03. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its Property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of the principal of and interest
(including interest accruing after the commencement of any
such proceeding) to the date of payment on the Senior
Indebtedness before Securityholders shall be entitled to
receive any payment of principal of or interest on Securities;
and
(2) until the Senior Indebtedness is paid in full in cash, any
distribution to which Securityholders would be entitled but
for this Article shall be made to holders of Senior
Indebtedness as their interests may appear, except that
Securityholders may receive securities that are subordinated
to Senior Indebtedness to at least the same extent as the
Securities.
For purposes of this Article 11, a distribution may consist of cash,
securities or other property, by set-off or otherwise.
Section 11.04. Default on Senior Indebtedness.
Upon the final maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all such Senior Indebtedness shall first be paid in
full, or such payment duly provided for in cash or in a manner satisfactory to
the holders of such Senior
42
<PAGE>
Indebtedness, before any payment is made by the Company or any person acting on
behalf of the Company on account of the principal or interest of the Securities.
The Company may not pay principal of or interest on the Securities and
may not acquire any Securities for cash or property (other than capital stock of
the Company or other securities of the Company that are subordinated to Senior
Indebtedness to at least the same extent as the Securities) if a default on
Senior Indebtedness occurs and is continuing that permits holders of such Senior
Indebtedness to accelerate its maturity.
The Company shall resume payments on the Securities and may acquire
them, if this Article otherwise permits the payment or acquisition at that time,
when the default is cured or waived.
Section 11.05. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness of the
acceleration. The Company shall pay the Securities when 180 days pass after the
acceleration occurs if this Article permits the payment at that time; provided,
however, that if no Senior Indebtedness is outstanding at the time of such
acceleration, the Company shall pay the Securities in accordance with the
provisions of Article 6.
<PAGE>
Section 11.06. When Distributions Must Be Paid Over.
In the event that the Company shall make any payment to the Trustee on
account of the principal or interest on the Securities at a time when such
payment is prohibited by Section 11.03 or 11.04, such payment shall be held by
the Trustee in trust for the benefit of, and shall forthwith be paid over and
delivered to, the holders of Senior Indebtedness (pro rata as to each of such
holders on the basis of the respective amounts of Senior Indebtedness held by
them) or their Representative under the indenture or other agreement (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
If a distribution is made to Securityholders that because of this
Article should not have been made to them, the Securityholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
43
<PAGE>
Section 11.07. Notice by the Company.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of principal of or
interest on the Securities to violate this Article, but failure to give such
notice shall not affect the subordination of the Securities to the Senior
Indebtedness provided in this Article. Nothing in this Article shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07.
Section 11.08. Subrogation.
After all Senior Indebtedness is paid in full and until the Securities
are paid in full, Securityholders shall be subrogated to the rights of holders
of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the
Securityholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior Indebtedness which
otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on Senior Indebtedness.
Section 11.09. Relative Rights.
This Article defines the relative rights of Securityholders and holders
of Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the
Securities in accordance with their terms;
(2) affect the relative rights of Securityholders and creditors of
the Company, other than holders of Senior Indebtedness; or
(3) prevent the Trustee or any Securityholder from exercising its
<PAGE>
available remedies upon a Default or Event of Default, subject
to the rights of holders of Senior Indebtedness to receive
distributions otherwise payable to Securityholders.
If the Company fails to pay principal of or interest on a Security on
the due date because of this Article, the failure is still a Default or Event of
Default.
44
<PAGE>
Section 11.10. Subordination May Not Be Impaired by the Company.
No right of any holder of Senior Indebtedness to enforce the
subordination of the indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.
Section 11.11. Distribution or Notice to the Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness pursuant to this Article 11, the distribution may be made
and the notice given to their Representative.
Section 11.12. Rights of the Trustee and Paying Agent.
Notwithstanding any provision of this Article 11 or any other provision
of this Indenture, the Trustee and Paying Agent shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment to or by the Trustee or a Paying Agent or the taking of any other
action (pursuant to this Article 11) by the Trustee or a Paying Agent unless and
until the Trustee or such Paying Agent, as the case may be, shall have received
at its office specified in Section 10.02 written notice thereof from the
Company, a Representative or a holder of Senior Indebtedness and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, and such Paying Agent, shall be entitled in all respects
conclusively to assume that no such facts exist. The Trustee or Paying Agent may
continue to make payments on the Securities unless it receives such a notice at
least three business days prior to the date upon which payment is due.
The Trustee shall be entitled to rely reasonably in good faith on the
delivery to it of a written notice by a person representing himself, herself or
itself to be a Representative or a holder of Senior Indebtedness to establish
that such notice has been given by a Representative or a holder of such Senior
Indebtedness. Only the Company, a Representative or a holder of Senior
Indebtedness that has no Representative may give the notice.
In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article 11, and if such evidence is not furnished, the
Trustee may defer any payment which it may be required to make for the
<PAGE>
45
<PAGE>
benefit of such person pursuant to the terms of this Indenture pending judicial
determination as to the rights of such person to receive such payment.
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
Custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 11.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 11.13. No Fiduciary Duty to Holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee or Paying Agent. Neither the Trustee nor
the Paying Agent shall be deemed to owe any fiduciary duty to the holders of
such Senior Indebtedness and, subject to the provisions of Section 7.02, the
Trustee shall not be liable to any holder of such Senior Indebtedness if it
shall, in the absence of bad faith, pay over or deliver to holders of
Securities, the Company or any other person monies or assets to which any holder
of such Senior Indebtedness shall be entitled by virtue of this Article 11 or
otherwise.
46
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed, all as of the date first above written.
Dated: , 1999 M.D.C. HOLDINGS, INC.
-----------
<PAGE>
By:
Name:
Title:
Dated: , 1999 , as Trustee
----------------- ------------------
By:
Name:
Title:
(SEAL)
47
<PAGE>
Exhibit A
No. CUSIP No.:
---------
[Title of Security]
M.D.C. HOLDINGS, INC.
a Delaware corporation
promises to pay to
or registered assigns
the principal sum of [Dollars] on
[Title of Security]
Interest Payment Dates: and
Record Dates and
Authenticated: Dated:
M.D.C. HOLDINGS, INC.
[Seal]
By
---------------------------
Title:
By
---------------------------
Title:
- ------------------------------,
as Trustee, certifies that this is one of the
Securities referred to in the within mentioned
Indenture.
By:
<PAGE>
-----------------------------
- --------------------------------
Authorized Signatory
M.D.C. HOLDINGS, INC.
[Title of Security]
A-1
<PAGE>
1. Interest.
M.D.C. HOLDINGS, INC. (the "Company"), a Delaware corporation, promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company will pay interest semiannually on
------------------
and of each year until the principal is paid or made available
--------------
for payment. Interest on the Securities will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid, from , 19 ; provided that, if there is no existing default
-------------- --
in the payment of interest, and if this Security is authenticated between a
record date referred to on the face hereof and the next succeeding interest
payment date, interest shall accrue from such interest payment date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
[Provisions as to the right of the Company to defer interest, if any, may be set
forth here. ]
2. Method of Payment. The Company will pay interest on the Securities (except
defaulted interest, if any, which will be paid on such special payment date to
Holders of record on such special record date as may be fixed by the Company) to
the persons who are registered Holders of Securities at the close of business on
the [Insert record dates]. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.
3. Paying Agent and Registrar.
Initially, (the "Trustee") will act as Paying Agent and
---------------
Registrar. The Company may change or appoint any Paying Agent, Registrar or
co-Registrar without notice. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of
, 199 ("Indenture") among the Company and the Trustee. The terms
- ------------- --
of the Securities include those stated in the Indenture (including those terms
set forth in the Authorizing Resolution or supplemental indenture pertaining to
<PAGE>
the Securities of the Series of which this Security is a part) and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 ("TIA") as
in effect on the date of the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the Act for a
statement of them.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture and the applicable Authorizing Resolution
or supplemental
A-2
<PAGE>
indenture. Requests may be made to: M.D.C. Holdings, Inc., 3600 S. Yosemite,
Suite 900, Denver, Colorado 80237, Attention: Secretary.
5. Optional Redemption.
The Company may redeem the Securities at any time on or
after , in whole or in part, at the following redemption prices
-------------
(expressed as a percentage of their principal amount) together with interest
accrued and unpaid to the date fixed for redemption:
If redeemed during the Twelve-Month period commencing
on and ending on in each of the
---------- -----------
following years Percentage
------- ------
------- ------
------- ------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may be
redeemed in part. On and after the redemption date, interest ceases to accrue on
Securities or portions of them called for redemption; provided, that if the
Company shall default in the payment of such Security at the redemption price
together with accrued interest, interest shall continue to accrue at the rate
borne by the Securities.
[Insert provisions relating to redemption at option of Holders, if any]
6. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange
Securities by presentation of such Securities to the Registrar or a co-Registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Securities of other denominations. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Security selected for
<PAGE>
redemption, except the unredeemed part thereof if the Security is
A-3
<PAGE>
redeemed in part, or transfer or exchange any Securities for a period of 15 days
before a selection of Securities to be redeemed.
7. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of
it for all purposes.
8. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its request. After that, Holders entitled to the money must look to the Company
for payment unless an abandoned property law designates another person.
9. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Securities of each Series affected by the
amendment and any past default or compliance with any provision relating to any
Series of the Securities may be waived in a particular instance with the consent
of the Holders of a majority in principal amount of the outstanding Securities
of such Series. Without the consent of any Securityholder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Securities in
addition to or in place of certificated Securities, to create a Series and
establish its terms, or to make any other change, provided such action does not
adversely affect the rights of any Securityholder.
10. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor corporation
will be released from those obligations.
11. Trustee Dealings With Company.
, the Trustee under the Indenture, in its individual or
--------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
A-4
<PAGE>
<PAGE>
12. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
13. Discharge of Indenture.
The Indenture contains certain provisions pertaining to defeasance,
which provisions shall for all purposes have the same effect as if set forth
herein.
14. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
15. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
16. Subordination.
To the extent set forth in Article 11 of the Indenture, the Securities
are subordinated to Senior Indebtedness, which generally is any Indebtedness
outstanding on the date of the Indenture or Indebtedness thereafter created,
incurred, assumed or guaranteed by the Company and all renewals, extensions and
refundings thereof except Indebtedness that expressly provides that it is not
senior to or superior in right of payment to the Securities. Senior Indebtedness
does not include Indebtedness of the Company to any of its subsidiaries, trade
payables of the Company and certain Indebtedness of others guaranteed by the
Company. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination and
authorizes the Trustee to give it effect.
A-5
<PAGE>
ASSIGNMENT FORM
If you, the Holder, want to assign this Security, fill in the form
below:
I or we assign and transfer this Security to:
- --------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------
(Insert assignee's social security or tax ID number)
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
(Print or type assignee's name, address, and zip code)
and irrevocably appoint:
- ---------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
- ---------------------------------------------------------------
Date: Your signature:
------------------- ---------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature
Guarantee:
-----------------------------------------------------------
EXHIBIT 5.1
-----------
(Letterhead of Holme Roberts & Owen LLP)
June 15, 1999
M.D.C. Holdings, Inc.
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
Re: M.D.C. Holdings, Inc. Public Offering
Ladies and Gentlemen:
As counsel for Richmond American Homes of California, Inc.,
Richmond American Homes of Maryland, Inc., Richmond American Homes of Nevada,
Inc., Richmond American Homes of Virginia, Inc., Richmond American Homes of
Arizona, Inc.and Richmond American Homes of Colorado, Inc. (the
"Co-Registrants"), each a subsidiary of M.D.C. Holdings, Inc., a Delaware
corporation ("MDC"), we are familiar with the Co-Registrants' Registration
Statement on Form S-3 (as amended, the "Registration Statement") filed with the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933
(as amended, the "Act"), on June 15, 1999, with respect to the offering and
issuance from time to time by the Co-Registrants of guarantees (the
"Guarantees") of up to $300,000,000 of one or more series of MDC's debt
securities registered under MDC's Registration Statement on Form S-3, File No.
333-70381 (the "Debt Securities"). All capitalized terms which are not defined
herein shall have the meanings assigned to them in the Registration Statement.
1
In connection with our examination of documents as hereinafter
described, we have assumed the genuineness of all signatures on, and the
authenticity of, all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as copies. With respect
to agreements and instruments executed by natural persons, we have assumed the
legal competency of such persons.
For the purpose of rendering this opinion, we have made such factual and legal
examination as we deemed necessary under the circumstances, and in that
connection we have examined, among other things, originals or copies of the
following:
(1) The Certificates of Incorporation of the Co-Registrants, as
amended to date;
(2) The Bylaws of the Co-Registrants, as amended to date;
(3) The Form of Senior Indenture (and form of notes) filed as an
exhibit to the Registration Statement;
(4) The Form of Senior Subordinated Indenture (and form of notes)
filed as an exhibit to the Registration Statement;
(5) The Form of Junior Subordinated Indenture (and form of notes)
filed as an exhibit to the Registration Statement;
<PAGE>
(6) Such records of the corporate proceedings of the
Co-Registrants, and such other documents that we considered
necessary or appropriate for the purpose of rendering this
opinion; and
(7) Such other certificates and assurances from public officials,
officers and representatives of the Co-Registrants that we
considered necessary or appropriate for the purpose of
rendering this opinion.
2
On the basis of the foregoing examination, and in reliance
thereon, we are of the opinion that (subject to compliance with the pertinent
provisions of the Act and, with respect to the Indentures (as defined below) and
the Debt Securities, the Trust Indenture Act of 1939, as amended, and to
compliance with such securities or "blue sky" laws of any jurisdiction as may be
applicable):
When (a) the Debt Securities and Guarantees in substantially the form
contained in (as appropriate) the Form of Senior Indenture, the Form of
Senior Subordinated Indenture or the Form of Junior Subordinated
Indenture (as amended or supplemented in accordance with the respective
terms thereof, each an "Indenture") shall have been authorized,
executed and authenticated in accordance with the terms of the
applicable
<PAGE>
Indenture, (b) the Indentures shall have been qualified under the Trust
Indenture Act of 1939, duly executed and delivered and (c) the Debt
Securities and Guarantees shall have been issued and sold as described
in the Registration Statement, and if in an underwritten offering, in
accordance with the terms and conditions of the applicable underwriting
agreement, and in a manner contemplated in the Registration Statement,
including the Prospectus Supplement relating to any such Debt
Securities and Guarantees, the Guarantees will be duly authorized and
valid and binding obligations of the Co-Registrants, subject to the
effect of any bankruptcy, insolvency, reorganization, moratorium,
arrangement, or similar laws affecting the enforcement of creditors'
rights generally (including, without limitation, the effect of
statutory or other laws regarding fraudulent transfers or preferential
transfers) and general principles of equity, regardless of whether
enforceability is considered in a proceeding in equity or at law.
This opinion is limited to the present corporate laws of the
State of Delaware, the present laws of the State of Colorado and the present
federal laws of the United States and to the present judicial interpretations
thereof and to the facts as they presently exist. We undertake no obligation to
advise you as a result of developments occurring after the date hereof or as a
result of facts or circumstances brought to our attention after the date hereof.
3
This opinion may be filed as an exhibit to the Registration
Statement. Consent is also given to the reference to this firm under the caption
"Legal Matters" in the prospectus contained in the Registration Statement. In
giving this consent, we do not admit we are included in the category of persons
whose consent is required under Section 7 of the Act or the rules and
regulations of the SEC promulgated thereunder.
Very truly yours,
/s/
HOLME ROBERTS & OWEN LLP
4
<TABLE>
<CAPTION>
M.D.C. HOLDINGS, INC.
RATIO OF EARNINGS TO FIXED CHARGES
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Earnings $118,989 $69,246 $63,687 $65,313 $69,856
-------- ------- ------- ------- -------
Fixed Charges $ 23,478 $27,165 $31,461 $36,401 $38,671
Earnings to Fixed Charges $ 5.07 $2.55 $2.02 $1.79 $1.81
===== ===== ===== ===== =====
Earnings:
Pretax Earnings from Continuing
Operations 83,852 39,327 32,754 26,651 30,982
Add:
Fixed Charges 23,478 27,165 31,461 36,401 38,671
Less capitalized interest (22,525) (25,607) (26,523) (26,136) (26,345)
Add amortization of previously
capitalized interest 34,184 28,361 25,995 28,397 26,548
------ ------ ------ ------ ------
Total Earnings 118,989 69,246 63,687 65,313 69,856
======= ====== ====== ====== ======
Fixed Charges:
Homebuilding and corporate
interest expense 0 761 3,773 7,773 9,454
Amortization and expensing of
debt expenses 953 797 1,165 2,492 2,872
Capitalized interest 22,525 25,607 26,523 26,136 26,345
------ ------ ------ ------ ------
Total Fixed Charges 23,478 27,165 31,461 36,401 38,671
====== ====== ====== ====== ======
</TABLE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 18, 1999 appearing on page F-2 of M.D.C. Holdings, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 1998. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PricewaterhouseCoopers LLP
Denver, Colorado
June 15, 1999
