EXHIBIT 4.1(a)
D.R. HORTON, INC. AND THE GUARANTORS NAMED HEREIN
Senior Debt Securities
Indenture
Dated as of June 9, 1997
AMERICAN STOCK TRANSFER & TRUST COMPANY, Trustee
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; 11.02
311(a)................................................................. 7.11
(b).................................................................... 7.11
(c).................................................................... N.A.
312(a)/................................................................ 2.05
(b).................................................................... 11.03
(c).................................................................... 11.03
313(a)................................................................. 7.06
(b)(1)................................................................. N.A.
(b)(2)................................................................. 7.06
(c).................................................................... 11.02
(d).................................................................... 7.06
314(a)................................................................. 4.02; 11.02
(b).................................................................... N.A.
(c)(1)................................................................. 11.04
(c)(2)................................................................. 11.04
(c)(3)................................................................. N.A.
(d).................................................................... N.A.
(e).................................................................... 11.05
315(a)................................................................. 7.01(b)
(b).................................................................... 7.05; 11.02
(c).................................................................... 7.01(a)
(d).................................................................... 7.01(c)
(e).................................................................... 6.11
316(a)(last sentence).................................................. 11.06
(a)(1)(A).............................................................. 6.05
(a)(1)(B).............................................................. 6.04
(a)(2)................................................................. N.A.
(b).................................................................... 6.07
317(a)(1).............................................................. 6.08
(a)(2)................................................................. 6.09
(b).................................................................... 2.04
318(a)................................................................. 11.01
N.A. means Not Applicable.
TABLE OF CONTENTS
This Table of Contents is not a part of the Indenture.
Page
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. Definitions.......................................................... 1
Section 1.02. Other Definitions.................................................... 10
Section 1.03. Incorporation by Reference of Trust
Indenture Act..................................................... 10
Section 1.04. Rules of Construction................................................ 11
ARTICLE TWO
The Securities
Section 2.01. Form and Dating...................................................... 11
Section 2.02. Execution and Authentication......................................... 14
Section 2.03. Registrar and Paying Agent........................................... 14
Section 2.04. Paying Agent to Hold Money in Trust.................................. 15
Section 2.05. Securityholder Lists................................................. 15
Section 2.06. Transfer and Exchange................................................ 15
Section 2.07. Replacement Securities............................................... 16
Section 2.08. Outstanding Securities............................................... 16
Section 2.09. Temporary Securities................................................. 17
Section 2.10. Cancellation......................................................... 17
Section 2.11. Defaulted Interest................................................... 17
Section 2.12. Treasury Securities.................................................. 18
Section 2.13. CUSIP Numbers........................................................ 18
Section 2.14. Deposit of Moneys.................................................... 18
Section 2.15. Book-Entry Provisions for Global
Security............................................................. 18
ARTICLE THREE
Redemption
Section 3.01. Notices to Trustee................................................... 20
Section 3.02. Selection of Securities to be Redeemed............................... 21
Section 3.03. Notice of Redemption................................................. 21
Section 3.04. Effect of Notice of Redemption....................................... 22
Section 3.05. Deposit of Redemption Price.......................................... 22
Section 3.06. Securities Redeemed in Part.......................................... 22
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ARTICLE FOUR
Covenants
Section 4.01. Payment of Securities................................................ 22
Section 4.02. Maintenance of Office or Agency...................................... 23
Section 4.03. Compliance Certificate............................................... 23
Section 4.04. Payment of Taxes; Maintenance of
Corporate Existence; Maintenance of
Properties........................................................ 23
Section 4.05. Additional Guarantors................................................ 24
ARTICLE FIVE
Successor Corporation
Section 5.01. When Company May Merge, etc.......................................... 25
ARTICLE SIX
Defaults and Remedies
Section 6.01. Events of Default.................................................... 26
Section 6.02. Acceleration......................................................... 28
Section 6.03. Other Remedies....................................................... 29
Section 6.04. Waiver of Existing Defaults.......................................... 29
Section 6.05. Control by Majority.................................................. 29
Section 6.06. Limitation on Suits.................................................. 30
Section 6.07. Rights of Holders to Receive Payment................................. 30
Section 6.08. Collection Suit by Trustee........................................... 31
Section 6.09. Trustee May File Proofs of Claim..................................... 31
Section 6.10. Priorities........................................................... 31
Section 6.11. Undertaking for Costs................................................ 32
ARTICLE SEVEN
Trustee
Section 7.01. Duties of Trustee.................................................... 32
Section 7.02. Rights of Trustee.................................................... 33
Section 7.03. Individual Rights of Trustee......................................... 35
Section 7.04. Trustee's Disclaimer................................................. 35
Section 7.05. Notice of Defaults................................................... 35
Section 7.06. Reports by Trustee to Holders........................................ 35
Section 7.07. Compensation and Indemnity........................................... 36
Section 7.08. Replacement of Trustee............................................... 36
Section 7.09. Successor Trustee by Merger, etc..................................... 37
Section 7.10. Eligibility; Disqualification........................................ 38
Section 7.11. Preferential Collection of Claims
Against Company................................................... 38
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ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys or
U.S. Government Obligations....................................... 38
Section 8.02. Survival of the Company's Obligations................................ 42
Section 8.03. Application of Trust Money........................................... 42
Section 8.04. Repayment to the Company............................................. 42
Section 8.05. Reinstatement........................................................ 43
ARTICLE NINE
Guarantees
Section 9.01. Unconditional Guarantees............................................. 43
Section 9.02. Severability......................................................... 45
Section 9.03. Release of a Guarantor............................................... 45
Section 9.04. Limitation of a Guarantor's Liability................................ 46
Section 9.05. Guarantors May Consolidate, etc., on
Certain Terms..................................................... 46
Section 9.06. Contribution......................................................... 46
Section 9.07. Waiver of Subrogation................................................ 47
Section 9.08. Execution of Guarantee............................................... 48
ARTICLE TEN
Amendments, Supplements and Waivers
Section 10.01. Without Consent of Holders........................................... 48
Section 10.02. With Consent of Holders.............................................. 49
Section 10.03. Compliance with Trust Indenture Act.................................. 50
Section 10.04. Revocation and Effect of Consents.................................... 50
Section 10.05. Notation on or Exchange of Securities................................ 51
Section 10.06. Trustee to Sign Amendments, etc...................................... 51
ARTICLE ELEVEN
Miscellaneous
Section 11.01 Trust Indenture Act Controls......................................... 52
Section 11.02. Notices.............................................................. 52
Section 11.03. Communications by Holders with
Other Holders..................................................... 53
Section 11.04. Certificate and Opinion as to
Conditions Precedent.............................................. 53
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Section 11.05. Statements Required in Certificate
or Opinion........................................................ 54
Section 11.06. Rules by Trustee and Agents.......................................... 54
Section 11.07. Legal Holidays....................................................... 54
Section 11.08. Governing Law........................................................ 54
Section 11.09. No Adverse Interpretation of Other
Agreements........................................................ 55
Section 11.10. No Recourse Against Others........................................... 55
Section 11.11. Successors and Assigns............................................... 55
Section 11.12. Duplicate Originals.................................................. 55
Section 11.13. Severability......................................................... 55
SIGNATURES.
EXHIBIT A - Form of Security
-iv-
INDENTURE dated as of June 9, 1997, by and among D.R. HORTON, INC., a Delaware
corporation (the "Company"), each of the Guarantors (as defined in Section 1.01
below) and AMERICAN STOCK TRANSFER & TRUST COMPANY (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, when used with reference to a specified person, any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Person specified.
"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.
"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 Disqualified Stock and Preferred Stock.
2
"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.
"Change of Control Provisions" has the meaning set forth in the definition of
"Disqualified Stock" below.
"Company" means the party 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 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, an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, (i) matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof, in whole or in part, on or prior to the final
maturity date of the Securities of the applicable Series or (ii) is convertible
into or exchangeable or exercisable for (whether at the option of the issuer or
the holder thereof) (a) debt securities or (b) any Capital Stock referred to in
(i) above, in each case, at any time prior to the final maturity date of the
Securities of the applicable Series; provided, however, that any Capital Stock
that would not constitute Disqualified Stock but for provisions thereof giving
holders thereof (or the holders of any security into or for which such Capital
Stock is convertible, exchangeable or exercisable) the right to require the
Company to repurchase or redeem such Capital Stock upon the occurrence of a
change in control occurring prior to the final maturity date of the Securities
of the applicable Series shall not constitute Disqualified Stock if the change
in control provisions applicable to such Capital Stock are no more favorable to
such holders than any provisions described in the Authorizing Resolution or
supplemental indenture pertaining to the Securities of the applicable Series
("Change of Control Provisions") and such Capital Stock specifically pro-
3
vides that the Company will not repurchase or redeem any such Capital Stock
pursuant to such provisions prior to the Company's repurchase of the Securities
of the applicable Series to the extent required pursuant to any such Change of
Control Provisions.
"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.
"Guarantee" means the guarantee of Securities of any applicable Series by each
Guarantor under this Indenture.
"Guarantors" means (i) initially on the execution of this Indenture, each of:
D.R. Horton Management Company, Ltd., a Texas limited partnership; DRHI, Inc., a
Delaware corporation; D.R. Horton-Royalty, Ltd., a Texas limited partnership;
DRH Construction, Inc., a Delaware corporation; DRH New Mexico Construction,
Inc., a Delaware corporation; D.R. Horton Denver Management Company, Inc., a
Colorado corporation; D.R. Horton Denver No. 10, Inc., a Colorado corporation;
D.R. Horton Denver No. 11, Inc., a Colorado corporation; D.R. Horton Denver No.
12, Inc., a Colorado corporation; D.R. Horton Denver No. 13, Inc., a Colorado
corporation; D.R. Horton Denver No. 14, Inc., a Colorado corporation; D.R.
Horton Denver No. 15, Inc., a Colorado corporation; D.R. Horton Denver No. 16,
Inc., a Colorado corporation; D.R. Horton Denver No. 17, Inc., a Colorado
corporation; D.R. Horton Denver No. 18, Inc., a Colorado corporation; D.R.
Horton, Inc., Albuquerque, a Delaware corporation; D.R. Horton, Inc., Denver, a
Delaware corporation; D.R. Horton, Inc., Minnesota, a Delaware corporation; D.R.
Horton, Inc., New Jersey, a New Jersey corporation; Meadows I, Ltd., a Delaware
corporation; Meadows II, Ltd., a Delaware corporation; Meadows III, Ltd., a
Delaware corporation; Meadows IX , Inc., a New Jersey corporation; Meadows X,
Inc., a New Jersey corporation; SGS Communities at Grande Quary, L.L.C., a New
Jersey limited liability company; D.R. Horton Los Angeles Holding Company, Inc.,
a California corporation; D.R. Horton Los Angeles Management Company, Inc., a
California corporation; D.R. Horton Los Angeles No. 9, Inc., a California
corporation; D.R. Horton Los Angeles No. 10, Inc., a California corporation;
D.R. Horton Los Angeles No. 11, Inc., a California corporation; D.R. Horton Los
Angeles No. 12, Inc., a California corporation; D.R. Horton Los Angeles No. 13,
Inc., a California corporation; D.R. Horton Los Angeles No. 14, Inc., a
4
California corporation; D.R. Horton Los Angeles No. 16, Inc., a California
corporation; D.R. Horton Los Angeles No. 17, Inc., a California corporation;
D.R. Horton, Inc. - Birmingham, a Delaware corporation; D.R. Horton, Inc. -
Greensboro, a Delaware corporation; D.R. Horton San Diego Holding Company, Inc.,
a California corporation; D.R. Horton San Diego Management Company, Inc., a
California corporation; D.R. Horton San Diego No. 9, Inc., a California
corporation; D.R. Horton San Diego No. 10, Inc., a California corporation; D.R.
Horton San Diego No. 11, Inc., a California corporation; D.R. Horton San Diego
No. 12, Inc., a California corporation; D.R. Horton San Diego No. 13, Inc., a
California corporation; D.R. Horton San Diego No. 14, Inc., a California
corporation; D.R. Horton San Diego No. 15, Inc., a California corporation; D.R.
Horton San Diego No. 16, Inc., a California corporation; D.R. Horton San Diego
No. 17, Inc., a California corporation; D.R. Horton San Diego No. 18, Inc., a
California corporation; D.R. Horton San Diego No. 19, Inc., a California
corporation; D.R. Horton San Diego No. 20, Inc., a California corporation; D.R.
Horton San Diego No. 21, Inc., a California corporation; D.R. Horton Texas,
Ltd., a Texas limited partnership; D.R. Horton, Inc. - Torrey, a Delaware
corporation; and S.G. Torrey of Atlanta, Ltd., a Georgia corporation; and (ii)
each of the Company's Subsidiaries which becomes a guarantor of Securities
pursuant to the provisions of this Indenture. An Unrestricted Subsidiary may
become a Guarantor if it is so designated by resolution of the Board of
Directors of the Company.
"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 (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), (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 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
5
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; provided, that Indebtedness shall not include
accounts payable, liabilities to trade creditors of such Person or other accrued
expenses arising in the ordinary course of business. The amount of Indebtedness
of any Person at any date shall be (a) the outstanding balance at such date of
all unconditional obligations as described above, net of any unamortized
discount to be accounted for as Interest Expense, in accordance with GAAP, (b)
the maximum liability of such Person for any contingent obligations under clause
(ii) above at such date, net of, any unamortized discount to be accounted for as
Interest Expense in accordance with GAAP and (c) in the case of clause (iv)
above, the lesser of (1) the fair market value of any asset subject to a Lien
securing the Indebtedness of others on the date that the Lien attaches and (2)
the amount of the Indebtedness secured.
"Indenture" means this Indenture as amended or supplemented from time to time,
including pursuant to any Authorizing Resolution or supplemental indenture
pertaining to any Series.
"Interest Expense" of any Person for any period means, without duplication, the
aggregate amount of (i) interest which, in conformity with GAAP, would be set
opposite the caption "interest expense" or any like caption on an income
statement for such Person (including, without limitation, imputed interest
included in Capitalized Lease Obligations, all commissions, discounts and other
fees and charges owned with respect to letters of credit and bankers' acceptance
financing, the net costs (but reduced by net gains) associated with Currency
Agreements and Interest Protection Agreements, amortization of other financing
fees and expenses, 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
6
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 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 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. 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-
7
Recourse Indebtedness because there is recourse to the borrower, any guarantor
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, the Controller 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.
"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.
8
"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 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.
"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 obli-
9
gation 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 as provided below;
provided that (a) the holders of Indebtedness thereof do not have direct or
indirect recourse against the Company or any Restricted Subsidiary, and neither
the Company nor any Restricted Subsidiary otherwise has liability, for any
payment obligations in respect of such Indebtedness (including any undertaking,
agreement or instrument evidencing such Indebtedness), except, (i) in each case,
to the extent that the amount thereof constitutes a "restricted payment"
permitted to be made under any provisions set forth limiting the making or
paying of a "restricted payment" under the Authorizing Resolution or
supplemental indenture pertaining to an applicable Series ("Restricted Payment
Provisions"), (ii) in the case of Non-Resource Indebtedness, to the extent such
recourse or liability is for the matters discussed in the last sentence of the
definition of "Non-Recourse Indebtedness," or (iii) to the extent such
Indebtedness is a guarantee by such Subsidiary of Indebtedness of the Company or
a Restricted Subsidiary and (b) no holder of any Indebtedness of such Subsidiary
shall have a right to declare a default on such Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity as a
result of a default on any Indebtedness of the Company or any Restricted
Subsidiary. Subject to the foregoing, the Board of Directors of the Company may
designate any Subsidiary to be an Unrestricted Subsidiary; provided, however,
that (i) the net amount (the "Designation Amount") then outstanding of all
previous Investments by the Company and the Restricted Subsidiaries in such
Subsidiary will be deemed to be a "restricted payment" pursuant to any
Restricted Payment Provisions at the time of such designation and will reduce
the amount available for other restricted payments under any Restricted Payment
Provisions, to the extent provided therein, (ii) the Company must be permitted
under any Restricted Payment Provisions to make the "restricted payment" deemed
to have been made pursuant to clause (i), and (iii) after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing. The Board of Directors of the Company may also redesignate an
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
(i) the Indebtedness of such Unrestricted Subsidiary as of the date of such
redesignation could then be incurred under any provisions set forth limiting the
incurrence of Indebtedness under the Authorizing Resolution or supplemental
indenture pertaining to an applicable Series
10
("Debt Limitation Provisions"), (ii) immediately after giving effect to such
redesignation and the incurrence of any such additional Indebtedness, the
Company and the Restricted Subsidiaries could incur $1.00 of additional
Indebtedness under any debt incurrence covenant ratio set forth in any Debt
Limitation Provisions and (iii) the Liens of such Unrestricted Subsidiary as of
the date of such redesignation could then be incurred in accordance with any
provisions set forth limiting the creation or existence of Liens under the
Authorizing Resolution or supplemental indenture pertaining to an applicable
Series ("Lien Limitation Provisions"). Any such designation or redesignation by
the Board of Directors of the Company will be evidenced to the Trustee by the
filing with the Trustee of a certified copy of the resolution of the Board of
Directors of the Company giving effect to such designation or redesignation and
an Officers' Certificate certifying that such designation or redesignation
complied with the foregoing conditions and setting forth the underlying
calculations of such Officers' Certificate. The designation of any Person as an
Unrestricted Subsidiary shall be deemed to include a designation of all
Subsidiaries of such Person as Unrestricted Subsidiaries; provided, however,
that the ownership of the general partnership interest (or a similar member's
interest in a limited liability company) by an Unrestricted Subsidiary shall not
cause a Subsidiary of the Company of which more than 95% of the equity interest
is held by the Company or one or more Restricted Subsidiaries to be deemed an
Unrestricted Subsidiary.
Section 1.02. Other Definitions.
Defined in
Term Section
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"Agent Members"........................................................ 2.15
"Business Day"......................................................... 11.07
"Custodian"............................................................ 6.01
"Depositary"........................................................... 2.15
"Event of Default"..................................................... 6.01
"Legal Holiday"........................................................ 11.07
"Paying Agent"......................................................... 2.03
"Registrar"............................................................ 2.03
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
11
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, each of the Guarantors, or any other
obligor on the Securities of a Series or any Guarantees 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.
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
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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;
(13) the currency or currencies (including any composite currency) in
which principal or interest or both may be paid;
13
(14) 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;
(15) provisions for electronic issuance of Securities or issuance of
Securities in uncertificated form;
(16) any Events of Default, covenants and/or defined terms in addition to
or in lieu of those set forth in this Indenture;
(17) whether and upon what terms Securities may be defeased if different
from the provisions set forth in this Indenture;
(18) the form of the Securities, which, unless the Authorizing Resolution
or supplemental indenture otherwise provides, shall be in the form of
Exhibit A;
(19) any terms that may be required by or advisable under applicable law;
(20) 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;
(21) whether any Securities will not have Guarantees; and
(22) 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.
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Section 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities. Each
Guarantor shall execute the Guarantee in the manner set forth in Section 9.08.
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.
A Security shall not be valid until the Trustee manually signs the certificate
of authentication on the Security. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue upon receipt of an
Officers' Certificate of the Company. Each Security shall be dated the date of
its authentication.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be presented
for registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for payment ("Paying Agent) and an office or
agency where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Registrar shall keep a register
of the Securities and of their transfer and exchange. The Company may have one
or more co-Registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any Agent not
a party to this Indenture. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall promptly notify the
Trustee in writing of the name and address of any such Agent and the Trustee
shall have the right to inspect the Securities register at all reasonable times
to obtain copies thereof, and the Trustee shall have the right to rely upon such
register as to the names and addresses of the Holders and the principal amounts
and certificate numbers thereof. If the Company fails to maintain a Registrar or
Paying Agent or fails to give the foregoing notice, the Trustee shall act as
such.
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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.
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 semiannual 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
16
the case of exchanges pursuant to 2.09, 3.06, or 10.05 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 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 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 for its 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 cancelled by it and those described in this Section. A
Security does not cease to be outstanding because the Company, any Guarantor or
one of their 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 the Paying Agent holds on a redemption date or maturity date 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.
17
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 and the Guarantors 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 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
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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, the Guarantors or any of their
respective Affiliates 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 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
19
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
and the Guarantors shall execute, and the Trustee shall authenticate and
deliver, one or more definitive Securities of like tenor and amount.
20
(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 to the Trustee for cancellation, and the Company and the Guarantors
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
cancelled at any time prior to notice of such redemption being mailed to
Holders. Any such cancelled 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).
21
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 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 Trus-
22
tee 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.
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 and the
Guarantors 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 the
Paying Agent holds on that date 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.
23
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.
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, materi-
24
ally 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 and to comply with all applicable laws; 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, Article Nine 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 which is not a
Guarantor; and
(c) at all times keep, maintain and preserve all 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 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.
Section 4.05. Additional Guarantors.
If the Company or any of the Guarantors transfers or causes to be transferred,
in one transaction or a series of related transactions, any property to any
Restricted Subsidiary of the Company that is not a Guarantor, or if the Company
or any of the Guarantors shall organize, acquire or otherwise invest in another
Subsidiary which becomes a Restricted Subsidiary, then such transferee or
acquired or other Subsidiary shall (i) execute and deliver to the Trustee a
supplemental indenture in form reasonably satisfactory to the Trustee pursuant
to which such Subsidiary shall unconditionally guarantee all of the Company's
obligations under the Securities of any Series that has the benefit of
Guarantees of other Subsidiaries of the Company and this Indenture (as it
relates to all such Series)
25
on the terms set forth in this Indenture and (ii) deliver to the Trustee an
Opinion of Counsel that such supplemental indenture has been duly authorized,
executed and delivered by such Subsidiary and constitutes a legal, valid,
binding and enforceable obligation of such Subsidiary. Thereafter, such
Subsidiary shall be a Guarantor for all purposes of this Indenture (as it
relates to all such Series).
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.
26
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:
(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 with
any of its agreements or covenants in, or provisions of, the Securities of
such Series, the Guarantees (as they relate thereto) 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 any Change of Control Provisions or Article Five (or any replacement
provisions as contemplated by Article Five), which will constitute Events
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
$20 million or more, individually or in the aggregate, and such
acceleration
27
does not cease to exist, or such Indebtedness is not satisfied, in either
case within five 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 $20 million or more,
individually or in the aggregate, in respect of Indebtedness (other than
Non-Resource Indebtedness) of the Company or any Restricted Subsidiary
within five 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 $20 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 satisfied, stayed, annulled or rescinded within 60 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
(D) makes a general assignment for the benefit of its creditors;
(8) a court of competent jurisdiction entersan 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
28
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 60 days; or
(9) any Guarantee of a Guarantor which is a Significant Subsidiary ceases
to be in full force and effect (other than in accordance with the terms of
such Guarantee and the Indenture) or is declared null and void and
unenforceable or found to be invalid or any Guarantor denies its liability
under its Guarantee (other than by reason of release of a Guarantor from
its Guarantee in accordance with the terms of the Indenture and the
Guarantee).
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 any Change of Control Provisions or Article
Five (or any replacement provisions as contemplated by Article Five)) the
Company does not cure the Default within 60 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
29
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 10.02, 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
30
continuing, and any Event of Default arising therefrom shall be deemed to have
been cured; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding Securities of a
Series may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on it with respect to such Series. The Trustee, however, may refuse to follow
any direction (i) that conflicts with law or this Indenture, (ii) that, subject
to Section 7.01, the Trustee determines is unduly prejudicial to the rights of
other Securityholders, or (iii) that would involve the Trustee in personal
liability.
Section 6.06. Limitation on Suits.
A Securityholder of a Series may not pursue any remedy with respect to this
Indenture or the Series unless:
(1) the Holder gives to the Trustee written notice of a continuing Event
of Default on the Series;
(2) the Holders of at least a majority in principal amount of the
outstanding Securities of the Series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 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.
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Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, is absolute
and unconditional and shall not be impaired or affected without the consent of
the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified in Section
6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal and interest remaining unpaid.
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;
32
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 or the Guarantors as their interests may appear.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having the due regard to the merits and
good faith of the claims or defenses made by the party litigant. This Section
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 other
33
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 this Indenture. The Trustee, however, shall examine the
certificates and opinions to determine whether or not they conform
to the requirements of this Indenture but need not confirm or
investigate the accuracy of mathematical calculations or other facts
or matters stated therein.
(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 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
34
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 11.04 and 11.05 hereof and containing such other
statements as the Trustee reasonably deems necessary to perform its duties
hereunder. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on the Officers' Certificate,
Opinion of Counsel or any other direction of the Company permitted
hereunder.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
(e) The Trustee may consult with counsel, and the written advice of such
counsel or any Opinion of Counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
(f) Unless otherwise specifically provided in the Indenture, any demand,
request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
35
(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 11.02 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.
36
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 Section 313(a) (but if no event
described in TIA Section 313(2) has occurred within the twelve months preceding
the reporting date no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b).
A copy of each report at the time of its mailing to 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
37
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.
38
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 Section 311(a) to the extent indicated therein.
ARTICLE EIGHT
Discharge of Indenture
Section 8.01. Defeasance upon Deposit of Moneys or U.S. Government Obligations.
(a) The Company may, at its option and at any time, elect to have either
paragraph (b) or paragraph (c) below be applied to the outstanding 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 and the Guarantors shall be deemed to have been
released and discharged from their 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
39
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 and the Guarantors shall be released and
discharged from the obligations under any covenant contained in Article Five,
Section 4.05 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
40
satisfactory to the Trustee, money in U.S. dollars or U.S. government
obligations or a combination thereof in such amounts and at such times as
are sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of and interest on
the outstanding Securities of such Series to maturity or redemption;
provided, however, that the Trustee (or other qualifying trustee) shall
have received an irrevocable written order from the Company instructing
the Trustee (or other qualifying trustee) to apply such money or the
proceeds of such U.S. government obligations to said payments with respect
to the Securities of such Series to maturity or redemption;
(2) No Default or Event of Default shall have occurred and be continuing
on the date of such deposit;
(3) Such deposit will not result in a Default under this Indenture or a
breach or violation of, or constitute a default under, any other material
instrument or agreement to which the Company or any of any of their
Subsidiaries is a party or by which it or any of their property is bound;
(4) (i) In the event the Company elects paragraph (b) hereof, the Company
shall deliver to the Trustee an Opinion of Counsel in the United States,
in form and substance reasonably satisfactory to the Trustee, to the
effect that (A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the Issue Date
pertaining to such Series, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall state that, or (ii) in the event the
Company elects paragraph (c) hereof, the Company shall deliver to the
Trustee an Opinion of Counsel in the United States, in form and substance
reasonably satisfactory to the Trustee, to the effect that, in the case of
clauses (i) and (ii), Holders of the Securities of such Series will not
recognize income, gain or loss for 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
41
clause (1) was not made by the Company with the intent of preferring the
Holders of the Securities of such Series over any other creditors of the
Company or with the intent of defeating, hindering, delaying or defrauding
any other creditors of the Company or others;
(6) The Company shall have delivered to the Trustee an Opinion of Counsel,
reasonably satisfactory to the Trustee, to the effect that, (A) the trust
funds will not be subject to the rights of Holders of Indebtedness of the
Company other than the Securities of such Series and (B) assuming no
intervening bankruptcy of the Company between the date of deposit and the
91st day following the deposit and that no Holder of Securities of such
Series is an insider of the Company, after the 91st day following the
deposit, the trust funds will not be subject to any applicable bankruptcy,
insolvency, reorganization or similar law affecting creditors' rights
generally; and
(7) The Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent
specified herein relating to the defeasance contemplated by this Section
8.01 have been complied with.
In the event all or any portion of the Securities of a Series are to be
redeemed through such irrevocable trust, the Company must make
arrangements satisfactory to the Trustee, at the time of such deposit, for
the giving of the notice of such redemption or redemptions by the Trustee
in the name and at the expense of the Company.
(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, and the obligations of the Guarantors shall terminate
with respect to such Series (subject to Section 8.02), 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
42
payable and the Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust solely for that
purpose an amount of money sufficient to pay and discharge the
entire Indebtedness on the Securities not theretofore delivered to
the Trustee for cancellation, for principal of and interest;
(2) The Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(3) The Company has delivered irrevocable instructions to the
Trustee to apply the deposited money toward the payment of the
Securities at maturity or redemption, as the case may be; and
(4) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that all conditions
precedent specified herein relating to the satisfaction and
discharge of this Indenture have been complied with.
Section 8.02. Survival of the Company's Obligations.
Notwithstanding the satisfaction and discharge of the Indenture under Section
8.01, the Company's obligations in paragraph 9 of the Securities and Sections
2.03 through 2.07, 4.01, 7.07, 7.08, 8.04 and 8.05, however, shall survive until
the Securities of an applicable Series are no longer outstanding. Thereafter,
the Company's obligations in paragraph 9 of the Securities of such Series and
Sections 7.07, 8.04 and 8.05 shall survive (as they relate to such Series).
Section 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. government obligations deposited
with it pursuant to Section 8.01. It shall apply the deposited money and the
money from U.S. 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
43
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 or any Guarantor
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 and each
Guarantor'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.
ARTICLE NINE
GUARANTEES
Section 9.01. Unconditional Guarantees.
Subject to any other provisions set forth in the Authorizing Resolution or
supplemental indenture relating to a
44
particular Series, each Guarantor hereby unconditionally, jointly and severally,
guarantees (each such guarantee to be referred to herein as the "Guarantee") to
each Holder of Securities of such Series authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, that: (i) the
principal of and interest on the Securities of such Series will be promptly paid
in full when due, subject to any applicable grace period, whether at maturity,
by acceleration or otherwise and interest on the overdue principal, if any, and
interest on any interest of the Securities of such Series and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder, except obligations to pay principal and interest on any other Series
not so guaranteed, will be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; and (ii) in case of any extension of time of
payment or renewal of any Securities of such Series or of any such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration or otherwise, subject,
however, in the case of clauses (i) and (ii) above, to the limitations set forth
in Section 9.04. Each Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities of such Series or this Indenture, the absence
of any action to enforce the same, any waiver or consent by any Holder of the
Securities of such Series with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that, subject to Section 9.03, this Guarantee will not be discharged except by
complete performance of the obligations contained in the Securities of the
applicable Series, this Indenture and in this Guarantee. If any Holder or the
Trustee is required by any court or otherwise to return to the Company, any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Guarantor, any amount paid by the
Company or any Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between each Guarantor, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations
45
guaranteed hereby may be accelerated as provided in Article Six for the purposes
of this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (y) in the event of any acceleration of such obligations as provided in
Article Six, such obligations (whether or not due and payable) shall forthwith
become due and payable by each Guarantor for the purpose of this Guarantee.
Section 9.02. Severability.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 9.03. Release of a Guarantor.
Upon the sale or disposition (whether by merger, stock purchase, asset sale or
otherwise) of a Guarantor (or all or substantially all its assets) to a Person
which is not a Restricted Subsidiary and which sale or disposition is otherwise
in compliance with the terms of this Indenture, or, unless the Company elects
otherwise, if any Guarantor is designated as an Unrestricted Subsidiary in
accordance with the terms of this Indenture, then such Guarantor (in the event
of a sale or other disposition of Capital Stock of such Guarantor or a
designation as an Unrestricted Subsidiary) or the Person acquiring such assets
(in the event of a sale or other disposition of all or substantially all of the
assets of such Guarantor) shall be deemed automatically and unconditionally
released and discharged from all obligations under this Article Nine without any
further action required on the part of the Trustee or any Holder.
An Unrestricted Subsidiary that is a Guarantor shall be deemed automatically and
unconditionally released and discharged from all obligations under this Article
Nine upon notice from the Company to the Trustee to such effect, without any
further action required on the part of the Trustee or any Holder.
The Trustee shall deliver an appropriate instrument evidencing any such release
upon receipt of a request by the Company accompanied by an Officers' Certificate
and Opinion of Counsel certifying as to the compliance with this Section 9.03.
46
Any Guarantor not released in accordance with this Section 9.03 remains liable
for the full amount of principal of and interest on the Securities as provided
in this Article Nine.
Section 9.04. Limitation of a Guarantor's Liability.
Each Guarantor and by its acceptance hereof each Holder hereby confirms that it
is the intention of all such parties that the guarantee by such Guarantor
pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for
purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 9.06, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
Section 9.05. Guarantors May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in any of the Securities shall prevent
any consolidation or merger of a Guarantor with or into the Company or another
Restricted Guarantor, or shall prevent any sale of assets or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor that is a Restricted Subsidiary of the Company.
Upon any such consolidation, merger, sale or conveyance, the Guarantee given by
such Guarantor shall no longer have any force or effect.
Section 9.06. Contribution.
In order to provide for just and equitable contribution among the Guarantors,
the Guarantors agree, inter se, that in the event any payment or distribution is
made by any Guarantor (a "Funding Guarantor") under the Guarantee, such Funding
Guarantor shall be entitled to a contribution from all other Guarantors in a pro
rata amount based on the Adjusted Net Assets of each Guarantor (including the
Funding Guarantor) for all payments, damages and expenses incurred by that
Funding
47
Guarantor in discharging the Company's obligations with respect to any
Securities or any other Guarantor's obligations with respect to the Guarantee.
"Adjusted Net Assets" of such Guarantor at any date shall mean the lesser of the
amount by which (x) the fair value of the property of such Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any other Subsidiary of the Guarantor in respect of the obligations of its
Guarantee), but excluding liabilities under the Guarantee, of such Guarantor at
such date and (y) the present fair salable value of the assets of such Guarantor
at such date exceeds the amount that will be required to pay the probable
liability of such Guarantor on its debts (after giving effect to all other fixed
and contingent liabilities incurred or assumed on such date and after giving
effect to any collection from any other Subsidiary of the Company in respect of
the obligations of such Guarantor under its Guarantee), excluding debt in
respect of the Guarantee of such Guarantor, as they become absolute and matured.
Section 9.07. Waiver of Subrogation.
Until all guaranteed obligations under this Indenture and with respect to all
Securities of an applicable Series are paid in full, each Guarantor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against the Company that arise from the existence, payment, performance
or enforcement of such Guarantor's obligations under the Guarantee and this
Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any Holder of Securities of the applicable Series against the
Company, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Company, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to any Guarantor in
violation of the preceding sentence and the Securities of the applicable Series
shall not have been paid in full, such amount shall have been deemed to have
been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Holders of the Securities of the applicable Series, and shall
forthwith be paid to the Trustee for the benefit of such Holders to be credited
and applied upon the Securities of the applicable Series, whether matured or
unmatured, in accordance with the terms of this Indenture. Each
48
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Indenture and that the waiver
set forth in this Section 9.07 is knowingly made in contemplation of such
benefits.
Section 9.08. Execution of Guarantee.
To evidence their guarantee to the Holders set forth in this Article Nine, the
Guarantors hereby agree to execute the Guarantee in substantially the form
included in Exhibit A or in any such other form set forth in the Authorizing
Resolution or supplemental indenture pertaining to the applicable Series, which
shall be endorsed on each Security ordered to be authenticated and delivered by
the Trustee. Each Guarantor hereby agrees that its Guarantee set forth in this
Article Nine shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee. Each such Guarantee
shall be signed on behalf of each Guarantor by two Officers, or an Officer and
an Assistant Secretary or one Officer shall sign and one Officer or an Assistant
Secretary (each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to such Guarantee prior to the
authentication of the Security on which it is endorsed, and the delivery of such
Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Guarantee on behalf of such Guarantor. Such
signatures upon the Guarantee may be by manual or facsimile signature of such
officers and may be imprinted or otherwise reproduced on the Guarantee, and in
case any such officer who shall have signed the Guarantee shall cease to be such
officer before the Security on which such Guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed the Guarantee had not ceased to be such officer of
the Guarantor.
ARTICLE TEN
Amendments, Supplements and Waivers
Section 10.01. Without Consent of Holders.
The Company, the Guarantors 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:
49
(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;
(6) to make any other change that does not adversely affect the rights of
Securityholders; and
(7) to remove a Guarantor in respect of any Series which, in accordance
with the terms of this Indenture applicable to the particular Series,
ceases to be liable in respect of its Guarantee.
After an amendment under this Section 10.01 becomes effective, the Company shall
mail notice of such amendment to the Securityholders.
Section 10.02. With Consent of Holders.
The Company, the Guarantors and the Trustee may amend or supplement this
Indenture or the Securities of a Series without notice to any Securityholder of
such Series but with the written consent of the Holders of at least a majority
in principal amount of the outstanding Securities of each such Series affected
by the amendment. Each such Series shall vote as a separate class. The Holders
of a majority in principal amount of the outstanding Securities of any Series
may waive compliance by the Company with any provision of the Securities of such
Series or of this Indenture relating to such Series without notice to any
Securityholder. Without the consent of each Securityholder of a Series affected,
however, an amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may not:
(1) reduce the amount of Securities of such Series whose Holders must
consent to an amendment, supplement or waiver;
50
(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 or the
Guarantee thereof;
(5) release any Guarantor from any of its obligations under its Guarantee
or this Indenture otherwise than in accordance with the terms of this
Indenture;
(6) make any change in Sections 6.04, 6.07 or this 10.02;
(7) waive a continuing Default or Event of Default in the payment of the
principal of or interest on any Security; or
(8) 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 10.03. 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.
51
Section 10.04. 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 (8) of
Section 10.02, 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 10.05. 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 ex-
52
change for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms.
Section 10.06. 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 ELEVEN
Miscellaneous
Section 11.01. 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 11.02. 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 or to any Guarantor:
D.R. Horton, Inc.
1901 Ascension Blvd., Suite 100
Arlington, Texas 76006
Attention: Chief Financial Officer
53
if to the Trustee:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Attention: Corporate Trust Administration
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 11.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 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 Section 312(c).
Section 11.04. 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 11.05) stating that,
54
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 11.05) 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 11.05. 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 11.06. 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 11.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on which
banking institutions in Fort Worth,
55
Texas 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 11.08. Governing Law.
The laws of the State of New York shall govern this Indenture, the Securities of
each Series and the Guarantees.
Section 11.09. 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 11.10. No Recourse Against Others.
All liability described in paragraph 13 of the Securities of any director,
officer, employee or stockholder, as such, of the Company is waived and
released.
Section 11.11. 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 11.12. 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 11.13. 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.
D. R. HORTON, INC.
By: David J. Keller
----------------------------------
Name: David J. Keller
Title: Chief Financial Officer
GUARANTORS:
DRHI, Inc.
DRH Construction, Inc.
D.R. Horton Denver Management Company, Inc.
D.R. Horton Denver No. 10, Inc.
D.R. Horton Denver No. 11, Inc.
D.R. Horton Denver No. 12, Inc.
D.R. Horton Denver No. 13, Inc.
D.R. Horton Denver No. 14, Inc.
D.R. Horton Denver No. 15, Inc.
D.R. Horton Denver No. 16, Inc.
D.R. Horton Denver No. 17, Inc.
D.R. Horton Denver No. 18, Inc.
D.R. Horton, Inc. - Albuquerque
D.R. Horton, Inc. - Denver
D.R. Horton, Inc. - Minnesota
D.R. Horton, Inc. - New Jersey
Meadows I, Ltd.
Meadows II, Ltd.
Meadows III, Ltd.
Meadows IX, Inc.
Meadows X, Inc.
D.R. Horton Los Angeles Holding Company Inc.
D.R. Horton Los Angeles Management
Company, Inc.
D.R. Horton Los Angeles No. 9, Inc.
D.R. Horton Los Angeles No. 10, Inc.
D.R. Horton Los Angeles No. 11, Inc.
D.R. Horton Los Angeles No. 12, Inc.
D.R. Horton Los Angeles No. 13, Inc.
D.R. Horton Los Angeles No. 14, Inc.
D.R. Horton Los Angeles No. 16, Inc.
D.R. Horton Los Angeles No. 17, Inc.
D.R. Horton Los Angeles No. 18, Inc.
D.R. Horton Los Angeles No. 19, Inc.
D.R. Horton Los Angeles No. 20, Inc.
D.R. Horton Los Angeles No. 21, Inc.
D.R. Horton, Inc. - Torrey
S.G. Torrey Atlanta, Ltd.
By: David J. Keller
-----------------------------------
Name: David J. Keller
Title: Treasurer
SGS COMMUNITIES AT GRANDE QUAY, LLC
By: Meadows IX, Inc., a member
By: David J. Keller
-------------------------------
Name: David J. Keller
Title: Treasurer
and
By: Meadows X, Inc., a member
By: David J. Keller
-------------------------------
Name: David J. Keller
Title: Treasurer
D.R. HORTON MANAGEMENT COMPANY, LTD.
By:: Meadows I, Ltd..,
its general partner
By: David J. Keller
---------------------------------
Name: David J. Keller
Title: Treasurer
D.R. HORTON - TEXAS, LTD.
By:: Meadows I, Ltd..,
its general partner
By: David J. Keller
---------------------------------
Name: David J. Keller
Title: Treasurer
D.R. HORTON - ROYALTY, LTD.
By:: Meadows I, Ltd..,
its general partner
By: David J. Keller
---------------------------------
Name: David J. Keller
Title: Treasurer
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Trustee
By: Herbert J. Lemmer
---------------------------------
Name: Herbert J. Lemmer
Title: Vice President
Exhibit A
No. CUSIP No.: _______
[Title of Security]
D.R. HORTON, 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:
D.R. HORTON, INC.
[Seal]
By____________________________
Title:
By____________________________
Title:
American Stock Transfer & Trust Company, as Trustee,
certifies that this is one of the Securities refered
toin the within mentioned Indenture.
By: ____________________________
Authorized Signatory
* Or other currency. Insert corresponding provisions on reverse side of Security
in respect of foreign currency denomination or interest payment requirement.
D.R. HORTON, INC.
[Title of Security]
1. Interest.
D.R. HORTON, 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, American Stock Transfer & Trust Company (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 June 9, 1997
("Indenture") among the Company, the Guarantors and the Trustee. The terms of
the Securities and the Guarantees 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
and the Guarantees 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: D.R. Horton, Inc., 1901
Ascension Blvd., Suite 100, Arlington, Texas 76006, Attention: Chief Financial
Officer.
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
[Insert provisions relating to redemption at option of Holders, if any]
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.
* If applicable.
6. Mandatory Redemption.*
The Company shall redeem % of the aggregate principal amount of Securities
originally issued under the Indenture on each of , which redemptions are
calculated to retire % of the Securities originally issued prior to maturity.
Such redemptions shall be made
at a redemption price equal to 100% of the principal amount thereof, together
with accrued interest to the redemption date. The Company may reduce the
principal amount of Securities to be redeemed pursuant to this Paragraph 6 by
the principal amount of any Securities previously redeemed, retired or acquired,
otherwise than pursuant to this Paragraph 6, that the Company has delivered to
the Trustee for cancellation and not previously credited to the Company's
obligations under this Paragraph 6. Each such Security shall be received and
credited for such purpose by the Trustee at the redemption price and the amount
of such mandatory redemption payment shall be reduced accordingly.
* If applicable. Insert different or additional denominations and multiples.
7. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations of
$1,0001 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.
8. Persons Deemed Owners.
The registered Holder of this Security shall be treated as the owner of it for
all purposes.
9. 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.
10. 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, to remove a Guarantor in respect of any Series which, in accordance with
the terms of the Indenture, ceases to be liable in respect of its Guarantee, or
to make any other change, provided such action does not adversely affect the
rights of any Securityholder.
* If different terms apply, insert a brief summary thereof.
11. 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.
12. Trustee Dealings With Company. American Stock Transfer & Trust 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.
13. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall not
have any liability for any obligations of the Company under the 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.
14. Discharge of Indenture.
The Indenture contains certain provisions pertaining to defeasance, which
provisions shall for all purposes have the same effect as if set forth herein.
15. Authentication.
This Security shall not be valid until the Trustee signs the certificate of
authentication on the other side of this Security.
16. 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).
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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:___________________________________________________________
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]
GUARANTEE
[List of Guarantors] (the "Guarantors") have unconditionally guaranteed, jointly
and severally (such guarantee by each Guarantor being referred to herein as the
"Guarantee") (i) the due and punctual payment of the principal of and interest
on the Securities, whether at maturity, by acceleration or otherwise, the due
and punctual payment of interest on the overdue principal and interest, if any,
on the Securities, to the extent lawful, and the due and punctual performance of
all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article Nine of the Indenture and (ii) in
case of any extension of time of payment or renewal of any Securities or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.
No past, present or future stockholder, officer, director, employee or
incorporator, as such, of any of the Guarantors shall have any liability under
the Guarantee by reason of such person's status as stockholder, officer,
director, employee or incorporator. Each holder of a Security by accepting a
Security waives and releases all such liability. This waiver and release are
part of the consideration for the issuance of the Guarantees.
Each holder of a Security by accepting a Security agrees that any Guarantor
named below shall have no further liability with respect to its Guarantee if
such Guarantor otherwise ceases to be liable in respect of its Guarantee in
accordance with the terms of the Indenture.
The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Securities upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
[List of Guarantors]
By:_____________________
Title: